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HomeMy WebLinkAboutReso 188-2021 (21-803)City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA City Council Resolution: RES 188-2021 File Number: 21-803 Enactment Number: RES 188-2021 RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A PURCHASE AND SALE AGREEMENT WITH ENSEMBLE INVESTMENTS, LLC FOR THE DISPOSITION OF A CITY -OWNED PROPERTY LOCATED AT 367 MARINA BOULEVARD (APN 015-010-970) IN THE AMOUNT OF $1,000,000 FOR A HOTEL DEVELOPMENT. WHEREAS, the City is the owner of certain real property (the "Property") located in the City of South San Francisco, California, known as County Assessor's Parcel Number (APN) 015-010-970 attached as Exhibit A; and WHEREAS, on March 23, 2011, the City Council approved the Oyster Point Specific Plan and certified the Phase 1 Project Environmental Impact Report which, among other things, planned for and analyzed the potential environmental impacts of developing a new, full-service hotel with up to 350 rooms on the Property; and WHEREAS, a Disposition and Development Agreement (DDA) was executed on March 23, 2011, between Oyster Point Ventures, LLC, the South San Francisco Redevelopment Agency, and the City of South San Francisco for the master development of Oyster Point, including the potential development of a hotel on the Property; and WHEREAS, the DDA was assigned to Kilroy Realty (Kilroy) in 2018; and WHEREAS, the DDA requires Kilroy to perform certain site work, grading, and installation of certain infrastructure to prepare for the Property for development, which will be completed, satisfying their obligation, by 2022; and WHEREAS, in 2017, the City solicited a hotel developer for a proposed development on the Property through an RFQ/RFP process; and WHEREAS, on December 11, 2017, the City's Housing Standing Committee recommended that City Council approve Ensemble Investments, LLC (Ensemble) to develop a full-service hotel on the Property and made a recommendation that the City Council authorize the City Manager to enter into an Exclusive Negotiating Rights Agreement (ENRA) with Ensemble for the development of the Property; and City of South San Francisco Page 1 File Number: 21-803 Enactment Number: RES 188-2021 WHEREAS, on April 11, 2018, the City Council authorized the City Manager to execute an ENRA with Ensemble, and has maintained exclusivity ever since; and WHEREAS, during the ENRA process, both Ensemble and the City determined the feasibility and benefits of the proposed development and negotiated a Purchase and Sale Agreement (PSA) for City Council consideration; and WHEREAS, the PSA includes the following deal points: • Ensemble will pay $1,000,000 for the Property, and apply a deposit of $150,000 to the purchase price that was received from the Exclusive Negotiating Rights Agreement; • Ensemble will construct a temporary and permanent north -south connection to the Bay Trail in accordance with the requirements imposed by the San Francisco Bay Conservation & Development Commission; • The City will provide Ensemble with a 50% rebate on Transient Occupancy Tax for 15 years capped at no more than $44,543,000; • Ensemble will accept liability for claims stemming from the design, construction, and operation of the hotel and will release the City for its first -party claims arising out of the existing environmental conditions on the Property; • Prior to closing, Ensemble must obtain approval of all necessary entitlements and a Development Agreement, as well as provide the City with an approved franchise agreement and final pro forma; and ® Ensemble must enter into a voluntary oversight agreement with the California Regional Water Quality Control Board for ongoing monitoring and management of the Property. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby: 1. Authorizes the City Manager to enter into a Purchase and Sale Agreement with Ensemble Investments, LLC for the disposition of a City -owned property located at 367 Marina Boulevard (APN 015-010-970) in the amount of $1,000,000 for a hotel development, in substantially the same form as attached hereto as Exhibit B, subject to review by the City Attorney and subject to minor revisions and clarifications of the City Attorney that do not otherwise expand the City's obligations; and 2. Authorizes the City Manager to take any other related actions consistent with the intention of the resolution. City of South San Francisco Page 2 File Number. 21-803 Enactment Number: RES 188-2021 At a meeting of the City Council on 10/27/2021, a motion was made by Councilmember Flores, seconded by Councilmember Nicolas, that this Resolution be approved. The motion passed. Yes: 5 Mayor Addiego, Vice Mayor Nagales, Councilmember Nicolas, Councilmember Coleman, and Councilmember Flores Attest by 4S) �C-Ll- Rosa Govea Acosta, City Clerk City of South San Francisco Page 3 © Latitude Geographics Group Ltd. 0.04 THIS MAP IS NOT TO BE USED FOR NAVIGATION WGS_1984_Web_Mercator_Auxiliary_Sphere Miles0.04 This map is a user generated static output from an Internet mapping site and is for reference only. Data layers that appear on this map may or may not be accurate, current, or otherwise reliable. 0.020 1,128 San Mateo map 1: San Mateo County 18708.001 4813-5533-2093.2 1 PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (“this Agreement”) is entered into as of _________, 20__ (the “Effective Date”), by and between the City of South San Francisco, a municipal corporation, (“Seller” or “City”) and Ensemble Investments, LLC, a California Limited Liability Company (“Buyer”). Seller and Buyer are collectively referred to herein as the “Parties.” RECITALS A. Seller is the owner of certain real property located in the City of South San Francisco California, also known as San Mateo County Assessor’s Parcel Number: 015-010-970 and more particularly described in the legal description and shown as Parcel 6 on Parcel Map 17- 0002 recorded on September 25, 2017, both attached hereto and incorporated herein as Exhibit A (the “Property”). B. On March 23, 2011, the City Council approved the Oyster Point Specific Plan and certified the Oyster Point Specific Plan and Phase 1 Project Environmental Impact Report which, among other things, planned for and analyzed the potential environmental impacts of developing a new full-service hotel with up to 350 rooms and approximately 40,000 square feet of retail uses on the Property (“Project”). C. A Disposition and Development Agreement was executed on March 23, 2011, between Oyster Point Ventures, LLC, the South San Francisco Redevelopment Agency, and the City of South San Francisco (“DDA”) for the master development of Oyster Point through a multi- phased project, which included the potential development of a hotel on an approximately 4.7 acre portion of the Property known as the “Hotel Site,”: among other things, the DDA requires Oyster Point Development, LLC, to perform certain site work, grading, and installation of infrastructure to prepare the Hotel Site for development. D. In 2017, the City solicited proposals from qualified hotel developers through an RFQ/RFP process, and upon review of the responsive proposals, the City’s Joint Housing Standing Committee made a recommendation at its December 11, 2017, meeting that the City enter into an Exclusive Negotiating Rights Agreement (“Original ENRA”) with Buyer for the development of a new full-service hotel on the Hotel Site. The City approved the Original ENRA with Buyer on April 11, 2018 and the Parties negotiated terms and conditions of the purchase and development of the Hotel Site pursuant to that Original ENRA. As part of the Original ENRA, Buyer previously deposited $100,000 to the City (“ENRA Deposit”) to be held in an interest bearing account of the City and credited towards Buyer’s purchase price of the Hotel Site. The Original ENRA was subsequently amended by the First Amendment to the Exclusive Negotiating Rights Agreement (“First Amendment,” and together with the Original ENRA, collectively, referred to herein as the “ENRA”) and the term of the ENRA was subsequently extended three additional times. The ENRA Deposit with any and all interest accrued thereon, will be applied towards the Purchase Price at Closing (as defined in Section 2.2 below). 18708.001 4813-5533-2093.2 2 E. Seller has verified to its reasonable satisfaction that the Buyer is, or upon execution of this Agreement, will be financially capable to prepare and process entitlements for the Project. F. Seller and Buyer have entered into a separate agreement to address the soft costs associated with certain design work the Seller has requested Buyer to perform in connection with the future development of a ferry terminal located on a Seller-owned property adjacent to the Hotel Site, commonly known as and referred to herein as the “Spit Property” (the “Cost-Sharing Agreement”). Buyer has paid One Hundred and Fifty Thousand Dollars ($150,000) in consulting services for the initial soft costs associated with the design and development of the Spit Property (the “Spit Reserve Funds”). The Spit Reserve Funds will not be applied towards the Purchase Price at Closing, nor paid to Seller in the event this Agreement is terminated for any reason. Buyer has provided all documents created by the consultant to City and City has accepted Buyer’s performance under the Cost-Sharing Agreement as complete and satisfactory. G. Buyer agrees to purchase the Property, and Seller agrees to sell the Property to Buyer, subject to the terms and conditions memorialized in this Agreement. H. In connection with this Agreement, Buyer and Seller intend to negotiate a separate development agreement to address the financing and construction of the Project (the “Development 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 is hereby acknowledged by the parties, Seller and Buyer hereby agree as follows: 1. INCORPORATION OF RECITALS AND EXHIBITS. The Recitals set forth above and the Exhibits attached to this Agreement are each incorporated into the body of this Agreement as if set forth in full. 2. PURCHASE AND SALE. 2.1 Agreement to Buy and Sell. Subject to the terms and conditions set forth herein, Seller agrees to sell the Property to Buyer, and Buyer hereby agrees to acquire the Property from Seller. 2.2 Purchase Price. The purchase price for the Property to be paid by Buyer to Seller (the “Purchase Price”) is One Million dollars ($1,000,000). The Purchase Price shall be paid in cash or other immediately available funds at the Closing to the Seller in accordance with Section 5.5(b). The Seller will retain the ENRA Deposit of $100,000 and at Closing, the ENRA Deposit with any and all interest accrued, applied towards the Purchase Price. 3. ESCROW. 3.1 Escrow Account. Seller has opened an interest-bearing escrow account (the “Escrow”) maintained by Chicago Title Insurance Company, 455 Market Street, #2100, San Francisco, CA 94105 (the “Escrow Holder” and the “Title Company”), with interest accruing to the benefit of Buyer. Escrow Holder shall perform all escrow and title services in connection with this Agreement. 18708.001 4813-5533-2093.2 3 3.2 Opening of Escrow. Within two (2) business days after the Effective Date, the Parties will deposit into Escrow this fully executed Agreement, or executed counterparts hereto. The date such fully executed version of this Agreement is received by Escrow Holder will be deemed the “Opening of Escrow” and Escrow Holder will give written notice to the Parties of such occurrence. 3.3 Buyer’s Deposit. Within three (3) business days after the Opening of Escrow, the Buyer shall deposit Thirty Thousand dollars ($30,000) in Escrow (“Initial Deposit”) accounting for 3% of the total Purchase Price. If the Due Diligence Contingency Period (as defined in Section 5.2(a) below) is extended pursuant to Section 5.2(a), Buyer shall deposit an additional Fifty Thousand dollars ($50,000) in Escrow (the “Additional Deposit”) accounting for 5% of the total Purchase Price. The Initial Deposit and Additional Deposit are sometimes collectively referred to herein as the “Deposits.” 3.4 Satisfaction of Due Diligence Contingency. Buyer shall have the right, in its sole discretion, to terminate this Agreement for any reason prior to the expiration of t he Due Diligence Contingency Period (as defined in Section 5.2) and receive a refund of the Deposits. Buyer hereby agrees to provide written notice to Seller prior to the expiration of the Due Diligence Contingency Period if Buyer disapproves any due diligence items or approves all due diligence items (“Approval Notice”). If Buyer disapproves any items through the delivery of the Approval Notice to Seller before 5:00 p.m. on the last day of the Due Diligence Contingency Period, this Agreement shall terminate, and all amounts deposited by Buyer into Escrow (except the ENRA Deposit and the Independent Consideration referenced below), together with interest thereon, if any, will be returned to Buyer, and neither party shall have any further rights or obligations hereunder except those which expressly survive the termination hereof. If Buyer fails to timely deliver the Approval Notice to Seller, it will be conclusively presumed that Buyer has approved all such items, matters or documents. 