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108-PC - 6 Resolution #6730, DA-2011-01 and exhibits.pdf ATTACHMENT PC-6 CITY OF CUPERTINO 10300 Torre Avenue Cupertino, California 95014 RESOLUTION NO. 6730 OF THE PLANNING COMMISSION OF THE CITY OF CUPERTINO RECOMMENDING THAT THE CITY COUNCIL APPROVE A DEVELOPMENT AGREEMENT FOR A 20 YEAR TERM FOR THE DEVELOPMENT OF AN OFFICE, RESEARCH AND DEVELOPMENT CAMPUS LOCATED AT THE AREA BOUNDED BY EAST HOMESTEAD ROAD, NORTH TANTAU AVENUE, I-280, NORTH WOLFE ROAD INCLUDING PROPERTIES LOCATED ON THE EAST SIDE OF NORTH TANTAU AVENUE The Planning Commission recommends approval of the rezoning to the City of Cupertino Municipal Code with the findings reflected in the Draft Ordinance attached hereto as Exhibit DA. nd PASSED AND APPROVED this 2 day of October 2013, at a Regular Meeting of the Planning Commission of the City of Cupertino by the following roll call vote: AYES: COMMISSIONERS: NOES: COMMISSIONERS: ABSTAIN: COMMISSIONERS: ABSENT: COMMISSIONERS: ATTEST: APPROVED: Aarti Shrivastava Don Sun, Chair Director of Community Development Planning Commission Ɏ EXHIBIT DA RECORD AND WHEN RECORDED MAIL TO: RECORD WITHOUT FEE PURSUANT TO GOVERNMENT CODE SECTION 6103 City of Cupertino City Clerk’s Office 10300 Torre Avenue Cupertino, CA 95014-3202 (Space Above This Line Reserved For Recorder's Use) DEVELOPMENT AGREEMENT BETWEEN CITY OF CUPERTINO, a California municipal corporation AND APPLE INC., a California corporation OAK #4816-8465-9477 v9 TABLE OF CONTENTS Page ARTICLE 1DEFINITIONS...........................................................................................................6 ARTICLE 2 EFFECTIVE DATE, TERM AND TERMINATION OF HP DEVELOPMENT AGREEMENT. ........................................................................................................ 10 Section 2.1 Effective Date ............................................................................................. 10 Section 2.2 Initial Term ................................................................................................. 10 Section 2.3 Extensions to Term .................................................................................... 10 Section 2.4 Apple Termination for Convenience ...................................................... 11 Section 2.5 City Termination In Event of Change in Use ........................................ 11 Section 2.6 HP Development Agreement Cancellation. .......................................... 11 ARTICLE 3 OBLIGATIONS OF APPLE. .................................................................................. 12 Section 3.1 Obligations of Apple Generally............................................................... 12 Section 3.2 Affordable Housing Contribution .......................................................... 12 Section 3.3 Tax Localization Plan and Requirements. ............................................. 12 Section 3.4 Construction Tax ....................................................................................... 12 Section 3.5 Tax Consulting Agreement. ..................................................................... 13 Section 3.6 Glendenning Barn ..................................................................................... 13 Section 3.7 Parkland Contribution .............................................................................. 14 Section 3.8 Fiber Optic Conduit Installation ............................................................. 14 Section 3.9 Traffic Signal Preemption Devices .......................................................... 15 Section 3.10 I-280 Trail Contribution ............................................................................ 15 Section 3.11 Storm Drain Facilities, Storm Drains and Runoff ................................. 15 Section 3.12 Real Property Acquisition ........................................................................ 15 Section 3.13 Mitigations.................................................................................................. 16 ARTICLE 4 OBLIGATIONS OF CITY. ..................................................................................... 16 Section 4.1 Obligations of City Generally .................................................................. 16 Section 4.2 Protection of Rights ................................................................................... 16 Section 4.3 Development Allocations ......................................................................... 16 Section 4.4 Apple’s Right to Rebuild .......................................................................... 17 Section 4.5 Design of On-Site and Off-Site Improvements. .................................... 17 OAK #4816-8465-9477 v9 -i- TABLE OF CONTENTS (continued) Page Section 4.6Development of the Site...........................................................................18 Section 4.7 Sequestration of Contributions in the Event of Litigation ................... 18 ARTICLE 5 DEVELOPMENT FEES, EXACTIONS AND DEDICATIONS. ........................ 18 Section 5.1 Development Impact Fees, Exactions and Dedications ....................... 18 Section 5.2 Cost Recovery Fees. ................................................................................... 19 Section 5.3 Retroactive Permits, Fees, and Fines ...................................................... 19 Section 5.4 Connection Fees ......................................................................................... 19 Section 5.5 Vesting Tentative Map .............................................................................. 19 Section 5.6 Fees Imposed by Outside Agencies ........................................................ 20 ARTICLE 6 VACATION OF PRUNERIDGE. .......................................................................... 20 Section 6.1 Vacation of Pruneridge Avenue .............................................................. 20 Section 6.2 Purchase of Pruneridge Avenue ............................................................. 20 Section 6.3 Street Closure. ............................................................................................ 20 ARTICLE 7 COOPERATION – IMPLEMENTATION. .......................................................... 20 Section 7.1 Processing Application for Subsequent Approvals .............................. 20 Section 7.2 Timely Submittals By Apple .................................................................... 21 Section 7.3 Timely Processing By City ....................................................................... 21 Section 7.4 Specific Subsequent Approvals ............................................................... 21 Section 7.5 Other Government Permits ...................................................................... 22 Section 7.6 Cooperation with Public Services. .......................................................... 22 ARTICLE 8 STANDARDS, LAWS AND PROCEDURES GOVERNING THE PROJECT. 22 Section 8.1 Vested Right to Develop ........................................................................... 22 Section 8.2 Permitted Uses Vested by This Agreement ........................................... 22 Section 8.3 Intentionally Omitted. .............................................................................. 22 Section 8.4 State and Local Building Standards ........................................................ 22 Section 8.5 No Conflicting Enactments ...................................................................... 22 Section 8.6 Initiatives and Referenda. ........................................................................ 24 Section 8.7 Environmental Review ............................................................................. 24 OAK #4816-8465-9477 v9 -ii- TABLE OF CONTENTS (continued) Page Section 8.8Life of Subdivision Maps, Development Approvals, and Permits.....25 Section 8.9 State and Federal Law............................................................................... 25 Section 8.10 City’s Reservations of Authority ............................................................. 25 Section 8.11 Timing of Project Construction and Completion. ................................. 26 Section 8.12 Apple is an Independent Contractor. ..................................................... 26 ARTICLE 9 AMENDMENT. ...................................................................................................... 27 Section 9.1 Project Approval Amendments ............................................................... 27 Section 9.2 Amendment of this Agreement ............................................................... 27 ARTICLE 10 ASSIGNMENT, COVENANTS, FORECLOSURE AND NOTICE. ................. 28 Section 10.1 Assignment. ................................................................................................ 28 Section 10.2 Covenants Run With The Land ............................................................... 29 Section 10.3 Foreclosure. ................................................................................................ 29 Section 10.4 Sale or Lease of a Portion of the Project Site or Individual Parcels .... 29 Section 10.5 Notice of Compliance Generally ............................................................. 30 ARTICLE 11 COOPERATION IN THE EVENT OF LEGAL CHALLENGE. ....................... 30 Section 11.1 Cooperation. ............................................................................................... 30 Section 11.2 Cure; Preapproval. .................................................................................... 31 ARTICLE 12 DEFAULT; REMEDIES; TERMINATION. ......................................................... 32 Section 12.1 Defaults ....................................................................................................... 32 Section 12.2 Remedies ..................................................................................................... 32 Section 12.3 Periodic Review. ........................................................................................ 32 Section 12.4 Effect of Termination Upon Apple’s Obligations ................................. 34 Section 12.5 Enforced Delay; Extension of Time of Performance ............................. 34 Section 12.6 California Law; Venue .............................................................................. 34 Section 12.7 Compliance with Laws ............................................................................. 34 Section 12.8 Resolution of Disputes .............................................................................. 35 ARTICLE 13 NO AGENCY, JOINT VENTURE OR PARTNERSHIP. ................................... 35 ARTICLE 14 MORTGAGEE PROTECTION: CERTAIN RIGHTS OF CURE. ..................... 35 OAK #4816-8465-9477 v9 -iii- TABLE OF CONTENTS (continued) Page Section 14.1Mortgagee Protection................................................................................35 Section 14.2 Mortgagee Obligations ............................................................................. 35 Section 14.3 Notice of Default to Mortgagee ............................................................... 36 ARTICLE 15 MISCELLANEOUS. ............................................................................................... 36 Section 15.1 Incorporation of Recitals and Introductory Paragraph ........................ 36 Section 15.2 Findings ...................................................................................................... 36 Section 15.3 Severability ................................................................................................. 36 Section 15.4 Time of Essence.......................................................................................... 36 Section 15.5 Other Necessary Acts ................................................................................ 36 Section 15.6 Construction ............................................................................................... 36 Section 15.7 Section Headings ....................................................................................... 37 Section 15.8 No Waiver .................................................................................................. 37 Section 15.9 Nondiscrimination .................................................................................... 37 Section 15.10 No Third-Party Beneficiary ...................................................................... 37 Section 15.11 Other Miscellaneous Terms ..................................................................... 37 Section 15.12 Notices ........................................................................................................ 37 Section 15.13 Entire Agreement, Counterparts and Exhibits ...................................... 38 Section 15.14 Covenant of Good Faith and Fair Dealing ............................................. 39 Section 15.15 Authority to Execute ................................................................................. 39 Section 15.16 Exhibits ....................................................................................................... 39 Section 15.17 Recordation of Development Agreement. ............................................. 40 OAK #4816-8465-9477 v9 -iv- DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT (the “Agreement”) is entered into as of ____________, 2013, by and between Apple Inc., a California corporation (“Apple”), and the City of Cupertino, a California municipal corporation (“City”), pursuant to California Government Code § 65864 et seq. R E C I TA L S Apple and City enter into this Agreement on the basis of the following facts, understandings and intentions, and the following recitals are a substantive part of this Agreement: A. To strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the Legislature of the State of California enacted Sections 65864 through 65869.5 of the California Government Code (“Development Agreement Statute”), which authorize City to establish procedures to enter into binding development agreements with persons having legal or equitable interests in real property located within City for development of property. B. The Cupertino Municipal Code (“CMC”), § 19.144.010 et seq., establishes the authority and procedure for review and approval of proposed development agreements. C. Apple has a legal and equitable interest in certain real property consisting of approximately 176 acres located within the City and generally bordered by East Homestead Road on the north; adjacent properties to the east of North Tantau Avenue on the east; Interstate 280 and The Hamptons apartment community on the south; and North Wolfe Road (the “Property”), attached hereto, on the west, as more particularly described in Exhibit DA-1a ,attached hereto (the “Project Site”). The Property is and as diagrammed in Exhibit DA-1b owned by Campus Holdings, Inc. (“CHI”), a Delaware corporation and fully owned subsidiary of Apple. CHI and Apple have entered into an agreement for Apple to develop and occupy the Property. Pruneridge Avenue extended through the Project Site on a roughly east/west alignment prior to the Project Approvals, and most of the former Pruneridge Avenue is now ARTICLE 6. The Project Site included as part of the Property and Project Site, as set forth in currently contains approximately 2,891,500 square feet of office, research and development and amenity building space (2,657,000 square feet of which is office and research and development), some of which are occupied by Apple and some of which were formerly used by Hewlett- Packard. Calabazas Creek crosses the southeastern portion of the Project Site. D. Apple intends to develop the Project Site as an office, research and development campus consistent with the Project Approvals and the Subsequent Approvals (the “Project”). E. The Project, including but not limited to the buildings, access and parking facilities, landscaping, and infrastructure improvements, are all more particularly shown on the OAK #4816-8465-9477 v9 Development Plan (“Development Plan”) submitted by Apple in connection with its applications for the Project Approvals (defined in Recital Q(2) below). F. Through this Agreement, the parties intend to preserve the size and density of development as set forth in the Development Plan and Project Approvals, as they may be amended. City and Apple each acknowledge that development and construction of the Project is a large-scale undertaking involving major investments by Apple and City, and assurances that the Project can be developed and used in accordance with the terms and conditions set forth herein and Applicable Law governing development of the Property will benefit both Apple and City. City is willing to enter into this Agreement for the reasons enumerated in CMC §§ 19.144.010 and 19.144.020, including but not limited to: (1) strengthening the public planning process; (2) encouraging private participation in comprehensive planning by providing a greater degree of certainty; (3) reducing the economic costs of development; (4) allowing for orderly planning of public improvements and services and the allocation of costs in order to achieve the maximum utilization of public and private resources in the development process; (5) ensuring that appropriate measures to enhance and protect the environment are achieved; and (6) ensuring that all conditions of approval, including the construction of off-site improvements made necessary by land development, will proceed in an orderly and economical fashion to City’s benefit. G. In addition to the reasons set forth in the CMC set forth above in Recital F, City also enters into this Agreement in order to: (1) increase the number of well-paid high-quality jobs in the City for employees who either live in the community and/or support local businesses; (2) improve the City’s quality of life and the built environment by redeveloping outmoded office buildings with a coherent state-of-the art corporate headquarters campus; (3) support the development of a local corporation that has grown into one of the world’s outstanding high tech firms, thereby stimulating local businesses and the local economy and supporting the City’s fiscal health and ability to provide needed services; (4) secure a source of substantial tax revenues for the City by encouraging a major corporation to continue its existing operations in the City; and (5) attract visitors who will generate both additional revenues for local businesses and increased tax revenues for the City, as well as further the City’s visibility worldwide. H. Apple acknowledges and recognizes that material inducements for City to enter into this Agreement are: (1) an opportunity to create a corporate headquarters campus; (2) the occupancy of the Property by Apple Inc. within the City; and (3) the contributions by Apple to parks, affordable housing and infrastructure. City’s willingness to enter into this Agreement is a material inducement to Apple to implement the Project, and Apple proposes to enter into this Agreement in order (x) to obtain assurances from City that the Property may be developed, constructed, completed and used pursuant to this Agreement, and in accordance with Applicable Law, subject to the exceptions and limitations expressed herein for the Term of this Agreement; and (y) to provide for a coordinated and systematic approach to funding the cost of certain public improvements and facilities planned by City, and to establish the timing and extent of contributions required from Apple for these purposes. 