TERMINAL ONE LAND DISPOSITION AGREEMENT

Transcription

1 TERMINAL ONE LAND DISPOSITION AGREEMENT This TERMINAL ONE LAND DISPOSITION AGREEMENT (the "Agreement") is made and entered into as of, 2014 (the Effective Date ), by the City of Richmond, a municipal corporation and charter city (the "City" or Richmond ), and Terminal One Development LLC, a Delaware limited liability company (the "Developer") (also referenced herein collectively as the Parties and individually as a Party ). RECITALS A. These Recitals utilize certain capitalized terms which are defined in Section 1 of this Agreement. B. City is the owner of certain real property in the City of Richmond, Contra Costa County ("County"), California, comprised of approximately 13.8 acres, commonly known as the Terminal One Property, as more particularly described in and shown on the Site Map attached as Exhibit B (the "Property"). The Property consists of approximately acres of dry land and approximately.71 acres of submerged land. The Property is located at 1500 Dornan Drive, Richmond, California (Assessor s Parcel Numbers: APN and APN ). C. Pursuant to Article II (Powers), Section 1 of the City Charter of the City of Richmond, the City has the power to dispose of its real property. D. On May 22, 2013, City issued a request for proposals from developers interested in purchasing and developing the Property (the RFP ). E. On July 7, 2013, in response to Richmond s RFP, Developer submitted its proposal to acquire a portion of the Property and, after acquisition, to develop the Property (the Proposal ). Pursuant to the Proposal, Developer proposes to acquire a roughly 11.9 acre portion of the Property, as more particularly described in the Residential Property Description attached as Exhibit A (the Residential Property ) for the development of a residential project incorporating a mix of single family detached, townhouse, and condominium units. Developer s Proposal also includes the development of a public park on a 1.9+ portion of the Property to be retained under City ownership (the Park Property ). The approximate locations of the Residential Property and the Park Property are shown on the Site Map attached as Exhibit B. F. On December 3, 2013, Developer was selected through a competitive process by the City to enter into exclusive negotiations with the City over the terms and conditions under which the Developer will purchase and develop the Residential 1

2 Property and develop the park improvements on the Park Property. Developer and City entered into an Exclusive Right to Negotiate Agreement effective December 4, 2013 (the ERNA ) providing for a period of exclusive negotiations and setting out certain proposed terms for this Agreement. In accordance with the ERNA, Developer made a nonrefundable deposit to the City in the amount of Five Hundred Thousand Dollars ($500,000) and entered into exclusive negotiations with the City regarding a term sheet identifying key business terms for the acquisition and development of the Residential Property and for the installation of park improvements on the Park Property (the Term Sheet ). G. In accordance with the requirements of the ERNA, Developer prepared and submitted for Richmond City Council (the City Council ) review, a Draft Master Development Plan for the development of the Residential Property and Park Property, including conceptual renderings and a development phasing plan attached as Exhibit K (as may be amended during the Entitlement Process, the Phasing Plan ). H. On March 25, 2014, after reviewing the Draft Master Development Plan for the Project, the City Council approved the Term Sheet setting forth the basic terms pursuant to which this Agreement has been negotiated. I. The type, size, density, quality, and other characteristics of use as reflected in the Draft Master Development Plan are further refined in the Scope of Development attached as Exhibit C (the Project ) which represents Developer s initial expectations with respect to the Project which Developer proposes to build on the Property and the land use entitlements for which Developer will seek approvals. J. The Parties recognize that the environmental impacts of the Project and other matters, including the final design of the Project, must be evaluated and addressed before any final Project approvals may be granted, that the approvals are at the discretion of the approving agencies, including the City in its capacity as a regulatory agency, and that the City is under no obligation whatsoever to approve a Project which meets or exceeds Developer s expectations as reflected in the Draft Master Development Plan. K. City desires to sell the Residential Property to Developer, and Developer desires to purchase the Residential Property from City, and both Parties desire that the Developer install park improvements on the Park Property, all in accordance with the terms and conditions contained in this Agreement. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Developer and City agree as follows. 2

3 AGREEMENT 1. DEFINITIONS. In this Agreement, the following terms shall each have the respective following meanings: Additional Exceptions shall have the meaning given in Section "Agreement" means this Land Disposition Agreement. Applicable Law shall have the meaning set forth in Section "BCDC" means the Bay Conservation and Development Commission. BNSF means the BNSF Railway Company. BNSF Property shall have the meaning given in Section 4.3. Business Days shall have the meaning given in Section 10. CCCPR means the Coalition of Concerned Citizens of Point Richmond and Beverly Galloway, petitioners in the matter of Coalition of Concerned Citizens of Point Richmond and Beverly Galloway v. City of Richmond, et al, Contra Costa Superior Court Case Number NO CCCPR Settlement Agreement shall have the meaning given in Section 4.7. "CEQA" means the California Environmental Quality Act and any implementing regulations. "City" means the City of Richmond, a municipal corporation and charter city. City Council shall have the meaning given in Recital G. "City's Parties" mean the City, and its respective board members, council members, managers, directors, officers, employees, representatives, agents, shareholders, affiliated attorneys and related entities, successors and assigns. "Close of Escrow" shall have the meaning given in Section 5.1. Closing shall have the meaning given in Section 5.1. "Closing Date" shall have the meaning given in Section