3.5 Independent Consideration. As independent consideration for Seller’s entering into this Agreement to sell the Property to Buyer, Buyer shall deliver the sum of One Thousand dollars ($1,000) to Seller through Escrow (“Independent Consideration”). In the event that Buyer terminates this Agreement in accordance with Section 3.4 above, Seller shall retain the Independent Consideration; in the event that Buyer does not terminate this Agreement as aforesaid, the Independent Consideration shall be applied to the Purchase Price at Closing. 4. DILIGENCE AND TITLE REVIEW. 4.1 Condition of Title/Preliminary Title Report. Escrow Holder shall deliver a Preliminary Title Report for the Property (the “Preliminary Report”) to Buyer within three (3) days after the Opening of Escrow. During the Due Diligence Contingency Period, and no later than thirty (30) days prior to expiration of the Due Diligence Contingency Period, Buyer shall deliver to Seller written notice (the “Title Objection Notice”) of its objections to matters identified in the Title Report (“Disapproved Exceptions”). Buyer’s failure to timely deliver the Title Objection Notice shall be deemed Buyer’s disapproval of the Title Report and Buyer’s election to terminate this Agreement, whereupon the Deposits and all interest accrued thereon shall immediately be released by Escrow Holder to Buyer. Seller shall have fourteen (14) business days after receipt of Buyer’s Title Objection Notice to notify Buyer in writing (“Seller’s Title Notice”) that either, (a) 18708.001 4813-5533-2093.2 4 Seller will cure or remove such Disapproved Exceptions from title prior to Closing (or cause the Title Company to issue an endorsement reasonably satisfactory to Buyer insuring Buyer as to such matter), or (b) Seller elects not to cure or cause the Disapproved Exceptions to be removed. If Seller refuses to cure or remove any Disapproved Exceptions, then, within five (5) business days after Buyer’s receipt of Seller’s Title Notice, Buyer may either (a) notify Seller in writing that it has elected to waive the Disapproved Exceptions and proceed with the purchase contemplated herein, or (b) terminate this Agreement, whereupon, the Deposits and all interest accrued thereon shall immediately be released by Escrow Holder to Buyer, and neither Party shall have any further obligation or liability to the other with respect to the transaction contemplated by this Agreement, except for those that expressly survive termination. Notwithstanding anything to the contrary contained above or elsewhere herein, Seller shall be obligated to cause all deeds of trust, tax liens, abstracts of judgments, mechanics’ liens, or similar monetary liens or encumbrances which require any monetary payment to be removed or released, to be removed from title to the Property, including those secured by leasehold or subleasehold estates, on or before the Closing, except for non-delinquent real property taxes and assessments (collectively, “Monetary Liens”). For the purpose of the foregoing, any monetary obligations, costs, or payments associated with the Property owner’s obligations pursuant to the Postclosure Monitoring and Maintenance Plan dated September 8, 2017 and the San Francisco Regional Water Quality Control Board Order No. 00-0146 issued on June 21, 2000, as each has been amended from time to time shall not be considered Monetary Liens. If Seller elects to cure or remove any Disapproved Exceptions, but fails to do so prior to Closing, then Buyer shall have the right to terminate this Agreement and to receive full reimbursement of the Deposits, and may pursue other remedies available to it under the Agreement. For purposes of this Agreement, any title matters approved by Buyer (or for which Buyer has withdrawn an objection) pursuant to this Section 4.1 are referred to herein as the “Permitted Exceptions.” In no event shall the Permitted Exceptions include any Monetary Liens. (a) Due Diligence Materials . Seller shall provide to Buyer copies of all actually known and reasonably available documents relating to the ownership and operation of the Property, including but not limited to plans, permits, maps, surveys, agreements and reports (environmental, structural, mechanical, engineering, soils, grading and geotechnical) that Seller has to its actual knowledge within its possession or control (collectively, the “Due Diligence Materials”) not later than fourteen (14) business days following the execution and delivery of this Agreement, or as soon as practicable thereafter. The term Due Diligence Materials does not include Environmental Documents (defined below). For the purposes of this Agreement, “Seller’s actual knowledge” or information “actually known” by Seller means the current, actual knowledge of the City Manager, Public Works Director, and City Engineer. Nothing in this Section 4.1(a) shall excuse or otherwise diminish Seller’s obligation to provide any disclosures regarding natural hazards or environmental conditions otherwise required for the proposed property transfer by any applicable laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any governmental authority (“Applicable Laws”). 4.2 Environmental Conditions and Environmental Documents. Seller has disclosed and hereby discloses to Buyer that the Property lies within an area that was formerly operated as a landfill and as such, materials, including solid and liquid waste, municipal waste, construction materials, debris, and Hazardous Materials (collectively, “Landfill Materials”) are 18708.001 4813-5533-2093.2 5 present at, on, under and emanating to and from the Property. In addition, the presence and breakdown of Landfill Materials at, under and adjacent to the Property has led and will continue to lead to, among other conditions: (a) the existence and generation of methane, other landfill gases, and other volatile organic compounds at, on, under and emanating to and from the Property; and (b) the settlement, including differential settlement, of the Property and adjacent areas (collectively, “Landfill Conditions”). The former landfill on the Property is regulated by, among other things, Order No. 00-46 issued by the San Francisco Regional Water Quality Control Board (“Water Board”) to the Seller on June 21, 2000 (“Order No. 00-46” or “Order”). The Order imposes closure and post-closure requirements, including performing sampling, analyses, and observations of groundwater, leachate, and surface water and submitting the results in semiannual and annual reports to the Water Board. A Final Closure Plan dated September 8, 2017 (“Final Closure Plan”) and a Postclosure Maintenance and Monitoring Plan (“Postclosure Plan”) (collectively, the “Closure Plans”), each dated September 8, 2017, were prepared pursuant to the Order. The former landfill area, including the Property, and the Landfill Materials will continue to be subject to the Order and the Closure Plans, as each of these documents may be amended from time to time with the approval of the Water Board. The Closure Plans assign certain ongoing obligations to the Seller and certain obligations to the future owner of the Property, as identified in Table 1 (the “Postclosure Responsibility Matrix”) of the Postclosure Plan1, which is set forth herein as Exhibit E. Additional documents relating to environmental conditions, activities, and requirements at the Property, including investigation, remediation, mitigation, operation and maintenance measures, are available on the Water Board’s Geotracker database (including at the following link: https://geotracker.waterboards.ca.gov/profile_report?global_id=L10009323371), as well as from other governmental entities, such as the California Department of Toxic Substances Control, the State Water Resources Control Board, and the County of San Mateo (collectively, the “Environmental Documents”). The Landfill Materials, Landfill Conditions, and all conditions identified or otherwise referenced in the Environmental Documents as of the Closing Date, are collectively referred to herein as the “Pre-Existing Property Conditions.” 4.3 Notice Pursuant to Health & Safety Code Section 25359.7. California Health & Safety Code Section 25359.7 requires an owner of nonresidential real property who knows, or has reasonable cause to believe, that any release of hazardous substance has come to be located on or beneath that real property to, prior to the sale of the real property by that owner, provide written notice of that condition to the buyer. In accordance with that section, Seller hereby notifies Buyer that hazardous materials, including hazardous substances, have come to be located on and beneath the Property, including Landfill Materials and Landfill Conditions, and other hazardous materials as set forth in the Environmental Documents. 4.4 Inspection of Property; Access Rights. (a) During the Due Diligence Contingency Period, Buyer or its agents shall be permitted to enter onto the Property to perform inspections and reasonable testing of the 1 See Pages 8-10 of the Postclosure Plan. 18708.001 4813-5533-2093.2 6 Property, including without limitation, soil samples, boring, and backhoe pits in order to assess the condition of the subsurface of the Property or other similar intrusive or invasive action on or under the Property. All physical inspections must be performed in accordance with this Agreement and coordinated with Seller’s representative. Developer agrees to notify the Cit y seventy-two (72) hours in advance of its intention to enter the Property. (b) Pursuant to the Bay Conservation and Development Commission (“BCDC”) Permit No. 2017.007.00, originally issued on April 27, 2018 and amended on July 30, 2021 as Amendment No. 2, and any amendments thereto (the “BCDC Permit”) attached hereto and incorporated herein as Exhibit B, Developer shall be responsible for construction of the temporary north-south Bay Trail connection no later than 6 months following the completion of Phase IC, with the construction of a 12-foot-wide accessible interim path that will originate near the existing pedestrian bridge at the southern shoreline of the peninsula and connect through the Hotel Site, to the southern sidewalk to Marina Boulevard. Seller agrees to provide prompt written notice to Buyer no less than thirty days in advance of the anticipated completion date for the Phase IC work. Prior to Closing, Buyer or its agents shall be entitled to enter onto the Property to complete construction of the temporary Bay Trail improvements subject to and consistent with all applicable provisions of the BCDC Permit, and to diligently process any permits required to install the temporary trail improvement. Access to the Property for such construction shall be coordinated with Seller’s representative. (c) In exercising its rights or performing any work under this Section 4.4, Buyer hereby agrees to indemnify and hold Seller harmless for any claims, actions, losses, liabilities, damages, costs, and expenses (“Access Claims and Losses”) incurred, suffered by or claimed against Seller by reason of Buyer’s entry onto or in connection with Buyer’s inspection and testing of the Property by Buyer and/or its agents, employees, or contractors ; provided, however, that Buyer shall have no obligations to indemnify, defend, protect and hold harmless Seller for Access Claims and Losses to the extent resulting from the negligence or willful misconduct of Seller or Buyer’s mere discovery of pre-existing adverse physical conditions in, on, or under the Property. 4.5 Development Agreement, Preliminary Pro Forma and Project Entitlements. (a) Buyer and Seller agree to negotiate diligently and in good faith the terms of the Development Agreement on such terms set forth in the Development Agreement term sheet attached hereto as Exhibit C and such other terms as shall be acceptable to each party in its sole discretion. Buyer and Seller will also work diligently and in good faith to process all discretionary entitlements for the Project concurrently with the negotiation of the Development Agreement. Buyer will use good faith efforts to submit an entitlement application and seek City Council approval of the Development Agreement and all discretionary entitlements for the Project prior to the Closing Date (as defined in Section 5.1 below). Notwithstanding anything else to the contrary, if the Buyer fails to submit a precise plan and associated entitlement application May 1, 2022, then the Seller, in its sole discretion, may elect to terminate this Agreement and may retain all Deposits paid pursuant to this Agreement. In the event that Seller exercises its right to terminate pursuant to this provision, neither party shall have any further rights or obligations hereunder 18708.001 4813-5533-2093.2 7 except those which expressly survive the termination hereof. The Parties shall execute and record such Development Agreement with the San Mateo County recorder on or prior to Closing. (b) Buyer will submit to the Seller documentation that reasonably demonstrates to the City’s reasonable satisfaction the financial feasibility of Buyer’s proposed development of the Project at least seven (7) business days prior to expiration of the Due Diligence Contingency Period. (c) Seller has no legal obligation to grant any approvals or authorizations for the Development Agreement and discretionary entitlements for the Project until the Development Agreement and discretionary entitlements have been approved by the City Council. Such approvals, and any future approvals required as part of the entitlement process, are subject to completion of environmental review by City in accordance with the California Environmental Quality Act, and City shall not take any discretionary actions committing it to a particular course of action in connection with the Project until City has completed, considered and certified/approved any additionally required CEQA environmental review documents. 