2 OAK #4816-8465-9477 v9 I.Apple and City mutually desire to enter into this Agreement, and proceedings have been taken in accordance with state law, as set forth below. J. On October 2, 2013, City’s Planning Commission (defined below in Recital Q(1)) held a duly noticed public hearing on this Project and: (1) determined that the CEQA compliance for the City’s consideration of this Project properly relies on the earlier analysis and assumptions in Cupertino’s General Plan 2000-2020 (“General Plan”) environmental impact report and the City’s recent preparation of environmental impact report concerning the Project (entitled Apple Campus 2 Project Environmental Impact Report (the “EIR”)), dated September 23, 2013; (2) determined that the Project is consistent with the City’s General Plan, as amended by the General Plan Amendments; and (3) recommended that the City of Cupertino City Council (“City Council”) approve this Project. K. On October __, 2013, the City Council held a duly noticed public hearing on this Agreement and (1) determined that consideration of this Agreement contained in the EIR complies in all respects with CEQA; (2) determined that this Agreement is consistent with City’s General Plan, as amended by the General Plan Amendments; (3) conducted all necessary proceedings in accordance with the City’s rules and regulations for the approval of this Agreement; and (4) introduced Ordinance No. 13-2114, approving this Agreement. L. On November __, 2013, the City Council adopted Ordinance No. 13-2114, enacting this Agreement, and the Ordinance became effective thirty (30) days thereafter (subject to and extended by any subsequent City Council reconsideration hearing) on __________ (“Effective Date”). M. Certain improvements, as set forth in the conditions of approval (“Conditions of Approval”), are necessary to provide infrastructure support for the Project. N. Apple intends to develop the Project in two or more phases, as described in the EIR. O. As of the Effective Date, Apple is City’s largest employer, and Apple has been located in City since Apple was established in 1976. Apple’s current corporate headquarters at the 1 Infinite Loop campus (the “IL Campus”) is located approximately one mile to the west of the Project Site. As a major corporate employer experiencing significant growth, Apple seeks to commence a long-range comprehensive planning process for the Property, in order to ensure that Apple’s future corporate operations will continue to be headquartered and expanded within the City. Following adoption of General Plan Amendments, the Project will be consistent with the Cupertino General Plan. P. In connection with the substantial investment of time and financial resources required for the long-range comprehensive planning and entitlement of a new corporate headquarters on the Project Site, the parties desire to enter into this Agreement in order to provide to the Property development allocations for office space available under the General 3 OAK #4816-8465-9477 v9 Plan, and to vest the General Plan and zoning, as amended for the Property, thereby establishing a reasonable and secure planning basis for the new corporate headquarters. Q. While this Agreement furthers numerous City goals and policies, there are two fundamental purposes it is intended to advance. First, from a fiscal standpoint, to ensure that the City not incur unfunded costs related to the planning, development, maintenance and operation of the Project including, among other things, the costs to the City of providing the Project with public services and facilities and mitigating the Project’s environmental impacts. Second, to provide Apple with the certainty required to make its substantial long term investment in the Project, by ensuring that it will have a full and vested right to develop, use and operate the Project and the Project Site under the terms and conditions set forth in this Agreement. The rights and obligations of the parties to the Agreement shall be construed and interpreted in such a manner as shall give full effect to each of these purposes. City has taken several actions to review and plan for the development of the Project. These include, without limitation, the following: (1) Environmental Impact Report. The environmental impacts of the Project, including the Project Approvals, many of the Subsequent Approvals, and numerous alternatives to the Project and its location, have properly been reviewed and assessed by City pursuant to the California Environmental Quality Act, Public Resources Code Section 21000 et seq.; California Code of Regulations Title 14, Section 15000 et seq. (the “CEQA Guidelines”); and City’s local guidelines promulgated thereunder (collectively, “CEQA”). On October 15, 2013 pursuant to CEQA and in accordance with the recommendation of the Planning Commission for the City of Cupertino (the “Planning Commission”), the City Council certified the EIR. As required by CEQA, the City adopted written findings, including a Statement of Overriding Considerations and approved a Mitigation Monitoring and Reporting Program (the “MMRP”) concurrent with its consideration of the Project Approvals. (2) Planning Commission and City Council Approvals. The Planning Commission, after a duly noticed public hearing, has reviewed and recommended certification of the EIR, approval of the General Plan Amendments, adoption of the Rezoning, approval of the various project level entitlements listed below, and approval of this Agreement. Following review and recommendation by the Planning Commission, and after a duly noticed public hearing and certification of the EIR, the City Council, by Resolution No. 13-082 approved amendments to the Cupertino General Plan (the “General Plan Amendments”); adoption of City Ordinance No. 13-2113, rezoning the PR zone, which corresponds to the approximately 1.1- acre portion of the site designated Parks and Open Space in the General Plan, to P(MP) (the “Rezoning”); approval of the project level entitlements listed below; and adoption of this Agreement. The City Council made findings and adopted additional Resolution Nos. 13-084 and 13-085 approving certain project level entitlements, including these additional permits, agreements and other approvals required for the Project: i. Pruneridge Vacation and Land Purchase Agreement 4 OAK #4816-8465-9477 v9 ii.Vesting Tentative Map effective 30 days after the second reading of the Development Agreement Ordinance iii. Conditional Use Permit iv. Development Permit v. Tree Removal Permit vi. Streamside Modification Permit vii. Architectural Site Approval for Phase 1 (other than the parking structure on North Tantau Avenue) Certain improvements as set forth in the Project Approval Conditions of Approval, including MMRP, are necessary to provide infrastructure support for the Project. The approvals, Conditions of Approval, permits and development policies described in this Recital Q(2) are collectively referred to as the “Project Approvals.” R. ACI Holdings, Inc., a California corporation and wholly owned subsidiary of Apple, and City, entered into an Agreement for Consultation Services dated _____________, to provide City with consulting services consisting of the assessment and creation of new sales and use tax revenue sources for City, to be derived from Apple and its subsidiaries (the “Tax Consulting Agreement”). S. The City has reviewed and considered the special innovative features and environmental benefits of the Project, including the designation of the Project as the first Environmental Leadership Development Project under the “Jobs and Economic Improvement Through Environmental Leadership Act” in the State of California, as approved by the Governor, following review by legislative committees and the California Air Resources Board. Based on these and other considerations, including the contributions identified in this Agreement, the City determined that the Project presents substantial public benefits and opportunities that are advanced by the City and Apple entering into this Agreement. This Agreement will, among other things: (1) reduce uncertainties in planning and provide for the orderly development of the Project; (2) mitigate many significant environmental impacts; (3) provide public improvements, infrastructure and community benefits; (4) strengthen the City’s economic base with a variety of high quality long term jobs, in addition to shorter term construction jobs; (5) provide for and generate substantial revenues for the City in the form of one time and annual fees and exactions and other fiscal benefits as documented in Keyser Marston Associates’ May 2013 fiscal report entitled “Economic and Fiscal Impacts Generated by Apple in Cupertino—Current Facilities and Apple Campus 2”; (6) provide an amount equal to twice the otherwise applicable affordable housing impact fee in furtherance of affordable housing opportunities; (7) result in the voluntary funding of critical citywide facilities and other infrastructure improvements; and (8) otherwise achieve the goals and purposes for which the Development Agreement Statute was enacted. T. In exchange for the benefits to the City described in the preceding Recital, together with the other public benefits that will result from the development of the Project, 5 OAK #4816-8465-9477 v9 Apple will receive by this Agreement assurances that it may proceed with the Project in accordance with Applicable Law, and therefore desires to enter into this Agreement. AG R EE M EN T NOW, THEREFORE, pursuant to the authority contained in California Government Code § 65864 and following, and CMC § 17.10.010 and following, and in consideration of the mutual representations, covenants and promises of the parties, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS. “Administrative Project Amendment” shall have that meaning set forth in Section 9.1(a) of this Agreement. “Administrative Agreement Amendment” shall have that meaning set forth in Section 9.2(a) of this Agreement. “Affordable Housing Contribution” shall have that meaning set forth in Section 3.2 of this Agreement. “Agreemen t” means this Agreement. “Apple” means Apple Inc., a California corporation, and its approved successors and assigns. “Applicable City Regulations” means (a) all City ordinances, rules, regulations, official policies, standards and specifications set forth in this Agreement and the Project Approvals, including the specific Conditions of Approval adopted with respect to the Project Approvals; (b) with respect to matters not addressed by this Agreement or the Project Approvals but governing permitted uses of the Property; building locations, sizes, densities, intensities, design and heights; lot coverage and open space; parking; and Exactions, those ordinances, rules, regulations, official policies, standards and specifications in force and effect on the Effective Date; (c) with respect to all other matters, the ordinances, rules, regulations, official policies, standards and specifications in force and effect as may be enacted, adopted and amended from time to time, including new City Laws, except those in conflict with this Agreement or the Project Approvals; (d) Changes in the Law; and (e) Exempt City Laws. “Applicable Law” means all State and Federal laws and regulations applicable to the Property and the Project as enacted, adopted and amended from time to time, and the Applicable City Regulations. “Campus Amenity Space” shall have that meaning set forth in Section 4.3(d) of this Agreement. 6 OAK #4816-8465-9477 v9 “CEQA” shall have that meaning set forth in Recital Q(1) above. “CEQA Guidelines” shall have that meaning set forth in Recital Q(1) above. “Changes in the Law” shall have that meaning set forth in Section 8.9 of this Agreement. “CHI” shall have that meaning set forth in Recital C of this Agreement. “City” means the City of Cupertino, a municipal corporation. “City Council” shall have that meaning set forth in Recital J above. “City Law” shall have that meaning set forth in Section 8.5 of this Agreement. “Completion” shall have that meaning set forth in Section 2.3 of this Agreement. “Compliance Letter” shall have that meaning set forth in Section 12.3(b). “Conditions of Approval” shall have that meaning set forth in Recital M above. “Connection Fees” means those fees charged by City on a citywide basis or by a utility provider to utility users as a cost for connecting to water, sanitary sewer and other applicable utilities, except for any such fee or portion thereof that constitutes an Impact Fee, as defined below. “Contributions” means, collectively, the Affordable Housing Contribution, the Park Land Contribution, the Glendenning Barn Relocation Contribution, and the I-280 Trail Contribution. “Cost Recovery Fees” shall have that meaning set forth in Section 5.2 of this Agreement. “CMC” shall have that meaning set forth in Recital B above. “CPI-U” shall have that meaning set forth in Section 5.1 of this Agreement. “Default Notice” shall have that meaning set forth in Section 12.1 of this Agreement. “Deficiencies” shall have that meaning set forth in Section 11.2(a) of this Agreement. “Development Agreement Statute” shall have that meaning set forth in Recital A of this Agreement. “Development Plan” shall have that meaning set forth in Recital E. “EIR” shall have that meaning set forth in Recital J of this Agreement. 7 OAK #4816-8465-9477 v9 “Effective Date” shall have that meaning set forth in Recital L of this Agreement. “Exactions” means exactions that may be imposed by the City as a condition of developing the Project, including in-lieu payments; requirements for acquisition, dedication or reservation of land; and obligations to construct on-site or off-site public and private infrastructure improvements such as roadways, utilities or other improvements necessary to support the Project, whether such exactions constitute subdivision improvements, mitigation measures in connection with environmental review of the Project, or impositions made under Applicable City Regulations. “Exempt City Laws” shall have that meaning set forth in Section 8.10(c) of this Agreement. “Existing Office Space Development Allocations” shall have that meaning set forth in Section 4.3(b) of this Agreement. “First Extension” shall have that meaning set forth in Section 2.3 of this Agreement. “General Plan” shall have that meaning set forth in Recital J. “General Plan Amendments” shall have that meaning set forth in Recital Q(2) of this Agreement. “General Plan Office Space Development Allocations” shall have that meaning set forth in Section 4.3(a) of this Agreement. “Glendenning Barn Relocation Contribution” shall have that meaning set forth in Section 3.6 of this Agreement. “I-280 Trail Contribution” shall have that meaning set forth in Section 3.10 of this Agreement. “IL Campus” shall have that meaning set forth in Recital O above. “Impact Fees” means the monetary amount charged by City in connection with a development project for the purpose of defraying all or a portion of the cost of mitigating the impacts of the development project or development of the public facilities related to the development project, including, any “fee” as that term is defined by Government Code section 66000(b), but not including Cost Recovery Fees. “Indemnified Parties” shall have that meaning set forth in Section 11.1(a). “Initial Term” shall have that meaning set forth in Section 2.2 of this Agreement. “Judgment” shall have that meaning set forth in Section 11.2(a) of this Agreement. 8 OAK #4816-8465-9477 v9 “MMRP” shall have that meaning set forth in Recital Q(1) of this Agreement. “Mortgagee” shall have that meaning set forth in Section 14.1 of this Agreement. “Notice of Compliance” shall have that meaning set forth in Section 10.5 of this Agreement. “Office Space Allocation” shall have that meaning set forth in Section 4.3(c) of this Agreement. “Park Land Acquisition Amount” shall have the meaning set forth in Section 3.7 of this Agreement. “Park Land Contribution” shall have the meaning set forth in Section 3.7 of this Agreement. “Periodic Review” shall have that meaning set forth in Section 12.3(a) of this Agreement. “Phase 1” shall mean the construction of the 2,820,000 square foot ring-shaped main building with a 2,385 space underground parking facility, a 100,000 square foot fitness center, a 120,000 square foot (1,000 seat) auditorium, a 5,870 space main parking structure with attached central plant, a 765-space auditorium, employee and visitor parking structure with 25,000 square foot valet parking reception area, 7,000 square foot visitor/security reception structures, a 10,000 square feet of landscaping and maintenance buildings, 10,000 square feet of outdoor food stations, and ancillary on-site and off-site public and private improvements. All figures are approximate. “Phase 2” shall mean all subsequent phase or phases of the Project which are not included within Phase 1, including the development of 600,000 square feet of office and research and development buildings with 1,740 parking stalls and two satellite plants for energy generation and ancillary on-site and off-site public and private improvements. All figures are approximate. “Planning Commission” shall have that meaning set forth in Recital Q(1) above. “Project” shall have that meaning set forth in Recital D above. “Project Approvals” shall have that meaning set forth in Recital Q(2) above. “Project Site” shall have that meaning set forth in Recital C above. “Property” shall have that meaning set forth in Recital C above. “Pruneridge Vacation Area” shall have that meaning set forth in Section 6.1. 