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HomeMy WebLinkAboutReso 91-2008RESOLUTION NO. 91-21)08 CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING AN EXCLUSIVE NEGOTIATION RIGHTS AGREEMENT WITH OYSTER POINT VENTURES LLC FOR POTENTIAL DEVELOPMENT OF THE OYSTER POINT MARINA ANDS OYSTER POINT BUSINESS PARK WHEREAS, City is the owner of certain real property located in the City and commonly known as the Oyster Point Marina ("Property"); and WHEREAS, City desires to redevelop the Property to provide public open space, active retail, food and beverage establishments, lodging, and other revenue-generating activities for the purpose of providing public amenities and creating revenue that will pay for the costs, maintenance, and operations of the Property; and WHEREAS, City and the San Mateo County Harbor District ("Harbor District") have established a joint powers authority that governs the development, operations, and maintenance of the Property; and WHEREAS, Harbor District has heretofore entered into certain long-term leases with King Ventures for certain portions of the Property ("King Leases"), pursuant to which King Ventures is required to develop, construct, and maintain a hotel and a commercial, village-style complex; and WHEREAS, to date, King Ventures has failed to satisfy its obligations pursuant to the King Leases; and WHEREAS, Oyster Point Ventures LLC, a California limited liability company ("Developer"), is the owner of certain property located in the City, commonly known as the Oyster Point Business Park ("Business Park"), and adjacent to the Property; and WHEREAS, Developer desires to redevelop the Business Park as a modern research and development life sciences campus with additional public amenities ("Campus"); and WHEREAS, Developer has negotiated a purchase and sale agreement to acquire King Venture's leasehold interest in the Property; and WHEREAS, Developer has proposed an integrated development of the Property and the Business Park to capitalize on the benefits of a public-private collaboration and complimentary uses of the Property and Business Park; and WHEREAS, Developer is interested in acquiring a portion of the Property for the purpose of developing a larger Campus, commercial/retail building, a hotel, and public parks; and WHEREAS, the Developer has requested the exclusive right to collaborate with City to redevelop the Oyster Point Business Park and the Property in .an integrated project and negotiate with City for the purpose of reaching agreement on a project description, appropriate land uses, economic feasibility, and a disposition and development agreement, owner participation agreement or other definitive agreement whose terms and conditions would govern any conveyance of the Property and the development of the Property; and WHEREAS, City desires to grant Developer the exclusive right to collaborate and negotiate with City with regard to development of the Property; and WHEREAS, the City Attorney has prepared an Exclusive Negotiation Rights Agreement ("Agreement") with Developer substantially in the form on file with the City Clerk to reflect the terms and conditions of such exclusive collaboration and negotiation. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco, does hereby: 1. Approve the Agreement substantially in the form on file with the City Clerk. 2. Authorize the City Manager to execute the Agreement; to make revisions to the Agreement, with review and approval by the City Attorney, which do not materially or substantially increase the City's obligations thereunder; to sign all documents; to make all approvals and take all actions necessary or appropriate to carry out and implement the intent of this Resolution. 3. Directs City staff to pursue negotiations with Developer regarding a project description, appropriate land uses, and economic feasibility of an integrated development of the Property and the Business Park and to prepare a framework agreement and other definitive agreement whose terms and conditions shall govern disposition and development of the Property if the City Council approves of a project description. 2 I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a regular meeting held on the 27th day of August 2008 by the following vote: AYES: Councilmembers Mark N. Addie~o Richard A. Garbarino, Kevin Mullin, MaXor Pro Tem Karyl Matsumoto and Mayor Pedro Gonzalez NOES: None ABSTAIN: None ABSENT: None ATTEST: 3 M&F DRAFT 21 August 2008 For discussion purposes on~~ EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT by and between CITY OF SOUTH SAN FRANCISCO and OYSTER POINT VENTURES, LLC THIS EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT (this "Agreement") is entered into effective as of , 2008 ("Effective Date") by and between the City of South San Francisco, a municipal corporation ("City") and Oyster Point Ventures LLC, a California limited liability company ("Developer"). City and ]Developer are hereinafter collectively referred to as the "Parties." RECITALS A. City is the owner of certain real property located in the City and commonly known as the Oyster Point Marina ("Property"), as shown on the parcel map attached hereto as Exhibit A ("Parcel Map"). The Property is located within the Downtown Redevelopment Project Area (the "Project Area") established by the Redevelopment