5. CLOSING, CONDITIONS OF CLOSING, AND PAYMENT OF PURCHASE PRICE. 5.1 Closing. The escrow for conveyance of the Property shall close (“Close of Escrow” or “Closing”) within thirty (30) days after the satisfaction, or waiver by the appro priate Party, of all of the Buyer’s Closing Conditions (as defined in Section 5.2 below) and all of the Seller’s Closing Conditions (as defined in Section 5.3 below), which shall occur no later than December 31, 2022, or such earlier date that Buyer may specify to Seller with thirty (30) days prior written notice (the “Closing Date”). 5.2 Buyer’s Conditions to Closing. Buyer's obligation to purchase the Property is subject to the satisfaction of all of the following conditions (“Buyer’s Closing Conditions”) or Buyer's written waiver thereof (in Buyer’s sole discretion) on or before the Closing Date: (a) Buyer has approved the condition of the Property. Buyer will have thirty (30) calendar days from receipt of the Due Diligence Materials or forty-five (45) calendar days following the Effective Date, whichever is earlier (the “Due Diligence Contingency Period”) to review the suitability of the Property for Buyer’s Project, including to investigate title and to conduct any feasibility, economic, environmental, or other such investigations, studies, and tests with respect to the Property as Buyer deems necessary or appropriate, and to approve or disapprove of such matters in Buyer’s sole and absolute discretion. Buyer may request one (1) thirty-day extension of the Due Diligence Contingency Period and such extension will be granted if (i) Buyer has paid Buyer’s Additional Deposit and (ii) Buyer has made reasonable efforts in Seller’s reasonable determination to pursue all matters identified in Section 4 which must be completed prior to the expiration of the Due Diligence Contingency Period. Buyer must notify Seller of its desire to extend, in writing, at least seven (7) days before the end of the initial Due Diligence Contingency Period. 18708.001 4813-5533-2093.2 8 (b) Seller shall have delivered to Buyer or Escrow Holder all of the items required to be delivered to Buyer pursuant to this Agreement, including, but not limited to, those provided for in Section 5.5 (a). (c) Seller or its City Council shall have approved all discretionary entitlements necessary to construct the Project, including the first reading of an ordinance approving the Development Agreement. (d) Seller has performed all obligations to be performed by Seller as of the Closing Date pursuant to this Agreement. (e) Seller’s representations and warranties herein are true and correct in all material respects as of the Closing Date. (f) The Title Company is irrevocably committed to issue an ALTA standard coverage title insurance policy to Buyer, effective as of the Closing Date, insuring fee simple title to the Property vested in Buyer in the full amount of the Purchase Price and subject only to the Permitted Exceptions (the “Title Policy”). If any of the Buyer’s Closing Conditions shall not have been satisfied on or before the Closing Date, then Buyer shall have the right to either (i) waive any such unmet Buyer’s Closing Conditions and proceed with Closing, or (ii) elect to not proceed with Closing by giving written notice to Seller of such election prior to the Closing Date, in which case the Deposits shall be immediately released to Seller and this Agreement shall terminate; provided, however, if such Buyer’s Closing Conditions have not been satisfied due to a default on the part of the Seller, the Deposits shall be returned to Buyer and Buyer shall also have its rights under Section 7.1. 5.3 Seller’s Conditions to Closing. The Close of Escrow and Seller’s obligation to sell and convey the Property to Buyer are subject to the satisfaction of the following conditions (“Seller’s Closing Conditions”) or Seller’s written waiver (in Seller’s sole discretion) of such conditions on or before the Closing Date: (a) Buyer shall have delivered to Seller or Escrow Holder all of the items required to be delivered to Seller pursuant to this Agreement, including but not limited to, those provided for in Section 5.5(b). (b) Buyer has delivered an approved franchise agreement for the Project or an alternative acceptable to the Seller. (c) Buyer has submitted to Seller a construction schedule for the Project, which is consistent with the post-closing milestones in the Development Agreement, including commencement of construction and substantial completion of the Project, and confirms to the City’s reasonable satisfaction the feasibility of Buyer’s development of the Project in accordance with the post-closing milestones in the Development Agreement. (d) Buyer has submitted a final pro forma including pro forma financing terms that confirms to the Seller’s reasonable satisfaction the financial feasibility of the Buyer’s development of the Project. 18708.001 4813-5533-2093.2 9 (e) Buyer has completed construction of the temporary north-south Bay Trail connection (if required, assuming timely completion of the Phase 1C work) and has incorporated a permanent north-south Bay Trail connection into the entitlements for the Project, as identified in BCDC Permit 2017.007.00, at Buyer’s expense and in accordance with the BCDC Permit or any amendments thereto, unless (i) BCDC has waived, released, or otherwise modified the BCDC Permit conditions such that the temporary or permanent trail, as applicable, is no longer required, or (ii) provided an extension of time for construction of the permanent north-south Bay Trail connection . Such trail construction shall be completed two (2) months prior to the deadline imposed by BCDC, as may be amended. Such Bay Trail connections shall comply with the Americans with Disabilities Act and any other applicable standards, requirements, or amendments. (f) Buyer has taken all steps necessary and required under the Order No. 00-46 and the Closure Plans, to the City’s reasonable satisfaction, to assume the applicable obligations of the owner or developer of the Property under the Order No. 00-46 and the Closure Plans respectively, and provided written assurance to Seller that Buyer is unequivocally prepared to assume and perform such obligations, including to the extent that each such document may be amended from time to time with approval of the Water Board. As to Order No. 00-46, such written assurance shall confirm that the date of Closing is the specific date for the transfer of responsibility for the obligations identified in Order No. 00-46 as to the Property. In furtherance of the foregoing condition as to Order No. 00-46, the Buyer shall cooperate with the Seller to notify the Water Board to request a transfer of responsibility of Order No. 00 -46 as to the Property, including providing the Seller with the Buyer’s full legal name, address, and telephone number of the persons responsible for contact with the Water Board. (g) Buyer has entered into a binding voluntary oversight agreement with the Water Board (i) pursuant to which the Water Board will oversee Buyer’s compliance with the requirements of Order No. 00-46, the Closure Plans, and related Applicable Laws, relating to Buyer’s acquisition, development, operation and use of the Property, and (ii) confirming that with respect to such requirements, the Buyer is the party primarily responsible for such compliance. It is the goal of the parties that, following the Closing Date, Buyer shall be solely responsible to perform, at its sole cost and expense, the compliance activities referenced in (i) and (ii) above. The Parties acknowledge that the City is liable for any violations of Order No. 00-46 or Sections 13267 and 13263 of the California Water Code relating to the Property up to the Closing Date and that the Buyer is liable for any such violations from and following the Closing Date. (h) Buyer has performed all obligations to be performed by Buyer pursuant to this Agreement before Closing Date. (i) Seller has secured, at reasonable cost, insurance or a commitment for insurance that covers or substantially offsets, in Seller’s reasonable discretion, the risks and liabilities that Seller will retain or to which Seller may be exposed pursuant to this Agreement following the Closing Date. Seller shall notify Buyer in writing no later than ninety (90) calendar days after the Effective Date (“Environmental Insurance Contingency Period”) that this condition has either (i) been satisfied or waived by Seller; or (ii) not been satisfied or waived by Seller and Seller has elected to not proceed with Closing, in which case the Deposits shall be immediately released to Buyer and this Agreement shall terminate. If Seller does not indicate its 18708.001 4813-5533-2093.2 10 election prior to the expiration of the Environmental Insurance Contingency Period, Seller shall have been deemed to have waived this condition. (j) Buyer's representations and warranties set forth herein are true and correct in all material respects as of the Closing Date. (k) Seller has approved all discretionary entitlements for the Project, including the first reading of an ordinance approving a Development Agreement. Buyer will deliver items (c), (d), (e), (f) and (g) at least seven (7) business days prior to Closing. If any of the Seller’s Closing Conditions shall not have been satisfied on or before the Closing Date as a result of a breach or default by Buyer, then Seller shall have its rights under Section 7.2. Notwithstanding the foregoing or anything contained herein to the contrary, if Buyer has failed to satisfy the condition contained in Section 5.3(e) above by the date specified by BCDC or if Seller’s Closing Conditions have not otherwise been satisfied on or before December 31, 2022, the Seller may, in its sole discretion, immediately terminate this Agreement. For the avoidance of doubt, the Parties acknowledge that the second reading of the ordinance approving the Development Agreement may occur after Closing, in which case the Development Agreement shall be executed and recorded post-Closing. However, if the Development Agreement has been fully approved by the City Council prior to December 31, 2022, then an executed copy of the Development Agreement will be deposited into escrow and recorded concurrently with the Close of Escrow. 5.4 Conveyance of Title. Seller will deliver marketable fee simple title to Buyer at the Closing, subject only to the Permitted Exceptions. As provided in Section 6.3 and further herein, the Property will be conveyed by Seller to Buyer in an “as is” condition, with no warranty, express or implied, by Seller as to the physical condition including, but not limited to, the soil, its geology, or the presence of known or unknown faults or Hazardous Materials or hazardous waste (as defined by Section 13); provided, however, that the foregoing shall not relieve Seller from disclosure of any such conditions of which Seller has actual knowledge or its obligations under Section 10. 5.5 Deliveries at Closing. (a) Deliveries by Seller. Prior to Closing, Seller shall deposit the following into the Escrow: (i) one (1) original executed and acknowledged grant deed, substantially in the form attached hereto as Exhibit D (“Grant Deed”); (ii) one (1) duly executed copy of the Development Agreement approved by City Council; (iii) one (1) duly executed affidavit or qualifying statement which satisfies the requirements of paragraph 1445 of the Internal Revenue Code of 1986, as amended, any regulations thereunder (the “Non-Foreign Affidavit”); (iv) one (1) duly executed California Franchise Tax Board form 590 (the “California Certificate”) to satisfy the requirements of California Revenue and Taxation Code Section 18805(b) and 26131, and (v) such other instruments, funds, and documents as required under the terms of this Agreement or reasonably requested by Escrow Holder, including any such affidavits necessary to issue the Title Policy. 18708.001 4813-5533-2093.2 11 (b) Deliveries by Buyer. Prior to Closing, Buyer shall deposit the following into the Escrow: (i) no less than one (1) business day prior to the Close of Escrow, Buyer shall deposit into Escrow immediately available funds in the amount, which together with the Independent Consideration, the Deposits, and the ENRA Deposit is equal to the Purchase Price as adjusted by any prorations between the Parties; (ii) one (1) original executed Preliminary Change of Ownership Report for the Property; (iii) the escrow fees and recording fees; (iv) the cost of the Title Policy; and (v) such other instruments, funds, and documents as required under the terms of this Agreement or reasonably requested by Escrow Holder. (c) Closing. Upon Closing, Escrow Holder shall: (i) record the Grant Deed; (ii) disburse to Seller the Purchase Price, less Seller’s share of any fees, costs and expenses; (iii) deliver to Buyer the Non-Foreign Affidavit, the California Certificate and the original recorded Grant Deed; (iv) pay any commissions and other expenses payable through Escrow; and (v) distribute to itself the payment of Escrow fees and expenses required hereunder. (d) Closing Costs. Buyer will pay all Escrow fees (including the costs of preparing documents and instruments), and recording fees. Buyer will also pay title insurance and title report costs. Seller will pay all transfer taxes and governmental conveyance fees, where applicable. (e) Pro-Rations. At the Close of Escrow, the Escrow Holder shall make the following prorations: (i) property taxes will be prorated as of the Closing Date based upon the most recent tax bill available, including any property taxes which may be assessed after the Closing Date but which pertain to the period prior to the transfer of title to the Property to Buyer, regardless of when or to whom notice thereof is delivered. Seller does not pay ad valorem taxes. 