4 Construction Documents shall have the meaning given in Section 6.1.1(e). "County" means Contra Costa County, California. Cure Period shall have the meaning given in Section 9.1. Dispute shall have the meaning given in Section 9.4. "Deposit" shall have the meaning given in Section "Developer" means Terminal One Development LLC, a Delaware limited liability company. Developer s Due Diligence Review shall have the meaning given in Section 3.1. Developer s Phase 1 Construction Permit-Related Obligations shall have the meaning given in Section Developer s Phase 1 Residential Unit Construction Obligations shall have the meaning given in Section Developer s Phase 1 Site Preparation Obligations shall have the meaning given in Section Developer s Phase 1 Subdivision Improvement Construction Obligations shall have the meaning given in Section Developer s Pre-Closing Obligations shall have the meaning given in Section Developer s Project Manager means Laconia Management LLC, a Delaware limited liability company. Developer s Subsequent Phase-Related Development Obligations shall have the meaning given in Section Draft Master Development Plan shall have the meaning given in Recital G. Due Diligence Effective Date shall have the meaning given in Section 3.1. Due Diligence Period shall have the meaning given in Section 3.1. "EBRPD" means East Bay Regional Park District. 4

5 "Effective Date" of this Agreement means the date first written above, which shall be the date on which the City Council approves this Agreement. Entitlement Period shall have the meaning given in Section "Entitlements" shall have the meaning given in Section "ERNA" shall have the meaning given in Recital F. "Escrow" shall have the meaning given in Section 5.1. "Escrow Holder" shall have the meaning given in Section 5.1. Final Design and Construction Documents shall have the meaning given in Section Final Map-Related Developer Obligations shall have the meaning given in Section "Grant Deed" shall have the meaning given in Section 5.1. "Hazardous Substances" means any toxic or hazardous wastes, asbestos, PCBs, petroleum products and byproducts, substances defined or listed as "hazardous substances" or "toxic substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C et seq., hazardous materials identified in or pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. 1802, et seq., hazardous wastes identified in or pursuant to the Resource Conservation and Recovery Act, 42 U.S.C et seq., any chemical substance or mixture regulated under the Toxic Substance Control Act of 1976, as amended, 15 U.S.C et seq., any "toxic pollutant" under the Clean Water Act, 33 U.S.C. 466 et seq., as amended, any hazardous air pollutant under the Clean Air Act, 42 U.S.C et seq., and any substance or pollutant which is present at, on or under either the Property or the BNSF Property in a form and quantity which is regulated under any applicable federal or state law concerning soils conditions, air quality or water quality. Independent Consideration shall have the meaning given in Section 2.3. Littlehale means James Scott Littlehale, petitioner in the matter of Littlehale v. City of Richmond, Contra Costa Superior Court Case Number NO Littlehale Settlement Agreement shall have the meaning given in Section 4.7. Local Approvals shall have the meaning given in Section

6 Local Business and Local Hire Requirements shall have the meaning given in Section 6.3. Memorandum shall have the meaning given in Section 5.1. MIG Report shall have the meaning given in Section Monetary Liens shall have the meaning given in Section Notice of Default shall have the meaning given in Section 9.1. Notice of Intent to Terminate shall have the meaning given in Section 9.2. "Official Records" shall have the meaning given in Section 5.1. Offsite Improvements shall have the meaning given in Section Other Agency Approvals shall have the meaning given in Section "Outside Closing Date" shall have the meaning given in Section 5.5. "Park Property" shall have the meaning given in Recital E. Permit to Enter and Release of Liability Agreement shall have the meaning given in Section 3.4. "Permitted Delay" shall have the meaning given in Section "Permitted Exceptions" shall have the meaning given in Section Phased Final Map shall have the meaning given in Section Phase 1 Construction Documents shall have the meaning given in Section Phase 1 Final Map shall have the meaning given in Section Phase 1 Final Map-Related Developer Obligations shall have the meaning given in Section Phase 1 Improvement Agreement shall have the meaning given in Section 6.1.1(d). Phase 1 Improvement Plans shall have the meaning given in Section 6.1.1(b). 6

7 Phase 1 Subdivision Improvements shall have the meaning given in Section 6.1.1(b). Phasing Plan shall have the meaning given in Recital G. "Planning Documents" shall have the meaning given in Section 4.5. Post-Closing Actions shall have the meaning given in Section 6.1. Preliminary Report shall have the meaning given in Section "Project" shall have the meaning given in Recital I. "Project Applications" shall have the meaning given in Section Project O&M Plan shall have the meaning given in Section 6.8. "Property" means the Terminal One property comprised of the Park Property and the Residential Property, as further defined in Recital B and as more particularly described and shown on the Site Map attached as Exhibit B. "Proposal" shall have the meaning given in Recital E. "Purchase Price" shall have the meaning given in Section 2.2. "Quimby Act" shall have the meaning given in Section 6.7. "Residential Property" shall have the meaning given in Recital E. "RFP" shall have the meaning given in Recital D. city. Richmond means the City of Richmond, a municipal corporation and charter Richmond Shores Project shall have the meaning given in Section RMC means the City of Richmond Municipal Code. "RWQCB" means the San Francisco Bay Regional Water Quality Control Board. Schedule of Closing Documents shall have the meaning given in Section "Schedule of Disclosure Documents" shall have the meaning given in Section 3.2. Scope of Development shall have the meaning given in Recital I. 7