Plan adopted for the Project Area pursuant to Ordinance No. 1056-89, adopted on July 1'2, 1989 (as subsequently amended). B. City desires to redevelop the Property to provide public open space, active retail, food and beverage establishments, lodging, and other revenue-generating activities for the purpose of providing public amenities and creating revenue that at least will pay for the costs, maintenance and operations of the Property. City and the San Mateo County Harbor District ("Harbor District") have entered into agreements related to the development, operations, and maintenance of the Property. C. Developer recently acquired and is the owner of certain property located in the City, commonly known as the Oyster Point Business Park ("Business Park"), and adjacent to the Property as shown on the Parcel Map. Developer acquired the; Business Park for the specific purpose of redeveloping the Business Park as a modern research and development life sciences campus with substantial public amenities ("Life Sciences Campus"). D. In light of the City's expressed interest in the redevelopment of the Oyster Point Marina, Developer has proposed apublic-private collaboratio~i that could plan and carry out an integrated development of the Property and the Business Park to provide the City and Developer the mutual benefits of complementary uses of the City Property and Business Park, and revenues for the City to implement its Oyster Point Marina redevelopment plans. E. The Harbor District has heretofore entered into certain long-term. leases with King Ventures for certain portions of the Property (the "King Leases"), as shown on the Parcel Map. 7'he King Leases require King Ventures to develop, construct, and maintain a hotel and a commercial, village-style complex, but to date, King Venture:; has not accomplished the goals and obligations pursuant to the King Leases. F. To allow the City and Developer to evaluate acid possibly to implement a common vision for collaborative development, Developer has acquired an option to acquire King Ventures' leasehold interests in the Property. MN 1133407-4 1 Oyster Point Marina sr-2561 4 t 6 Exclusive Negotiation Rights Agreement s-z~-2oos G. For the purpose of implementing such a collaborative development effort, Developer is interested in reaching an agreement under which the City and the Developer would establish a common approach to the development of the Property and the Business Park; Developer would acquire a portion of the Property, on which it would develop a larger Life Sciences Campus in conjunction with the Business Park; and. City and Developer would work collaboratively in the development of City's retained portion oiFthe Property for commercial/retail uses, a hotel, and public recreational space, as more particularly described herein. H. The City Council directed staff to pursue negotiations with Developer regarding this proposal, and Developer's possible development of the Project on the Property, and authorized City staff to prepare for consideration by the City Council an agreement granting Developer exclusive rights to negotiate for the purpose of reaching a final agreement on the details of such a collaborative effort and land exchange. The elements of negotiation will include appropriate land uses, economic feasibility, and a disposition and development agreement, owner participation agreement, or other definitive agreement ("Definiitive Agreement") whose terms and conditions would govern the conveyance of property interests and development of the Property. L As the first stage of work under this Agreement, and in recognition of the substantial ongoing risk and costs Developer will incur by acquiring the King Leases, conducting studies, and preparing initial designs of improvements for the ]Property in conjunction with the Business Park, the Parties intend to prepare a preliminary framework agreement ("Framework Agreement"), as described in more detail be?ow, for consideration by the City Council. The Framework Agreement will establish a more precise descriptic-n of the proposed development, the roles and responsibilities of the Parties, timeframes, and other matters appropriate to guide the process of CEQA review, consideration of project approvals, and creation. of a Definitive Agreement for the collaborative redevelopment of the Property. NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt rind sufficiency of which are hereby acknowledged, the Parties agree as follows. 1. Good Faith Efforts to Negotiate. The Parties shall u;~e their best efforts to successfully negotiate, first, a Framework Agreement and, later, a Definitive Agreement which shall describe the terms and conditions governing disposition of the City Property and development of the Project. These negotiations may also involve the Redevelopment Agency of the City of South San Francisco and Harbor District. The Parties shall diligently and in good faith pursue such negotiations. Furthermore, the Parties shall use reasonable efiEorts to obtain any third-party consent, authorization, or approval required in connection with the negotiations contemplated hereby. Without limiting the generality of the foregoing, Developer expressly acknowledges that any Definitive Agreement resulting from negotiations contemplated herein shall become effective only if