6. REPRESENTATIONS AND WARRANTIES. 6.1 Seller’s General Representations and Warranties. In addition to the representations and warranties of Seller contained in Section 6.2 below pertaining to Seller’s Environmental Representations and Warranties (which are Seller’s exclusive representations and warranties pertaining to the environmental issues at or associated with the Property) , Seller hereby represents, warrants and covenants to Buyer that the statements below in this Section 6.1 are each true and correct as of the Closing Date (subject to any knowledge qualifications set forth therein) provided however, if to Seller’s actual knowledge any such statement becomes untrue prior to Closing, Seller will notify Buyer in writing and Buyer will have three (3) business days thereafter to determine if Buyer wishes to proceed with Closing. If Buyer determines it does not wish to proceed, then the terms of Section 3.4 pertaining to return of funds deposited into Escrow will apply. Seller’s representations and warranties under this Section 6.1 do not apply to any matter addressed, directly or indirectly, in Section 6.2 below. (a) Authority. Seller is a municipal corporation, lawfully formed, in existence and in good standing under the laws of the State of California. Seller has the full right, capacity, power and authority to enter into and carry out the terms of this Agreement. This Agreement has been duly executed by Seller, and upon delivery to and execution by Buyer is a valid and binding agreement of Seller. 18708.001 4813-5533-2093.2 12 (b) Encumbrances. Seller has not alienated, encumbered, transferred, mortgaged, assigned, pledged, or otherwise conveyed its interest in the Property or any portion thereof, nor entered into any Agreement to do so, and there are no liens, encumbrances, mortgages, covenants, conditions, reservations, restrictions, easements or other matters affecting the Property, except as disclosed in the Preliminary Report. Seller will not, directly or indirectly, alienate, encumber, transfer, mortgage, assign, pledge, or otherwise convey its interest prior to the Close of Escrow, as long as this Agreement is in force. (c) There are no agreements to the Seller’s actual knowledge, affecting the Property except those which have been disclosed by Seller in writing. (d) There are no actions, suits, or proceedings of any kind or nature whatsoever, legal or equitable, pending or, to Seller’s actual knowledge based on reasonable investigation, threatened against Seller, relating to the Property or relating to or arising out of the ownership, management, or operation of the Property, in any court or before any federal, state, county, or municipal department, commission, board, bureau, agency, or other governmental instrumentality, and Seller has received no notice thereof except those which have been disclosed by Seller in writing. (e) Seller has delivered to Buyer all of the documents and materials required to be delivered by Seller pursuant to Section 4.3, and none of the documents and materials delivered by Seller to Buyer pursuant to Section 4.3 contain any material misstatements or omissions to the Seller’s actual knowledge . The foregoing representations and warranties shall survive Close of Escrow of this Agreement and shall not be deemed merged into the deed upon Closing. 6.2 Seller’s Environmental Representations and Warranties. Seller hereby represents, warrants and covenants to Buyer that the statements below in this Section 6.2 are each true and correct as of the Closing Date (subject to any knowledge qualifications set forth therein) provided however, if to Seller’s actual knowledge any such statement becomes untrue prior to Closing, Seller will notify Buyer in writing and Buyer will have three (3) business days thereafter to determine if Buyer wishes to proceed with Closing. If Buyer determines it does not wish to proceed, then the terms of Section 3.4 pertaining to return of funds deposited into Escrow will apply. (a) To Seller’s actual knowledge , there are no Hazardous Materials (as defined by Section 13) or environmental contamination located on the Property in violation of any Environmental Laws (as defined by Section 13), and no pending or threatened proceeding or notices by any governmental authority with respect to the presence, suspected presence, or release of Hazardous Materials on the Property or the migration thereof from or to other property, except as such information has been previously disclosed by Seller in writing or is otherwise made available or reasonably known to Buyer, including, but not limited to, information contained in the Environmental Documents. 18708.001 4813-5533-2093.2 13 (b) To Seller’s actual knowledge, the Due Diligence Materials and the Environmental Documents are the only documents that identify the Pre-Existing Property Conditions (as defined in Section 6.3 below). (c) Seller has disclosed the presence of landfill materials and certain Hazardous Materials on the Property to Buyer, which are subject to the terms and conditions of the Postclosure Plan and Order No. 00-46. Other than the express representations and warranties of Seller specifically set forth in Section 6.1 and Section 6.2 of this Agreement, Seller makes no representations or warranties of any kind, express or implied, as to any matters concerning the Property, including without limitation: (i) the quality, nature, adequacy and physical condition of the Property, (ii) the quality, nature, adequacy, and physical condition of soils, geology and any groundwater, (iii) Pre-Existing Property Conditions, (iv) the existence, quality, nature, adequacy and physical condition of utilities serving the Property, (v) the development potential of the Property, and the Property's use, habitability, merchantability, or fitness, suitability, value or adequacy of the property for any particular purpose, (vi) except as otherwise provided in this Agreement, the zoning or other legal status of the Property or any other public or private restrictions on use of the Property, (vii) except as otherwise specifically provided in this Agreement, the compliance of the Property or its operation with any Environmental Laws, covenants, conditions and restrictions of any governmental or quasi-governmental entity or of any other person or entity, (vii) except as otherwise specifically provided in this Agreement, the presence or removal of Hazardous Materials, substances or wastes on, under or about the Property or the adjoining or neighboring property; (viii) the quality of any labor and materials used in any improvements on the Property, (ix) the condition of title to the Property, (x) the leases, service contracts, or other agreements affecting the Property, or (xi) the economics of the operation of the Property. 6.3 Buyer’s Representations and Warranties. In addition to the representations, warranties and covenants of Buyer contained in other sections of this Agreement, Buyer hereby represents, warrants and covenants to Seller that the statements below in this Section 6.2 are each true as of the Effective Date, and, if to Buyer’s actual knowledge any such statement becomes untrue prior to Closing, Buyer shall so notify Seller in writing and Seller shall have at least three (3) business days thereafter to determine if Seller wishes to proceed with Closing. (a) Buyer is a California Limited Liability Company. Buyer has the full right, capacity, power and authority to enter into and carry out the terms of this Agreement. This Agreement has been duly executed by Buyer, and upon delivery to and execution by Seller shall be a valid and binding agreement of Buyer. (b) Buyer is not bankrupt or insolvent under any applicable federal or state standard, has not filed for protection or relief under any applicable bankruptcy or creditor protection statute, and has not been threatened by creditors with an involuntary application of any applicable bankruptcy or creditor protection statute, and has the financial means and expertise to complete all of Buyer’s obligations under this Agreement. 18708.001 4813-5533-2093.2 14 6.4 Property Sold, “AS IS”. Buyer specifically acknowledges that the Seller is selling the Property on an “AS IS”, “WHERE IS” and “WITH ALL FAULTS” basis and that, subject only to Seller's specific representations and warranties in Section 6.1 and Section 6.2 of this Agreement, , Buyer is not relying on any representations or warranties of any kind whatsoever, express or implied, from Seller, or its employees, appointed or elected officials, agents, attorneys, contractors or brokers as to any matters concerning the Property. Buyer is a sophisticated purchaser and its consultants have reviewed or have had the opportunity to review the Due Diligence Materials and Environmental Documents and to perform due diligence relating to the Property, the Pre-Existing Property Conditions, the landfill, and Landfill Materials to the full extent desired by Buyer, in its sole discretion. Any decision by Buyer to acquire the Property is based solely on Buyer’s own due diligence and evaluation of the Pre-Existing Property Conditions and the limited representations specifically set forth in Section 6.1 and 6.2 of this Agreement by Seller. 7. DEFAULT, REMEDIES, TERMINATION. 7.1 In the event of a breach or default under this Agreement by Seller, which is not cured within ten (10) days (such longer period as may be reasonably required to cure such default) after written notice, if such breach or default occurs prior to Close of Escrow, Buyer reserves the right to either (a) seek specific performance from Seller or (b) to do any of the following: (i) to waive the breach or default and proceed to close as provided herein; (ii) to extend the time for performance until Seller is able to perform with the understanding that such extension cannot extend beyond December 31, 2022; or (iii) to terminate this Agreement upon written notice to Seller, whereupon Seller shall cause Escrow Holder to return to Buyer any and all sums placed into the Escrow by Buyer (including the Deposits), reserving all other rights and remedies available to it under this Agreement or otherwise at law or in equity, including the right to collect costs and damages for such breach from Seller . 7.2 IN THE EVENT OF A BREACH OR DEFAULT HEREUNDER BY BUYER WHICH IS NOT CURED WITHIN TEN (10) DAYS (OR SUCH LONGER PERIOD AS MAY BE REASONABLY REQUIRED TO CURE SUCH DEFAULT) AFTER WRITTEN NOTICE AND THE CLOSING DOES NOT OCCUR DUE TO SUCH DEFAULT, SELLER MAY ELECT TO TERMINATE THIS AGREEMENT UPON WRITTEN NOTICE TO BUYER AND/OR MAY RETAIN THE DEPOSITS AS LIQUIDATED DAMAGES. THE PARTIES AGREE THAT IN SUCH INSTANCE, THE DEPOSITS REPRESENT A REASONABLE APPROXIMATION OF SELLER’S DAMAGES AND ARE NOT INTENDED AS A FORFEITURE OR PENALTY BUT RATHER AN ENFORCEABLE LIQUIDATED DAMAGES PROVISION PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671, ET SEQ. IN NO EVENT SHALL EITHER PARTY BE ENTITLED TO LOST PROFITS OR CONSEQUENTIAL DAMAGES AS A RESULT OF THE OTHER PARTY’S BREACH OF THIS AGREEMENT. _______________ _______________ Buyer’s Initials Seller’s Initials 18708.001 4813-5533-2093.2 15 8. BROKERS. Seller represents that no real estate broker has been retained by Seller in the sale of the Property or the negotiation of this Agreement. Buyer represents that no real estate broker has been retained by Buyer in the procurement of the Property or negotiation of this Agreement. Each party shall indemnify, hold harmless and defend the other party from any and all claims, actions and liability for any breach of the party’s respective representation, and any commission, finder’s fee, or similar charges arising out of the transactions contemplated by this Agreement. 9. ASSIGNMENT. Absent an express signed written agreement between the Parties to the contrary, neither Seller nor Buyer may assign its rights or delegate its duties under this Agreement without the express written consent of the other. No permitted assignment of any of the rights or obligations under this Agreement shall result in a novation or in any other way release the assignor from its obligations under this Agreement. Notwithstanding any provision hereof, Buyer may assign this Agreement without the consent of Seller to one or more entities controlled by, or under common control with, or owned in whole or in part by Buyer, provided, Buyer shall not be released from its obligations under this Agreement. As used in this subsection, “controlled” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies, whether through the ownership of voting securities, partnership interest, contracts (other than those that purport to transfer Buyer’s interest to a third party not specifically identified in this subsection) or otherwise. 