8 Site Preparation-Related Developer Obligations shall have the meaning given in Section "SLC" means State Lands Commission. SLC Approvals shall have the meaning given in Section 4.6. Special Tax Allocation Procedures shall have the meaning given in Section Term Sheet shall have the meaning given in Recital F. Third Party Claims shall have the meaning given in Section "Title Company" shall have the meaning given in Section "Title Policy" shall have the meaning given in Section Toll means Toll Bros., Inc. Toll Project Approvals shall have the meaning given in Section 6.9. Toll Settlement Agreement shall have the meaning given in Section 6.9. "To the best of City's knowledge" shall have the meaning given in Section 7.1. To the best of Developer s knowledge : shall have the meaning given in Section 7.2. Transit Access Plan shall have the meaning given in Section 4.4. "Trust shall have the meaning given in Section PURCHASE AND SALE. 2.1 Agreement to Buy and Sell. Subject to the terms and conditions set forth herein, City agrees to sell and convey to Developer, and Developer hereby agrees to acquire and purchase from City, the Residential Property. As used herein, the term "Residential Property" shall include the Residential Property and all of City's right, title and interest in and to all appurtenant easements, rights of way, permits, entitlements, assignments of any utility agreement, connections for water and sewer, and engineering plans, if any. 8

9 2.2 Purchase Price. The purchase price for the Residential Property shall be Ten Million Dollars ($10,000,000) (the "Purchase Price"). The Purchase Price (including the components thereof) is payable as follows: Nonrefundable Earnest Money Deposit. Pursuant to the ERNA, Developer has previously deposited with City the total sum of Five Hundred Thousand Dollars ($500,000) (the "Deposit"). The Deposit is non-refundable under any circumstances whatsoever. The Deposit shall be applied to the Purchase Price at Closing Funding Purchase Price at Closing. The remainder of the Purchase Price plus any amounts owed by Developer for closing costs less the amount of the Deposit shall be deposited by the Developer with the Escrow Holder in cash or other immediately available funds as required by Escrow Holder s normal and customary practices one day prior to the Close of Escrow. 2.3 Independent Consideration. Within five (5) days following the Effective Date of this Agreement, Developer shall deliver to Escrow Holder for immediate release to City, the sum of One Hundred Dollars ($100) (the Independent Consideration ) in consideration for City s entering into this Agreement to the exclusion of other potential purchasers and granting Developer the rights to inspect and evaluate the Property during the Due Diligence Period and to proceed with its good faith, conscientious efforts to secure the Project Entitlements during the Entitlement Period. The Independent Consideration is deemed to be fully earned when delivered to Escrow Holder, is not applicable to the Purchase Price, and is not refundable under any circumstances. 9

10 3. DEVELOPER DUE DILIGENCE 3.1 Due Diligence Period. Developer shall have an initial one hundred twenty (120) day period, subject to extension as provided below, within which to determine the feasibility of purchasing and developing the Property and to otherwise conduct its due diligence (the Due Diligence Period ). Developer shall have the right to automatically extend the Due Diligence Period an additional sixty (60) days by providing City with written notice of Developer s election to extend prior to the end of the initial one hundred twenty (120) day Due Diligence Period. The Due Diligence Period shall commence on the date (the Due Diligence Effective Date ) Developer receives from City, and acknowledges receipt thereof, all of the Disclosure Documents listed in the attached Exhibit H (the Schedule of Disclosure Documents ) and shall run for a period of one hundred twenty (120) days from the Due Diligence Effective Date, unless Developer elects to extend the Due Diligence Period by timely written notice to City, in which case the Due Diligence Period shall run for a period of one hundred eighty (180) days from the Due Diligence Effective Date. This extended one hundred eighty (180) day Due Diligence Period may be further extended for such additional time periods as City and Developer may mutually agree. Developer shall have the right during the Due Diligence Period to review and investigate title as well as all other such matters affecting the Property as Developer deems pertinent with respect to its proposed acquisition, ownership, financing, development, and marketing of the Property, including environmental matters and local conditions affecting the Property such as the presence and impact of any environmental contamination on or adjoining the Property, with all such review and investigation to be conducted in accordance with this Section 3 ( Developer s Due Diligence Review ). Permitted Delay as further described in Section 11.6 shall toll the Due Diligence Period. This Agreement shall automatically terminate at the expiration of the Due Diligence Period, as such period may be extended or tolled in accordance with this Section 3.1, unless Developer provides City with written notice of Developer s decision to remove any contingencies, excepting those related to title which shall be addressed as provided in Section 3.3 below, and proceed with its conscientious efforts to pursue the Entitlements and to satisfy Developer s other Pre-Closing Obligations as provided in Section 4 below. 3.2 Disclosure Documents. Within five (5) days following the Effective Date of this Agreement, City shall deliver to Developer copies of all agreements, leases, licenses, records and other documents which to the best of City s knowledge constitute all non-privileged material documents in City s possession or control relating to the ownership, condition, development and operation of the Property and the rights included with or related to the Property and which City and Developer agree are relevant in the context of this Agreement. 3.3 Title Review Preliminary Report. Within thirty (30) days following the Effective Date of this Agreement, Developer shall obtain, at Developer s sole cost and expense, a Preliminary Report of Title for the Residential Property, as described in 10

