ST. JOSEPH AND TALLER SAN JOSE (NEGOTIATION AGMT) - 2014

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NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, and for their mutual reliance, the Parties agree as follows: TERMS 1. RECITALS. The Recitals above are incorporated herein by this reference as if fully set forth herein. 2. EFFECTIVE DATE. This Agreement shall become effective (the "Effective Date ") on the date when this Agreement has been: (a) approved by the CITY Council, and (b) executed by the authorized representatives of each of the CITY and DEVELOPER. 3. NATURE OF AGREEMENT. As more particularly described in Section 6.1, this Agreement is not intended to constitute a binding agreement by the CITY and the DEVELOPER to acquire or develop the Property, nor is this Agreement intended as a binding agreement to enter into a Development Agreement or any other contract. No Party shall be legally bound to consummate the acquisition of the Property or development of the Project unless and until a Development Agreement has been duly executed by the Parties. Neither the CITY nor the DEVELOPER shall be under any obligation to approve or execute a Development Agreement upon the conclusion of the Negotiation Period (as defined in Section 4 below), and any party may refuse to approve and execute a Development Agreement at its sole and absolute discretion, with or without cause. In the event that a Development Agreement is approved and executed by the Parties, this Agreement shall be superseded by such Development Agreement. 4. TERM AND NEGOTIATION PERIOD. The term of this Agreement shall commence on the Effective Date and shall continue thereafter for a period of one hundred eighty (180) days after the Effective Date ( "Negotiation Period "), unless sooner terminated as provided herein. The Negotiation Period may be extended once for no more than one hundred eighty (180) days upon the mutual written agreement of the CITY and DEVELOPER, and all references in this Agreement to the Negotiation Period shall include any such extended period. The Development Agreement may contain further exclusivity language as agreed by the Partiea The City Manager is authorized to extend the Agreement on behalf of the CITY, pursuant to the terms of this Agreement. 5. GOOD FAITH NEGOTIATIONS. The CITY, SJHS and TSJ agree, during the Negotiation Period, to negotiate diligently and in good faith to comply with the terms and conditions set forth in this Agreement and to complete the tasks set forth in Sections 7 and 8, respectively, subject to the following provisions: 5.l The term "negotiate," as used in this Agreement, shall preclude the CITY from soliciting, accepting, reviewing or analyzing, during the Negotiation Period proposals from persons or entities other than DEVELOPER or any of their Affiliates to purchase, acquire an interest in, and /or develop the Property or from entering into any other discussions whether orally or in writing with any other person or entity regarding the purchase, acquisition of an interest in, and /or development of the Property. DEVELOPER acknowledges that, during the Negotiation Period, persons or entities other than DEVELOPER may submit unsolicited proposals to the CITY relating to the purchase, acquisition of an interest in, and/or the _2_ 48677228.1