9 OAK #4816-8465-9477 v9 “Rezoning” shall have that meaning set forth in Recital Q(2) of this Agreement. “Second Extension” shall have that meaning set forth in Section 2.3 of this Agreement. “Subsequent Approvals” shall mean all other land use approvals, entitlements, and permits other than the Project Approvals that are necessary or desirable for the Project. In particular, as addressed in the EIR, the parties contemplate that Apple will seek certain approvals for Phase 2 of the Project, including development permits, conditional use permits and other discretionary and ministerial permits and approvals in furtherance of the Project Approvals. The Subsequent Approvals may also include, without limitation, the following: amendments of the Project Approvals, design review approvals, including architectural site assessments, improvement agreements, use permits, grading permits, building permits, lot line adjustments, sewer and water connection permits, certificates of occupancy, subdivision maps, preliminary and final development plans, re-subdivisions, and any amendments to, or repealing of, any of the foregoing. Subject to the limitations set forth herein, the City retains discretion on site plan and architectural review for the Phase 1 parking structure located on North Tantau Avenue and for all of Phase 2. Except as otherwise provided in Section 8.7, Subsequent Approvals may not change the conditions of approval previously approved, unless mutually agreed to in writing by City and Apple in accordance with Section 9.1(a) hereof. “Term” shall have that meaning set forth in Section 2.3 of this Agreement. “Tax Consulting Agreement” shall have that meaning set forth in Recital R of this Agreement. “Tax Localization Plan” shall have that meaning set forth in Section 3.3(a) of this Agreement. “Traffic Signal Preemption Contribution” shall have that meaning set forth in Section 3.9 of this Agreement. “Transfer Agreement” shall have that meaning set forth in Section 10.1(b) of this Agreement. ARTICLE 2 EFFECTIVE DATE, TERM AND TERMINATION OF HP DEVELOPMENT AGREEMENT. Section 2.1Effective Date. This Agreement shall become effective as specified in Recital L. Section 2.2Initial Term. The initial term of this Agreement shall commence upon the th Effective Date and expire on the sixth (6) anniversary thereof (“Initial Term”). Section 2.3Extensions to Term. If Apple completes construction of two million four hundred thousand (2,400,000) square feet of new office and research and development space on 10 OAK #4816-8465-9477 v9 the Project Site after the Effective Date and prior to the expiration of the Initial Term, this Agreement shall be automatically extended for an additional six (6) years (the “First Extension”). If Apple fails to complete construction of this new square footage by the expiration of the Initial Term, the Agreement will terminate. If the First Extension occurs and if Apple completes construction of three million (3,000,000) square feet of new office, research and development, and amenity space from the Effective Date through the twelfth (12th) anniversary thereof, the Agreement shall be automatically extended for an additional eight (8) years (the “Second Extension”), for a total term of twenty (20) years from the Effective Date. As used herein, “Term” means the Initial Term and, if applicable, the First Extension and Second Extension. Apple shall not be obligated to pay a fee or charge for the automatic extensions to the Initial Term. New square footage means development of any new office and research and development space in the case of the First Extension, or any new office, research and development and amenity space, in the case of the Second Extension, and, in both cases, includes new space replacing all or a portion of the existing square footage in place as of the Effective Date and new space in excess of such existing square footage. For purposes of this Section 2.3, “Completion” shall mean issuance to Apple of a temporary or permanent Certificate of Occupancy, which the City shall not unreasonably withhold, or other reasonable evidence of completion sufficient for the Project or portion thereof to be used for its intended purpose. All time periods referenced in this Section (and any termination of the Agreement) shall automatically be tolled in the event of excusable delay as provided in Section 12.5 below. Section 2.4Apple Termination for Convenience. Subject to the terms of this Section 2.4, at any time after the Initial Term, and for any reason, Apple may terminate this Agreement by written notice to City. The effective date of termination, which shall not be sooner than 3 months following the date of Apple’s notice, shall be specified in the notice of termination. Except as otherwise provided in Section 4.7 below with respect to City’s obligation to return sequestered Contributions funds to Apple if litigation prevents Apple from developing a campus substantially consistent with the Project contemplated by this Agreement and Project Approvals, if, for any reason, Apple has not paid City the full amount of each of the Contributions as of the date of such notice, Apple’s termination notice shall be accompanied by payment of the remaining balance of such unpaid Contributions. Such termination shall be treated in the same manner as expiration of this Agreement at the end of the Term. Section 2.5City Termination In Event of Change in Use. If Apple and/or its successor desire to use the Property for a purpose other than a corporate campus, and provided that such use is permitted under the Cupertino Municipal Code, the City may elect to terminate this Agreement by written notice to Apple. Such termination shall be treated in the same manner as expiration of this Agreement at the end of the Term. Section 2.6HP Development Agreement Cancellation. Apple agrees that as of the Effective Date, that certain development agreement between Apple’s predecessor-in-interest, Hewlett-Packard Company, and the City dated November 6, 1995, approved by City Council Ordinance No. 1702, as amended, has been cancelled pursuant to Government Code Section 65868 and is of no further force or effect. 11 OAK #4816-8465-9477 v9 ARTICLE 3OBLIGATIONS OF APPLE. Section 3.1Obligations of Apple Generally. The parties acknowledge and agree that the City’s agreement to perform and abide by the covenants and obligations set forth in this Agreement is a material consideration for Apple’s agreement to perform and abide by its long term covenants and obligations, as set forth in this Agreement. The parties acknowledge that many of Apple’s long term obligations set forth in this Agreement are in addition to Apple’s agreement to perform all the mitigation measures identified in the MMRP and Conditions of Approval. Section 3.2Affordable Housing Contribution. As set forth in the EIR, Apple agrees to pay the City an amount equal to two times the otherwise applicable City affordable housing in-lieu fee for the North Vallco Area (“Affordable Housing Contribution”) to fund the development of affordable housing in the City. The Affordable Housing Contribution will be calculated on the increase in square footage of building space, including office, research and development and Campus Amenity Space, at full build out of the Project, over the square footage of building space on the Property as of the Effective Date (i.e. 2,891,500 sq. ft.), and shall be paid by Apple, in full, no later than thirty-one (31) days after the Effective Date. Section 3.3Tax Localization Plan and Requirements. (a)Apple shall require the incorporation of requirements substantially in the form set forth in Exhibit DA-1c in its contracts with general contractors performing work at the Project Site, in connection with causing sales and use tax arising from purchases of materials, fixtures or equipment for the Project to be allocated to the City, to the extent allowed by law (the “Tax Localization Plan”). Apple shall direct its general contractors to comply with the Tax Localization Plan. In order to monitor compliance with the Tax Localization Plan, Apple shall designate a representative for the purpose of semiannual review with the City of relevant documents and filings with the State Board of Equalization. (b)Subject to the succeeding sentence, as between Apple and City, Apple shall be responsible for the administrative expenses incurred in connection with the Tax Localization Plan. Subsequent to receipt by City of the first ten million dollars ($10,000,000) in sales and use tax under the Tax Localization Plan, City will pay the actual administrative costs incurred in connection with the Tax Localization Plan, up to an aggregate amount of six hundred thousand dollars ($600,000). Such payments shall be made within thirty (30) days, following City’s receipt of invoices from Apple, together with reasonable supporting documentation of the administrative costs. Section 3.4Construction Tax. Pursuant to CMC Chapter 3.32, Apple shall pay City, on a per-square-foot basis, a one-time construction tax based on the gross building area (as defined in CMC Chapter 3.32.020) for industrial, office and commercial space constructed in connection with the Project, exclusive of non-commercial parking lots. The applicable tax rate as calculated by City shall be adjusted quarterly. Apple shall pay the construction tax 12 OAK #4816-8465-9477 v9 applicable to the first 2.4 million square feet of development no later than thirty-one (31) days after the Effective Date. If litigation is filed within applicable challenge periods to the Project Approvals, Apple may request by written notice to City that City sequester the initial installment of construction tax in a segregated interest bearing account and defer further expenditure of such funds until the earlier of (1) the date on which such litigation is resolved in a manner which allows Apple to develop a campus substantially consistent with the Project contemplated by this Agreement and the Project Approvals, and (2) the date on which Apple commences mass grading of the Property in connection with development of the Project. If Apple has not commenced mass grading of the Property and the litigation is not resolved in a manner which allows Apple to develop a corporate campus substantially consistent with the Project contemplated by this Agreement and the Project Approvals, then Apple may terminate this Agreement and the Development Permit and consent to return of the Property’s zoning and general plan land use designations to the zoning and general plan land use designations in place immediately prior to the Effective Date, and thereafter City shall promptly refund the initial installment of the construction tax (and all other unexpended Contributions), together with all interest thereon, to Apple. Section 3.5Tax Consulting Agreement. Apple shall cause its wholly owned subsidiary, Baz Industries, Inc., a California corporation, the successor to ACI Holdings, Inc., to amend the Tax Consulting Agreement with the City to provide substantially as follows: So long as the Development Agreement remains in effect, and regardless of the reason for termination, Sections 2(c), (d) and (e) shall be deleted and replaced with a new Section 2(c) reading: “If, for any fiscal year during the term covered by this Agreement, new local tax revenue exceeds Two Hundred Fifty Thousand Dollars ($250,000), then Consultant shall receive the sum of Sixty Two Thousand Five Hundred Dollars ($62,500) plus an amount equal to thirty-five percent (35%) of all such new local tax revenue in excess of Two Hundred Fifty Thousand Dollars ($250,000).” The Tax Consulting Agreement shall also include provisions that require payments, refunds and deposits into escrow so that the compensation paid by the City thereunder shall accurately reflect the tax revenues allocated to and retained by the City. Apple represents that it has not entered into a tax consulting agreement, similar to the existing Tax Consulting Agreement, with any other city and/or county in California, and Apple agrees not to do so during the term of this Agreement. The amendment to the Tax Consulting Agreement shall be effective no later than thirty-one (31) days after the expiration of all applicable challenge periods to the Project Approvals, without the filing of litigation. Apple will assist City at Apple’s sole expense in defending against any administrative proceedings instituted by the State Board of Equalization relating to whether the City is the proper point-of-sale location. Section 3.6Glendenning Barn. Consistent with MMRP mitigation CULT-1, Apple, at its expense, will be responsible for (1) relocating the Glendenning Barn to a new location on the Project Site acceptable to the City or relocating Glendenning Barn to a location off the Project Site to be designated by City, and (2) ensuring that the relocated barn meets applicable State historic building code requirements. Apple shall substantially complete such relocation work prior to issuance of the first certificate of occupancy for building space in the Project. If Apple elects to relocate the Glendenning Barn off the Project Site, it shall notify the City of its election 13 OAK #4816-8465-9477 v9 in writing within ninety (90) days after the Effective Date. In addition, if, and only if, the Glendenning Barn is relocated off the Project Site, Apple shall pay city Two Million Six Hundred Forty Four Thousand and Thirty-Five Dollars ($2,644,035) (the “Glendenning Barn Relocation Contribution”), which represents the agreed upon costs of acquiring or providing a relocation site for the Glendenning Barn on City-owned property, the cost of improvements to the relocation site and the Glendenning Barn, the net present value of annual maintenance expenses, and additional amounts for capital repair costs anticipated in years ten and twenty. Apple will pay such amount to City within thirty (30) days after receipt of City’s written demand, which may be given at any time following relocation of the Glendenning Barn; provided, however, if City opts to acquire a new site for the Glendenning Barn rather than locate the Glendenning Barn on an existing City-owned site, then Apple will deposit up to $1,000,000 of the Glendenning Barn Relocation Contribution in the escrow established for City’s purchase of such new site so that the funds can be applied towards the purchase price payable by City at closing, in which case the balance of the Glendenning Barn Relocation Contribution will be payable by Apple following relocation of the Glendenning Barn as provided above. Section 3.7Parkland Contribution. In connection with Mitigation Measure PLAN-1 in the EIR, the parties agree that the sum of Eight Million Two Hundred Seventy Thousand Nine Hundred Ninety-Four Dollars ($8,270,994) (the “Park Land Contribution”) constitutes sufficient funds to acquire 1.1 acres of park land, improve it with park equipment and provide a maintenance and capital replacements endowment for twenty (20) years. Apple will pay the Park Land Contribution into the City’s Parks Fund, to be used exclusively for park purposes, within ninety (90) days after the Effective Date. As an alternative to the payment for acquisition of the 1.1 acres for parkland and as contemplated by Mitigation Measure PLAN-1, Apple may purchase, designate and dedicate to the City, 1.1 acres elsewhere in the City as Parks and Open Space, provided the land is publicly accessible and appropriate for public park use as determined by City and otherwise acceptable to City in its reasonable discretion. If Apple elects this option, the Park Land Contribution will be reduced by the amount the parties have designated as the portion of the aggregate payment reflecting the acquisition of park land (the “Park Land Acquisition Amount”) regardless of the actual amount Apple paid for the designated parcel. If Apple acquires and conveys a suitable alternative park land site to City after Apple has paid the Park Land Contribution, but before the City has itself entered into an agreement to purchase a park land site, then City will refund the Park Land Acquisition reasonable out-of-pocket amounts, if any, that City may have already committed Amount (less or expended in connection with site selection and acquisition activities, such as due diligence review, title review, appraisals, and environmental investigations, and for which City provides reasonable documentation) concurrently with Apple’s transfer of title to the alternative park land site. To avoid incurring unnecessary and duplicative costs, if either party is in negotiations or is otherwise preparing to purchase an alternative park parcel, that party shall promptly notify the other party of that fact. Section 3.8Fiber Optic Conduit Installation. Apple, at its expense, shall install an additional separate fiber optic conduit along Wolfe Road between the 280 Freeway and Homestead Road, solely in order to accommodate City’s usage. The fiber optic conduit shall be 14 OAK #4816-8465-9477 v9 installed in accordance with plans and specifications approved by the Director of Public Works. City shall be responsible for installation and maintenance of fiber within the separate conduit. Section 3.9Traffic Signal Preemption Devices. In addition to complying with Mitigation Measure PSU-1, Apple shall fund similar traffic signal preemption throughout the City at a cost not to exceed Three Hundred Twenty Thousand Dollars ($320,000) (the “Traffic Signal Preemption Contribution”). Apple shall pay amounts requested within thirty (30) days after receipt of City’s invoice, accompanied by reasonable documentation supporting City’s installation of the signal preemption covered by the invoice. Section 3.10I-280 Trail Contribution. As provided by Mitigation Measure PLAN-3 in the EIR, Apple shall contribute Two Hundred Fifty Thousand Dollars ($250,000) toward the cost of a study of a bike and/or pedestrian path, including, potentially, a full Class I separated trail where rights-of-way are adequate, along the drainage channel that runs parallel to southbound I-280 between North De Anza Boulevard and Calabazas Creek, and then south along the western bank of Calabazas Creek to Vallco Parkway (the “I-280 Trail Contribution”). The I-280 Trail Contribution shall be paid no later than thirty-one (31) days after the Effective Date. Section 3.11Storm Drain Facilities, Storm Drains and Runoff. This Agreement does not affect Apple’s obligations to pay for or construct improvements in the storm drain system required to implement the Project, nor does it affect Apple’s obligations to meet any applicable federal, state and local discharge limits and requirements pertaining to storm drain facilities, storm drains or runoff. Section 3.12Real Property Acquisition. Any right-of-way or property right necessary for the completion of portions of the Project or the implementation of the MMRP or Conditions of Approval will be Apple’s responsibility. The City, at Apple's expense, shall obtain an appraisal suitable for the purpose of government acquisitions. Apple shall then make diligent and good faith efforts to acquire all necessary properties. If any of the negotiations for any of the acquisitions reach impasse, at City's request, Apple shall deposit with City the amount of the fair market appraisal plus estimated soft acquisition costs and costs of proceeding, including the costs of obtaining or seeking possession of the property, as City reasonably determines. If the actual costs of acquisition are greater than the deposit, Apple will provide additional funds to City upon notice in order to pay all costs of acquisition. City may require that Apple make periodic payments requested by City to cover costs. Any additional remaining deposit will be returned to Apple upon conclusion of the acquisition. By entering into this Agreement, City does not commit to exercising the power of eminent domain to acquire any property, and has not made any decision or commitment in regard to exercising that power. Under Applicable Law and under this Agreement, the determination to proceed by way of eminent domain to acquire any property or interest in property is within the sole and exclusive authority of the City Council, and City has not waived or relinquished any of its powers to solely decide whether, when, and on what terms it may consider, deny, approve, or pursue acquisition by use of the power of eminent domain. 15 OAK #4816-8465-9477 v9 Section 3.13Mitigations. Apple agrees to contribute to the costs of public facilities and services in the amounts set forth in the Development Plan, Project Approvals, MMRP and Conditions of Approval, as required to mitigate impacts of the development of the Property. City and Apple recognize and agree that but for Apple’s contributions to mitigate the impacts arising as a result of the entitlements granted pursuant to this Agreement and the Project Approvals, City would not and could not approve the development of the Property as provided by this Agreement and the Project Approvals. City’s approval of development of the Property is in reliance upon, and in consideration of, Apple’s agreement to make contributions toward the cost of public improvements and public services as provided to mitigate the impacts of development of the Property. ARTICLE 4 OBLIGATIONS OF CITY. Section 4.1Obligations of City Generally. The parties acknowledge and agree that Apple’s agreement to perform and abide by its covenants and obligations set forth in this Agreement, including Apple’s decision to process the Project in the City, is a material consideration for City’s agreement to perform and abide by the long term covenants and obligations of City, as set forth in this Agreement. Section 4.2Protection of Rights. To the maximum extent permitted by Applicable Law, City shall take any and all actions as may be necessary or appropriate to ensure that the vested rights provided by this Agreement can be enjoyed by Apple and to prevent any City Law, as defined below, from invalidating or prevailing over all or any part of this Agreement. City shall cooperate with Apple and shall undertake such actions, at Apple’s expense, as may be necessary to ensure this Agreement remains in full force and effect. City shall not support, adopt, or enact any City Law, or take any other action that would violate the express provisions or intent of the Project Approvals or, when issued, the Subsequent Approvals. Section 4.3Development Allocations. (a)New Office Space Development Allocations. In accordance with the stated goals of the General Plan encouraging development of corporate headquarters that positively contribute to the City’s fiscal well-being, and to establish a reasonable entitlement basis enabling Apple to invest substantial resources in the Property, City assigns to the Property the Office Space Allocations currently available under the General Plan as set forth in Exhibit DA-1d, attached hereto and incorporated herein (the “General Plan Office Space Development Allocations”). (b)Preservation of Existing Office Space Development Allocations. Notwithstanding the vacancy or demolition of any or all of the existing structures on the Property, City confirms that the gross square footage of the buildings existing on the Property as of the Effective Date is and shall remain part of the Property’s fully entitled existing office space allocation (the “Existing Office Space Development Allocations”), which can be used for realization of the Project. 