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HomeMy WebLinkAboutCOM 0759.011 1996-1998 Ramseyer version - Draft 3 RECMM 04-', H a Dat County Council LAND COURT SYSTEM REGULAR SYSTEM ) AFTER RECORDATION, RETURN BY MAIL (X) PICKUP( To: BENJAMIN A. KUDO Dwyer Imanaka Schraff Kudo Meyer & Fujimoto 900 Fort Street Mall Suite 1800 Honolulu, HI 96813 TMK Nos: (3) 7-9-12:03 (3) 7-9-12:04 (3) 7-9-12:11 (3) 8-1-04: 03 (portion) DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT ("AGREEMENT"), made this day of 1998, by and between the COUNTY OF HAWAII, a municipal corporation of the State of Hawaii, whose principal place of business and mailing address is 25 Aupuni Street, Hilo, Hawaii, acting through its mayor ("COUNTY"), and 1250 OCEANSIDE PARTNERS, a Hawaii limited partnership, dba OCEANSIDE 1250, whose principal place of business and mailing address is 74-5620A Palani Road, Suite 200, Kailua-Kona, Hawaii 96740 ("OCEANSIDE"). RECITALS: A. These Recitals refer to and utilize certain capitalized terms which are defined in Paragraph (2), herein. The parties intend to refer to those definitions in conjunction with the use thereof in these Recitals. Cow " 75- 7- rilrL$!~ COJNLfL. tot! i~ APR 1 IJSS B. The Hawaii State Legislature, under Development Agreement Statute section 46-123, granted authorization to the COUNTY to enact an ordinance authorizing the executive branch of the COUNTY to enter into a development agreement with any person having a legal or equitable interest in real property, for the development of such property; C. The County Council enacted Ordinance No. 93-37 pursuant to Development Agreement Statute section 46-123, which ordinance was passed into law on April 27, 1993. D. Pursuant to the Development Agreement Statute and the Development Agreement Code, the COUNTY adopted rules governing Development Agreements on May 16, 1995. E. The Development Agreement Code and the Development Agreement rules establish the procedures and requirements for the consideration of development agreements upon application by or on behalf of persons having a legal or equitable interest in property. F. OCEANSIDE is the owner in fee simple of a portion of the Property, and Lessee of the remainder of the Property. A map describing that portion of the Property owned by OCEANSIDE in fee simple and that portion that is leased is attached hereto and identified as Exhibit "A". G. OCEANSIDE or its related entity, affiliate or subsidiary plans to develop the Project on the Property. H. The Project will require a major investment by OCEANSIDE, for example, in public facilities and on- and off site improvements, to make the Project feasible. 1. The Project was reviewed and planned according to the Land Use Regulations. J. OCEANSIDE has applied for and the COUNTY has granted a number of Approvals for the Project. K. As part of OCEANS] DE's applications for Approvals from the COUNTY: 1. The COUNTY has examined the Project's impacts on vehicular traffic conditions, and has determined that construction of the Bypass Highway will not only offset traffic impacts caused by the Project, it will also provide a public purpose by improving existing traffic conditions in the region. 2. The COUNTY has determined that the construction and development of a Coastline Park will be an asset to the COUNTY and the public by providing coastal recreational opportunities, preserving open space and archaeological sites within the Project, as well as meeting the Project's park requirements pursuant to Ordinance No. 96-7, Ordinance No. 96-8 and Special Management Area ("SMA") Permit No. 345. L. The COUNTY has concluded that development of the Project will provide many public benefits to the COUNTY through the zoning, the SMA conditions of approval, and the imposition of on- 2 and off-site development requirements pursuant to the terms and conditions of this Agreement, including, without limitation, additional tax revenues resulting in fiscal benefits to the COUNTY, financing and/or installation and construction of infrastructure and the creation of job opportunities in and through the construction, development and use of the Project. OCEANSIDE shall not be obligated to adhere to and perform the terms and conditions of this Development Agreement ("Agreement") until it has commenced construction of the Project and provided that any zoning approvals and permits that OCEANSIDE has received have not been challenged and overturned by or that such challenges are not pending resolution before a court of law or a comparable federal, state or county administrative body. For purposes of this paragraph, "commenced construction" shall mean that OCEANSIDE has been awarded final subdivision approval and has received all necessary construction permits for the Project. M. Pursuant to Sec. 46-121, HRS, Hawaii County Code Chapter 30, and Hawaii County's Rule I, relating to Development Agreements, the COUNTY and OCEANSIDE have entered into this Agreement. This Agreement will: Q provide for the parameters within which the obligations of OCEANSIDE for public and other improvements will be met; (ii) provide assurances to OCEANSIDE that the project will not be restricted or prohibited by the subsequent enactment or adoption of more restrictive Land Use Regulations, including but not limited to changes in zoning classifications or revocation of OCEANSIDE's Approvals, except when, with the agreement of OCEANSIDE, it becomes necessary to