10. INDEMNIFICATION. 10.1 Indemnification by Seller. Except for the Claims (as defined below) released by Buyer pursuant to Section 11.1, Seller agrees to the fullest extent allowed by law, to indemnify, protect, defend (with counsel satisfactory to Buyer), and hold Buyer and it s officers, directors, managers, members, employees, agents, contractors, subcontractors, consultants, invitees, or licensees acting on behalf of Buyer (collectively, “Buyer Indemnitees”) harmless from and against any and all Claims suffered by Buyer Indemnitees, to the extent caused by: (a) Any material misrepresentation or breach of warranty or covenant made by Seller in this Agreement, provided that Seller’s obligations under this Section 10.1 shall not apply to any misrepresentation or breach of warranty or covenant actually known to and waived by Buyer prior to Closing ; (b) Claims by any third party to the extent caused by the Pre-Existing Property Conditions; provided, however, Seller’s obligations hereunder shall not apply to the extent that such third party claims are caused by the acts or negligent omissions of Buyer or any Buyer Indemnitee, including without limitation: (i) Buyer’s design, construction, operation, use, and/or maintenance of the Project; (ii) Buyer’s performance of or failure to perform Buyer’s Post- Closing Mitigation Measures (as defined in Section 14.1 below); (iii) Buyer’s design, construction, operation, use, and/or maintenance of any of Buyer’s Post-Closing Mitigation Measures; (iv) Buyer’s failure to install, operate, maintain or upgrade Vapor Intrusion Mitigation System (“VIMS”)/Methane Mitigation System (“MMS”) in accordance with Best Management Practices (for the purposes of this Agreement “Best Management Practices” means methods that are identified in the conditions of approval for the Project imposed pursuant to the entitlement process and during the plan check process prior to issuance of building permits) or as required by 18708.001 4813-5533-2093.2 16 Applicable Law, including in response to changed, unexpected, or unanticipated conditions at the Project; (v) Buyer’s breach of this Agreement; and (vi) failure by Buyer to provide any notice, disclosure or other information required by Applicable Laws in connection with the presence or potential presence of Pre-Existing Property Conditions at or otherwise relating to the Project, provided, however, that Seller’s obligations to Buyer Indemnitees under this Section 10.1(b) shall not be excused by the mere discovery by a Buyer Indemnitee of a Pre-Existing Property Condition; and (c) Claims to the extent caused by Seller’s: (i) violation of Applicable Laws pertaining to the Pre-Existing Property Conditions from and after the Closing Date; and (ii) performance of or failure to perform Seller’s Post-Closing Mitigation Measures from and after the Closing Date. Notwithstanding anything to the contrary herein, Seller’s obligations under this Section 10.1 shall not apply to any Claims for any alleged lost profits, lost opportunity, or alleged consequential, speculative, contingent or punitive damages. 10.2 Indemnification by Buyer. Except for the Claims released by Seller pursuant to Section 11.2, Buyer agrees to the fullest extent allowed by law, to indemnify, protect, defend (with counsel satisfactory to Seller), and hold Seller (and its elected and appointed officers, officials, directors, legislative body members, managers, employees, consultants, contractors, subcontractors, attorneys, agents, invitees, and/or licensees acting on behalf of Seller; collectively “Seller Indemnitees”) harmless from and against any and all Claims (as defined in Section 11.1(a)) suffered by Seller Indemnitees, at any time or times after the Closing Date, to the extent caused by: (a) Any material misrepresentation or breach of warranty or covenant made by Buyer in this Agreement, provided that Buyer’s obligations under this Section 10.2 shall not apply to any misrepresentation or breach of warranty or covenant actually known to and waived by Seller prior to Closing; (b) The acts or negligent omissions of Buyer or any Buyer Indemnitee, including without limitation: (i) Buyer’s design, construction, operation, use, and/or maintenance of the Project; (ii) Buyer’s performance or failure to perform Buyer’s Post-Closing Mitigation Measures; (iii) Buyer’s design, construction, operation, use, monitoring, and/or maintenance of any of Buyer’s Post-Closing Mitigation Measures; and (iv) Buyer’s failure to install, operate, maintain or upgrade VIMS/MMS as in accordance with Best Management Practices or required by Applicable Law, including in response to changed, unexpected, or unanticipated conditions at the Project. Notwithstanding anything to the contrary herein, Buyer’s obligations under this Section 10.2 shall not apply to any Claims by any Buyer Indemnitee for any alleged lost profits, lost opportunity, or alleged consequential, speculative, contingent or punitive damages. The provisions of this Section 10 shall survive the Close of Escrow. 11. RELEASES. 18708.001 4813-5533-2093.2 17 11.1 By Buyer. (a) Pre-Existing Property Conditions. Effective upon the Close of Escrow, except with respect to the representations and warranties of Seller under Section 6.1 and 6.2 of this Agreement and the indemnification obligations of Seller under Sections 8 and 10.1, Buyer waives releases, remises, acquits and forever discharges Seller (and its elected and appointed officers, officials, directors, legislative body members, managers, employees, attorneys, consultants. invitees, licensees, agents, and contractors and subcontractors acting on behalf of Seller) from any and all actions, causes of action, charges, claims, compensation, costs, damages, fees (including attorneys’ fees and experts’ fees), fines, demands, judgments, losses, orders, penalties, rights, and expenses of any kind or type, and compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen (collectively, “Claims”), which Buyer has or may have, now or in the future, on account of or in any way arising from or in connection with the Pre-Existing Property Conditions. (b) Buyer’s Post-Closing Mitigation Measures. Effective upon the Close of Escrow, Buyer waives, releases, remises, acquits and forever discharges Seller, and its officers, directors, legislative body members, managers, employees and agents, and contractors and subcontractors acting on behalf of Seller, from any and all Claims to the extent arising from or in connection with (a) Buyer’s implementation of or failure to implement Buyer’s Post-Closing Mitigation Measures (as described in Section 14.1), and (b) Buyer’s failure to comply with Applicable Laws pertaining to the Pre-Existing Property Conditions and/or Buyer’s Post-Closing Mitigation Measures. (c) Buyer acknowledges that Buyer is familiar with Section 1542 of the California Civil Code, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY. Effective upon the Close of Escrow, by initialing below, Buyer expressly waives the benefits of Section 1542 of the California Civil Code with respect to the foregoing releases: Buyer’s initials:_____________ 11.2 By Seller. Effective upon the Close of Escrow, except with respect to the representations and warranties of Buyer under Section 6.3 of this Agreement and the indemnification obligations of Buyer under Sections 8 and 10.2, Seller waives, releases, remises, acquits and forever discharges Buyer, and its officers, directors, members, managers, employees and agents, consultants, invitees, licensees, and contractors and subcontractors acting on behalf of Buyer, from any and all Claims to the extent arising from or in connection with (a) Seller’s implementation of or failure to implement Seller’s Post-Closing Mitigation Measures (as described 18708.001 4813-5533-2093.2 18 in Section 14.2), and (b) Seller’s post-Closing failure to comply with Applicable Laws pertaining to the Pre-Existing Property Conditions and/or Seller’s Post-Closing Mitigation Measures. Seller acknowledges that Seller is familiar with Section 1542 of the California Civil Code, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY. Effective upon the Close of Escrow, by initialing below, Seller expressly waives the benefits of Section 1542 of the California Civil Code with respect to the foregoing release: Seller’s initials: _____________ The releases provided by Buyer and Seller pursuant to this Section 11 include releases for lost profits, lost opportunity, and consequential, speculative, contingent or punitive damages. This Section 11 shall survive the termination of this Agreement and the Close of Escrow. 12. ADDITIONAL COSTS AND OBLIGATIONS OF BUYER. Buyer acknowledges that development of the Project on a former landfill and the Pre-Existing Property Conditions will impact Buyer’s construction and operation of the Project, including requiring enhanced or modified construction techniques, managing and accommodating the presence and potential presence of hazardous materials beneath the Property, and the design, installation, operation and maintenance of various mitigation systems, all of which will increase the cost of constructing and operating the Project. Buyer agrees that it shall be solely responsible for all such costs, including each of the following: (a) Additional Development Costs. All additional development costs incurred or necessary due to the fact that development of the Project is occurring on a landfill and/or due to the presence or potential presence of Pre-Existing Property Conditions, such additional costs include the following types of requirements and costs: (1) More complex building foundation; (2) Additional geotechnical costs; (3) MMS design, installation, and maintenance; (4) VIMS design, installation, and maintenance; (5) Cap management and repair to the extent required in connection with Buyer’s construction and operation of the Project; 18708.001 4813-5533-2093.2 19 (6) Proper management and disposal of waste encountered during development; (7) Compliance with Applicable Laws, including compliance arising due to changes in Applicable Laws; (8) Delays due to discovery of unanticipated conditions; (9) Additional construction precautions due to the presence of hazardous or landfill materials; (10) Construction considerations due to existence of cap; (11) Compliance with requirements in the Closure Plans; and (12) Regulatory oversight of development activities. (b) System Upgrades. Costs to install, operate, maintain and upgrade VIMS and MMS systems, including in response to changed, unexpected, or unanticipated conditions at the Project or Property. Nothing in this Section shall be deemed or is intended to affect Seller’s obligations under Section 10.1. 13. SELLER’S COVENANTS. From the Effective Date until the Closing Date, unless this Agreement is earlier terminated pursuant to the terms hereof: 13.1 At Seller’s sole cost and expense, Seller shall maintain the Property and operate the Property in compliance with all Applicable Laws and governmental orders, including the Post-Closure Plan and Order No. 00-46, and in the same manner as before the making of this Agreement and in the same condition as it currently exists, as though Seller were retaining the Property; 13.2 Seller shall not, after the Effective Date, enter into or terminate any leases, contracts, agreements, or amendments of same, pertaining to the Property without obtaining the prior consent of Buyer; 13.3 Seller shall not encumber the Property with any liens, encumbrances, or other instruments creating a cloud on title or otherwise transferring or disposing of all or any part of the Property or any interest therein, unless the same will be removed, discharged, or paid in full on or before the Closing; and 13.4 Seller shall not offer the Property for sale or lease or otherwise solicit, make, pursue, negotiate, or accept offers for the sale or lease of the Property to any third party. 18708.001 4813-5533-2093.2 20 14. ENVIRONMENTAL POST-CLOSING OBLIGATIONS; HAZARDOUS MATERIALS; DEFINITIONS. 14.1 Buyer’s Post-Closing Obligations. Buyer acknowledges that Buyer and its experts have studied and understand the impacts, potential impacts and risks associated with the Pre-Existing Property Conditions on and relating to acquisition, development and operation of the Property and that from and after the Closing Date, Buyer shall design, develop, construct, operate, manage, and maintain the Project in accordance with Best Management Practices applicable to the Project in a manner that mitigates the adverse impacts of said Pre-Existing Property Conditions in accordance with all Applicable Laws, agreements, covenants, directives, guidance, orders, enforceable requirements, and Best Management Practices applicable to the Project and the Property, including Buyer’s obligations pursuant to the Postclosure Plan. In addition to the foregoing and Buyer’s other obligations under this Agreement, Buyer agrees that it shall implement, operate, and maintain each of the specific mitigation measures identified in Exhibit F (“Buyer’s Post-Closing Mitigation Measures”). 