a Definitive Agreement is approved by the City Council following notice and hearing as required by applicable law and that the Project maybe constructed only upon MN 1 133407-4 2 Oyster Point Marina si-zs6t416 Exclusive Negotiation Rights Agreement ~-Z ~ -Zoos compliance with all other requirements of law, including without limitation the California Environmental Quality Act. 2. Developer's Exclusive Right to Negotiate with City. City agrees that it will not, during the term of this Agreement (the "Term") directly or indirectly, through any officer, employee, agent, or otherwise, solicit, initiate or encourage the submission of bids, offers or proposals by any person or entity with respect to the acquisition of any interest in the Property or the development of the Property, and City shall not engage any broker, financial adviser or consultant to initiate or encourage proposals or offers from other parties with respect to the disposition or development of the Property or any portion thereof. Furthermore, City shall not, directly or indirectly, through any officer, employee, agent or otherwise, engage in negotiations concerning any such transaction with, or provide information bo, any person other than Developer and its representatives with a view to engaging, or preparing to~ engage, that person with respect to the disposition or development of the Property or any portion thereof. 3. Term. The Term shall commence on the Effective Date, and shall automatically terminate one-hundred eighty (180) days from the Effective Date or upon execution of a Definitive Agreement, whichever occurs first, unless extended or earlier terminated as provided herein. The Term maybe extended by an additional 180 days upon the mutual written agreement of the Parties and approval by the City Council, provided that the negotiations contemplated herein have progressed to the satisfaction of the City Council in its sole discretion. 4. Framework Agreement. The Parties agree to cooperatively develop and negotiate a Framework Agreement that would provide the outline of the process for the creation of an integrated development plan for the Property and the Business Park, the consideration and possible approval of the plan and the related land transfers, as well as the roles and responsibilities of the Parties during this process and intended schedule for the process. The Framework Agreement is intended to include (i) sufficient detail to allow the City Council to determine whether such project is in the best interests of the City, and (ii) sufficient assurance regarding the City's views regarding key elements of the proje-ct to justify Developer in continuing with the substantial ongoing expenditures it would incur to pursue the collaborative effort and a Definitive Agreement. The City will direct its staff to submit a form of Framework Agreement to the City Council for consideration and possible approval within sixty (60) days of the Effective Date. The Framework Agreement shall include, for example, the following elements: (a) Project Description. The Framework Agreement will describe generally the elements that would be included in the integrated development project (collectively, "Project"): (i) Establishment of a modern research an~i development Life Sciences Campus, including substantial public amenities, across the Bt;isiness Park property and a portion of the Property to be acquired by Developer; MN 1 133407-4 3 Oyster Point Marina st'-256 t 4 t 6 Exclusive Negotiation Rights Agreement 8-21-2008 (ii) Retail/commercial uses, food and beverage sales, hotel or similar type of lodging, Harbor District and Marina uses, and public open/recr~eational space on the portion of the Property to be retained by City; and (iii) Infrastructure and other public amenities, including recreational facilities, road improvements, water, sewer, gas, electricity, lighting, and landscaping improvements throughout the entire Property and Business Park. (b) Conveyances. The Framework Agreement shah provide basic terms on which the City and Developer, subject to approval of a Definitive Agreement, would negotiate the acquisition, disposition and/or exchange of real property for the purpose of developing the Property and Business Park, including Developer's acquisition of title to certain parcels currently comprising the King Leases, and including a method for valuation of the respective property interests. (c) Public Financing. In accordance with the preliminary financial analysis described below, the Framework Agreement will provide for Developer and City (and other agencies as appropriate and where such agencies concur) to collaborate to utilize redevelopment financing or special districts, if necessary, to finance all or a portion of the public infrastructure and amenities. (d) Project Entitlements. The Framework Agreement will identify, to the extent feasible, the approvals, authorizations, agreements and consents required for the implementation of the Project, including, by way of example, environmental review, rezoning, development agreement, street vacations, and approval of financing for improvements. (e) Development Schedule. The Framework Agreement will include a schedule describing the anticipated dates by which, subject to approval of a Definitive Agreement, the Parties shall complete environmental