11 Exhibit A (the Preliminary Report ), from Old Republic Title Company (the Title Company ). The Title Company shall also serve as the Escrow Holder pursuant to Section 5.1 and provide the Title Policy pursuant to Section The Preliminary Report shall include legible copies of all documents referenced therein as exceptions to title and a plot plan for the Residential Property showing the locations of all recorded easements and the geographic scope of all exceptions to title that are only applicable to a portion of the Residential Property Review Period. Developer shall have until the end of the Due Diligence Period to review the Preliminary Report and any documents referred to in the Preliminary Report and to give City written notice of any exceptions to title, other than Monetary Liens which City is obligated to remove prior to Closing in accordance with Section below, to which Developer objects. Developer s written notice of title objections may also include objections to the Preliminary Report s legal description of the Residential Property that arise out of any survey of the Residential Property undertaken during the Due Diligence Period. Within sixty (60) days following its receipt of Developer s written notice of title objections, City shall advise Developer in writing whether it will: (a) cause Title Company to remove or endorse over the exceptions not approved by Developer or (b) otherwise cure those aspects of title to which Developer has objected. If City fails to so advise Developer within the sixty (60) day timeframe, City shall be deemed to have refused to cause Title Company to remove or endorse over or to otherwise cure the aspects of title to which Developer has objected. If City refuses or is deemed to have refused to cure those aspects of title to which Developer has objected, Developer may elect either: (a) to reject title and terminate this Agreement, in which case City shall retain the Deposit and any interest thereon and shall be entitled to retain the Planning Documents, and City and Developer shall have no further rights or obligations under this Agreement, except as otherwise expressly provided herein; or (b) to accept title subject to the legal description of the Residential Property and the exceptions to title described in the Preliminary Report, including those exceptions to which Developer has objected but which City has refused to remove or endorse over, but excluding Monetary Liens City is obligated to remove prior to Closing in accordance with Section below (the Permitted Exceptions ), and proceed with the purchase of the Residential Property Monetary Liens. At its expense and without the necessity of Developer objection pursuant to Section 3.3.2, City shall remove at or before Closing all monetary liens (collectively, Monetary Liens ), including, without limitation: (a) all leases, rental agreements and third party occupancy rights, (b) all delinquent taxes, bonds, and assessments, including late fees, interest and penalties; and (c) all other monetary liens, whether or not shown on the Preliminary Report, provided the City has notice of any monetary liens not shown on the Preliminary Report (including judgment and mechanics and/or materialmen s liens, whether or not liquidated, and mortgages and deeds of trust, with City being fully responsible for any fees, interest and penalties). Monetary Liens shall not include a lien for non-delinquent general and supplemental real property taxes. Any and all Monetary Liens that City is required to remove pursuant to this Section shall not be Permitted Exceptions. In the event City fails to remove any 11

12 and all Monetary Liens in accordance with this Section 3.3.3, Developer may elect either: (a) to reject title and terminate this Agreement, in which case City shall retain the Deposit and any interest thereon and shall be entitled to retain the Planning Documents, and City and Developer shall have no further rights or obligations under this Agreement, except as otherwise expressly provided herein; or (b) to accept title subject to the Monetary Liens which City has failed to remove (in which case, any such Monetary Liens that are listed on the Preliminary Report shall thereafter constitute Permitted Exceptions) and proceed with the purchase of the Residential Property, provided that the Purchase Price shall be reduced by the amount of any such Monetary Liens that City has failed to remove together with any fees, interest and penalties related thereto Additional Exceptions. Any additional exceptions to title beyond the Permitted Exceptions (other than exceptions caused by Developer or required or requested by Developer in connection with approval of the Project) shown on any supplement to the Preliminary Report that may be issued from time to time by the Title Company (the Additional Exceptions ) shall be removed by City at or prior to the Close of Escrow, or City shall cause the Title Company to endorse over such exceptions at the Close of Escrow, in a manner satisfactory to Developer in its reasonable discretion, unless such exceptions are expressly approved by Developer in writing (in which case the approved exceptions shall thereafter constitute Permitted Exceptions). In the event City fails to remove any and all Additional Exceptions that have not been expressly approved by Developer in writing prior to or at the Close of Escrow in accordance with this Section 3.3.4, Developer may elect either: (a) to reject title and terminate this Agreement, in which case City shall retain the Deposit and any interest thereon and shall be entitled to retain the Planning Documents, and City and Developer shall have no further rights or obligations under this Agreement, except as otherwise expressly provided herein; or (b) to accept title subject to the Additional Exceptions that City has failed to remove or endorse over (in which case, such Additional Exceptions shall thereafter constitute Permitted Exceptions) and proceed with the purchase of the Residential Property Leases, Possession. Prior to the Close of Escrow, the City shall terminate all leases, rental agreements and third party occupancy rights, including any mooring rights at the pier on the Property, and shall deliver possession of the Residential Property at Closing free of the rights of any tenant or other person claiming any interest in or rights to occupy the Residential Property. City shall cause any tenant or other third party occupant of the Property, including any ships currently moored at the pier on the Property, to be permanently moved with no right to return to the Property. City shall be solely responsible for any obligations regarding relocation of any tenants or other third party occupants and the provision of replacement premises which shall be conducted at no cost to Developer. In the event City fails to terminate all leases, rental agreements and third party occupancy rights prior to or at the Close of Escrow in accordance with this Section 3.3.5, Developer may elect either: (a) to reject title and terminate this Agreement, in which case City shall retain the Deposit and any interest thereon and shall be entitled to retain the Planning Documents, and City and Developer shall have no further rights or obligations under this Agreement, except as otherwise 12