14.2 Seller’s Post-Closing Obligations. In addition to Seller’s other obligations under this Agreement, Seller agrees that it shall implement, operate, and maintain each of the specific mitigation measures identified in Exhibit G (“Seller’s Post-Closing Mitigation Measures”). 14.3 Hazardous Materials. As used in this Agreement, “Hazardous Materials” means any chemical, compound, material, mixture, or substance that is now or may in the future be defined or listed in, or otherwise classified or regulated pursuant to any Environmental Laws (defined below). including as a “hazardous substance”, “hazardous material”, “waste”, “hazardous waste”, “extremely hazardous waste”, “infectious waste”, “toxic substance”, “contaminant”, “pollutant”, “toxic pollutant”, or any other term or formulation intended to define, list, classify or regulate substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity. The term “Hazardous Materials” shall also include asbestos or asbestos-containing materials, radon, chrome and/or chromium, polychlorinated biphenyls, per- and polyfluoroalky substances, petroleum, petroleum products or by-products, petroleum components, oil, mineral spirits, methane, natural gas, natural gas liquids, liquefied natural gas, and synthetic gas usable as fuel, perchlorate, and methyl tert butyl ether, whether or not defined as a hazardous waste or hazardous substance in the Environmental Laws. Environmental Laws. As used in this Agreement, “Environmental Laws” means any and all federal, state and local statutes, laws (including common laws), ordinances, orders, rules, regulations, guidance documents, judgments, governmental authorizations or directives, or any other requirements of governmental authorities, as may presently exist, or as may be amended or supplemented, or hereafter enacted, relating to the presence, release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the environment or human, plant or animal health, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation and 18708.001 4813-5533-2093.2 21 Recovery Act (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Porter-Cologne Water Quality Control Act (Cal. Water Code § 13000 et seq.), the Toxic Mold Protection Act (Cal. Health & Safety Code § 26100, et seq.), the Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code § 25249.5 et seq.), the Hazardous Waste Control Act (Cal. Health & Safety Code § 25100 et seq.), the Hazardous Materials Release Response Plans & Inventory Act (Cal. Health & Safety Code § 25500 et seq.), and the Carpenter-Presley-Tanner Hazardous Substances Account Act (Cal. Health and Safety Code, Section 25300 et seq.). The provisions of this Section 14 shall survive the Close of Escrow. 15. MISCELLANEOUS. 15.1 Attorneys’ Fees. If any party employs counsel to enforce or interpret this Agreement, including the commencement of any legal proceeding whatsoever (including insolvency, bankruptcy, arbitration, mediation, declaratory relief or other litigation), the prevailing party shall be entitled to recover its reasonable attorneys’ fees and court costs (including the service of process, filing fees, court and court reporter costs, investigative fees, expert witness fees, and the costs of any bonds, whether taxable or not) and shall include the right to recover such fees and costs incurred in any appeal or efforts to collect or otherwise enforce any judgment in its favor in addition to any other remedy it may obtain or be awarded. Any judgment or final order issued in any legal proceeding shall include reimbursement for all such attorneys’ fees and costs. In any legal proceeding, the “prevailing party” shall mean the party determined by the court to most nearly prevail and not necessarily the party in whose favor a judgment is rendered. 15.2 Interpretation. This Agreement has been negotiated at arm’s length and each party has been represented by independent legal counsel in this transaction and this Agreement has been reviewed and revised by counsel to each of the Parties. Accordingly, each party hereby waives any benefit under any rule of law (including Section 1654 of the California Civil Code) or legal decision that would require interpretation of any ambiguities in this Agreement against the drafting party. 15.3 Survival. All indemnities, covenants, representations and warranties contained in this Agreement shall survive Close of Escrow. 15.4 Successors. Except as provided to the contrary in this Agreement, this Agreement shall be binding on and inure to the benefit of the Parties and their successors and assigns. 15.5 Governing Law/Venue. This Agreement shall be construed and interpreted in accordance with the laws of the State of California with venue in the court of competent jurisdiction in San Mateo County. 18708.001 4813-5533-2093.2 22 15.6 Integrated Agreement; Modifications. This Agreement contains all the agreements of the Parties concerning the subject hereof any cannot be amended or modified except by a written instrument executed and delivered by the parties. There are no representations, agreements, arrangements or understandings, either oral or written, between or among the parties hereto relating to the subject matter of this Agreement that are not fully expressed herein. In addition there are no representations, agreements, arrangements or understandings, either oral or written, between or among the Parties upon which any party is relying upon in entering this Agreement that are not fully expressed herein. 15.7 Severability. If any term or provision of this Agreement is determined to be illegal, unenforceable, or invalid in whole or in part for any reason, such illegal, unenforceable, or invalid provisions or part thereof shall be stricken from this Agreement, any such provision shall not be affected by the legality, enforceability, or validity of the remainder of this Agreement. If any provision or part thereof of this Agreement is stricken in accordance with the provisions of this Section, then the stricken provision shall be replaced, to the extent possible, with a legal, enforceable and valid provision this is in keeping with the intent of the Parties as expressed herein. 15.8 Notices. Any delivery of this Agreement, notice, modification of this Agreement, collateral or additional agreement, demand, disclosure, request, consent, approval, waiver, declaration or other communication that either party desires or is required to give to the other party or any other person shall be in writing. Any such communication may be served by email, personally, or by nationally recognized overnight delivery service (i.e., Federal Express) which provides a receipt of delivery, or sent by prepaid, first class mail, return receipt requested to the party’s address as set forth below: To Buyer: Ensemble Investments, LLC 444 West Ocean Boulevard Suite 650 Long Beach, CA 90802 Attn: Senior Vice President, Conrad Garner Telephone No.: (562) 435-4857 [email protected] With a Copy to: Coblentz Patch Duffy & Bass LLP One Montgomery Street, Suite 3000 San Francisco, CA 94104 Attn: Frank Petrilli Telephone No.: (415) 268-0503 [email protected] To Seller: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager, Mike Futrell Telephone No.: (650) 829-6620 Fax (650) 829-6609 [email protected] 18708.001 4813-5533-2093.2 23 With a Copy to: Meyers Nave PC 1999 Harrison Street, 9th Floor Oakland, CA 94612 Attn: City Attorney, Sky Woodruff Telephone No.: [_____________] [email protected] If to Escrow Holder: Tyler Micklebost Chicago Title Insurance Co One Embarcadero Center, Suite 250 San Francisco, CA 94111 Telephone No.: (415) 291-5109 [email protected] Any such communication shall be deemed effective upon personal delivery or on the date of first refusal to accept delivery as reflected on the receipt of delivery or return receipt, as applicable. Any party may change its address by notice to the other party. Notice by email transmission shall be deemed given upon verification of receipt if received before 5:00 p.m. on a regular business day, or else on the next business day. Each party shall make an ordinary, good faith effort to ensure that it will accept or receive notices that are given in accordance with this section and that any person to be given notice actually receives such notice. 15.9 Time. Time is of the essence to the performance of each and every obligation under this Agreement. 15.10 Days of Week. If any date for exercise of any right, giving of any notice, or performance of any provision of this Agreement falls on a Saturday, Sunday or holiday, the time for performance will be extended to 5:00 p.m. on the next business day. 15.11 Reasonable Consent and Approval. Except as otherwise provided in this Agreement, whenever a party is required or permitted to give its consent or approval under this Agreement, such consent or approval shall not be unreasonably withheld or delayed. If a party is required or permitted to give its consent or approval in its sole and absolute discretion or if such consent or approval may be unreasonably withheld, such consent or approval may be unreasonably withheld but shall not be unreasonably delayed. 15.12 Further Assurances. The Parties shall at their own cost and expense execute and deliver such further documents and instruments and shall take such other actions as may be reasonably required or appropriate to carry out the intent and purposes of this Agreement. 15.13 Waivers. Any waiver by any party shall be in writing and shall not be construed as a continuing waiver. No waiver will be implied from any delay or failure to take action on account of any default by any party. Consent by any party to any act or omission by another party shall not be construed to be consent to any other subsequent act or omission or to waive the requirement for consent to be obtained in any future or other instance. 18708.001 4813-5533-2093.2 24 15.14 Signatures/Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any one of such completely executed counterparts shall be sufficient proof of this Agreement. 15.15 Date and Delivery of Agreement. Notwithstanding anything to the contrary contained in this Agreement, the parties intend that this Agreement shall be deemed effective, and delivered for all purposes under this Agreement, and for the calculation of any statutory time periods based on the date an agreement between parties is effective, executed, or delivered, as of the Effective Date. 15.16 Representation on Authority of Parties. Each person signing this Agreement represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver this Agreement. Each party represents and warrants to the other that the execution and delivery of the Agreement and the performance of such party’s obligations hereunder have been duly authorized and that the Agreement is a valid and legal agreement binding on such party and enforceable in accordance with its terms. 15.17 Possession. At Closing, Seller shall deliver sole and exclusive possession of the Property to Buyer. 15.18 Approvals. Whenever this Agreement calls for Seller approval, consent, extension or waiver, the written approval, consent, or waiver of the Seller’s City Manager or his or her designee(s) shall constitute the approval, consent, extension or waiver of the Seller, without further authorization required from the Seller’s Council. The Seller hereby authorizes the City Manager and his or her designee(s) to deliver any such approvals, consents, or extensions or waivers as are required by this Agreement, or that do not otherwise reduce Seller’s rights under this Agreement, and to waive requirements under this Agreement, on behalf of the Seller. 15.19 Force Majeure. Buyer shall not be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any obligation under this Agreement, when and to the extent such failure or delay is caused by a Force Majeure Event. The failure or inability of Buyer to perform its obligations under this Agreement due to a Force Majeure Event shall be excused for the duration of the Force Majeure Event and extended for a period equivalent to the period of such delay. Buyer shall give Seller notice within five (5) business days of the commencement of the Force Majeure Event, explaining the nature or cause of the delay and stating the period of time the delay is expected to continue. Buyer shall use diligent efforts to end the failure or delay and ensure the effects of such Force Majeure Event are minimized. Buyer shall resume the performance of its obligations as soon as reasonably practicable after the removal of the cause. As used herein, “Force Majeure Event” is any of the following events: (i) acts of God; (ii) floods, fires, earthquakes, explosions, or other natural disasters; (iii) war, invasions, hostilities (whether war is declared or not), terrorist threats or acts, riots or other civil unrest; (iv) governmental authority, proclamations, orders, laws, actions, or requests; (v) embargoes or blockades; (vi) epidemics, pandemics, or other national or regional emergencies; (vii) strikes, labor stoppages or slowdowns, or other industrial disturbances; and (viii) shortages of supplies, adequate power, or transportation facilities. 