preserve the public health, safety and welfare; and (iii) provide appropriate assurances to OCEANSIDE that it may complete the development and construction of the Project in accordance with all Land Use Regulations and Approvals applicable to the Project on the date of this Agreement, subject to OCEANSIDE's adherence to and performance of all material terms and conditions of this Agreement. N. Use of this Agreement will reduce or eliminate the uncertainty in the Project planning and development approval process, which in turn, would encourage the efficient utilization of resources and minimize the economic cost to the public; allow for the orderly planning of public facilities and services; and otherwise achieve the purposes and objectives for which the Development Agreement Statute and the Development Agreement Code were enacted. This Agreement clarifies the Land Use Regulations and Approvals, which in turn provide for the overall design, construction and development of the Project and all on-site and off-site improvements and appurtenances associated therewith, in the manner specified in this Agreement, including, without limitation, the design, construction and development of projects to provide benefits to the region and the COUNTY such as the Bypass Highway and the Coastline Park as set forth herein. 0. OCEANSIDE submitted an Application to the Office of the Mayor on 1998 pursuant to Development Agreement Code section 5. 3 P. On , 1998, pursuant to Development Agreement Code section 5(a) and Development Agreement Statute section 46-128, the County Council held a Public Hearing on the draft of this Agreement. Q. On 1998, pursuant to Development Agreement Code sections 50) and 5(e) and Development Agreement Statute section 46-129, after review and comment by appropriate governmental agencies of the draft of this Agreement, and consideration of all evidence presented and heard at the Public Hearing pursuant to the Development Agreement Code, the County Council found and determined that this Agreement complies and is in accordance with the County General Plan, as amended, and any applicable community development plans adopted by the County Council as of the date of the Enacting Resolution. In connection with said findings, the County Council passed the Enacting Resolution approving this Agreement for execution by the Mayor. NOw, THEREFORE, pursuant to the authority contained in the Development Agreement Statute, the Development Agreement Code, and the Development Agreement Rules, and in consideration of the mutual covenants and agreements set forth herein, the COUNTY and OCEANSIDE mutually agree as follows: 1. RECITALS. The recitals hereinabove are incorporated herein by this reference and made a part of this Agreement as though set forth in full herein. 2. DEFINITIONS. Whenever used in this Agreement, the terms defined below shall have the following meaning: a. AGREEMENT. "Agreement" shall mean this Development Agreement entered into by the COUNTY and OCEANSIDE, approved by the County Council through the Enacting Resolution, and executed by the Mayor on behalf of COUNTY. b. APPLICATION. "Application" shall mean the application for this Agreement submitted by OCEANSIDE to the Planning Department. C. APPRAISER. "Appraiser" shall mean any unbiased appraiser, licensed and certified in the State of Hawaii and appointed as provided herein. d. APPROVALS. "Approvals" shall mean any and all permits or approvals which have been or will be received by OCEANSIDE for the Project from the COUNTY, the State, or any other governmental or quasi-governmental agency pursuant to any Land Use Regulations as of the date of this Agreement, including, without limitation: (1) Change of Zone Approval (REZ 93-5), accepted by the County Council on June 15, 1994 as Bill 182, Draft 6 and signed into law by the Mayor on June 28, 1994 as Ordinance No. 94-73, attached hereto as Exhibit "S"; and amended and superseded by Bill 181, Draft 6 accepted by 4 the County Council on January 3, 1996, and signed into law by the Mayor on January 15, 1996 as Ordinance No. 96-8 attached hereto as Exhibit "B" and incorporated herein by this reference. (2) Change of Zone Approval (REZ 95-12) accepted by the County Council on January 3, 1996 as Bill 158, Draft 5, and signed into law by the Mayor on January 15, 1996 as Ordinance No. 96-7 attached hereto as Exhibit "C" and incorporated herein by this reference. (3) Special Management Area Use Permit Approval (SMA 93-1) granted by the Planning Commission on November 5, 1993 (SMA Permit No. 345) attached hereto as Exhibit "D" and incorporated herein by this reference. (4) Use Permit Approval (USE 93-2) granted by the Planning Commission on November 5, 1993 (Use Permit No. 115) attached hereto as Exhibit "E" and incorporated herein by this reference. (5) Special Management Area Use Permit Approval (SMA 95-3) granted by the Planning Commission on September 28, 1995 (SMA Permit No. 356) attached hereto as Exhibit "F" and incorporated herein by this reference. (6) Change of Zone Approval passed by the County Council on March 7, 1997 and signed into law by the Mayor on March 13, 1997 as Ordinance 97-36 attached hereto as Exhibit "G" incorporated herein by this reference. e. BOND. "Bond" shall mean a performance bond, cash bond, surety company bond, personal surety bond, or other financial assurance obtained or caused to be obtained by OCEANSIDE. Such bond shall be good for no more