13 expressly provided herein; or (b) to accept title subject to the leases, rental agreements and third party occupancy rights City has failed to terminate (in which case, any such leases, rental agreements, or third party occupancy rights that are listed on the Preliminary Report shall thereafter constitute Permitted Exceptions) and proceed with the purchase of the Residential Property Title Policy. Developer's obligation to proceed to the Close of Escrow shall be conditioned upon the commitment by Title Company to issue an ALTA Owner's Policy of Title Insurance with full extended coverage showing fee title to the Residential Property vested in Developer with liability equal to the Purchase Price, subject only to the Permitted Exceptions (the "Title Policy"). In the event Title Company is unable or unwilling to issue a title insurance policy in accordance with this Section 3.3.6, Developer may elect either: (a) to reject title and terminate this Agreement, in which case City shall retain the Deposit and any interest thereon and shall be entitled to retain the Planning Documents, and City and Developer shall have no further rights or obligations under this Agreement, except as otherwise expressly provided herein; or (b) to accept title without title insurance coverage and proceed with the purchase of the Residential Property. 3.4 Access. From and after the Effective Date of this Agreement through the Close of Escrow and provided the Developer has in full force and effect, and has delivered to the City certificates of coverage for, all insurance policies as set forth in the attached Exhibit J, Developer, its employees, consultants, engineers, authorized agents, and contractors shall have the right to enter the Property for the purposes of conducting such investigations, inspections and tests of the Property as Developer deems necessary, all at Developer s sole cost and expense. Developer and City shall enter into a Permit to Enter and Release of Liability Agreement in a form to be provided by City, which will set out the terms pursuant to which Developer is permitted to enter the Property and conduct surveys, studies, analyses, and such other tests as Developer deems appropriate in connection with the intended purchase and development of the Residential Property and development of the Park Property and other Offsite Improvements. Developer hereby agrees to indemnify and hold City harmless from and against any and all loss, expense, claim, damage and injury to person or property resulting from the acts or omissions of Developer, its employees, consultants, engineers, authorized agents and contractors in connection with the performance of any investigation, inspection, or test as contemplated herein, provided, however, that this indemnity shall not apply to impacts on the value of the Property arising from conditions discovered by Developer s testing, inspection or investigation. Developer further agrees to restore the Property to substantially the same condition it was in prior to Developer s exercise of its rights of entry, investigation, inspection, and testing pursuant to this Section 3.4 and to keep the Property free of any liens or third party claims resulting from such entry, investigation, inspection, or testing. All arrangements for Developer s site investigations, inspections, and tests with respect to the BNSF Property shall be negotiated directly with BNSF. 13

14 3.5 Project Economic Viability. If, based on a market study, the Project is determined not to be economically viable, Developer may opt not to purchase the Residential Property. The determination of the economic viability of the Project shall be made by Developer in its sole discretion. 4. DEVELOPER OBLIGATIONS PRIOR TO CLOSE 4.1 Entitlement Process Entitlement Period. Developer shall have an initial twenty-four (24) months following the Due Diligence Effective Date, subject to extension as provided below (the Entitlement Period ), within which to pursue and obtain the Entitlements, as described in Section below, and to otherwise satisfy Developer s obligations prior to Closing, as described in this Section 4 ( Developer s Pre-Closing Obligations ). Provided Developer is conscientiously pursuing the Entitlements and Developer s other Pre-Closing Obligations, Developer shall have the right to automatically extend the Entitlement Period by an additional twelve (12) months by providing City with written notice of Developer s election to extend prior to the end of the initial twenty-four (24) month Entitlement Period. This extended thirty-six (36) month Entitlement Period may be further extended for such additional time periods as the City and Developer may mutually agree. Permitted Delay as further described in Section 11.6, including but not limited to third party CEQA litigation or other litigation which delays the Entitlement Process, shall toll the Entitlement Period. This Agreement shall automatically terminate at the expiration of the Entitlement Period, as such period may be extended or tolled in accordance with this Section 4.1.1, unless Developer provides City with prior written notice of Developer s intention and readiness to proceed to Closing in accordance with Section 5 below Entitlements. The Entitlements shall consist of the land use approvals required to develop the Project and the Project-related offsite improvements consisting of construction of the park improvements at the Park Property as well as shoreline and infrastructure improvements that shall include: (a) the Bay Trail that is part of the Project, (b) the new shoreline road, (c) the conversion of Brickyard Cove Road into a bike and pedestrian trail subject to the approval of the City, (d) the Terminal One Pier wharf preservation, and (e) such other waterfront shoreline improvements as the Developer and City may mutually agree to include in the initial phase of development (the Offsite Improvements ). The Entitlements will include local discretionary approvals by the Richmond City Council, Planning Commission, Design Review Board, and other local governmental agencies with discretionary approval authority (the Local Approvals ). In particular, the Local Approvals may include but are not limited to planned area development zoning, development plans, conditional use permits, design review permits, a development agreement, vesting subdivision maps, a general plan amendment, and other discretionary approvals as needed to develop the Project and Offsite Improvements. Nothing in this Agreement shall be deemed to require City to grant any Local Approvals or otherwise commit its 14