18708.001 4813-5533-2093.2 25 15.20 Environmental Review. This Agreement has been reviewed with respect to the applicability of the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) (“CEQA”). City staff has determined that entering into this Agreement does not have the potential for creating a significant effect on the environment and is therefore exempt from further review under CEQA pursuant to State CEQA Guidelines Section 15060(c)(3) because it is not a project as defined by the CEQA Guidelines Section 15378. Entering into this Agreement does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment. Nothing in this Agreement commits the City to a particular course of action with respect to the proposed Project, and the City will not take any discretionary actions committing it to a particular course of action in connection with the proposed Project until the City has completed, considered and certified/approved any additionally required CEQA environmental review documents. SIGNATURES ON FOLLOWING PAGE 18708.001 4813-5533-2093.2 26 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. SELLER: CITY OF SOUTH SAN FRANCISCO By: Mike Futrell City Manager ATTEST: By: City Clerk APPROVED AS TO FORM: By: Sky Woodruff City Attorney BUYER: ENSEMBLE INVESTMENTS, LLC, a California Limited Liability Company By: Title: 18708.001 4813-5533-2093.2 27 LIST OF EXHIBITS Exhibit A Legal Description/Parcel Map Exhibit B BCDC Permit Exhibit C Development Agreement Term Sheet Exhibit D Grant Deed Exhibit E Postclosure Responsibility Matrix Exhibit F Buyer’s Post-Closing Mitigation Measures Exhibit G Seller’s Post-Closing Mitigation Measures 18708.001 4813-5533-2093.2 Exhibit A Exhibit A LEGAL DESCRIPTION/PARCEL MAP 18708.001 4813-5533-2093.2 Exhibit B Exhibit B BCDC PERMIT 18708.001 4813-5533-2093.2 Exhibit C Exhibit C DEVELOPMENT AGREEMENT TERM SHEET Development Agreement (DA) - Term Sheet Seller: City of South San Francisco Buyer: Ensemble Investments, Inc. Property: Property Address Parcel Number 367 Marina Boulevard South San Francisco, CA 94080 015-010-970 Property Plan: Up to 350 rooms; full-service hotel facility which is the quality of a “AAA” (or similar rating) four diamond or higher hotel, comparable to a Hilton Curio or Marriott Autograph Collection hotel. Term Comments 1.) Execute and implement an Operations & Maintenance Agreement with the City providing the City and/or the Water Board with financial assurance for completion of the Buyer’s Post- Closing Mitigation Measures. 2.) Execute and implement a Maintenance and Security Agreement of site after execution of PSA. - Maintain erosion control of site. - Installation of temporary fence within timeframe of installation of temporary BCDC trail. - Installation of temporary frontage improvements. 3.) Developer to construct and maintain a temporary north-south Bay Trail connection and a permanent north- south Bay Trail connection on site, at Developer’s expense, as described in San Francisco Bay Conservation and Development Commission (“BCDC”) Permit No. 2017-007-02 - ADA compliant - Complies with BCDC standards and existing Permit No. 2017.007.02, and any amendments. - Ensemble to agree to any amendments BCDC places on the condition. 18708.001 4813-5533-2093.2 Exhibit C - Temporary path to be constructed no later than 6 months following the completion of Phase IC work, which is currently estimated to be completed by July 1, 2022; parties anticipate that temporary path will be completed prior to finalizing the DA, in which case the DA will only address the permanent path. - Permanent path to be constructed within the hotel development and open to the public upon opening of the hotel, but no later than 36 months after the closure of the temporary path. - constructed of a durable, all- weather accessible material. 4.) Developer to enter into a Transient Occupancy Tax (TOT) Rebate Agreement with City. Agreement Parameters: - 50% TOT rebate for fifteen years; - The total TOT rebate is capped at the 15-year projection of $44,530,000 - If the hotel exceeds revenue forecasts, the agreement has a condition to allow “homerun insurance,” for the City to also benefit in the event of a sale; City to receive 5% of Net Proceeds of a Property Sale (defined as selling greater than 50% ownership) limited and reduced to the extent Investors receive a minimum 20.00% IRR at time of sale. 5.) Condition that memorializes Developer’s commitment to agree to a future Community Facilities District (CFD) assessment of up to $1 per 18708.001 4813-5533-2093.2 Exhibit C square foot, if formed within 120 months of the execution of the DA. 6.) Developer is responsible for the installation of a new pump station onsite, to accommodate for additional flow from the hotel, as detailed in the 2011 Successor Agency/Kilroy DDA (Section 3.3.2a “Phase IIC Improvements”). - The initial cost of the new sewer pump station is shared between the Successor Agency ($1,822,124) and Kilroy ($839,490); the Successor Agency currently is holding these Successor Agency funds in a dedicated reserve account. Ensemble will agree to contribute $250,000 towards the construction costs, with the City/Successor Agency being responsible for additional cost-overruns. This would include design and installation (but not maintenance). 7.) Developer is responsible for allowing access for methane monitoring of the closed landfill. Developer is also obligated to ensure that the design of the hotel and surrounding site will accommodate and permit access for methane monitoring. - Must allow access for any third party consultant or Successor Agency representatives to maintain methane monitoring subject to applicable regulatory monitoring procedures. 8.) Developer and City to adhere to all dates addressed in Master Schedule 18708.001 4813-5533-2093.2 Exhibit C Master Development Schedule – October 11, 2021 Activity Milestones Submit application for Precise Plan No later than May 1, 2022 Receive Development Agreement Approval (first reading) No later than December 16, 2022 Receive Entitlement Approval No later than December 16, 2022 Closing of Escrow No later than December 31, 2022 Submit application for Building Permit No later than December 31, 2023. Delivery of Proof of an Approved Construction Loan from a Reputable Lender Within 18 months of submitting for Building Permit, but no later than June 30, 2025. Delivery of a Final Construction Contract Within 18 months of submitting for Building Permit, but no later than June 30, 2025. Construction Commences Within 19 months of submitting for building permit, but no later than July 31, 2025. Substantial Completion of Construction Within 36 months of construction commencement; targeted for September 2027 (26-month schedule), but no later than June 2028 (35-month schedule). Estimated Opening of hotel Targeted November 2027, but no later than August 2028. *Note that all target dates are subject to automatic extension for delays due to factors beyond Developer’s reasonable control in accordance with the force majeure provisions of the Development Agreement. 18708.001 4813-5533-2093.2 Exhibit D Exhibit D GRANT DEED Recording Requested by and when Recorded, return to: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 & 27388.1(a)(2) SUBJECT TO DOCUMENTARY TRANSFER TAX OF $1,155.00 PER REVENUE AND TAXATION CODE § 11911 APN: 015-010-600 (SPACE ABOVE THIS LINE RESERVED FOR RECORDER’S USE) -FORM OF A- GRANT DEED RECITALS A. The City of South San Francisco (“Grantor” or “City”) is the owner of certain real property located in the City of South San Francisco California, also known as San Mateo County Assessor’s Parcel Number: 015-010-970 and more particularly described in the legal description and shown as Parcel 6 on Parcel Map 17-0002 recorded on September 25, 2017, both attached hereto and incorporated herein as Exhibit A (the “Property”). B. On March 23, 2011, the City Council approved the Oyster Point Specific Plan and certified the Oyster Point Specific Plan and Phase 1 Project Environmental Impact Report which, among other things, planned for and analyzed the potential environmental impacts of developing a new full-service hotel with up to 350 rooms and approximately 40,000 square feet of retail uses on the Property (“Project”). C. A Disposition and Development Agreement was executed on March 23, 2011, between Oyster Point Ventures, LLC, the South San Francisco Redevelopment Agency, and the City of South San Francisco (“DDA”) for the master development of Oyster Point through a multi- phased project, which included the potential development of a hotel on an approximately 4.7 acre portion of the Property known as the “Hotel Site,”: among other things, the DDA requires Oyster Point Development, LLC, to perform certain site work, grading, and installation of infrastructure to prepare the Hotel Site for development. D. In 2017, the City solicited proposals from qualified hotel developers through an RFQ/RFP process, and upon review of the responsive proposals, the City’s Joint Housing Standing Committee made a recommendation at its December 11, 2017, meeting that the City enter into an Exclusive Negotiating Rights Agreement (“Original ENRA”) with Ensemble Investments, LLC 18708.001 4813-5533-2093.2 Exhibit D for the development of a new full-service hotel on the Hotel Site. The City approved the Original ENRA with Ensemble Investments, LLC on April 11, 2018 and the Parties negotiated terms and conditions of the purchase and development of the Hotel Site pursuant to that Original ENRA. As part of the Original ENRA, Ensemble Investments, LLC previously deposited $100,000 to the City (“ENRA Deposit”) to be held in an interest bearing account of the City and credited towards Ensemble Investments, LLC’s purchase price of the Hotel Site. The Original ENRA was subsequently amended by the First Amendment to the Exclusive Negotiating Rights Agreement (“First Amendment,” and together with the Original ENRA, collectively, referred to herein as the “ENRA”) and the term of the ENRA was subsequently extended three additional times. The ENRA Deposit with any and all interest accrued thereon, will be applied towards the Purchase Price at Closing. E. Ensemble Investments, LLC (“Grantee”) has made an offer to purchase the Property, and the City agrees to sell the Property to Grantee, subject to the terms and conditions of the purchase and sale agreement (“PSA”); and, F. The City and Grantee agree that the purpose of this Grant Deed is to convey the property to the Grantee as part of the Closing as set forth in Section 5 of the PSA pursuant to the terms and at the times set forth in the PSA; and, NOW THEREFORE, in consideration of the mutual benefits and obligations herein, receipt of which is hereby acknowledged, the City of South San Francisco, a municipal corporation, (the “Grantor”) hereby grants to Ensemble Investments, LLC (the “Grantee”) all that real property located in the City of South San Francisco, County of San Mateo, State of California and more particularly described in Exhibit A attached hereto and incorporated in this grant deed (“Grant Deed”) by this reference. This Grant Deed may be executed in counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. SIGNATURES ON FOLLOWING PAGES. 18708.001 4813-5533-2093.2 Exhibit D IN WITNESS WHEREOF, Grantor has executed this Grant Deed as of ________________, 2022. GRANTOR THE CITY OF SOUTH SAN FRANCISCO By: _______________________________ Mike Futrell City Manager ATTEST: By: _______________________________ City Clerk APPROVED AS TO FORM: By: _______________________________ Sky Woodruff City Attorney GRANTEE Ensemble Investments, LLC By: _______________________________ SIGNATURES MUST BE NOTARIZED 18708.001 4813-5533-2093.2 Exhibit D EXHIBIT A to Grant Deed LEGAL DESCRIPTION 18708.001 4813-5533-2093.2 Exhibit D A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) ) ss. County of San Mateo ) On_____________________, 20____ before me, _____________________, a Notary Public, in and for said State and County, personally appeared _______________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. _______________________________ NOTARY PUBLIC 18708.001 4813-5533-2093.2 Exhibit D A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) ) ss. County of San Mateo ) On_____________________, 20____ before me, _____________________, a Notary Public, in and for said State and County, personally appeared _______________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. _______________________________ NOTARY PUBLIC 5003696.1 18708.001 4813-5533-2093.2 Exhibit E Exhibit E POSTCLOSURE RESPONSIBILITY MATRIX 18708.001 4813-5533-2093.2 Exhibit F Exhibit F BUYER’S POST-CLOSING MITIGATION MEASURES Buyer shall perform, at Buyer’s sole expense, each of Buyer’s Post-Closing Mitigation Measures identified in this Exhibit F. The measures identified herein are not intended as Buyer’s sole post- closing obligations with respect to the Pre-Existing Property Conditions and shall not reduce or otherwise diminish Buyer’s other obligations under the Agreement with respect to such conditions or otherwise. Capitalized terms not specifically defined herein shall have the meaning prescribed in the Agreement. A. Site Security 1. Provide site security for the Property and all building(s) at the Property. Security features should be designed to prevent unauthorized access by the general public. Building security features may include barriers and/or restricted access signage and alarm systems. B. Engineering Measures - Fill /Capping/Construction Activities 1. Install a minimum of nine (9) feet of clean fill or as otherwise engineered by a qualified civil engineer and subject to City Public Works approval and building plan check within the building footprint area above the landfill cap. Outside of the building footprint, utility trenches shall be located at least twelve (12) inches above the top of the landfill cap within clean fill, except to the extent necessary to connect to existing utility connections. Any utility connections within the cap or below the cap shall occur in trenches with a protective clay layer and clean backfill as engineered by a qualified civil engineer subject to City Public Works approval and building plan check. 