16 OAK #4816-8465-9477 v9 (c)Office Space Allocation. The General Plan Office Space Development Allocations and the Existing Office Space Development Allocations together comprise the “Office Space Allocation.” Office space in the Project that will be counted as part of the Office Space Allocation will be calculated as the gross office area, including the building structure. Section Excluded from the Office Space Allocation will be Campus Amenity Space identified in 4.3(d), below. (d)Campus Amenity Space. In order to promote personal enrichment for Apple’s employees, enhance their health and wellness, and provide on-site amenities, thereby substantially reducing the employees’ vehicle trips, City agrees that amenity space planned for the Project will not be counted as part of the Office Space Allocation. Such spaces shall include exterior bridges; portions of certain walkways that connect buildings, cafeterias and cafes; fitness and wellness centers; and an auditorium all as more particularly described in Exhibit DA-1e (“Campus Amenity Space”). Should Apple wish to convert any Campus Amenity Space to office space or other non-amenity space then Apple shall apply for additional office allocation space. City reserves full discretion with respect to review and approval of any Section proposed conversions. To the extent permitted by Applicable Law, and subject to 8.10(a) below, applications to convert Campus Amenity Space shall be processed administratively and approved by the Community Development Director. (e)Preservation of Existing Credits, Development Rights. Notwithstanding the vacancy or demolition of any or all of the existing structures on the Property, City confirms that Apple can rely on City cooperating to take steps or make such determinations as are necessary to preserve and retain for Apple’s benefit the existing development rights and credits enjoyed by or applicable to the Property, in particular, infrastructure allocations (including, but not limited to, traffic, sewer, water and other service capacities or allocations) within or servicing the Property, to the extent such allocations fall solely within the City’s jurisdiction. Section 4.4Apple’s Right to Rebuild. City agrees that Apple, in its sole discretion, may renovate or rebuild all or portions of the Project during the Term of this Agreement should it become necessary due to natural disaster, changes in seismic requirements, changes in technology, or should the buildings located within the Project become functionally outdated. However, any such renovation or rebuilding shall be subject to the square footage and height limitations vested by this Agreement, and shall comply with the Project Approvals, the building codes existing at the time of such rebuilding or reconstruction, and the requirements of CEQA. Section 4.5Design of On-Site and Off-Site Improvements. Except as otherwise provided below, the City recognizes that the Project Approvals include final architectural and site approvals for Phase 1 and that no further architectural or design review shall be required for the full build out of Phase 1. Apple acknowledges that architectural and site approvals still need to be obtained for the parking structure to be located on North Tantau Avenue. Architectural and site approvals for the North Tantau Avenue garage are Subsequent Approvals and shall be subject to review and approval by City as provided in this Agreement. Development of Phase 2 and certain off-site improvements shall be subject to final architectural 17 OAK #4816-8465-9477 v9 and design review by City in accordance with Applicable Law. The Project Approvals, including Conditions of Approval and all improvement plans prepared in accordance with the Conditions of Approval, shall govern the design and scope of all on-site and off-site improvements benefiting, or to be constructed on the Property, including all street widths and dedications. Except as otherwise expressly provided herein, the City shall not impose requirements or conditions upon Project development and construction that are inconsistent with the Project Approvals. Further, except as expressly provided herein, the City shall not exercise discretion in determining whether or how to grant Subsequent Approvals in a manner that would prevent development of the Project for the uses and to the maximum intensity of development set forth in the Project Approvals. Section 4.6Development of the Site. In consideration for City entering into this Agreement, Apple agrees to perform all of its obligations contained in this Agreement in the time and manner set forth in the Project Approvals. Notwithstanding any other provision in this Agreement, City acknowledges that this Agreement does not obligate Apple to build the Project or any component of the Project. Section 4.7Sequestration of Contributions in the Event of Litigation. City shall not expend or commit to third parties any portion of the Contributions prior to the date which is sixty five (65) days after the Effective Date. If litigation is filed within applicable challenge periods to the Project Approvals, Apple may request in writing that City sequester that portion of the Contributions which have not previously been expended or committed to third parties in a segregated interest bearing account and defer further expenditure of such funds until the earlier of (1) the date on which such litigation is resolved in a manner which allows Apple to develop a headquarters campus substantially consistent with the Project contemplated by this Agreement and the Project Approvals, and (2) the date on which Apple commences mass grading of the Property in connection with development of the Project. If Apple has not commenced mass grading of the Property and the litigation is not resolved in a manner which allows Apple to develop a corporate campus substantially consistent with the Project contemplated by this Agreement and the Project Approvals, then Apple may terminate this Agreement and the Development Permit and consent to return of the Property’s zoning and general plan land use designations to the zoning and general plan land use designations in place immediately prior to the Effective Date, and thereafter City shall promptly refund the Contributions, together with all interest thereon, to Apple. ARTICLE 5 DEVELOPMENT FEES, EXACTIONS AND DEDICATIONS. Section 5.1Development Impact Fees, Exactions and Dedications. Except as otherwise expressly provided herein, during the Term, City shall have the right to impose only such Impact Fees, Exactions and dedications as City has adopted as of the Effective Date of this Agreement , including those set forth in the Project Approvals, including Conditions of Approval. For convenience of reference, the City Impact Fees in effect as of the Effective Date attached hereto and incorporated herein. Any Impact Fees that are identified in Exhibit DA-1f may are in existence as of the Effective Date but are inadvertently omitted from Exhibit DA-1f 18 OAK #4816-8465-9477 v9 still be charged. During the Term, the City may increase the existing City Impact Fees but only to reflect increases in cost of living expenses, as measured by the cumulative Consumer Price Index for All Urban Consumers (“CPI-U”), as defined in Cupertino’s CMC Section 5.04.460 (and as reflected in the most recent report of consumer prices for the San Francisco/Bay Area Standard Metropolitan Statistical Area as published by the U.S. Department of Labor, Bureau of Labor Statistics). Except as otherwise expressly provided in this Agreement, during the Term no other increases to Impact Fees in existence on the Effective Date and no new City Impact Fees or Exactions imposed after the Effective Date shall apply to the Project. Section 5.2Cost Recovery Fees. During the Term, Apple shall be responsible for the costs to City of processing any land use approvals, including without limitation, building permits, plan checks, inspection fees, environmental studies required under CEQA and other similar requests for City permits and Subsequent Approvals, at the rates in effect from time to time (“Cost Recovery Fees”). Cost Recovery Fees may be increased if the increase is applicable citywide and reflects the reasonable cost to City of performing the administrative processing or other service for which the particular Cost Recovery Fee is charged. Apple shall pay all applicable Cost Recovery Fees, in effect from time to time at then applicable rates related to the actual provision of direct services to the Project. Cost Recovery Fees shall be due and payable on a phase-by-phase basis, so that only those fees applicable to the actual construction of each phase shall be paid upon the issuance of the applicable permits for that phase. If Apple requests City to make additional, accelerated, or more frequent inspections than would otherwise take place in City’s ordinary course of business, then City may either hire additional contract inspectors, plan checkers, engineers or planners or City may hire a full- or part-time employee(s), subject to Apple’s prior written approval. If City hires additional contractors or consultants, then Apple shall reimburse City the reasonable cost of such additional contractors or consultants, plus an administrative and overhead charge of ten (10) percent. If City hires a full or part-time employee(s), then Apple shall reimburse City for a pro rata share of the total cost of the employee(s), as agreed to by Apple in advance and in writing. This obligation shall remain for the Term of this Agreement. Section 5.3Retroactive Permits, Fees, and Fines. If and to the extent Apple or the Property is subject to fees or fines for retroactive permits or fees or fines designed to be punitive in nature, Apple shall pay such fees or fines at the rates in effect at the time such fees or fines are imposed, as long as those same fees, fines or retroactive permit charges are applicable City- wide and payable by other developers and builders under the same or similar circumstances. Section 5.4Connection Fees. During the Term, Apple shall pay all applicable Connection Fees at the rates in effect from time to time. Section 5.5Vesting Tentative Map. Apple has filed a Vesting Tentative Map. Notwithstanding the provisions of the Subdivision Map Act, Apple agrees that the rights under the Vesting Tentative Map are vested as of the Effective Date and all provisions related to fees ARTICLE 5 of this Agreement. shall be governed by 19 OAK #4816-8465-9477 v9 Section 5.6Fees Imposed by Outside Agencies. During the Term, City agrees to exclude Apple from any and all collection agreements regarding fees, including without limitation development impact fees, which other public agencies request City to impose at City’s discretion on the Project or the Project Site after the Effective Date. Nothing in this Section 5.6 shall prohibit the City from imposing on Apple any mandatory fee or obligation that is imposed by a regional agency in accordance with regional, state or federal requirements and implemented by the City in cooperation with such regional agency. ARTICLE 6 VACATION OF PRUNERIDGE. Section 6.1Vacation of Pruneridge Avenue. As part of the Project Approvals, City has determined to vacate and sell to Apple that certain approximately 4.64 acre portion of Pruneridge Avenue identified in Exhibit DA-1g attached hereto and incorporated herein (the “Pruneridge Vacation Area”), in exchange for, and concurrent with, Apple’s causing its wholly owned subsidiary, CHI, to purchase the City’s fee interest in the Pruneridge Vacation Area. The area to be vacated and sold to CHI specifically excludes the area necessary to provide continued public street access to The Hamptons apartment complex. The parties shall cooperate to implement the street vacation. Section 6.2Purchase of Pruneridge Avenue. City’s decision to vacate the Pruneridge Vacation Area, subject to completing the relocation of all utilities and appurtenances within the roadway area at Apple’s expense, was based on Apple agreeing to pay or causing CHI to pay City Twenty Three Million Eight Hundred Fourteen Thousand Two Hundred Fifty-Seven Dollars ($23,814,257) for the City’s fee interest and all appurtenances, including all easements and rights-of-way, in such property. The parties acknowledge that the purchase price for the Pruneridge Vacation Area includes a substantial premium over fair market value. Apple’s obligation to cause CHI to purchase the Pruneridge Vacation Area upon completion of the vacation and relocation of existing utilities and appurtenances is set forth in a separate purchase and sale agreement between City and CHI dated ____________. Section 6.3Street Closure. The street closure is contingent upon the substantial relocation of all utilities within the Pruneridge Vacation Area, as reasonably determined by the Director of Public Works. ARTICLE 7 COOPERATION – IMPLEMENTATION. Section 7.1Processing Application for Subsequent Approvals. City and Apple anticipate that the Project will be implemented in accordance with the Project Approvals, including the MMRP and the Conditions of Approval. The foregoing actions and other necessary or convenient implementation actions shall not require an amendment to this Agreement. By certifying the EIR, and approving the General Plan Amendments and other Project Approvals, the City has made a final policy decision that the Project is in the best interests of the public health, safety and general welfare. Accordingly, the City shall not use its discretionary authority in considering any application for a Subsequent Approval to change the 20 OAK #4816-8465-9477 v9 policy decisions reflected by the Project Approvals or otherwise to prevent or delay development of the Project as set forth in the Project Approvals. Instead, the Subsequent Approvals shall be deemed to be tools to implement those final policy decisions and shall be issued by City so long as they comply with this Agreement and Applicable Law and are not inconsistent with the Project Approvals as set forth above. Apple acknowledges that Applicable Law, the Project Approvals and this Agreement contemplate further City review of elements or portions of the Project, such as architectural and site review of the Phase 1 parking garage on North Tantau Avenue and all of Phase 2, including potential supplemental CEQA compliance, if required. Nothing in this Agreement shall be deemed to limit City’s legal authority with respect to these reviews as provided by and otherwise consistent with this Agreement. In no event shall such further review by City revisit the Conditions of Approval, or the Project Approvals or be conditioned on or require any change in the Project except as otherwise provided in the Project Approvals or this Agreement or as otherwise required by Applicable Law. Section 7.2Timely Submittals By Apple. Apple acknowledges that City cannot expedite processing Subsequent Approvals until Apple submits complete applications on a timely basis. Apple shall use its best efforts to: (1) provide to City in a timely manner any and all documents, applications, plans, and other information necessary for City to carry out its obligations hereunder; and (2) cause Apple’s planners, engineers, and all other consultants to provide to City in a timely manner all such documents, applications, plans and other necessary required materials. It is the express intent of Apple and City to cooperate and diligently work to obtain any and all Subsequent Approvals. Section 7.3Timely Processing By City. Upon Apple’s submission of all appropriate applications and Cost Recovery Fees for any Subsequent Approval, City shall promptly and diligently commence and complete all steps necessary to act on the Subsequent Approval application including, without limitation: (1) providing at Apple’s request and sole expense, outside building consultants to review plans or otherwise assist City’s efforts to expedite City processing and approval work (Apple shall pay for these outside consultant costs at cost plus 10% for administrative costs incurred); (2) if legally required, providing notice and holding public hearings; and (3) acting on any such Subsequent Approval applications. Section 7.4Specific Subsequent Approvals. The parties acknowledge that Apple has not filed appropriately detailed plans in order for the City to act on certain Subsequent Approvals as of the Effective Date, including, among others, site plan and architectural review of the Phase 1 parking garage on North Tantau Avenue and development permits and conditional use permits that may be necessary for development of the Phase 2 buildings and improvements. In addition to the other general covenants concerning processing of Subsequent Approvals set forth in this Agreement, City shall, to the maximum extent permitted by Applicable Law, promptly and diligently commence and complete all steps (including noticing and public hearings) necessary to act on these contemplated Subsequent Approval applications. 