review, obtain entitlements, commence construction, and complete the Project. The schedule shall reflect both Parties' good-faith, diligent pursuit of their respective responsibilities, in compliance with applicable law. (f) Roles and Responsibilities of Parties; Participation of Harbor District. The Framework Agreement will provide for the legal obligations of each respective Party, should the Parties enter a Definitive Agreement, to carry out the Project, including the responsibilities of each Party for conducting negotiations and obtaining approvals from other local, state, or federal agencies. The Framework Agreement shall also provide for the participation of the Harbor District in (i) negotiations toward entry of a Definitive Agreement, (ii) the Project itself, should the Parties enter a Definitive Agreement., and (iii) the City's primary role as liaison with the Harbor District in that regard. S. Framework Agreement: Process. The Parties intend that the following preliminary plans, studies, and agreements will be prepared, with input and cooperation from both Parties, to inform the terms of the Project Description and overall Framework Agreement. The Parties will each work in good faith to ensure that these preliminary plans, studies, and agreements are prepared according to the timeframes established below. MN 1 133407-4 4 Oyster Point Marina sf-2561416 Exclusive Negotiation Rights Agreement x-Z t -Zoos (a) Preliminary Concept Plans. Developer shall deliver to City preliminary design concept drawings, a site development map, and depiction of proposed land uses related to the Project no later than thirty (30) days following the Effective Date. These plans will include specific proposals relating to scale, massing, and location of buildings and improvements on the Property. (b) Draft Framework Agreement. Developer shall provide to City an initial draft of the Framework Agreement, for purposes of review and negotiation, no later than thirty (30) days following the Effective Date. (c) Pro Forma and Development Costs. Once development concept plans have been prepared, Developer shall provide City with a pro forma for the Life Sciences Campus portion of the proposed Project, no later than thirty (30) days following tr-e Effective Date. Thereafter, Developer will consult with the City regarding the pro forma and development cost information and will supplement that information in response to City's rea:;onable requests. To the fullest extent permitted by law, City agrees to keep in confidence and not disclose any pro forma produced or delivered by Developer pursuant to this Agreement. If any person should assert a claim that disclosure is required by law, City will give Developer a reasonable opportunity to obtain, at Developer's expense, a protective order prior to such disclosure, and City shall cooperate with Developer's efforts to obtain such projective order, including, without limitation, by providing supporting affidavits and/or testimony. (d) Economic Feasibility. Developer shall provide to City an analysis of the economic potential and financial sustainability of the completed Project to achieve the City's goal of establishing the Property as financially self-sustaining, no later than forty (40) days following the Effective Date. Such economic analysis shall include (i) the potential sales tax revenue, property tax revenue, and any other potential revenue; that could inure to the City as a result of developing the Project; and (ii) the potential costs to the City for maintaining the Property and providing public services required by law. Thereafter, Developer will consult with the City regarding the economic feasibility study and will supplement that information in response to City's reasonable requests. 6. Preliminary Concept, No Obligation to Proceed. E:KCept as specifically set forth herein, nothing in this Agreement creates a binding obligation, and no binding commitment to approve or carry out the Project will exist unless the Parties sign a Definitive Agreement. Each Party expressly acknowledges and agrees that this Agreement creates no obligation on the part of any Party to: (i) enter into a Framework Agreement or Definitive Agreement; (ii) grant any approvals or authorizations required for the Project; (iii) agree; to any specific terms or obligations; (iv) provide financing for the Project; or (v) procf;ed with the development of the Project. Any negotiated Framework Agreement is preliminary in nature and subject to approval by the City and Developer and memorialization in an executed Definitive Agreement and other related documents. The Parties acknowledge that the Framev~~ork Agreement maybe revised as the environmental, financial, and planning processes proceed. The provisions of this section are hereby incorporated into each and every section of this Agreement as though set forth in their entirety in each such section. MN 1 133407-4 5 Oyster Point Marina sr-25614 ~ 6 Exclusive Negotiation Rights Agreement 8-21-2008 7. Definitive Agreement. The Definitive Agreement shall specify all the material terms for the redevelopment of the Property and the implementation oi'tlie Project, including without limitation detailed description of improvements; pricing of the various property interests to be conveyed, acquired, and/or exchanged; and the timing of City approvals and authorizations and development. If the Parties successfully negotiate a Definitive Agreement, City shall promptly conduct a noticed public hearing. City shall have no legal obli;;ation to grant any approvals or authorizations for the Project until the Definitive Agreement has been approved by the City Council. 