15 discretionary powers in any particular manner. In addition to the Local Approvals, the Entitlements will also include certain discretionary approvals from Federal, State, and regional governmental entities (the Other Agency Approvals ). These Other Agency Approvals may include without limitation approvals from the BCDC, SLC, California State Historic Preservation Office, California Department of Fish and Wildlife, RWQCB, U.S. Army Corps of Engineers, United States Coast Guard, U.S. Fish & Wildlife Service, and National Marine Fisheries Service Responsibility for Securing Entitlements. With the single exception of those certain approvals required from the State Lands Commission, which shall be the joint responsibility of City and Developer pursuant to Section 4.6 below, Developer shall be solely responsible for processing and securing all of the Entitlements required to develop the Project and construct the Offsite Improvements Preparation, Submittal, and Processing of Project Applications. Following execution of this Agreement, the Developer intends to file applications with the City for the Local Approvals required to develop the Project and construct the Offsite Improvements (the Project Applications ).City agrees to sign as co-applicant, if required, for any Project Applications involving City-owned property. The Parties anticipate that preparation of the Project Applications shall commence promptly following approval and execution of this Agreement. Following Developer submittal of the Project Applications, Developer and City agree to use their best efforts to diligently and expeditiously process the Project Applications in a manner that does not unreasonably delay City s exercise of its discretionary authority in acting upon such applications. Nothing in this Section shall be deemed to require City to grant any Local Approval or otherwise to exercise its discretionary authority in any particular manner Timing of Developer Applications for Other Agency Approvals. Except for the SLC Approvals, application for which shall be the joint responsibility of City and Developer in accordance with Section 4.6, Developer shall apply for the Other Agency Approvals required to develop the Project and construct the Offsite Improvements in sufficient time so as not to delay the Close of Escrow CEQA Review. Following execution of this Agreement, the City shall use its best efforts to diligently complete any required environmental review of the Project, the Offsite Improvements, and the Entitlements in accordance with CEQA. The Developer agrees to pay the costs of the CEQA review. The Developer acknowledges: (a) that the environmental review process under CEQA will involve preparation and consideration of additional information as well as consideration of public input from interested organizations and individuals, which may include Littlehale and CCCPR; (b) that approval or disapproval of the Project following completion of the environmental review process is within the sole, complete, unfettered and absolute discretion of the City without limitation by or consideration of the terms of this Agreement; and (c) that the City makes no representation regarding the ability or willingness of the City to approve development of the Project at the conclusion of the 15

16 environmental review process required by CEQA, or regarding the imposition of any mitigation measures as conditions of any approval that may be imposed on the Project. In addition, the Developer acknowledges that any required approvals by any other local, regional, State or Federal agency may require additional environmental review, and that any approval by the City shall not bind any other local, regional, State or Federal agency to approve the Project or to impose mitigation measures which are consistent with the terms of this Agreement or with the terms of any mitigation measures required by the City pursuant to the City's environmental review Mitigation Measures. If the City approves the development of the Project following completion of the environmental review process and such approval is conditioned upon implementation of specified environmental mitigation measures, then the Developer shall be responsible at its sole cost and expense for implementing such mitigation measures and any mitigations measures required in any Other Agency Approvals as part of the development of the Project. 4.2 Legal Parcels. The Developer, at its own cost, shall survey the Property, and take all necessary steps to apply to the City for a Certificate of Compliance regarding the establishment of the Residential Property as a separate legal parcel as part of the Entitlement process. The City agrees to cooperate with such efforts as the seller of the Residential Property, but reserves sole, complete, absolute and unfettered discretion as a regulatory body in any such applications. 4.3 BNSF Property. Developer shall use its best efforts to purchase the real property parcel approximately one (1) acre in size owned by the BNSF Railway Company ( BNSF ) and located on the north side of Brickyard Cove Road as shown on attached Exhibit D (the BNSF Property ) and to incorporate the BNSF Property into the Project site for landscaping. In the event Developer is unable to acquire a fee interest in the BNSF Property, Developer shall use its best efforts to secure an easement over the BNSF Property for such landscaping. Upon request by City, Developer shall provide up to three (3) status reports during each twelve (12) month period following the Effective Date of this Agreement on its efforts toward obtaining such ownership or easements. If, in spite of Developer s best efforts, as determined by City, Developer is unable to enter into a purchase and sale agreement to acquire either a fee interest in or an easement over the BNSF Property within a timeframe that will not delay the Entitlement process, the Project Entitlements shall be revised to exclude the BNSF Property, Developer shall proceed with the processing of the Entitlements without the BNSF Property, and Developer shall have no further obligations under this Agreement to acquire any interest in the BNSF Property. 4.4 Transit Access Plan. Prior to the Close of Escrow, Developer shall, at its sole cost and expense, prepare and submit to City, a Transit Access Plan which evaluates the feasibility of extending existing AC Transit fixed transit routes to the Project, with such plan to include estimated ridership levels, subsidy levels, and cost estimates (the Transit Access Plan ). 16