21 OAK #4816-8465-9477 v9 Section 7.5Other Government Permits. At Apple’s sole discretion and in accordance with Apple’s construction schedule, Apple shall apply for such other permits and approvals as may be required by other governmental or quasi-governmental entities in connection with the development of, or the provision of services to, the Project. City shall cooperate with Apple in Apple’s efforts to obtain such permits and approvals and shall, from time to time at Apple’s request and at Apple’s expense, use its best efforts to enter into binding agreements with any such entity as may be necessary to ensure the timely availability of such permits and approvals. Section 7.6Cooperation with Public Services. To the maximum extent permitted by Applicable Law and consistent with its authority, City, at Apple’s expense, shall cooperate and assist Apple in Apple’s efforts to reserve capacity for sewer and water services from other third party governmental entities. ARTICLE 8 STANDARDS, LAWS AND PROCEDURES GOVERNING THE PROJECT. Section 8.1Vested Right to Develop. Subject to the fulfillment of the terms and obligations of this Agreement, for the Term of this Agreement Apple shall have a vested right to develop the Project on the Project Site in accordance with the Project Approvals and the terms and conditions of this Agreement. Nothing in this Section shall be deemed to eliminate or diminish Apple’s obligation to obtain any required Subsequent Approvals. Section 8.2Permitted Uses Vested by This Agreement. The permitted uses of the Project Site; the density and intensity of use of the Project Site; the maximum height, bulk and size of proposed buildings; provisions for reservation or dedication of land for public purposes and the location of public improvements; the general location of public utilities; and other terms and conditions of development applicable to the Project, shall be as set forth in the Project Approvals and, as and when they are issued (but not in limitation of any right to develop as set forth in the Project Approvals), the Subsequent Approvals. The permitted uses for the Project are those specified in the Project Approvals and CMC Section 19.72.030. Section 8.3Intentionally Omitted. Section 8.4State and Local Building Standards. Except as otherwise provided herein or as may be required by Applicable Law, the City shall apply to Phase 1 of the Project, all State and local building standards and City’s design and construction standards for road and storm drain facilities, in effect on the Effective Date. For Phase 2 and off-site improvements, the City may apply any updated and adopted State and local building standards in effect at the time the Phase 2 permit or off-site improvement applications, as applicable, are substantially complete and submitted for plan review to the City Building Department, provided any such standards have been adopted and uniformly applied by City on a citywide basis and provided further that no such standards are adopted for the purpose of preventing, frustrating or otherwise limiting construction of all or any part of the Project. Section 8.5No Conflicting Enactments. City shall not impose on the Project (whether by action of the City Council or by initiative, referendum or other means) any ordinance, 22 OAK #4816-8465-9477 v9 resolution, rule, regulation, standard, directive, condition or other measure (each individually, a “City Law”) that is in conflict with Applicable Law or this Agreement or that reduces the development rights or assurances provided by this Agreement. Notwithstanding the preceding sentence, Apple may consent in its sole discretion and in writing to any new City Law. Without limiting the generality of the above, any City Law shall be deemed to conflict with Applicable Law or this Agreement or reduce the development rights provided hereby if it would result in any of the following, either by specific reference to the Project or as part of a general enactment which applies to or affects the Project: (a)Change any land use designation or permitted use of the Project Site; (b)Limit or control the availability of public utilities, services or facilities or any privileges or rights to public utilities, services, or facilities (for example, water rights, water connections or sewage capacity rights, sewer connections and the like) for the Project, provided, however, nothing herein shall be deemed to exempt the Project or the Project Site from any City-wide or regional water use rationing requirements that may be imposed from time to time in the future; (c)Limit or control the location of buildings, structures, grading, or other improvements comprising the Project in a manner that is inconsistent with or more restrictive than the limitations included in the Project Approvals or the Subsequent Approvals (as and when they are issued); (d)Limit or control the rate, timing, phasing or sequencing of the approval, development or construction of all or any part of the Project in any manner; (e)Apply to the Project any City Law otherwise allowed by this Agreement that is not uniformly applied on a City-wide basis to all substantially similar types of development projects and project sites; (f)Result in Apple having to substantially delay construction of the Project or require the issuance of additional permits or approvals by the City other than those required by Applicable Law; (g)Substantially increase the cost of constructing or developing the Project or any portion thereof, unless failure to impose such restrictions would place the employees and workers at the Project or the immediate community in a condition dangerous to their health or safety; (h)Impose against the Project any dedication or Exaction not specifically authorized by this Agreement, the Project Approvals or Applicable Law; or (i)Limit the processing or procuring of applications and approvals of Subsequent Approvals. 23 OAK #4816-8465-9477 v9 Section 8.6Initiatives and Referenda. (a)If any City Law is enacted or imposed by initiative or referendum, or by the City Council directly or indirectly in connection with any proposed initiative or referendum, which City Law would conflict with Applicable Law or this Agreement or reduce the development rights provided by this Agreement and the Project Approvals, such City Law shall not apply to the Project. (b)Without limiting the generality of any of the above, no moratorium or other limitation (whether relating to the rate, timing, phasing or sequencing of development) affecting subdivision maps, building permits or other entitlements to use that are approved or to be approved, issued or granted within the City, or portions of the City, shall apply to the Project. (c)To the maximum extent permitted by Applicable Law, City shall endeavor to prevent any City Law from invalidating or prevailing over all or any part of this Agreement, and City shall cooperate with Apple and shall undertake such actions, at Apple’s expense, as may be necessary to ensure this Agreement remains in full force and effect. (d)City, except to submit to vote of the electorate initiatives and referendums required by Applicable Law to be placed on a ballot, shall not support, adopt or enact any City Law, or take any other action that would violate the express provisions or spirit and intent of this Agreement, the Project Approvals or, when issued, the Subsequent Approvals. (e)Apple reserves the right to challenge in court any City Law that would conflict with Applicable Law or this Agreement or reduce the development rights provided by this Agreement. Section 8.7Environmental Review. The parties understand that the EIR was intended to be used in connection with each of the Project Approvals and Subsequent Approvals needed for the Project. Consistent with the CEQA policies and requirements applicable to the EIR, City agrees to use the EIR in connection with the processing of any Subsequent Approvals to the maximum extent allowed by Applicable Law and not to impose on the Project any mitigation measures or other conditions of approval other than those specifically imposed by the Project Approvals, including Conditions of Approval and the MMRP. In addition, to the extent consistent with CEQA’s policies and requirements applicable to tiered EIR’s, City agrees to use the EIR in connection with the processing of Subsequent Approvals to the extent allowed by Applicable Law. Notwithstanding the foregoing, the parties acknowledge that certain Subsequent Approvals may legally require additional analysis under CEQA. For example, a change in the Project could require additional analysis under CEQA if the triggering conditions identified in CEQA Guidelines section 15162 are met. In the event supplemental or additional CEQA review is required for a Subsequent Approval, City shall limit such supplemental or additional CEQA review to the scope of analysis mandated by CEQA in light of the scope of City’s discretion to be exercised in connection with the 24 OAK #4816-8465-9477 v9 Subsequent Approvals.Apple acknowledges that, if the City determines based upon supplemental or additional CEQA review that the Project will result in new significant effects or substantially increase the severity of effects that were identified in the EIR, City may require additional feasible mitigation measures necessary to mitigate such impacts. In the event further mitigation measures are identified by such additional environmental review, City may require, and Apple shall comply at its expense with, all feasible mitigation measures necessary to substantially lessen new or substantially more severe significant environmental impacts of the Project, which were not foreseen at the time of execution of this Agreement. Section 8.8Life of Subdivision Maps, Development Approvals, and Permits. The term of any subdivision map or any other map, permit, or other land use entitlement approved as a Project Approval or Subsequent Approval shall automatically be extended for the longer of the Term of this Agreement (including any extensions) or the term otherwise applicable to such Project Approval or Subsequent Approval if this Agreement is no longer in effect. Section 8.9State and Federal Law. As provided in California Government Code § 65869.5, this Agreement shall not preclude the application to the Project of changes in laws, regulations, plans or policies, to the extent that such changes are specifically mandated and required by changes in state or federal laws or regulations (“Changes in the Law”). In the event Changes in the Law prevent or preclude compliance with one or more provisions of this Agreement, such provisions of the Agreement shall be modified or suspended, or performance thereof delayed, as may be necessary to comply with Changes in the Law, and City and Apple shall take such action as may be required pursuant to this Agreement including, without ARTICLE 7 (Cooperation-Implementation) and Section 12.5 (Excusable Delays; limitation, Extension of Time of Performance). Nothing in this Agreement shall preclude City from imposing on Apple any fee specifically mandated and required by regional, state or federal laws and regulations. Section 8.10City’s Reservations of Authority. The parties acknowledge and agree that City is restricted in its authority to limit its police power by contract and that the limitations, reservations and exceptions contained in this Agreement are intended to reserve to City all of its police power which cannot be so limited by Applicable Law. Notwithstanding any other provision of this Agreement to the contrary, the following regulations and provisions shall apply to the development of the Property: (a)Procedural regulations relating to hearing bodies, petitions, applications, notices, records, hearings, reports, recommendations, appeals and any other matter of procedure, provided such procedures are uniformly applied on a City-wide basis to all substantially similar types of development projects and properties. (b)Except as otherwise provided in Section 8.4, those State and local building standards governing construction standards and specifications, including building, plumbing, mechanical, electrical, fire and grading requirements, and all other uniform 25 OAK #4816-8465-9477 v9 construction codes then applicable in City at the time of permit application, including design and construction standards for road and storm drain facilities. (c)City Laws which may be in conflict with this Agreement or the Project Approvals but which are necessary to protect persons or property from dangerous or hazardous conditions which create a substantial and demonstrable threat to the public health or safety of residents or users of the Property and the affected surrounding region, based on findings by the City Council identifying the dangerous or hazardous conditions requiring such changes in the law and how such changes would alleviate the dangerous or hazardous condition (“Exempt City Laws”). (d)City Laws applicable to the Property, which do not conflict with this Agreement or the Project Approvals. Section 8.11Timing of Project Construction and Completion. (a)Notwithstanding any provision of this Agreement to the contrary, City and Apple expressly agree that there is no requirement that Apple initiate or complete development of the Project or any particular phase of the Project within any particular period of time, and City shall not impose such a requirement on any Project Approval or Subsequent Approval. The parties acknowledge that Apple cannot, at this time, predict when or the rate at which or the order in which phases will be developed. Such decisions depend upon numerous factors that are not within Apple’s control. (b)In light of the above, the parties agree that Apple shall be able to develop in accordance with Apple’s own time schedule as such schedule may exist from time to time, and Apple shall determine which part of the Project Site to develop first, and at Apple's chosen schedule. In particular, and not in limitation of any of the above, the parties desire to avoid the holding of the California Supreme Court in Pardee Construction Co. v. City of Camarillo, 37 Cal.3d 465 (1984). In that case, the Court held that the parties’ failure to consider and expressly provide for the timing of development resulted in a later-adopted initiative restricting the timing of development. Accordingly, the parties expressly acknowledge that Apple shall have the right to develop the Project in such order and at such rate and at such times as Apple deems appropriate within the exercise of its subjective business judgment. Section 8.12Apple is an Independent Contractor. Apple is not an agent or employee of City, but is an independent contractor with full rights to manage its employees subject to Applicable Law. All persons employed or utilized by Apple in connection with this Agreement and shall not be considered employees of City in any are employees or contractors of Apple respect. 26 OAK #4816-8465-9477 v9 ARTICLE 9AMENDMENT. Section 9.1Project Approval Amendments. To the extent permitted by Applicable Law, any Project Approvals or Subsequent Approvals may, from time to time, be amended or modified in the following manner: (a)Administrative Project Amendments. Upon Apple’s written request for an amendment or modification to a Project Approval or Subsequent Approval, the Community Development Director or his/her designee shall determine: (1) whether the requested amendment or modification is minor when considered in light of the Project as a whole; and (2) whether the requested amendment or modification is consistent with this Agreement and Applicable Law. If the Community Development Director or his/her designee finds that the proposed amendment or modification is minor, consistent with this Agreement and Applicable Law, and will result in no new significant impacts not addressed and mitigated by the MMRP or Conditions of Approval, the amendment shall be determined to be an “Administrative Project Amendment” and the Community Development Director or his/her designee may, except to the extent otherwise required by Applicable Law, approve such amendment. Upon approval, any Administrative Project Amendment shall be automatically incorporated into and Section 8.10(a) below, lot line adjustments, vested as part of this Agreement. Subject to reductions in the density, intensity, scale or scope of the Project, minor changes in land uses involving minimal acreage, minor alterations in vehicle circulation patterns or vehicle access points, minor changes in the amount of parking and parking layout, changes in trail alignments, substitutions of comparable landscaping for any landscaping shown on any final development plan or landscape plan, variations in the location of structures that do not substantially alter the design concepts of the Project, variations in the location or installation of utilities and other infrastructure connections or facilities that do not substantially alter the design concepts of the Project, and minor adjustments to the Project Site diagram or Project Site legal description shall be treated as Administrative Project Amendments. (b)Non-Administrative Project Amendments. Any request by Apple for an amendment or modification to a Project Approval or Subsequent Approval which is determined not to be an Administrative Project Amendment as set forth above shall be subject to review, consideration and action pursuant to Applicable Law and this Agreement. Section 9.2Amendment of this Agreement. This Agreement may be amended from time to time, in whole or in part, by mutual written consent of the parties or their successors in interest, as follows: (a)Administrative Agreement Amendments. Any amendment to this Agreement which does not substantially affect: (1) the Term of this Agreement; (2) permitted uses of the Project Site; (3) provisions for the reservation or dedication of land; (4) conditions, terms, restrictions or requirements for subsequent discretionary actions; (5) the density or intensity of use of the Project Site or the maximum height or size of proposed buildings; or (6) monetary contributions by Apple shall be considered an “Administrative Agreement 27 OAK #4816-8465-9477 v9 Amendment,” and the Community Development Director or his or her designee may, except to the extent otherwise required by Applicable Law, approve the Administrative Agreement Amendment without notice and public hearing. (b)Amendment Exemptions. No Subsequent Approval, nor any amendment of a Project Approval or Subsequent Approval, shall require an amendment to this Agreement, unless a material term of this Agreement is changed by the Approval or Subsequent Approval. Instead, any such matter automatically shall be deemed to be incorporated into the Project and vested under this Agreement. ARTICLE 10 ASSIGNMENT, COVENANTS, FORECLOSURE AND NOTICE. Section 10.1Assignment. (a)Except as otherwise expressly provided below, neither party shall convey, assign or transfer any of its interests, rights or obligations under this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. Failure by City to respond within sixty (60) days to any request made by Apple for such consent shall be deemed to be City’s approval of the transfer in question, provided Apple has clearly indicated in its written request to City that City’s failure to respond within such time period will be deemed approval of the request. Apple may assign its rights under this Agreement to entities controlling, controlled by or under common control with Apple Inc. without City’s consent; provided, however, any such assignment to an Apple Inc. affiliate shall be subject to continued compliance with all of Apple’s obligations under this Agreement, including Section 3.5. Assignments to entities which are not affiliates of Apple Inc. shall be subject to review and approval by City in its reasonable discretion. In addition to any other reasonable basis, City may withhold its consent upon a determination that the proposed assignee has insufficient assets or financial ability to complete or manage the Project or carry out any of the obligations under this Agreement. Such determination shall be made by the Community Development Director, and is appealable by Apple to the City Council. Each approved successor-in-interest to Apple shall be bound by all of the terms and provisions of this Agreement applicable to that portion of the Property acquired by it. Subject to the preceding sentence, this Agreement shall be binding upon and inure to the benefit of the parties' successors, assigns and legal representatives. The terms of this Section 10.1 shall not restrict, prevent or otherwise affect Apple’s ability to lease, sell or convey interests in the Property. (b)In connection with the transfer or assignment by Apple of all or any portion of the Project Site or its rights and obligations under this Agreement (other than a transfer or assignment by Apple to a “Mortgagee” (as defined in Section 14.1)), Apple and the transferee shall enter into a written agreement (a “Transfer Agreement”) regarding the respective interests, rights and obligations of Apple and the transferee in and under this Agreement, the Project Approvals, and the Subsequent Approvals. Such Transfer Agreement may: (1) release Apple and CHI from obligations under the Agreement, the Project Approvals, or the Subsequent Approvals that pertain to that portion of the Project being transferred, as 28 OAK #4816-8465-9477 v9 described in the Transfer Agreement, provided that the transferee expressly assumes such obligations; (2) transfer to the transferee vested rights to improve that portion of the Project being transferred; and (3) address any other matter deemed by Apple or City to be reasonably necessary or appropriate in connection with the transfer or