8. Developer's Studies. During the Term, Developer shall use its best efforts to prepare, at Developer's expense, any studies, surveys, plans, specifications and reports ("Developer's Studies") Developer deems necessary or desirable to determine the suitability of the Project and for the purposes of developing a Framework Agreement or Lefinitive Agreement. City agrees to cooperate with and to provide information and consultation as reasonably requested by Developer in connection with these studies and otherwise in connection with such process. Such studies may include, without limitation, title investigation, relocation analyses (if applicable), marketing, feasibility, soils, seismic and environmental studies,, financial feasibility analyses, design studies, and any other studies in accordance with and for the purposes of Section .With the exception of proprietary information, privileged attorney-client communications, or other privileged documents, upon request by City, Developer agrees to deliver to City copies of Developer's Studies solely for the purposes of this Agreement.. 9. Right of Entry. City agrees to provide Developer access to City's property, subject to advance written permission which shall not be unreasonably withheld, as maybe necessary to prepare the Developer's Studies, and will use good faith efforts to assist Developer to obtain access to property owned or controlled by others as maybe necessary to prepare Developer's Studies. In connection with entry onto the Property, Developer shall and hereby agrees to indemnify, defend (with counsel approved by City) and hold harmless the Indemnitees (defined in Section 19) from and against all Claims (defined in Section l~) resulting from or arising in connection with entry upon the Property by Developer or Developer's agents, employees, consultants, contractors, or subcontractors during the Term of this Agreement, but excluding any existing environmental or hazardous materials conditions. Prior to Developer's entry onto the Property, Developer shall provide City with proof of insurance; in accordance with City's requirements. Developer shall obtain and maintain throughout the term of this Agreement the following insurance: (a) Workers Compensation insurance providing statutory benefits in accordance with California law; (b) Automobile liability insurance for all owned, non-owned, and hired motor vehicles which Developer or Developer's agents or contractors will use on Developer's behalf for entry onto the Property, in a minimum amount of $1,000,000 combined single limit; and (c) Commercial General Liability insurance with a minimum limit of $3,000,000 per occurrence for bodily injury and property damage. MN 1 133407-4 6 Oyster Point Marina s1-2561416 Exclusive Negotiation Rights Agreement 8-21-2008 All liability policies Developer is required to maintain hereunder shall be written on an occurrence basis and shall name the Indemnitees (defined in Seaction ) as additional insureds. Developer's inspection, examination, survey, and review of the Property shall be at Developer's sole expense. Developer shall provide City with copies of all non-privileged and non-proprietary reports and test results within ten (10) days following completion of such reports and testing, if such reports and test results are completed prior to the expiration or earlier termination of this Agreement. Developer's failure to provide such reports and test results within such ten (10) day period shall not be a default hereunder if Developer provides such reports and test results within five (5) days of receipt of City's written request therefor. Developer shall repair, restore, and return the Property to its condition immediately preceding Developer's entry thereon at Developer's sole expense. Developer shall at all times keep the Property free and clear of all liens and encumbrances affecting title to the Property. Developer's indemnification obligations, obligations to provide reports and studies, and obligations to discharge liens that attach to the Property as set forth in this Section 9 shall survive the expiration or earlier termination of this Agreement. 10. City's Reports and Studies. Within five (5) days following the Effective Date, City shall make available to Developer for review or copying, at De;veloper's expense, all non- privileged studies, surveys, plans, specifications, reports, and other documents with respect to the Property that City has in its possession or control or that are reasonably available to City. Studies or documents prepared by City and its agents solely for the purpose of negotiating the Framework Agreement and the terms of a Definitive Agreement are excluded from this requirement, provided however, City may share with Developer any studies reports, maps, plans or other relevant information for the purpose of successfully negotiating the Framework Agreement and any Definitive Agreement. 