17 4.5 Planning Documents. Throughout the Entitlement process, Developer shall provide City with copies of all technical studies and analysis and design and engineering work product submitted to any governmental entity with jurisdiction over the Project and the Offsite Improvements as required to process the Other Agency Approvals. Developer acknowledges and agrees that all such submittals together with all plans, studies, reports, and specifications for the Project and the Offsite Improvements that are submitted to City as required to process the Local Approvals (collectively, the Planning Documents ) are a matter of public record and may be retained in the City files. The Parties further acknowledge and agree that the Planning Documents have been prepared exclusively for use on processing the Project Entitlements; that in consenting to City s retention of the Planning Documents, Developer makes no representations or warranties as to their use for any other purpose; and that, to the extent City makes use of the Planning Documents for purposes other than the processing of the Project Entitlements, it does so on its own volition and at its own risk. 4.6 State Lands. The Parties recognize that a portion of the Property may be encumbered by the public trust for commerce, navigation and fisheries ( Trust ), and that it is in their mutual interest to work with the State Lands Commission to establish the boundary of any lands subject to the Trust, and, if necessary, to remove any Trust-related clouds on title to the Residential Property. Accordingly, Developer, as City s prospective successor in interest with regard to ownership of the Residential Property, and City, consistent with its obligations as trustee of lands subject to the Trust, agree to collaborate in a good faith diligent effort to determine if there are Trust-related clouds on title to the Residential Property, and if such clouds are found to exist, to negotiate a title settlement agreement with the State Lands Commission, together with any additional SLC approvals as necessary to enable City to convey clear title to the Residential Property at Closing (collectively, the SLC Approvals ). The terms of the title settlement agreement and other SLC Approvals shall be mutually acceptable to both City and Developer. In the event City and Developer are unable to secure mutually acceptable SLC Approvals in sufficient time so as not to delay the Close of Escrow, the additional time required to secure such approvals shall be deemed a Permitted Delay pursuant to Section 11.6 and shall toll the Entitlement Period. If, in spite of the good faith diligent efforts of the Parties, mutually acceptable SLC Approvals cannot be secured and Trust-related clouds remain on title that City is unwilling or unable to endorse over, Developer may elect either: (a) to reject title and terminate this Agreement, in which case City shall retain the Deposit and any interest thereon and shall be entitled to retain the Planning Documents, and City and Developer shall have no further rights or obligations under this Agreement, except as otherwise expressly provided herein; or (b) to accept title subject to the Trust-related clouds on title (in which case such Trust-related clouds on title shall thereafter constitute Permitted Exceptions) and proceed with the purchase of the Residential Property. 17

18 4.7 Settlement Agreements CCCPR Settlement Agreement. The Coalition of Concerned Citizens of Point Richmond ( CCCPR ) Terminal One Project Settlement and Release Agreement dated April 23, 2010 (the CCCPR Settlement Agreement ) to which the City is a party (a memorandum of which has been recorded against the Property) was entered into for the purpose of resolving controversies between CCCPR and the City relative to the Point Richmond Shores Residential Condominium Project (the Richmond Shores Project ) previously approved for development on the Property. The CCCPR Settlement Agreement required that the Richmond Shores Project be developed in accordance with certain design principles, restrictions and requirements that were applicable to the Richmond Shores Project unless they were determined to be infeasible to implement. Such principles, restrictions, and requirements included the Point Richmond Shores Design Principles Report prepared by Moore, Iacofano, Goltzman, Inc. and attached as Exhibit J (the MIG Report ) as well as developer obligations relating to construction of certain offsite improvements, garbage collection at the north of the Property, building massing at the north of the Property, closure of parts of Brickyard Cove Road to through vehicular traffic, and a maximum number of units to be developed on the Property. City and Developer desire to avoid the controversies which led to the CCCPR litigation and the CCCPR Settlement Agreement and to this end have incorporated in this Agreement provisions which Developer is obligated to meet where feasible that are analogous to the design principles, restrictions, and requirements of the CCCPR Settlement Agreement. If any of these analogous design principles, restrictions or requirements are not feasible to implement, Developer shall consult with City and the petitioners that are parties to the CCCPR Settlement Agreement concerning mutually agreeable alternative requirements. For the purpose of determining the feasibility of implementing any of these analogous design principles, restrictions, or requirements, feasible shall have the same meaning as provided under the CEQA Guidelines, 14 Cal. Code Reg. Section Feasible means capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, legal, social, and technological factors Littlehale Settlement Agreement. The James Scott Littlehale ( Littlehale ) Terminal One Project Settlement and Release Agreement dated April 23, 2010 (the Littlehale Settlement Agreement ) to which the City is a party, was also entered into for the purpose of resolving controversies between Littlehale and the City relative to the Richmond Shores Project. The Littlehale Settlement Agreement, like the CCCPR Settlement Agreement, established certain design principles, restrictions and requirements that were applicable to the Richmond Shores Project. City and Developer desire to avoid the controversies that gave rise to the Littlehale litigation and the Littlehale Settlement Agreement and to this end have incorporated in this Agreement provisions which Developer is obligated to meet that are analogous to the design principles, restrictions, and requirements of the Littlehale Settlement Agreement. 18