assignment. Each Transfer Agreement shall be in a form reasonably acceptable to the City and shall be recorded in the Official Records of Santa Clara County. (c)Any Transfer Agreement shall be binding on Apple, City and the transferee. Upon recordation of any Transfer Agreement in the Official Records of Santa Clara County, Apple and CHI shall automatically be released from those obligations assumed by the transferee therein. (d)Apple and CHI shall be free from any and all liabilities accruing on or after the date of any assignment or transfer with respect to those obligations assumed by a transferee pursuant to a Transfer Agreement. No breach or default hereunder by any person succeeding to any portion of Apple's obligations under this Agreement shall be attributed to Apple or CHI, nor may Apple's rights hereunder with respect to the balance of the Property that is not subject to the assignment or transfer be canceled or diminished in any way by any breach or default by any such person. Section 10.2Covenants Run With The Land. The terms of this Agreement, the Rezoning, the General Plan Amendments, and this Development Agreement are legislative in nature, and apply to the Property as regulatory ordinances. All of the provisions, agreements, rights, powers, standards, terms, covenants and obligations contained in this Agreement shall run with the land and shall be binding upon the parties and their respective heirs, successors (by merger, consolidation or otherwise) and assigns, devisees, administrators, representatives, lessees and all other persons or entities acquiring the Property, any lot, parcel or any portion thereof and any interest therein, whether by sale, operation of law or other manner, and shall inure to the benefit of the parties and their respective successors. Section 10.3Foreclosure. Nothing contained in this ARTICLE 10 shall prevent a Transfer of the Property, or any portion thereof, to a lender as a result of a foreclosure or deed in lieu of foreclosure, and any lender acquiring the Property, or any portion thereof, as a result of foreclosure or a deed in lieu of foreclosure shall take such Property subject to the rights and obligations of Apple under this Agreement; provided, however, in no event shall such lender be liable for any defaults or monetary obligations of Apple arising prior to acquisition of title to the Property by such lender, and provided further, in no event shall any such lender or its successors or assigns be entitled to a building permit or occupancy certificate until all fees due under this Agreement (relating to the portion of the Property acquired by such lender) have been paid to City. Section 10.4Sale or Lease of a Portion of the Project Site or Individual Parcels. Apple may not sell or lease the parking lot parcels, or the fitness center, or auditorium parcels separately from the main building without prior written approval of the City as these parcels 29 OAK #4816-8465-9477 v9 contain required parking for the main building parcel or do not meet all City requirements for a standalone parcel. Section 10.5Notice of Compliance Generally. Within forty-five (45) days following any written request which Apple may make from time to time, City shall execute and deliver to Apple (or to any party requested by Apple) a written “Notice of Compliance,” in recordable form, duly executed and acknowledged by City, that certifies: (a)This Agreement is unmodified and in full force and effect, or if there have been modifications hereto, that this Agreement is in full force and effect as modified and stating the date and nature of such modifications; (b)There are no current uncured defaults under this Agreement or specifying the dates and nature of any such default; (c)The failure to deliver such a statement within such time, unless parties have agreed to a reasonable extension of time to respond, shall constitute a conclusive presumption against City that this Agreement is in full force and effect without modification except as may be represented by Apple and that there are no uncured defaults in the performance of Apple, except as may be represented by Apple; provided Apple has clearly indicated in its written request for such statement that City’s failure to respond within such time period will be deemed City’s admission with respect to the matters set forth above. Apple shall have the right, at Apple's sole discretion, to record the Notice of Compliance. Apple shall cover all reasonable City costs related to responding to the request for a Notice of Compliance, within thirty (30) days after Apple’s receipt of invoices from City, together with reasonable supporting documentation. ARTICLE 11 COOPERATION IN THE EVENT OF LEGAL CHALLENGE. Section 11.1Cooperation. (a)If any administrative, legal or equitable action or other proceeding instituted by any person not a party to this Agreement challenges the validity of any provision of the Agreement or any Project Approval or Subsequent Approval, the parties shall cooperate in defending such action or proceeding. The parties shall use best efforts to select mutually agreeable legal counsel to defend such action, and Apple shall pay all compensation for such legal counsel, following Apple’s receipt of invoices from City, together with reasonable supporting documentation. Such compensation shall include reasonable compensation paid to counsel not otherwise employed as City staff and shall include City Attorney time and overhead costs and other City staff overhead costs and any costs directly related to the litigation reasonably incurred by City. If Apple and the City cannot in good faith agree on joint counsel, the City shall have the right to retain counsel of its own choosing, separate from Apple’s litigation counsel. Apple shall pay all reasonable fees and costs incurred by City’s counsel in the defense of the litigation, within thirty (30) days following City’s written demand therefor, which may be made from time to time during the course of such litigation. Apple shall 30 OAK #4816-8465-9477 v9 indemnify, defend, and hold harmless City, its elective and appointive boards, commissions, officers, agents, and employees (the “Indemnified Parties”) from and against any damages, attorneys’ fees or cost awards, including attorneys’ fees awarded under Code of Civil Procedure section 1021.5, assessed or awarded against City by way of judgment, settlement, or stipulation. To the extent any proposed settlement of a litigation challenge requires the City’s cooperation or any amendment of this Agreement or any Project Approval, then such settlement shall be subject to City’s approval not to be unreasonably withheld, conditioned or delayed. If the terms of the proposed settlement would constitute an amendment or modification of this Agreement or any Project Approvals, the settlement shall not become effective unless such amendment or modification is approved by City in accordance with Applicable Law, and City reserves its full legislative discretion with respect thereto. If Apple opts not to contest or defend such litigation challenge, City shall have no obligation to do so. (b)The parties agree that this ARTICLE 11 shall constitute a separate agreement entered into concurrently, and that if any other provision of this Agreement, or the Agreement as a whole, is invalidated, rendered null, or set aside by a court of competent jurisdiction, the parties agree to be bound by the terms of this ARTICLE 11, which shall survive such invalidation, nullification or setting aside or other expiration or termination of this Agreement. Section 11.2Cure; Preapproval. (a)If, as a result of any administrative, legal or equitable action or other proceeding as described in ARTICLE 11, all or any portion of this Agreement, Project Approvals, or Subsequent Approvals are set aside or otherwise made ineffective by any judgment (a “Judgment”) in such action or proceeding based on procedural, substantive or other deficiencies (collectively, the “Deficiencies”), the parties agree to use their respective best efforts to sustain and reenact or readopt this Agreement, Project Approvals, and/or Subsequent Approvals that the Deficiencies related to, as follows, unless the parties mutually agree in writing to act otherwise: (i)If any Judgment requires reconsideration or consideration by City of this Agreement, a Project Approval, or a Subsequent Approval, then the City shall consider or reconsider that matter in a manner consistent with the intent of this Agreement, to the extent permitted by the Judgment. If any such Judgment invalidates or otherwise makes ineffective all or any portion of this Agreement, a Project Approval, or a Subsequent Approval, then the parties shall cooperate and shall cure any Deficiencies identified in the Judgment or upon which the Judgment is based in a manner consistent with the intent of this Agreement. City shall then readopt or reenact this Agreement, Project Approval, Subsequent Approval, or any portion of the same, to which the Deficiencies related. (ii)Acting in a manner consistent with the intent of this Agreement includes, without limitation, recognizing that the parties intend that Apple may develop an office, research and development campus and adopting such ordinances, resolutions, and other 31 OAK #4816-8465-9477 v9 enactments as are necessary to readopt or reenact all or any portion of this Agreement, Project Approvals, and/or Subsequent Approvals without contravening the Judgment. (b)The parties agree that this ARTICLE 11 shall constitute a separate agreement entered into concurrently, and that if any other provision of this Agreement, or the Agreement as a whole, is invalidated, rendered null, or set aside by a court of competent jurisdiction, the parties agree to be bound by the terms of this Section, which shall survive such invalidation, nullification or setting aside. ARTICLE 12 DEFAULT; REMEDIES; TERMINATION. Section 12.1Defaults. Failure by either party to perform any material term or provision of this Agreement shall constitute a default, provided that the party alleging the default shall give the other Party advance written notice of the default and thirty (30) days to cure the condition, or, if the nature of the default is such that it cannot be cured within thirty (30) days, the party receiving notice shall not be in default if the party commences performance of its obligations within the thirty (30) day period and diligently completes that performance. The written notice of default (“Default Notice”) shall specify in detail the nature of the alleged failure, and where appropriate, the manner in which said failure might be cured. Section 12.2Remedies. The parties acknowledge that City and Apple would not have entered into this Agreement if City or Apple were to be liable in damages under, or with respect to, this Agreement or the application thereof. City and Apple shall not be liable in damages to one another, or to any assignee, transferee or any other person, and both City and Apple covenant not to sue for or claim damages. Each party shall have the right to (1) bring any proceeding in the nature of specific performance, injunctive relief or mandamus, and/or (2) bring any action at law or in equity as may be permitted by law or this Agreement. The parties acknowledge that monetary damages and remedies at law generally are inadequate upon the occurrence of a default. Therefore, specific performance or other extraordinary equitable relief (such as injunction) is an appropriate remedy for the enforcement of this Agreement, other remedies at law being inadequate under all the circumstances pertaining as of the Effective Date of this Agreement and any such equitable remedy shall be available to the parties. Section 12.3Periodic Review. (a)Conducting the Periodic Review. Throughout the Term of this Agreement, at least once every twelve (12) months following the Effective Date, City shall review the extent of good-faith compliance by Apple with the terms of this Agreement. This review (the “Periodic Review”) shall be conducted by the Community Development Director or his/her designee and shall be limited in scope to compliance with the terms of this Agreement pursuant to California Government Code Section 65865.1. Apple shall pay reasonable City costs related to the Periodic Review, within thirty (30) days following Apple’s receipt of invoices from City, together with reasonable supporting documentation. 32 OAK #4816-8465-9477 v9 (b)Apple’s Submittal. If requested by City, and within ninety (90) days before each anniversary of the Effective Date, Apple shall submit a compliance letter (“Compliance Letter”) to the Director along with a copy directed to the City Attorney, describing Apple’s compliance with the terms of the Conditions of Approval, Project Approvals and this Agreement during the preceding year. The Compliance Letter shall include a statement that the Compliance Letter is submitted to City pursuant to the requirements of Government Code § 65865.1, this Agreement and the CMC, and that City’s failure to respond within the time periods set forth in this Section 12.3 shall be deemed City’s concurrence that Apple has complied in good faith with the terms and conditions of this Agreement for the review period in question. (c)City’s Findings. Within sixty (60) days after receipt of the Compliance Letter, the Community Development Director shall determine whether, for the year under review, Apple has demonstrated good faith substantial compliance with the terms of this Agreement. If the Community Development Director finds and determines that Apple has complied substantially with the terms of this Agreement, or does not determine otherwise within sixty (60) days after delivery of the Compliance Letter, the annual review shall be deemed conclusively concluded, Apple shall be deemed to have complied in good faith with the terms and conditions of this Agreement during the year under review, and this Agreement shall remain in full force and effect. Upon a determination of compliance, the Community Development Director shall, if Apple requests, issue a recordable certificate confirming Apple’s compliance through the year under review. Apple may file and record the certificate with the Santa Clara County Recorder’s Office. If the Community Development Director initially determines the Compliance Letter to be inadequate in any respect, he/she shall provide notice to that effect to Apple. If, after a duly noticed public hearing thereon, the City Council finds and determines based on substantial evidence that Apple has not complied substantially in good faith with the terms of this Agreement for the year under review, the Community Development Director shall give written notice to Apple specifying the noncompliance and such notice shall serve as a Default Notice under Section 12.1. If Apple fails to cure the noncompliance within above, the City Council, in its discretion, may: (1) grant the time set forth in Section 12.1 additional time for compliance by Apple; or (2) following the hearing described in CMC § 19.144.170, modify this Agreement with Apple’s written approval to the extent necessary to remedy or mitigate the noncompliance; or (3) terminate this Agreement. Except as affected by 19.116.230 and following, shall govern City’s compliance the terms hereof, the terms of CMC § review process. During the Initial Term, if the Community Development Director has found the Compliance Letter to be inadequate and yet the City Council does not hold a hearing and make its determination within one (1) year after delivery of the Compliance Letter for a given year, then it shall be conclusively deemed that Apple has complied in good faith with the terms and conditions of this Agreement during such one (1) year period. Following the Initial Term, if the City Council does not hold a hearing and make its determination within two (2) years after delivery of the Compliance Letter for a given year, then it shall be conclusively deemed that Apple has complied in good faith with the terms and conditions of this Agreement during such two (2) year period. 33 OAK #4816-8465-9477 v9 Section 12.4Effect of Termination Upon Apple’s Obligations. Termination of this Agreement as to Apple shall not affect any of Apple’s obligations to comply with the City’s General Plan and the terms and conditions of any Project Approvals or Subsequent Approvals approved with respect to the Project. Any obligations of indemnification and defense relating to matters arising before termination of this Agreement shall survive termination of this Agreement. Section 12.5Enforced Delay; Extension of Time of Performance. In addition to specific provisions of this Agreement, neither party shall be deemed to be in default where delays in performance or failures to perform (other than obligations to make monetary payments which shall not be subject to this Section 12.5) are due to, and a necessary outcome of, war, insurrection, strikes or other labor disturbances, walk-outs, riots, floods, earthquakes, fires, casualties, acts of God, restrictions imposed or mandated by other governmental entities (including new or supplemental environmental regulations), enactment of conflicting state or federal laws or regulations, judicial decisions, inability to obtain materials, power or public facilities (such as water or sewer service) to the Project, or similar basis for excused performance which is not within the reasonable control of the party to be excused. Litigation attacking the validity of this Agreement or any of the Project Approvals or Subsequent Approvals, or any permit, ordinance, entitlement or other action of a governmental agency other than City necessary for the development of the Project pursuant to this Agreement, shall be deemed to create an excusable delay. A party’s financial inability to perform shall not be a ground for claiming an excusable delay. The party claiming an excusable delay shall notify the other party of its intent to claim an excusable delay, the specific grounds of the same and the anticipated period of the excusable delay within thirty (30) days after the occurrence of the conditions that establish the grounds for the claim. If notice by the party claiming such extension is sent to the other party more than thirty (30) days after the commencement of the cause, the period shall commence to run only thirty (30) days prior to the giving of such notice. The period of the excusable delay shall last no longer than the conditions preventing performance. Upon the request of either party hereto, an extension of time for the performance of any obligation whose performance has been so prevented or delayed will be memorialized in writing. The term of any such extension shall be equal to the period of the excusable delay, or longer, as may be mutually agreed upon; provided, however, in no event shall any excusable delay extend the th expiration date of the Term beyond the 20anniversary of the Effective Date. Section 12.6California Law; Venue. This Agreement shall be construed and enforced in accordance with the laws of the State of California, without reference to its choice of laws provisions, and the exclusive venue for any disputes or legal actions shall be the Superior Court of California in and for the County of Santa Clara. Section 12.7Compliance with Laws. Apple shall comply with all requirements of state and federal law, in addition to the requirements of this Agreement, including, without limitation, the payment of prevailing wages, if required. 