11. [Reserved] 12. Expenses. (a) Prior to Execution of Framework Agreement. ]Except as otherwise expressly provided herein, until the execution of a Framework Agreement, each Party shall bear all of its own costs and expenses (including, without limitation, expenses incurred for economic, environmental, and engineering consultants, and legal fees and expenses) incurred in connection with negotiating a Framework Agreement. For the period pric-r to the execution of a Framework Agreement, Developer agrees (i) to pay on behalf of the City the reasonable costs for a consultant to review the preliminary economic analysis that is to be submitted by Developer as set forth in Section >id), subject to the Parties' mutual approval of (1) the consultant that will review for the City the economic analysis, and (2) the scope of work to be performed in such review; and (ii) to reimburse the City for other staff time and costs of advisers retained by the City to assist in negotiating a Framework Agreement, in an amount not to exceed twenty- thousand dollars ($20,000). MN 1 1 3 3407-4 '] Oyster Point Marina sf-2661416 Exclusive Negotiation Rights Agreement 8-21-2008 (b) Following Execution of Framework Agreement. After the execution of any Framework Agreement, Developer shall pay or reimburse all further costs and expenses incurred or paid by the City in connection with this Agreement and the activities contemplated hereby (including without limitation, appraisal costs, the analysis of Project pro formas, the negotiation and preparation of a Definitive Agreement, the preparation of surveys, the preparation of any reports required by Redevelopment Law (Health & Safety Code Section 33000 et seq.), if applicable, the undertaking of any actions necessary for the conveyance of the Property or any portion thereof, and compliance with all other required statutory procedures), except as the Parties otherwise may agree. 13. (Reserved] 14. Relationship of Parties. The Parties agree that nothint; in this Agreement shall be deemed or interpreted to create between them the relationship of lessor and lessee, of buyer and seller, of principal and agent, or of partners or joint venturers. 15. Confidentiality; Dissemination of Information. During the Term, each Party shall obtain the consent of the other Party prior to issuing or permitting any of its officers, employees or agents to issue any press release or other information to the press with respect to this Agreement; provided however, no Party shall be prohibited from supplying any information to its representatives, agents, attorneys, advisors, financing sources, or others to the extent necessary to accomplish the activities contemplated hereby so long as such representatives, agents, attorneys, advisors, financing sources, or others are made aware of the terms of this Section. Nothing contained in this Agreement shall prevent either Party at any time from furnishing any required information to any governmental entity or authority pursuant to a legal requirement or from complying with its legal or contractual obligations. The Parties each agree to maintain the confidentiality ofthe studies, analyses, reports and correspondence prepared in connection with this Agreement to the fullest extent permitted by law. 16. Termination. This Agreement maybe terminated at any time by mutual written consent of the Parties. City shall have the right to terminate this Agreement upon its good faith determination that Developer is not proceeding diligently anal in good faith to carry out its obligations pursuant to this Agreement. City shall exercise such right by providing at least thirty (30) days' advance written notice to Developer which notice shall describe the nature of Developer's default hereunder. Notwithstanding the foregoing, if Developer commences to cure such default within such 30-day period and diligently prosecutes such cure to completion within the earliest feasible time but not later than sixty (60) days following the date of the notice, this Agreement shall remain in effect. Developer shall have the ril;ht to terminate this Agreement, effective upon thirty (30) days' written notice to City, if (i) t:he; results of its investigation of the Property are unsatisfactory with respect to Developer's desired redevelopment activities; or (ii) Developer is unable to obtain other necessary approvals, rights or interests. Neither Party shall have the right to seek an award of damages as a result of the tc;rmination of this Agreement pursuant to this Section, unless made in bad faith. MN 1133407-4 $ Oyster Point Marina sr-2561416 Exclusive Negotiation Rights Agreement 8-21-2008 17. Effect of Termination. Upon termination as provided herein, or upon the expiration of the Term and any extensions thereof without the Parties having; successfully negotiated a Definitive Agreement, this Agreement shall forthwith be void, and there shall be no further liability or obligation on the part of either of the Parties or their respective officers, employees, agents or other representatives; provided however, the provisions of Section (Expenses), Section 1~5 (Confidentiality), Section 19 (Indemnification) and Section (No Brokers) shall survive such termination. 18. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Part:ies at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by one of the following methods: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given. by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a non-business day. City: City of South San Francisco 400 Grand Ave. South San Francisco, CA 94080 Attn: City Manager Phone: (650) 829-6620 Facsimile: (650) 829-6623 MN 1 133407-4 9 Oyster Point Marina sf-256t 4 t 6 Exclusive Negotiation Rights Agreement 8-21-2008 With a copy to: Meyers Nave Riback Silver & Wilson 575 Market Street, Suite 2600 San Francisco, CA 94105 Attn: Steven T. Mattas Phone: (415) 421-3711 Facsimile: (415) 421-3767 Developer: Oyster Point Ventures LLC 601 California Street, Suite 1310 San Francisco, CA 94108 Attn: Paul Stein Phone: (415) 421-8200 Facsimile: (415) 421-8201 With copies to: Shorenstein Realty Services, L..P. 235 Montgomery Street, 16th Floor San Francisco, CA 94104 415.772.7069 direct 415.772.7148 fax Attn: Todd Sklar Morrison & Foerster LLP 425 Market Street San Francisco, CA 94105 Attn: Zane O. Gresham Phone: (415) 268-7000 Facsimile: (415) 268-7522 19. Indemnification. Developer hereby covenants, on behalf of itself and its permitted successors and assigns, to indemnify, hold harmless and defend City and Harbor District and their respective elected and appointed officials, officers, agents, representatives and employees (all of the foregoing, "Indemnitees") from and against all liability, loss, cost, claim, demand, action, suit, legal or administrative proceeding, penalty, deficiency, fine, damage and expense (including, without limitation, reasonable attorney's fees and costs of litigation) (all of the foregoing, collectively hereinafter "Claims") arising out of or in connection with this Agreement or the activities contemplated hereby; provided however, Developer shall have no indemnification obligation with respect to the gross negligence or willful misconduct of any Indemnitee. Developer's indemnification obligations set forth in this Section shall survive the expiration or earlier termination of this Agreement. 20. Severability. If any term or provision of this Agreement or the application thereof shall, to any extent, be held to be invalid or unenforceable, such terra or provision shall be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining terms and provisions of this Agreement or the application of such MN 1133407-4 10 Oyster Point Marina st-2561416 Exclusive Negotiation Rights Agreement s-zl-zoos terms and provisions to circumstances other than those as to which it is held invalid or unenforceable unless an essential purpose of this Agreement would be defeated by loss of the invalid or unenforceable provision. 21. Entire Agreement; Amendments in Writing; Cow'lterparts. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral and written, between the Parties with respect to such subject matter. This Agreement maybe amended only by a written instrument executed by the Parties or their successors in interest. This Agreement maybe executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. 22. Successors and Assigns; No Third-Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns; provided however, that Developer shall not transfer or assign this Agreement or Developer's rights hereunder by operation of law or otherwise without the prior written consent of City, and any such assignment without such consent shall be void. Natv~~ithstanding the foregoing, Developer shall be permitted to assign this Agreement to an entity or entities controlled by Developer or under common control with Developer without City consent. This Agreement is not intended to benefit, and shall not run to the benefit of or be enforceable by, any other person or entity other than the Parties and their permitted successors a.nd assigns. 23. No Brokers. Each Party warrants and represents to the other that no brokers have been retained or consulted in connection with this transaction other than as disclosed in writing to the other Party. Each Party agrees to defend, indemnify and hold harmless the other Party from any claims, expenses, costs or liabilities arising in connection with a breach of this warranty and representation. The terms of this Section shall survive the expiration or earlier termination of this Agreement. 24. Captions; Construction. The captions of the sections and articles of this Agreement are for convenience only and are not intended to affect the interprf;tation or construction of the provisions hereof. The provisions of this Agreement have bef;n jointly drafted by the Parties and will be construed as to the fair meaning and not for or against ;any Party based upon any attribution of such Party as the sole source of the language in question. 25. Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. All disputes arising hereunder shall be heard in courts having jurisdiction in San Mateo County, California. SIGNATURES ON THE NEXT PA E MN 1 133407-4 11 Oyster Point Marina sf-2561416 Exclusive Negotiation Rights Agreement s-2l-zoos IN WITNESS WHEREOF, the Parties have executed. this Agreement as of the date first written above. CITY CITY OF SOUTH SAN FRANCISCO, a municipal corporation By: Name: City Manager ATTEST: By: City Clerk DEVELOPER OYSTER POINT VENTURES LLC, a California limited liability company By: Name: Its: APPROVEL> AS TO FORM: By: City .Attorney MN 1133407-4 12 Oyster Point Marina st'-2561416 Exclusive Negotiation Rights Agreement s-z ~ -aoos