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Shea La Quinta/Tolling AgreementTOLLING AGREEMENT SHEA LA QUINTA, LLC ("Shea'), a California limited liability corporation, on the one hand, and the CITY OF LA QUINTA and CITY COUNCIL OF THE CITY OF LA QUINTA (collectively, "City," in the singular), on the other hand, hereby enter into this Tolling Agreement ("Tolling Agreemenfl, effective as of December L 2007. RECITALS A. On July 31, 2001, the County of Riverside approved Tentative Map No. 30023 for the active adult community known as Trilogy La Quinta (the "Trilogy Project"). The Trilogy Project is now in the boundaries of the City of La Quinta and consists of approximately 1,200 dwelling units, recreational trails, bike paths, and a golf course. Phase Six of the Trilogy Project consists of 200 dwelling units and the Trilogy Project's equipment yard and well site ("Phase 6'�. B. Shea has requested approval by the City of a Final Map for Phase 6 of the Trilogy Project. Following Shea's application, a dispute has arisen between Shea and the City over the interpretation of certain Conditions of Approval for the Trilogy Project, Shea's satisfaction of those Conditions of Approval, and the City's obligation to process and agendize Shea's Phase 6 Final Map for approval by the City Council. C. On October 29, 2007, Shea filed a Verified Petition for Writ of Mandamus and Complaint ("Petition") in the Superior Court of Riverside County, California, against the City (Case No. RIC484197), alleging, among other things, that: (i) the City's refusal to put Shea's final map associated with Phase 6 of the Trilogy Project on the City Council's agenda for consideration was unlawful; (ii) the City purportedly violated the Subdivision Map Act; (iii) the City purportedly violated Shea's Civil Rights under 42 U.S.C. section 1983; and (iv) the City's actions constituted inverse condemnation of part of the Trilogy Project and violated Shea's constitutional rights, resulting in unspecified damages. The City has not yet filed its responsive pleading but disputes all of Shea's claims. D. The City contends that certain statutes of limitations have already expired with respect to all of Shea's claims in the Petition. Shea disagrees. E. Since the filing of the Petition, the Parties have entered into settlement discussions and wish to explore the possibility of resolving their differences regarding the processing and approval of Phase 6 without resort to further litigation. F. In order that the Parties may have time to fully explore the prospects for an informal resolution of this matter, and may focus time, efforts and money toward potential settlement, Shea desires to dismiss the lawsuit without prejudice and withhold and not file any other claims against the City related to the Trilogy Project during the Page 1 of 5 term of this Tolling Agreement. The Parties desire to toll all applicable statutes of limitation for a period of six (6) months, while protecting and preserving all potential claims and defenses relating to or arising out of the allegations of the Petition. G. At its regular meeting on December 4, 2007, the City's governing board authorized the City Attorney to enter into this Tolling Agreement on behalf of the City. 1. Shea agrees to dismiss the lawsuit without prejudice and withhold and not file any other claims against the City related to the Trilogy Project during the term of this Tolling Agreement. 2. The Parties hereto agree that any and all statutes of limitation for the claims brought by Shea in the Petition are tolled as of the date Shea filed its Petition, and any claims against the City that may arise with respect to the Trilogy Project during the tolling period are tolled as of the effective date of this Tolling Agreement. Each of these claims shall remain tolled until June 2, 2008 (the "Sunset" date), or46 days after the termination of this Tolling Agreement as permitted through paragraph 3 ("Termination '), whichever date is earlier. Should Shea re -file its claims raised in the Petition, the City shall not assert any defense premised upon the passage of time between October 29, 2007, and Sunset or Termination, whichever date is earlier. Should Shea file against the City asserting claims other than those set forth in the Petition, the City shall not assert any defense premised upon the passage of time between the effective date of this Tolling Agreement and Sunset or Termination, whichever date is earlier. Nothing in this Tolling Agreement shall be construed to revive statutes of limitation, if any, that had expired as of October 29, 2007. 3. Any Party may, at any time, provide the other with written noti terminating this Tolling Agreement. Such termination shall be effective<t5 days following delivery of written notice of exercise of the termination option to the other Party. Such notice of termination shall in no event result in the shortening of any period of limitation otherwise provided by law. Notice of termination of this Tolling Agreement shall be by service upon legal counsel for the other Party, either by personal delivery, registeredlcertified mail, or facsimile transmission, and the -day period referenced herein shall be deemed to commence on the date of deliv of ch notice, as indicated on any proof of receipt of the same. 4. Nothing in this Tolling Agreement shall be construed as an admission by any Party of any fault or liability, or lack thereof, nor shall it be construed as a waiver, retraction or modification of the positions of any Party. The Parties further acknowledge that all future discussions concerning the resolution of the dispute herein shall be considered settlement discussions and protected under Evidence Code section 1152, except for the public hearings on Phase 6. Page 2 of 5 5. This Tolling Agreement constitutes the complete understanding of the Parties with respect to the subject matter hereof, and may not be modified except by a writing signed by both of the Parties. 6. In the event that Shea files a new petition or re -files its Petition after termination of the Tolling Agreement, Shea waives any claim for delay damages that might arise during the period this Tolling Agreement is in effect. 7. Each person who executes this Tolling Agreement represents and warrants that he/she has the authority to do so on behalf of the Party for whom executed. 8. For purposes of this Tolling Agreement, notices shall be sent as follows: To Shea: J. F. Shea Co., Inc. 655 Brea Canyon Road Walnut, CA 91789 Attention: Max B. Johnson, Vice President and General Counsel Telephone: (909) 594-0903 Facsimile: (909) 869-0849 With a copy to: Jackson DeMarco Tidus Petersen & Peckenpaugh 2030 Main Street, Suite 1200 Irvine, CA 92614 Attention: Michael L. Tidus, Esq. Telephone: (949) 752-8585 Facsimile: (949) 752-0597 To City: City of La Quinta P.O. Box 1504 La Quinta, CA 92247 Attn: City Clerk With a copy to: Stowell, Zeilenga & Ruth, Vaughn &Treiger LLP 2815 Townsgate Road #330 Westlake Village, CA 91361 Attention: Richard Zeilenga, Esq. Telephone: (805) 446-1496 Facsimile: (805) 446-1490 Page 3 of 5 9. This Tolling Agreement may be executed in counterparts, and signatures transmitted by facsimile shall be valid and considered original signatures for all purposes. AGREED AND ACCEPTED: SHEA LA QUINTA, LLC DATED: December -, 2007 DATED: December 42007 CITY OF LA QUINTA DATED: December 7 2007 By: Shea Homes, Inc. Its: Sole Manager By: _ e* Devlin W .A s Se By: Ulrich Sauerbrey Its: Assistant Secretary CITY COUNCIL OF THE CITY OF LA QUINTA DATED: December. 2007 ATTEST: CITY CLERK 1 ..�' DATED: December a 2007 B; Page 4 of 5 REVIEWED AND APPROVED AS TO FORM: Attorneys for SHEA DATED: December 2007 Attorneys for CITY DATED: December I7x 750015.6 JACKSON, DeMARCO, PETERSEN, TIDUS & PECKENPAUGH STOWELL, ZEELENGA, RUTH, Page 5 of 5 State of California County of Riverside On December 6, 2007, before me, Phyllis Manley, Notary Public, personally appeared Perry Devlin, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. (Seal) Caronrebn • 169177% Cam* oo�.e ea«oa�a>Im State of California County of Riverside On December 6, 2007, before me, Phyllis Manley, Notary Public, personally appeared Ulrich Sauerbrey, proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. (Seal)