34 OAK #4816-8465-9477 v9 Section 12.8Resolution of Disputes. With regard to any dispute involving development of the Project, the resolution of which is not provided for by this Agreement or Applicable Law, Apple shall, at City’s request, meet with City. The parties at any such Section 12.8 meetings shall attempt in good faith to resolve any such disputes. Nothing in this shall in any way be interpreted as requiring that Apple and City and/or City’s designee reach agreement with regard to those matters being addressed, nor shall the outcome of these meetings be binding in any way on City or Apple unless expressly agreed to by the parties to such meetings. If any dispute is not resolved within thirty (30) days after the parties first meet, or such longer period as the parties mutually agree, then each party may pursue all legal and equitable remedies available it. ARTICLE 13 NO AGENCY, JOINT VENTURE OR PARTNERSHIP. It is specifically understood and agreed to by and between the parties hereto that: (1) the subject development is a private development; (2) City has no interest or responsibilities for, or duty to, third parties concerning any public improvements until such time, and only until such time, that City accepts the same pursuant to the provisions of this Agreement or in connection with the various Project Approvals or Subsequent Approvals; (3) Apple shall have full power over and exclusive control of the Project, subject only to the limitations and obligations of Apple under this Agreement, the Project Approvals, Subsequent Approvals, and Applicable Law; and (4) City and Apple hereby renounce the existence of any form of agency relationship, joint venture or partnership between City and Apple and agree that nothing contained herein or in any document executed in connection with this Agreement shall be construed as creating any such relationship between City and Apple. ARTICLE 14 MORTGAGEE PROTECTION: CERTAIN RIGHTS OF CURE. Section 14.1Mortgagee Protection. This Agreement shall be superior and senior to all liens placed upon the Property or any portion thereof after the date on which this Agreement or a memorandum thereof is recorded, including the lien of any deed of trust or mortgage (“Mortgage”). Notwithstanding the above, no breach hereof shall defeat, render invalid, diminish or impair the lien of any Mortgage made in good faith and for value, but all of the terms and conditions contained in this Agreement shall be binding upon and effective against all persons and entities, including all deed of trust beneficiaries or mortgagees (each a “Mortgagee”) who acquire title to the Property or any portion thereof by foreclosure, trustee’s sale, deed in-lieu-of foreclosure, voluntary transfer or otherwise. Section 14.2Mortgagee Obligations. City, upon receipt of a written request from a foreclosing Mortgagee, shall permit the Mortgagee to succeed to the rights and obligations of Apple under this Agreement, so long as all defaults by Apple that are reasonably susceptible of being cured are cured by the Mortgagee as soon as reasonably possible, provided, however, that in no event shall such Mortgagee personally be liable for any of Apple’s defaults or monetary obligations arising prior to acquisition of possession of such Property by such Mortgagee. The foreclosing Mortgagee shall have the right to find a substitute for Apple to assume Apple’s 35 OAK #4816-8465-9477 v9 obligations, which substitute shall be considered for approval by City pursuant to ARTICLE 10 of this Agreement, but shall not, itself, be required to comply with all of the provisions of this Agreement. Section 14.3Notice of Default to Mortgagee. If City receives notice from a Mortgagee requesting a copy of any notice of default given to Apple and specifying the address for service thereof, City shall endeavor to deliver to the Mortgagee, concurrently with service thereof to Apple, all notices given to Apple describing all claims by City that Apple has defaulted hereunder. If City determines that Apple is not in compliance with this Agreement, City also shall endeavor to serve notice of noncompliance on the Mortgagee concurrently with service on Apple. Each Mortgagee shall have the right, but not the obligation, during the same period available to Apple to cure or remedy, or to commence to cure or remedy, the condition of default claimed or the areas of noncompliance set forth in City’s notice. ARTICLE 15 MISCELLANEOUS. Section 15.1Incorporation of Recitals and Introductory Paragraph. The Recitals contained in this Agreement, and the introductory paragraphs preceding the Recitals, are hereby incorporated into this Agreement as if fully set forth herein. Section 15.2Findings. City hereby finds and determines that execution of this Agreement furthers public health, safety and general welfare and that the provisions of this Agreement are consistent with the General Plan. Section 15.3Severability. If any term or provision of this Agreement, or the application of any term or provision of this Agreement to a particular situation, is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining terms and provisions of this Agreement, or the application of this Agreement to other situations, shall continue in full force and effect unless amended or modified by mutual consent of the parties. Section 15.4Time of Essence. Time is of the essence in the performance of each and every covenant and obligation to be performed by the parties hereunder. Section 15.5Other Necessary Acts. Each party shall execute and deliver to the other all such other further instruments and documents as may be reasonably necessary to carry out the Project Approvals, Subsequent Approvals and this Agreement and to provide and secure to the other party the full and complete enjoyment of its rights and privileges of this Agreement. Section 15.6Construction. The language in this Agreement in all cases shall be construed as a whole and in accordance with its fair meaning. Each reference in this Agreement to this Agreement or any of the Project Approvals or Subsequent Approvals shall be deemed to refer to the Agreement, Project Approval or Subsequent Approval as it may be amended from time to time, whether or not the particular reference refers to such possible amendment. This Agreement has been reviewed and revised by legal counsel for both City and Apple, and no 36 OAK #4816-8465-9477 v9 presumption or rule that ambiguities shall be construed against the drafting party shall apply to the interpretation or enforcement of this Agreement. Section 15.7Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. Section 15.8No Waiver. No delay or omission by either party in exercising any right or power accruing upon the other party’s noncompliance or failure to perform under the provisions of this Agreement shall impair or be construed to waive any right or power. A waiver by either party of any of the covenants or conditions to be performed by Apple or City shall not be construed as a waiver of any succeeding breach of the same or other covenants and conditions Section 15.9Nondiscrimination. Neither party shall discriminate, in any way, against any person on the basis of race, color, national origin, gender, marital status, sexual orientation, age, creed, religion or disability in connection with or related to the performance of this Agreement. Section 15.10No Third-Party Beneficiary. This Agreement shall not be construed or deemed to be an Agreement for the benefit of any third-party or parties, and no third-party or parties shall have any claim or right of action hereunder for any cause whatsoever. Section 15.11Other Miscellaneous Terms. The singular shall include the plural; the masculine gender shall include the feminine; “shall” is mandatory; “may” is permissive. The words “includes” and “including” shall be interpreted as though followed by the words “without limitation.” If there is more than one signer of this Agreement, the signer obligations are joint and several. Section 15.12Notices. Any notice or communication required hereunder between City or Apple must be in writing, and may be given either personally, by registered or certified mail (return receipt requested), or by FedEx or other similar courier promising overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the party to whom it is addressed. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of (1) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (2) two (2) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any party may at any time, by giving ten (10) days written notice to the other party, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the parties at their addresses set forth below: 37 OAK #4816-8465-9477 v9 If to City, to:City Clerk City of Cupertino 10300 Torre Avenue Cupertino, CA 95014-3202 Telephone: (408)777-3200 with Copies to: City Attorney City of Cupertino 20410 Town Center Lane, Suite 210 Cupertino, CA 95014 Telephone: (408)777-3200 and: City Manager City of Cupertino 10300 Torre Avenue Cupertino, CA 95014-3202 Telephone: (408)777-3200 If to Apple, to: Apple Inc. 1 Infinite Loop, M/S 47-2 REF Cupertino, California 95014 Attention: Apple Campus 2 Project Manager with Copies to: Apple Inc. 1 Infinite Loop, M/S 4 DLAW Cupertino, California 95014 Attention: Real Estate Counsel Telephone: (408) 862-6012 and: Morrison & Foerster LLP 425 Market Street San Francisco, CA 94105 Attention: David Gold Telephone: (415) 268-7000 The provisions of this Section shall be deemed directive only and shall not detract from the validity of any notice given in a manner that would be legally effective in the absence of this Section. Section 15.13Entire Agreement, Counterparts and Exhibits. This Agreement and all exhibits attached to it and or incorporated herein, together with the Pruneridge Vacation Area purchase and sale agreement, the Development Plan, MMRP, and the Project Approvals, 38 OAK #4816-8465-9477 v9 including Conditions of Approval, are the sole and entire Agreement between the parties concerning the subject matter hereof. The parties acknowledge and agree that they have not made any representation with respect to the subject matter of this Agreement or any representations inducing the execution and delivery, except representations set forth herein, and each party acknowledges that it has relied on its own judgment in entering this Agreement. The parties further acknowledge that all statements or representations that previously may have been made by either of them to the other are void and of no effect, and that neither of them has relied thereon in its dealings with the other. To the extent that there is any conflict between the Project Approvals and this Agreement, the Project Approvals shall govern the parties’ respective rights and obligations. Section 15.14Covenant of Good Faith and Fair Dealing. Neither party to this Agreement shall do anything that shall have the effect of harming or injuring the right of the other Party to receive benefits of this Agreement. Each party shall refrain from doing anything that would render its performance under this Agreement impossible. Each party shall do everything this Agreement contemplates to accomplish the objectives and purpose of this Agreement. Section 15.15Authority to Execute. The person or persons executing this Agreement on behalf of City warrant and represent that they have the authority to execute this Agreement on behalf of City, and further represent that they have the authority to bind City to the performance of its obligations in this Agreement. The person or persons executing this Agreement on behalf of Apple warrant and represent that they have the authority to execute this Agreement on behalf of Apple, that all corporate approvals have been obtained including from CHI which are necessary to bind Apple to the performance of its obligations in this Agreement, and that they have the authority to bind Apple to the performance of its obligations in this Agreement. Section 15.16Exhibits. The following exhibits are attached to this Agreement and incorporated herein for all purposes: EXHIBIT DA-1a:Property Description (a) (b)EXHIBIT DA-1b: Project Site Diagram (c)EXHIBIT DA-1c: Tax Localization Plan (d)EXHIBIT DA-1d: General Plan Office Space Development Allocations EXHIBIT DA-1e:Campus Amenity Space (e) EXHIBIT DA-1f:Impact Fees (f) (g)EXHIBIT DA-1g: Pruneridge Avenue Vacation 39 OAK #4816-8465-9477 v9 Section 15.17Recordation of Development Agreement. Pursuant to California Government Code § 65868.5, no later than ten (10) days after the Effective Date, the City Clerk shall record an executed copy of this Agreement in the Official Records of Santa Clara County. This Agreement has been entered into by and between Apple and City as of the day and year first above written. CITY: CITY OF CUPERTINO, a California municipal corporation By: Name: Its: ATTEST: By: Grace Schmidt, City Clerk APPROVED AS TO FORM: By: Carol Korade, City Attorney APPLE: APPLE INC., a California corporation By: Name: Its: Signatures continued on next page 40 OAK #4816-8465-9477 v9 This Agreement is hereby acknowledged and consented to: CHI: CAMPUS HOLDINGS, INC., a California corporation By: Name: Its: 41 OAK #4816-8465-9477 v9 EXHIBIT DA-1a LEGAL DESCRIPTION OF THE PROPERTY OAK #4816-8465-9477 v9 EXHIBIT DA-1a EXHIBIT DA -1a REAL PROPERTY DESCRIPTION REAL PROPERTY IN THE CITY OF CUPERTINO, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, MORE PARTICULARLY DESCRIBED AS FOLLOWS: PARCEL ONE: (APN 316-07-045) BEGINNING AT A POINT ON THE WESTERLY LINE OF TANTAU AVENUE AT A SOUTHEASTERLY CORNER OF PARCEL "B", AS SAID AVENUE AND PARCEL ARE SO DESIGNATED ON THAT CERTAIN PARCEL MAP FILED FOR RECORD ON NOVEMBER 22, 1968 IN BOOK 244 OF MAPS, PAGE 51, SANTA CLARA COUNTY RECORDS; THENCE FROM SAID POINT OF BEGINNING ALONG SAID WESTERLY LINE OF TANTAU AVENUE, S. 0º26'11" W. 89.42 FEET; THENCE SOUTHWESTERLY, ALONG A TANGENT CURVE TO THE RIGHT, HAVING A RADIUS OF 50.00 FEET, THROUGH A CENTRAL ANGLE OF 88º58'31", FOR AN ARC LENGTH OF 77.65 FEET TO A POINT ON THE NORTHWESTERLY LINE OF PRUNERIDGE AVENUE, AS SAID AVENUE IS SHOWN ON THE ABOVE PARCEL MAP; THENCE ALONG SAID LAST MENTIONED NORTHWESTERLY LINE S. 89º24'42" W. 114.20 FEET TO THE BEGINNING OF A TANGENT CURVE TO THE LEFT HAVING A RADIUS OF 646.00 FEET, THROUGH A CENTRAL ANGLE OF 25º10'13", FOR AN LENGTH OF 283.79 FEET TO A POINT OF REVERSE CURVATURE; THENCE ALONG SAID REVERSE CURVE TO THE RIGHT, HAVING A RADIUS OF 554.00 FEET, THROUGH A CENTRAL ANGLE OF 4º19'53", FOR AN ARC LENGTH OF 41.88 FEET TO A POINT AT THE MOST SOUTHEASTERLY CORNER OF SAID PARCEL "B" HEREINABOVE REFERRED TO; THENCE LEAVING SAID NORTHWESTERLY LINE OF PRUNERIDGE AVENUE AND ALONG AN EASTERLY LINE OF SAID PARCEL "B", N. 0º12'57" E. 217.31 FEET; THENCE ALONG A SOUTHERLY LINE OF SAID PARCEL "B", N. 89º24'39" E. 476.05 FEET TO THE POINT OF BEGINNING, BEING A PORTION OF LOT 4, AS SAID LOT IS SO DESIGNATED ON THAT CERTAIN MAP OF THE GLENDENNING ESTATE IN THE QUITO RANCHO, RECORDED OCTOBER 24, 1884 TO BOOK "B" OF MAPS, AT PAGE 15, RECORDS OF SANTA CLARA COUNTY. PARCEL TWO: (APN 316-07-044) ALL THAT CERTAIN REAL PROPERTY SHOWN ON THE MAP ENTITLED "PARCEL MAP BEING ALL OF PARCELS "A" & "B" AS SHOWN ON THAT CERTAIN MAP RECORDED IN BOOK 244 OF MAPS AT PAGE 51" FILED FOR RECORD OCTOBER 1, 1976, BOOK 380, OF MAPS, PAGE 49, SANTA CLARA COUNTY RECORDS. PARCEL A: (APN 316-06-033) PARCEL 1 AS SHOWN ON THAT CERTAIN PARCEL MAP WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON SEPTEMBER 6, 1972 IN BOOK 308 OF MAPS PAGE 12. PARCEL B: (APN 316-06-052) PARCEL 2, AS SHOWN ON THAT CERTAIN PARCEL MAP FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON AUGUST 25, 1981, IN BOOK 489 OF MAPS PAGE(S) 11 AND 12. PARCEL C: (APN 316-06-048) PARCEL 1, PARCEL MAP OF LANDS OF GROSVENOR CUPERTINO PARTNERS, FILED AUGUST 25, 1981, BOOK 489 OF MAPS, PAGES 13 AND 14, SANTA CLARA COUNTY RECORDS, AS AMENDED IN THAT CERTAIN LOT LINE ADJUSTMENT, RECORDED JUNE 1 30, 1983 AS INSTRUMENT NO. 7730541. EXCEPTING THEREFROM THE UNDERGROUND WATER RIGHTS, WITH NO RIGHT OF SURFACE ENTRY, AS GRANTED IN THE DEED FROM GROSVENOR CUPERTINO PARTNERS TO CALIFORNIA WATER SERVICE COMPANY, A CALIFORNIA CORPORATION, RECORDED OCTOBER 19, 1981 IN BOOK G 400 PAGE 445, OFFICIAL RECORDS. PARCEL D: (APN 316-06-033 & -038) ALL OF PARCEL 3, AS SHOWN UPON THAT CERTAIN PARCEL MAP FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON AUGUST 25, 1981 IN BOOK 489 OF MAPS, AT PAGE 11. PARCEL E PARCEL ONE: (APN 316-06-045) PARCEL 4, AS SHOWN UPON THE PARCEL MAP FILED FOR RECORD ON AUGUST 25, 1981 IN BOOK 489, OF MAPS, PAGES 13, AND 14, SANTA CLARA COUNTY RECORDS. EXCEPTING THEREFROM THE UNDERGROUND WATER RIGHTS, WITH NO RIGHT OF SURFACE ENTRY, AS GRANTED TO CALIFORNIA WATER SERVICE COMPANY BY DEED RECORDED OCTOBER 19, 1981, IN BOOK G400, PAGE 445, OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THAT PORTION THEREOF LYING WITHIN THAT CERTAIN PARCEL OF LAND CONVEYED TO GROSVENOR INTERNATIONAL (CUPERTINO) LIMITED, A CALIFORNIA CORPORATION, ET AL, BY DEED RECORDED JULY 21, 1983 IN BOOK H738, PAGE 56, OFFICIAL RECORDS, AND BEING SHOWN AS "44.5' STRIP FROM PCL. 4 TO PCL. 3" ON LOT LINE ADJUSTMENT RECORDED JUNE 29, 1983 IN BOOK H674, PAGE 622, OFFICIAL RECORDS. PARCEL TWO: (APN 316-06-049) PARCEL 5, AS SHOWN UPON THE PARCEL MAP FILED FOR RECORD ON AUGUST 25, 1981 IN BOOK 489, OF MAPS, PAGES 13, AND 14, SANTA CLARA COUNTY RECORDS. EXCEPTING THEREFROM THE UNDERGROUND WATER RIGHTS, WITH NO RIGHT OF SURFACE ENTRY, AS GRANTED TO CALIFORNIA WATER SERVICE COMPANY BY DEED RECORDED OCTOBER 19, 1981, IN BOOK G400, PAGE 445, OFFICIAL RECORDS. PARCEL F: (APN 316-06-046) BEGINNING AT THE MOST WESTERLY CORNER OF PARCEL 7 AS SHOWN UPON THAT CERTAIN PARCEL MAP RECORDED IN BOOK 329 OF MAPS AT PAGE 49, SANTA CLARA COUNTY RECORDS. THENCE FROM SAID POINT OF BEGINNING NORTH 30° 00' 28" EAST ALONG THE NORTHWESTERLY LINE OF SAID PARCEL 422.91 FEET; THENCE SOUTH 57° 02' 22" EAST 527.23 FEET; THENCE SOUTH 32° 57' 38" WEST 451.50 FEET TO THE SOUTHWESTERLY LINE OF SAID PARCEL; THENCE ALONG SAID SOUTHWESTERLY LINE NORTH 57° 02' 22" WEST 123.95 FEET AND NORTH 52° 40' 11" WEST 382.61 FEET TO THE POINT OF BEGINNING. 2 EXCEPTING THEREFROM ANY AND ALL WATERS, WITH NO RIGHT OF SURFACE ENTRY, AS QUITCLAIMED TO CALIFORNIA WATER SERVICE COMPANY, A CALIFORNIA CORP. IN A DEED DATED OCTOBER 13, 1981 AND RECORDED OCTOBER 19, 1981 IN BOOK G400 AT PAGE 445, OFFICIAL RECORDS. PARCEL G: (APN 316-06-053) BEGINNING AT THE MOST SOUTHERLY CORNER OF PARCEL "8" AS SHOWN UPON THAT CERTAIN PARCEL MAP RECORDED IN MAP BOOK 329, PAGE 49, SANTA CLARA COUNTY RECORDS; THENCE FROM SAID POINT OF BEGINNING NORTH 57° 02' 22" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL 1004.25 FEET; THENCE NORTH 32° 57' 38" EAST 451.50 FEET; THENCE SOUTH° 02' 22" EAST 96.42 FEET; THENCE EASTERLY AND NORTHEASTERLY ALONG A CURVE CONCAVE TO THE NORTH WITH A RADIUS OF 90 FEET, THROUGH A CENTRAL ANGLE OF 122° 45' 18" FOR AN ARC LENGTH OF 192.82 FEET; THENCE NORTH 0° 12' 20" EAST 19.11 FEET THENCE SOUTH 89° 47' 40" EAST 380.50 FEET TO THE EASTERLY LINE OF PARCEL "7" AS SHOWN UPON SAID MAP; THENCE SOUTH 0° 12' 20" WEST ALONG SAID EASTERLY LINE 200.26 FEET; THENCE SOUTH 56° 53' 38" EAST 151.23 FEET TO A POINT IN THE EASTERLY LINE OF THE LANDS OF VALLCO PARK LTD. PER DEED RECORDED IN BOOK 8764, PAGE 259, OFFICIAL RECORDS, SANTA CLARA COUNTY RECORDS; THENCE ALONG SAID EASTERLY BOUNDARY LINE ALONG A NON-TANGENT CURVE TO THE LEFT HAVING A RADIUS OF 542.50 FEET WHOSE RADIUS POINT BEARS SOUTH 56° 53' 38" EAST, THROUGH A CENTRAL ANGLE OF 27° 36' 46" OR AN ARC LENGTH OF 261.45 FEET; THENCE SOUTH 5° 29' 36" WEST ALONG SAID EASTERLY LINE 441.50 FEET TO THE NORTHEASTERLY LINE OF THE JUNIPERO SERRA FREEWAY" THENCE NORTH 57° 02' 22" WEST ALONG SAID NORTHEASTERLY LINE 1.89 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THE UNDERGROUND WATER RIGHTS, WITH NO RIGHT OF SURFACE ENTRY, AS GRANTED TO CALIFORNIA WATER SERVICE COMPANY BY DEED RECORDED OCTOBER 19, 1981, IN BOOK G400 OR, PAGE 445. PARCEL H PARCEL ONE: (APN 316-06-050) PARCEL 3 AND A PORTION OF PARCELS 4 AND 6, AS SAID PARCELS ARE SHOWN ON THAT CERTAIN PARCEL MAP FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON SEPTEMBER 7, 1973 IN BOOK 329 OF MAPS AT PAGE 49 AND AS AMENDED BY CERTIFICATE OF CORRECTION RECORDED AUGUST 14, 1975 IN BOOK B561, PAGE 100 OF OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF SAID PARCEL 6; THENCE ALONG THE NORTHEASTERLY AND SOUTHEASTERLY LINES OF SAID PARCEL 6 THE FOLLOWING THREE (3) COURSES: SOUTH 49° 06' 20" EAST 355.32 FEET TO THE BEGINNING OF A TANGENT CURVE TO THE LEFT; ALONG SAID CURVE, HAVING A RADIUS OF 646 FEET THROUGH A CENTRAL ANGLE OF 7° 16' 31", AN ARC DISTANCE OF 82.03 FEET; SOUTH 30° 00' 28" WEST 139.51 FEET; THENCE LEAVING SAID SOUTHEASTERLY LINE NORTH 59° 59' 32" WEST 40.00 FEET; THENCE SOUTH 30° 00' 28" WEST 143.22 FEET TO THE SOUTHEASTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF SAID PARCEL 3; THENCE ALONG SAID PROLONGATED LINE NORTH 49° 06' 20" WEST 263.99 FEET TO THE MOST SOUTHERLY CORNER OF SAID PARCEL 3; THENCE ALONG THE SOUTHWESTERLY AND NORTHWESTERLY LINES OF SAID PARCEL 3 THE FOLLOWING FOUR (4) COURSES: NORTH 49° 06' 20" WEST 151.25 FEET; NORTH 40° 53' 40" EAST 65.00 FEET; NORTH 49° 06' 20" WEST 36.00 FEET; NORTH 40° 53' 40" EAST 215.00 FEET TO THE POINT OF BEGINNING. 