2. Install a geotextile fabric (as a marker) on top of the erosion resistant layer (i.e. the landfill cap) so the top of the cap can be identified during future construction activities. 3. Install all landscaping and irrigation systems at elevations within the newly- installed fill layer above the cap to protect cap integrity. 4. Grade/maintain the Property to prevent surface water accumulation. Install and maintain survey monuments on the Property to monitor landfill settlement. Quarterly inspections are required to ensure monuments are intact and usable and any repairs or replacement are performed as necessary. Installation of at least two permanent survey monuments are required so that the location and elevation of refuse, final cover, and landfill gas system components can be determined throughout the post-closure period. Additionally, monuments will be surveyed every five years and settlement maps will be produced throughout the post-closure period or until settlement has stopped. 18708.001 4813-5533-2093.2 Exhibit F C. Engineering Measures - MMS/Building 1. Design, install and operate a methane mitigation and monitoring system (MMS) approved in advance by the Water Board and City in building structures. The MMS shall meet the requirements of Title 27 CCR Sections 20931 and 21190, for structures on landfilled areas, and of those listed in the PCMMP. The MMS shall also be designed in general accordance with methane mitigation standards used by Los Angeles County Public Works' Gas Hazard Mitigation Policy and Standards (https://dpw.lacounty.gov/epd/swims/onlineservices/methane-mitigation- standards.aspx). At a minimum, the MMS shall include a vapor barrier membrane (VBM) combined with a horizontal collection and venting system below the VBM. The venting system vents vapors through vertical riser piping that extends from beneath the building to above the roof level. Mechanical blowers will be on standby for use as an active venting system in the event elevated methane levels are detected by electronic sensors installed at various locations within the buildings. The MMS shall also be designed to mitigate potential vapors of other contaminants, including VOCs. 2. Design and install trench dams in utility trenches to prevent migration of methane and/or volatile organic compounds (VOCs) into buildings. 3. All building utilities, methane membrane and collection pipes should be connected/adhered to underside of building foundation slab or installed in a manner that prevents damage from potential future ground settlement. 4. Utilities should be designed to accommodate potential future ground settlement in areas outside of building footprint. 5. Perform all required inspections, maintenance, monitoring and reporting in connection with the approved MMS meeting the requirements of Title 27 CCR Sections 20931 and 21190, for structures on landfilled areas, the requirements listed in the PCMMP and other applicable requirements and regulations. Provide copies of all reports to the City. 18708.001 4813-5533-2093.2 Exhibit F D. Site Maintenance, Monitoring and Reporting 1. Maintain all hardscapes and softscapes at the Property. Hardscapes are building slabs, slab on grade, roadways, sidewalks and any other hard surfaces over the final landfill cover (“cap”); softscapes are landscaped areas over the cap. Maintain all irrigation systems associated with softscape. Inspect all final cover at the Property, including buildings, hardscape and softscape at the Property monthly during the wet season and quarterly during the dry season. In the event corrective action is warranted, promptly implement any necessary corrective action. 2. Prepare and implement an Operation and Maintenance (“O&M”) Plan for the Property, approved in writing by the San Francisco Regional Water Quality Control Board (“Water Board”) to address routine inspections, maintenance and reporting for the: a) landfill cap; b) methane and VOC collection, monitoring and alarm systems; and c) groundwater, surface water and leachate monitoring systems, as required. 3. Prepare annual maintenance and monitoring reports relating to implementation of the O&M Plan for the Property, methane and VOC monitoring plan, surface water sampling monitoring plan, and elevation monitoring plan, as required. Submit maintenance and monitoring reports to stakeholders. 4. Prepare and implement a methane and volatile organic compound (“VOC”) monitoring plan for the Property, including the installation of any necessary monitoring wells, approved in writing by the Water Board that describes the frequency and procedures for monitoring in structures and perimeter areas of the site and required corrective actions if monitoring results exceed established thresholds. Perform required reporting and provide copies of all reports to the City. Quarterly monitoring is required within subsurface vaults, utilities and any other subsurface structures where gas may potentially build up. At a minimum, a portable landfill gas meter will be used for subsurface structure monitoring. 5. Prepare and implement an elevation monitoring plan for the Property. 6. Review and properly update all maintenance and monitoring plans and ensure that corrective actions are implemented in a timely manner. E. Emergency Response Measures 1. Prepare and implement a post-closure Emergency Response Plan (ERP) for the Property outlining the procedures to be followed in the event of an emergency (such as fires, explosions, earthquakes, floods, vandalism, surface drainage problems, waste releases, etc.). Procedures for dealing with each type of emergency should be included in the ERP. Multiple agencies (fire, police, City, etc.) should be involved with preparation of the plan. 2. Require annual (at a minimum) updates and training for the ERP. 18708.001 4813-5533-2093.2 Exhibit F 3. For planned or emergency subsurface activities, implement the ERP, assess damage and perform corrective action as necessary. F. Administrative/Legal Measures – Site Maintenance/Cap/Construction Activities 1. Have entered into a binding voluntary oversight agreement with the Water Board (i) pursuant to which the Water Board will oversee Buyer’s compliance with the requirements of Order No. 00-46, the Closure Plans, and related Applicable Laws, relating to Buyer’s acquisition, development, operation and use of the Property, and (ii) confirming that with respect to such requirements, the Buyer is the party primarily responsible for such compliance. 2. Comply with the requirements of Order No. 00-46, the Closure Plans, and related Applicable Laws, relating to Buyer’s acquisition, development, operation and use of the Property. 3. Execute and implement an O&M Agreement with the City providing the City and/or the Water Board with financial assurance for completion of the Buyer’s Post-Closing Mitigation Measures. 4. Establish and assure an automatic dig alert notification to City Public Works in advance of any soil disturbance at the Property. 5. All construction activities that potentially disturb landfill cap shall be performed only pursuant to a Soil Management Plan (SMP) approved in advance by the Water Board. 6. Record a land use covenant prohibiting construction/subsurface work unless City is notified in advance and the work is performed pursuant to the Water Board- approved SMP. 7. Require hotel personnel to notify City if geotextile “marker” fabric is encountered or visible. 18708.001 4813-5533-2093.2 Exhibit G Exhibit G SELLER’S POST-CLOSING MITIGATION MEASURES Seller shall perform, at Seller’s sole expense, each of Seller’s Post -Closing Mitigation Measures identified in this Exhibit G. Nothing herein shall reduce or otherwise diminish Seller’s other obligations under the Agreement. Capitalized terms not specifically defined herein shall have the meaning prescribed in the Agreement. G. Site Security 1. Provide site security for landfill areas other than the Property (“City Landfill Areas”). Security features should be designed to prevent unauthorized access by the general public and may include barriers, and restricted access signage, locks and confined space signage for subsurface vaults and utility trenches and locking well caps for landfill gas and groundwater monitoring wells. H. Site Maintenance, Monitoring and Reporting 1. Cover. Inspect final cover on all areas of the City Landfill Areas monthly during the wet season and quarterly during the dry season. In the event corrective action is warranted in the City Landfill Areas, promptly implement any necessary corrective action. 2. Groundwater and Leachate Monitoring Systems. Inspect and maintain required groundwater and leachate monitoring systems for the City Landfill Areas. Perform required monitoring and reporting. 3. Surface Water Monitoring Systems. Sample and monitor required surface water monitoring system, inclusive of stormwater drainage piping and associated catch basins and drainage channels, on the City Landfill Areas. Perform required system maintenance and reporting. 4. Surface Water Sampling Monitoring Plan. Prepare and implement a surface water sampling monitoring plan for the City Landfill Areas that describes the procedures for monitoring of surface water and the storm drainage system and required corrective actions if monitoring results exceed plan-established thresholds. 5. Elevation. Prepare and implement an elevation monitoring plan for the City Landfill Areas. 6. Landfill Gas Monitoring Systems. Inspect and maintain required landfill gas monitoring systems for the City Landfill Areas. Perform required inspection and reporting. There are no landfill gas monitoring components located on the Property. 18708.001 4813-5533-2093.2 Exhibit G 7. Methane/VOC Wells. Install methane/VOC monitoring wells outside and separate from buildings on City Landfill Areas. Perform required monitoring and reporting. 8. Methane/VOC Monitoring. Monitor for methane/VOCs within subsurface structures on City Landfill Areas. Perform required reporting. Quarterly monitoring is required within subsurface vaults, utilities and any other subsurface structures where gas may potentially build up. At a minimum, a portable landfill gas meter will be used for subsurface structure monitoring. 9. O&M Plan. Prepare and implement an Operation and Maintenance (“O&M”) Plan for the City Landfill Properties, approved in writing by the San Francisco Regional Water Quality Control Board (“Water Board”) to address routine inspections, maintenance and reporting for the: a) landfill cap; b) methane and VOC collection, monitoring and alarm systems; and c) groundwater, surface water and leachate monitoring systems. 10. O&M Reporting. Prepare annual maintenance and monitoring reports relating to implementation of the O&M Plan, methane and VOC monitoring plan, surface water sampling monitoring plan, and elevation monitoring plan, as required. Submit maintenance and monitoring reports to stakeholders. 11. Methane and VOC Monitoring Plan. Prepare and implement a methane and volatile organic compound (“VOC”) monitoring plan for the City Landfill Areas approved in writing by the Water Board that describes the frequency and procedures for monitoring in structures and perimeter areas of the site and required corrective actions if monitoring results exceed established thresholds. Perform required reporting. Quarterly monitoring is required within subsurface vaults, utilities and any other subsurface structures where gas may potentially build up. At a minimum, a portable landfill gas meter will be used for subsurface structure monitoring. I. Survey Monuments 1. Install and maintain survey monuments on the City Landfill Property to monitor landfill settlement. Quarterly inspections are required to ensure monuments are intact and usable, and any repairs or replacement are performed as necessary. Installation of at least two permanent survey monuments are required so that the location and elevation of refuse, final cover, and landfill gas system components can be determined throughout the post-closure period. Additionally, monuments will be surveyed every five years and settlement maps will be produced throughout the post-closure period or until settlement has stopped. J. Emergency Response Measures 18708.001 4813-5533-2093.2 Exhibit G 1. Prepare and implement a post-closure Emergency Response Plan (ERP) for the City Landfill Property outlining the procedures to be followed in the event of an emergency (such as fires, explosions, earthquakes, floods, vandalism, surface drainage problems, waste releases, etc.). Procedures for dealing with each type of emergency should be included in the ERP. Multiple agencies (fire, police, City, etc.) should be involved with preparation of the plan. 2. Require annual (at a minimum) updates and training for the ERP. 3. For planned or emergency subsurface activities, implement the ERP, assess damage and perform corrective action as necessary. 3886803.2