19 4.8 Evidence of Funding. Prior to Close of Escrow, Developer shall submit to City evidence of funding for construction of the Offsite Improvements, which improvements are required to be constructed in the initial phase of the Project in accordance with Section 6.6 below. Developer s evidence of funding may include demonstrated in-house funding capability, access to private capital, or availability of public financing such as Mello Roos Community Facilities District or assessment district funding for which provision is made in Section 6.1.1(d) below, as well as a performance security such as a completion performance bond or letter of credit, or some combination thereof. The burden shall be on the Developer to demonstrate to City s reasonable satisfaction Developer s funding capability. Developer s submission to City evidencing funding for these initial phase improvements shall also describe the delivery method Developer intends to employ. 4.9 Project Design. The Parties acknowledge and agree that the design principles set forth in the MIG Report (with the exception of the design of the Ferry Point Way median) are the principles of design desired by the Richmond community and, where feasible, the design of the Project and the Offsite Improvements shall be substantially consistent with these principles, which contemplate, among other elements of Project Design: (a) a shoreline road that will serve as the primary connection between Dornan Drive and Brickyard Cove Road; (b) the closure of a portion of Brickyard Cove Road north of the Project site to through vehicular traffic once the shoreline road is completed, provided the closed section of Brickyard Cove Road may remain open to Bay Trail users; private residential access; parking access for Project residents, guests, and visitors; emergency vehicles; and construction-related use; (c) a site layout that incorporates a graduated approach to the distribution of development densities and massing, with the higher intensities of use to be located on the northern portion of the Project site; and Project site. (d) the location of the garbage transfer area at the north of the If any of the design principles referenced above are not feasible to implement, the Parties shall proceed as set forth in Section ESCROW AND CLOSE OF ESCROW 5.1 Opening and Close of Escrow. Developer has opened an escrow (the "Escrow") with the Title Company (including its successors as escrow agent, if any, the "Escrow Holder") in its office currently located at th Street, Suite 2000, Oakland, CA Within three (3) business days after the date when this Agreement is fully executed, Developer shall deposit with Escrow Holder a copy of the fully executed Agreement, or executed counterparts hereof, and shall also deliver to Escrow Holder for 19

20 immediate recordation against the Property a fully executed Memorandum of this Agreement, or executed counterparts thereof, in the form attached as Exhibit E (the Memorandum ). As used in this Agreement, the "Close of Escrow" or Closing shall mean the date a Grant Deed in the form of Exhibit F attached hereto ("Grant Deed") conveying the Residential Property to Developer is recorded in the Office of the Recorder of the County (the "Official Records"). 5.2 Escrow Fees and Other Charges. In connection with the Close of Escrow, Developer shall pay: (a) the premium cost of the Title Policy, including the cost of any endorsements required by Developer, (b) recording charges, (c) one-half (1/2) of Escrow Holder's fees, and (d) all County and City transfer taxes and fees. In connection with the Close of Escrow, City shall pay one-half (1/2) of Escrow Holder's fees. All other costs related to the transaction shall be paid by the Parties in the manner consistent with common practice in residential land transactions in the County. 5.3 Developer s Conditions to Close of Escrow. Developer s obligations to close Escrow and purchase the Residential Property are conditioned upon the satisfaction or waiver of the following conditions: Legal Parcel. The creation of the Residential Property as a legal parcel prior to or at Close of Escrow in accordance with Section Entitlements. Developer shall have received all Entitlements for a Project that is acceptable to Developer in Developer s sole discretion and either: (a) all statutory or regulatory periods for appealing or otherwise legally challenging the Entitlements, including but not limited to legal challenges under CEQA, have expired without any appeal or legal challenge being made, or (b) if an appeal or legal challenge to the Entitlements is made, such appeal or legal challenge has been resolved in a manner acceptable to the Developer in Developer s sole discretion. All Entitlements must be satisfactory to Developer and City, in their sole discretion No Default. The representations and warranties of the City shall be true in all material aspects and the City shall not be in default of its obligations under this Agreement. 5.4 City's Conditions to Close of Escrow. City's obligations to close escrow and sell, transfer and convey the Residential Property are conditioned upon the satisfaction or waiver of the following conditions: Deposit of Funds. Developer shall have deposited into Escrow, in cash or immediately available funds, all amounts necessary to consummate the purchase and sale of the Residential Property Evidence of Funding for Offsite Improvements. Developer shall have provided evidence of funding for the Offsite Improvements in accordance with the requirements of Section 4.8 above. 20