3 PURSUANT TO THAT CERTAIN LOT LINE ADJUSTMENT RECORDED AUGUST 4, 1997 AS DOCUMENT NO. 13799372 OF OFFICIAL RECORDS. PARCEL TWO: (APN 316-06-051) ARCEL 5 AND A PORTION OF PARCELS 4 AND 6, AS SAID PARCELS ARE SHOWN ON THAT CERTAIN PARCEL MAP FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON SEPTEMBER 7, 1973 IN BOOK 329 OF MAPS AT PAGE 49 AND AS AMENDED BY CERTIFICATE OF CORRECTION RECORDED AUGUST 14, 1975 IN BOOK B561, PAGE 100 OF OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST WESTERLY CORNER OF SAID PARCEL 4; THENCE ALONG THE NORTHWESTERLY LINE OF SAID PARCEL 4 NORTH 40° 53' 40" EAST 312.83 FEET TO THE MOST SOUTHERLY CORNER OF PARCEL 3 AS SHOWN ON SAID MAP; THENCE LEAVING SAID NORTHWESTERLY LINE ALONG THE SOUTHEASTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF SAID PARCEL 3 SOUTH 49° 06' 20" EAST 263.99 FEET; THENCE NORTH 30° 00' 28" EAST 143.22 FEET; THENCE SOUTH 59° 59' 32" EAST 40.00 FEET TO THE SOUTHEASTERLY LINE OF SAID PARCEL 6; THENCE ALONG SAID SOUTHEASTERLY LINE AND THE SOUTHWESTERLY LINE OF PARCEL 6 THE FOLLOWING FIVE (5) COURSES: SOUTH 30° 00' 28" WEST 830.58 FEET; NORTH 52° 40' 11" WEST 98.37 FEET TO THE BEGINNING OF A NON-TANGENT CURVE TO THE RIGHT; TO WHICH POINT A RADIAL LINE BEARS SOUTH 37° 31' 27" WEST; ALONG SAID CURVE, HAVING A RADIUS OF 300.01 FEET, THROUGH A CENTRAL ANGLE OF 32° 35' 44" AN ARC DISTANCE OF 170.68 FEET; NORTH 20° 08' 05" WEST 247.82 FEET; NORTH 40° 53' 40" EAST 57.15 FEET TO THE MOST WESTERLY CORNER OF SAID PARCEL 5; THENCE ALONG THE NORTHWESTERLY AND NORTHEASTERLY LINES OF SAID PARCEL 5 THE FOLLOWING TWO (2) COURSES: NORTH 40° 53' 40" EAST 145.85 FEET; SOUTH 49° 06' 20" EAST 46.01 FEET TO THE POINT OF BEGINNING. PURSUANT TO THAT CERTAIN LOT LINE ADJUSTMENT RECORDED AUGUST 4, 1997 AS DOCUMENT NO. 13799372 OF OFFICIAL RECORDS. PARCEL THREE: (EASEMENT OVER APN 316-06-037) NON-EXCLUSIVE EASEMENT FOR VEHICULAR AND PEDESTRIAN INGRESS AND EGRESS AS CONTAINED IN THE INSTRUMENT ENTITLED "EASEMENT AGREEMENT REGARDING PARKING AND ACCESS" RECORDED FEBRUARY 11, 1998, INSTRUMENT NO. 14047825, SANTA CLARA COUNTY RECORDS OVER A PORTION OF PARCEL 2 AS HOW ON THAT CERTAIN PARCEL MAP FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON SEPTEMBER 7, 1973 IN BOOK 329 OF MAPS AT PAGE 49 AND AS AMENDED BY CERTIFICATE OF CORRECTION RECORDED AUGUST 14, 1975 IN BOOK B561, PAGE 100 OF OFFICIAL RECORDS, DESCRIBED AS FOLLOWS: THAT 22 FOOT WIDE STRIP OF LAND LYING NORTHWESTERLY, ADJACENT TO AND PARALLEL WITH THE COURSE SHOWN ON SAID PARCEL MAP AS "N40° 53' 40"E" WHICH TERMINATES AT PRUNERIDGE AVENUE SAID STRIP COMMENCING AT SAID TERMINATION POINT AND THENCE CONTINUING SOUTHWESTERLY ALONG SAID COURSE 64 FEET. 4 PARCEL I PARCEL ONE: (APN 316-18-025) A PORTION OF LOT 1 OF THE CRAFT ESTATE PARTITION, MAP FILED MARCH 19, 1906, BOOK L OF MAPS, PAGE 28, SANTA CLARA COUNTY RECORDS, DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHEAST CORNER OF SAID LOT 1; THENCE SOUTH 0º 26' 11" WEST, ALONG THE EASTERLY LINE OF SAID LOT 1, 824.62 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE FROM SAID TRUE POINT OF BEGINNING, NORTH 89º 33' 49" WEST, 289.78 FEET TO THE EASTERLY LINE OF TANTAU AVENUE; THENCE ALONG THE EASTERLY LINE OF TANTAU AVENUE, SOUTH 4º 18' 51" EAST, 374.94 FEET AND ALONG THE ARC OF A TANGENT CURVE TO THE RIGHT HAVING A RADIUS OF 640 FEET, THROUGH AN ANGLE OF 24º 57' 22", AN ARC DISTANCE OF 278.76 FEET TO THE NORTHEAST LINE OF THE JUNIPERO SERRA FREEWAY, AS ESTABLISHED BY DEED TO STATE OF CALIFORNIA, RECORDED IN BOOK 5889 OFFICIAL RECORDS, PAGE 328; THENCE ALONG THE NORTHEAST LINE OF SAID FREEWAY, SOUTH 57º 19' 49" EAST, 200.01 FEET AND SOUTH 58º 45' 50" EAST, 155.83 FEET TO THE EASTERLY LINE OF SAID LOT 1; THENCE ALONG THE EASTERLY LINE OF SAID LOT 1, NORTH 0º 25' 57" WEST, 579.29 FEET AND NORTH 0º 26' 11" EAST, 254.93 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THE UNDERGROUND WATER, WITHOUT RIGHTS OF SURFACE ENTRY, AS GRANTED TO THE CITY OF CUPERTINO BY DEED RECORDED JANUARY 17, 1989 IN BOOK K820, PAGE 1180 OF OFFICIAL RECORDS. PARCEL TWO: (APN 316-18-026) A PORTION OF LOT 1 OF THE CRAFT ESTATE PARTITION, MAP FILED MARCH 19, 1906, BOOK L OF MAPS, PAGE 28, SANTA CLARA COUNTY RECORDS, DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHEAST CORNER OF SAID LOT 1; THENCE SOUTH. 0º 26' 11" WEST ALONG THE EASTERLY LINE OF SAID LOT 1, 95.63 FEET; THENCE SOUTH 63º 10' 07" WEST, 335.82 FEET TO THE EASTERLY LINE OF TANTAU AVENUE; THENCE SOUTH 0º 26' 11" WEST ALONG SAID EASTERLY LINE, 450.13 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE FROM SAID TRUE POINT OF BEGINNING, SOUTHERLY ALONG A CURVE TO THE LEFT HAVING A RADIUS OF 20 FEET TANGENT TO THE PRECEDING COURSE, THROUGH AN ANGLE OF 90º, AN ARC DISTANCE OF 31.42 FEET, THENCE SOUTH 89º 33' 49" EAST, 5.06 FEET; THENCE SOUTH 0º 26' 11" WEST, 40 FEET; THENCE ALONG THE ARC OF A NON-TANGENT CURVE TO THE LEFT HAVING A RADIUS OF 20 FEET, FROM A TANGENT BEARING NORTH 89º 33' 49" WEST THROUGH AN ANGLE OF 94º 45' 2", AN ARC DISTANCE OF 33.07 FEET TO THE EASTERLY LINE OF TANTAU AVENUE; THENCE NORTH 4º 18' 51" WEST ALONG THE EASTERLY LINE OF TANTAU AVENUE, 81.92 FEET TO THE TRUE POINT OF BEGINNING. PARCEL THREE: (APN 316-18-012) A PORTION OF LOT 1 OF THE CRAFT ESTATE PARTITION, MAP FILED MARCH 19, 1906 IN BOOK L OF MAPS, PAGE 28, SANTA CLARA COUNTY RECORDS, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 1; THENCE SOUTH 63º 10' 07" WEST, 335.82 FEET TO THE EASTERLY LINE OF TANTAU AVENUE; THENCE NORTH 0º 26' 11" EAST ALONG THE EASTERLY LINE OF TANTAU AVENUE, 27.47 FEET TO THE 5 NORTHWEST LINE OF SAID LOT 1; THENCE NORTH 67º 29' 18" EAST ALONG SAID NORTHWEST LINE, 324.16 FEET TO THE POINT OF BEGINNING. PARCEL FOUR: (APN 316-18-027) A PORTION OF LOT 1 OF THE CRAFT ESTATE PARTITION, MAP FILED MARCH 19, 1906 IN BOOK L OF MAPS, PAGE 28, SANTA CLARA COUNTY RECORDS, AND DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHEAST CORNER OF SAID LOT 1; THENCE FROM SAID POINT OF COMMENCEMENT SOUTH 0º 26' 11" WEST ALONG THE EASTERLY LINE OF SAID LOT 1, 95.63 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE LEAVING SAID EASTERLY LINE OF LOT 1, SOUTH 63º 10' 07" WEST, 335.82 FEET TO THE EASTERLY LINE OF TANTAU AVENUE; THENCE SOUTHERLY ALONG SAID LINE SOUTH 0º 26' 11" WEST, 450.13 FEET; THENCE ALONG A TANGENT CURVE TO THE LEFT HAVING A RADIUS OF 20.00 FEET THROUGH A CENTRAL ANGLE OF 90º AN ARC LENGTH OF 31.42 FEET; THENCE SOUTH 89º 33' 49" EAST TANGENT TO THE AFORESAID CURVE, 5.06 FEET; THENCE AT A RIGHT ANGLE TO THE LAST SAID COURSE SOUTH 0º 26' 11" WEST, 40 FEET; THENCE SOUTHWESTERLY ALONG THE ARC OF A CURVE TO THE LEFT HAVING A RADIUS OF 20 FEET, FROM A TANGENT BEARING NORTH 89º 33' 49" WEST, THROUGH AN ANGLE OF 94º 45' 2", AN ARC DISTANCE OF 33.07 FEET TO THE EASTERLY LINE OF TANTAU AVENUE; THENCE SOUTH 4º 18' 51" EAST, ALONG THE EASTERLY LINE OF TANTAU AVENUE, 43.49 FEET; THENCE SOUTH 89º 33' 49" EAST, 289.78 FEET TO THE EASTERLY LINE OF SAID LOT 1; THENCE NORTH 0º 26' 11" EAST, ALONG SAID EASTERLY LINE, 728.99 FEET TO THE TRUE POINT OF BEGINNING. PARCEL J: (APN 316-18-035) COMMENCING AT THE INTERSECTION OF THE PROLONGATION OF THE EASTERLY LINE OF THAT CERTAIN 19.27 ACRE TRACT CONVEYED BY JAMES E. GLENDENNING, ET AL, TO JOSEPH G. GLENDENNING, BY DEED DATED NOVEMBER 25, 1914, AND RECORDED NOVEMBER 25, 1914 IN BOOK 423 OF DEEDS, AT PAGE 424, SANTA CLARA COUNTY RECORDS, WITH THE SOUTHERLY LINE OF LOT 5 AS SAID LOT 5 IS SHOWN UPON THAT CERTAIN MAP ENTITLED, "MAP OF PARTITION OF THE GLENDENNING ESTATES IN THE QUITO-RANCHO", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE COUNTY RECORDER OF SANTA CLARA COUNTY ON OCTOBER 24, 1884 IN BOOK "B" OF MAPS AT PAGE 15; THENCE EASTERLY ALONG THE SAID SOUTHERLY LINE OF LOT 5, N. 89° 24' 39" E. 513.56 FEET; THENCE S. 0° 26' 11" W. 954.95 FEET; THENCE N. 67° 29' 18" E. 40.72 FEET TO THE TRUE POINT OF BEGINNING; THENCE FROM SAID TRUE POINT OF BEGINNING ALONG THE WESTERLY LINE OF SAID 10.00 FOOT WIDE STRIP OF LAND, N. 0° 26' 11" E. 660.07 FEET; THENCE ALONG THE ARC OF A CURVE TO THE RIGHT HAVING A RADIUS OF 50.00 FEET THROUGH A CENTRAL ANGLE OF 88° 58' 31" AN ARC LENGTH OF 77.65 FEET; THENCE NORTH 89° 24' 42" EAST 250.94 FEET TO A POINT ON THE EASTERLY LINE OF THE TRACT OF LAND CONVEYED TO JOE MARCHESE, ET UX, BY DEED RECORDED OCTOBER 5, 1944 IN BOOK 1227 OF OFFICIAL RECORDS, PAGE 30; THENCE ALONG SAID EASTERLY LINE, S. 0° 48' W., 580 FEET TO THE SOUTHEASTERLY CORNER OF SAID LOT 4, AS SAID LOT 4 IS SHOWN UPON THAT CERTAIN MAP ENTITLED, "MAP OF THE PARTITION OF THE GLENDENNING ESTATES IN THE QUITO RANCHO", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE COUNTY RECORDER OF SANTA CLARA COUNTY ON OCTOBER 24, 1884 IN BOOK "B" OF MAPS, AT PAGE 15; THENCE ALONG THE SOUTH-EASTERLY LINE OF SAID LOT 4, S. 67° 29' 18" W., 320 FEET MORE OR LESS TO THE TRUE POINT OF BEGINNING. 6 PARCEL L: PARCEL ONE: (APN 316-09-019 & -027) A PORTION OF LOTS 4 AND 7, AS SHOWN ON THAT CERTAIN MAP ENTITLED "MAP OF THE PARTITION OF THE GLENDENNING ESTATE IN THE QUITO RANCHO", WHICH WAS FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON OCTOBER 24, 1884 IN BOOK B OF MAPS, PAGE 15, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE NORTHERLY LINE OF PRUNERIDGE AVENUE, AS ESTABLISHED BY FINAL JUDGMENT OF CONDEMNATION IN FAVOR OF THE CITY OF CUPERTINO, A CERTIFIED COPY OF WHICH WAS RECORDED JULY 20, 1967, BOOK 7757 OFFICIAL RECORDS, PAGE 626, WITH THE EASTERLY LINE OF SAID LOT 4; THENCE FROM SAID POINT OF BEGINNING NORTH 0° 26' 11" EAST ALONG THE EASTERLY LINE OF SAID LOT 4, 138.54 FEET TO THE NORTHEAST CORNER OF SAID LOT 4 AND THE SOUTHEAST CORNER OF SAID LOT 7; THENCE NORTH 0° 12' 36" EAST ALONG THE EASTERLY LINE OF SAID LOT 7, 118.89 FEET; THENCE SOUTH 89° 24' 42" WEST 288.33 FEET TO THE EASTERLY LINE OF TANTAU AVENUE; THENCE SOUTHERLY ALONG SAID LINE OF TANTAU AVENUE ON THE ARC OF A CURVE TO THE LEFT, FROM A TANGENT WHICH BEARS SOUTH 11° 07' 17" WEST WITH A RADIUS OF 562.50 FEET, THROUGH A CENTRAL ANGLE OF 10° 41' 06" FOR AN ARC DISTANCE OF 104.90 FEET; THENCE CONTINUING ALONG SAID LINE SOUTH 0° 26' 11" WEST 102.42 FEET AND ON A TANGENT CURVE TO THE LEFT, WITH A RADIUS OF 50 FEET, THROUGH A CENTRAL ANGLE OF 91° 01' 29" FOR AN ARC DISTANCE OF 79.43 FEET TO SAID NORTHERLY LINE OF PRUNERIDGE AVENUE; THENCE NORTH 89° 24' 42" EAST ALONG SAID LINE, 247.65 FEET TO THE POINT OF BEGINNING. PARCEL TWO: (APN 316-09-028) A PORTION OF LOT 7, AS SHOWN ON THAT CERTAIN MAP ENTITLED "MAP OF THE PARTITION OF THE GLENDENNING ESTATE IN THE QUITO RANCHO", WHICH WAS FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON OCTOBER 24, 1884 IN BOOK B OF MAPS, PAGE 15, DESCRIBED AS FOLLOWS: BEGINNING ON THE EASTERLY LINE OF SAID LOT 7, DISTANT THEREON NORTH 0° 12' 36" EAST 118.89 FEET FROM THE SOUTHEASTERLY CORNER OF SAID LOT 7; THENCE SOUTH 89° 24' 42" WEST 288.33 FEET TO THE EASTERLY LINE OF TANTAU AVENUE; THENCE NORTHERLY ALONG THE EASTERLY LINE OF TANTAU AVENUE, ON THE ARC OF A CURVE TO THE RIGHT, HAVING A RADIUS OF 562.45 FEET, FROM A TANGENT BEARING NORTH 11° 07' 17" EAST THROUGH AN ANGLE OF 14° 56' 08" AN ARC DISTANCE OF 146.63 FEET; THENCE ALONG THE ARC OF A REVERSE CURVE TO THE LEFT, HAVING A RADIUS OF 637.5 FEET, THROUGH AN ANGLE OF 19° 56' 11", AN ARC DISTANCE OF 221.82 FEET TO THE WESTERLY PROLONGATION OF THE NORTHERLY LINE OF TRACT 1867, WESTWOOD OAKS UNIT NO. 5, THE MAP OF WHICH WAS RECORDED MAY 22, 1958 IN BOOK 93 OF MAPS, PAGES 49, 50 AND 51; THENCE ALONG SAID PROLONGATION NORTH 89° 24' 05" EAST 181.83 FEET TO THE EASTERLY LINE OF SAID LOT 7; THENCE SOUTH 0° 12' 36" WEST ALONG THE EASTERLY LINE OF SAID LOT 7, 349.59 FEET TO THE POINT OF BEGINNING. 7 EXHIBIT DA-1b PROJECT SITE DIAGRAM OAK #4816-8465-9477 v9 EXHIBIT DA-1c TAX LOCALIZATION PLAN California Sales and Use Tax. If Owner so directs, Contractor and all Subcontractors shall take measures to ensure that, to the fullest extent permitted by applicable laws and regulations, all sales, purchases, and uses of tangible personal property subject to sales or use tax are located at the Site for purposes of state and local sales and use tax law, with the objective of maximizing the allocation to the City of construction sales and use tax revenues derived from the Project. The measures taken by the Contractor or Subcontractors to satisfy this provision shall be subject to Owner’s prior review and approval, and all calculations and payments are subject to the audit provisions of Section 4.11. Without limiting the generality of the foregoing, Contractor shall: (i) obtain all permits and licenses necessary to maximize the City’s allocation of construction sales and use taxes derived from the Project, including but not limited to California Seller’s Permits, Use Tax Direct Payment Permits, and any other license or permit necessary or desirable to maximize the City’s allocation of sales and use taxes derived from the Project; (ii) designate, and require all Subcontractors to designate, the Site as the place of sale of all “fixtures” furnished and/or installed as part of the Project; (iii) designate, and require all Subcontractors to designate, the Property as the place of use of all “materials” used in the construction of the Project; and (iv) allocate, and require all Subcontractors to allocate, the local sales and use taxes derived from the Construction Contract and all Subcontracts directly to the City. If required by Owner, Contractor shall establish a purchasing entity or purchasing office located in the City. Contractor shall complete and file, and require all Subcontractors to complete and file, any forms the State Board of Equalization (the “SBOE”) requires to effect the allocation of sales and use tax required by this Section pursuant to applicable regulations of the SBOE, as amended or supplemented from time to time. If required by Owner, Contractor shall, and shall cause its Subcontractors to, maintain a monitoring report or other documentation, in such detail as Owner may specify, tracking the amount and categories of construction sales and use tax revenues allocated to the City under this Section. In this clause the “City” means the City of Cupertino and “Site” means the approximately 175- acre site bounded by the 280 Freeway, Wolfe Road, Homestead Road and North Tantau Avenue, located in Cupertino, California. OAK #4816-8465-9477 v9 EXHIBIT DA-1d GENERAL PLAN OFFICE SPACE DEVELOPMENT ALLOCATIONS Development Allocation is granted as follows: 1.87,746 sq. ft. from the Vallco Park North Special Center and 2.109,935 sq. ft. from 150,000 sq .ft. available in the Major Employers allocation (companies with Cupertino sales offices and corporate headquarters) OAK #4816-8465-9477 v9 EXHIBIT DA-1e CAMPUS AMENITY SPACE Campus Amenity Space approved for the project is as follows and further shown in the plans that follow: Structure Amenity Space Area Entries 112,000 Area of Walkway Main Building 234,000 in excess of 7.5 feet Restaurant 90,000 Outdoor Food Stations 10,000 Transit Center 4,500 Fitness Center 89,000 Corporate Auditorium 120,000 Valet Parking Reception 20,000 Maintenance Buildings 10,000 Security Receptions 7,000 Central Plant 50,000 Testing labs/ Phase 2 – Office, 100,000 anechoic chambers Research and Development Restaurant 20,000 North 12,000 Phase 2 – Satellite Plants South 30,000 TOTAL908,500 OAK #4816-8465-9477 v9 66 237 D 456 Bnfojuz!BsfbSFTUBVSBOUQFSJNFUFS!DPSSJEPS!203345-111SFTUBVSBOUFOUSJFTSFDSFBUJPO!0!PUIFSBNFOJUZSFDSFBUJPO!0!PUIFSFOUSJFTFOUSJFTXPSLTIPQ!'!UFTUJOH!'!EBUB!DFOUFSTbufmmjuf!Qmbout!SFTUBVSBOU 57 57U 312 311 21-1116-111211-111231-11121-1118-11136-111743-111 4-83:-111 3-931-111!FOUSJFT Hsptt!Bsfb BQQMF!DBNQVT!3 58 C CvjmejohNbjo!CvjmejohPvuepps!Gppe!Tubujpot!Usbotju!Dfoufs!Dpsqpsbuf!Gjuoftt!DfoufsDpsqpsbuf!BvejupsjvnNbjoufobodf!CvjmejohtTfdvsjuz!CvjmejohtWbmfu!Qbsljoh!SfdfqujpoQibtf!3!Upubm! +! B Tpvsdf;!Gptufs!,!Qbsuofst!3124+!Benjojtusbujwf!tvqqpsu!bsfbt!gps!Dpsqpsbuf!Bvejupsjvn!bsf!jodmvefe!jo!bnfojuz!bsfbt/ Upubm!Hsptt!Bsfb;!!4-83:-111!trguUpubm!Bnfojuz!Bsfb;!!959-611!trguUpubm!Gmpps!Bsfb;!!3-991-611!trgu 23456789: 22 2123 Pddvqjfe!!!!!!!!!!!Nbjo!Cvjmejoh!!!!!!!!!!!!Dpsqpsbuf!Gjuoftt!Dfoufs!!!!!!!!!!!!Dpsqpsbuf!Bvejupsjvn!!!!!!!!!!!!!Nbjoufobodf!Cvjmejoh!!!!!!!!!!!!Nbjoufobodf!Cvjmejoh!!!!!!!!!!!!Xpmgf!Wjtjups!Dfoufs!! !!!!!!!!!Uboubv!Wjtjups!Dfoufs!!!!!!!!!!!!!!!!!!!!!!Wbmfu!Qbsljoh!Sfdfqujpo!!!!!!!!!!!!!!!!!!!!!!Usbotju!Dfoufs!!!!!!!!!!!!!!!!!!!!!!Pvuepps!Gppe!Tubujpot!Vopddvqjfe!!!!!!!!!!!Qbsljoh!Tusvduvsf!!!!!! !!!!!!!Dfousbm!Qmbou Qibtf!3!!!!!!!!!!!Qibtf!3!Efwfmpqnfou! 23456789: 2223 Pddvqjfe!!!!!!!!!!!!!Nbjo!Cvjmejoh!!!!!!!!!!!!!!!!!Dpsqpsbuf!Gjuoftt!Dfoufs!!!!!!!!!!!!!Dpsqpsbuf!Bvejupsjvn!!!!!!!!!!!!!!!!!!!!!!!!Sftfbsdi!Gbdjmjujft!!!!!!!!!!!Nbjoufobodf!Cvjmejoh!!!!!!!!!!!!Nbjou fobodf!Cvjmejoh!!!!!!!!!!!Xpmgf!Tfdvsjuz!Cvjmejoht!!!!!!!!!!!Uboubv!Tfdvsjuz!Cvjmejoht!!!!!!!!!!!Usbotju!Dfoufs!Vopddvqjfe!!!!!!!!!!!!!Qbsljoh!Tusvduvsf!!!!!!!!!!!!)vopddvqjfe*!!!!!!!!!!!!!Dfousbm!Qm bou!!!!!!!!!!!!!)vopddvqjfe*Qibtf!3!!!!!!!!!!!!Qibtf!3!Efwfmpqnfou!!!!!!! Bnfojuz!Bsfb;! 9 24 : 8 4 2 21 22 5 7 23 6 !!! pccjft-!Nf{{bojoft-!Xbmlxbzt Hsptt!Bsfb 3-931-111!tg Gmpps!Bsfb!!!!!!!!!!95/6&3-495-111!tg! Bnfojuz!Bsfb!!!!!!.!Sftubvsbou-!Dbgft!!!!!.!Fousbodf!M!!!!!.!Qfsjnfufs!Djsdvmbujpo!!!!!!.!Gvuvsf!Fohjoffsjoh!'!Uftujoh! 29-11129-11129-11165-111 Mfwfm!2Mfwfm!3Mfwfm!4Mfwfm!5 47-111 Dbgf Bsfb!Dbmdvmbujpo MpcczXbmlxbz!Dbgf!0!Dbgf!Cbdl!pg!Ipvtf6-6116-6116-6116-61133-111 Upubm! 611!trgu611!trgu Cbdl!pg!Ipvtf 3361!trgu MFWFM!4 Dbgf 611!trgu611!trgu Cbdl!pg!Ipvtf 5536!trgu 611 3-6113-111 Mfwfm!2Mfwfm!3Mfwfm!4Mfwfm!5 Bsfb!Dbmdvmbujpo MpcczXbmlxbz-!Cbuisppnt-!Mjgut!Dbgf!0!Dbgf!Csfblpvu!Tqbdf Upubm! 611!trgu 3111!trgu3611!trgu Mfwfm!2Mfwfm!3Mfwfm!4Mfwfm!5 4:-51129-9117-5117-5117-51149-111 Bsfb!Dbmdvmbujpo Ejojoh!BsfbTfswfsz!Bsfb Upubm! 4-311!trgu4-311!trgu 23-511!trgu 4-311!trgu4-311!trgu MFWFM!5MFWFM!4 4-311!trgu :-511!trgu 4:-511!trgu 4-311!trgu:-511!trgu Mfwfm!2Mfwfm!3Mfwfm!4Mfwfm!5 Bsfb!Dbmdvmbujpo Dpnnpo!Dpssjepst!20369-51169-51169-51169-511344-711 Upubm! 8/6!gu 8/6!gu 8/6!gu 8/6!gu EXHIBIT DA-1f IMPACT FEES 1. Master Storm Drain Area Fees: Commercial and Industrial $8,029/acre 2. Housing Mitigation In-Lieu Fees: P(MP) (per sq. ft.) $2.79* *This amount is City’s base housing mitigation in-lieu fee. As noted in Section 3.2 of the Agreement, Apple has agreed to pay an Affordable Housing Contribution equal to twice the base in-lieu fee. This fee is calculated on the net additional square footage building space added by the Project over the square footage of building space on the Property as of the Effective Date (i.e. 2,891,500 square feet). OAK #4816-8465-9477 v9 EXHIBIT DA-1g PRUNERIDGE AVENUE VACATION OAK #4816-8465-9477 v9 EXHIBIT DA-1g DA-1g DA-1g : : PRUNERIDGE AVENUE : VACATION KEY MAP 1 : : CUPERTINO CA 4 LEGEND : : PRUNERIDGE AVENUE : VACATION 2 : : CUPERTINO CA 4 LEGEND : : PRUNERIDGE AVENUE : VACATION 3 : : CUPERTINO CA 4 LEGEND : : PRUNERIDGE AVENUE : VACATION 4 : : CUPERTINO CA 4