than five (5) years from the date the bond is issued, unless otherwise extended by the mutual agreement of the Director of the COUNTY Department of Public Works and OCEANSIDE in writing. f. BYPASS HIGHWAY. "Bypass Highway" shall mean that bypass highway between the approximate vicinity of Keauhou and Captain Cook, consisting of two (2) lanes with a sufficient Right-of-Way for a total of four (4) lanes required in part to satisfy the conditions of Approvals and to alleviate traffic congestion on the Mamalahoa Highway that has existed for many years. This Bypass Highway is also referred to as the "Mamalahoa Highway Bypass" under Ordinance Nos. 96-7, 96-8 and 97-36 attached hereto as Exhibits "C", "B" and "G", respectively. Further detail and description of the Bypass Highway is attached hereto as Exhibit "H" and incorporated herein by this reference. g. COASTLINE PARK. "Coastline Park" shall mean that coastline park required by the COUNTY to be established under Conditions 8 and 10 of SMA Permit No. 345, Condition H of Ordinance No. 96-8, and Condition K of Ordinance No. 96-7, and subject to the terms and conditions as set forth in this Agreement. 5 h. COUNTY. "COUNTY" shall mean the County of Hawaii, municipal corporation, and where applicable, the appropriate departments and agencies but does not include the County Council. i. COUNTY COUNCIL. "County Council" shall mean the County of Hawaii County Council. i. DENSITY. "Density" shall have the meaning given such tern in the Zoning Code. k. DEVELOPER. "Developer" shall mean a person, corporation, organization, partnership, association, or other legal entity constructing, erecting, enlarging, altering, or engaging in any development activity. 1. DEVELOPMENT AGREEMENT CODE. "Development Agreement Code" shall mean Ordinance No. 93-37, which ordinance was passed into law on April 27, 1993 (now HCC chapter 30). in. DEVELOPMENT AGREEMENT RULES. "Development Agreement Rules" shall mean County of Hawaii Office of the Mayor Rule I regarding Development Agreements, approved by the Mayor on May 16, 1995 and filed in the Office of the County Clerk on May 18, 1995. n. DEVELOPMENT AGREEMENT STATUTE. "Development Agreement Statute" shall mean HRS sections 46-121 through 46-132. o. DIRECTOR. "Director" shall mean the Director of the Planning Department of the County of Hawaii. P. ENACTING RESOLUTION. "Enacting Resolution" shall mean Resolution No. approving this Agreement, adopted by the County Council on , 1998, a copy of which is attached hereto as Exhibit "I" and incorporated herein by this reference. q. ExACTION. "Exaction" shall mean any and all exactions; fair share contributions, impact or in-lieu fees or payments; dedication or reservation requirements; obligations for on- or off-site improvements or construction requirements for public facilities or infrastructure; or services called for in connection with the development or construction of the Project pursuant to the Land Use Regulations and Approvals. r. GOVERNMENTAL ENTITY OR AGENCY. "Governmental entity or agency" shall mean and include, without limitation, the legislative, administrative and executive branches of the local, state and federal governments. S. HCC. "HCC" shall mean Hawaii County Code, as amended. 6 t. HRS. "HRS" shall mean Hawaii Revised Statutes, as amended. U. IMPACT FEE ORDINANCE. "Impact Fee Ordinance" shall mean a Unified Impact Fees Ordinance or similar ordinance setting forth criteria for the imposition of the exactions or the assessment of impact fees. V. LAND USE REGULATIONS. "Land Use Regulations" shall mean any and all State and County laws, ordinances, resolutions, rules and policies governing the permitted uses of the Property, including, without limitation, uses, density, design, height, size and building specifications of proposed buildings; construction standards and specifications for roads and utilities, roadway improvements; affordable housing; community benefit assessments; water utilization and all exaction requirements applicable to the development of the Property; made applicable and in force as of the date of this Agreement. W. LAND OWNER. "Land Owner" shall mean the equitable or legal holder of interest in real property or the lessee holding under a recorded lease. X. LAWS. "Laws" shall mean the laws of the State, the Constitution of the United States, the Constitution of the State, any federal, state or local codes, statutes, or executive mandates in any court decision, ordinances, or charter provisions or administrative rules and regulations of any applicable governmental entity or agency. y. LENDER. "Lender" shall mean any financial institution or entity providing funds for the Project, including but not limited to banks, savings and loans, investors and partners. Z. MAYOR. "Mayor" shall mean the Mayor of the COUNTY. aa. OFFICE OF THE MAYOR. "Office of the Mayor" shall mean the Mayor of the COUNTY and the managing director. ab. OCEANSIDE. "OCEANSIDE" shall mean 1250 OCEANSIDE PARTNERS, a Hawaii limited partnership, dba OCEANSIDE 1250, whose principal place of business and mailing address is 74-5620A Palani Road, Suite 200, Kailua-Kona, Hawaii 96740, its successors and assigns. ac. PERSON. "Person" shall mean any individual, group, partnership, firm, association, corporation, trust, governmental official, administrative body, tribunal or any form of business or legal entity. ad. PLANNING COMMISSION. "Planning Commission" shall mean the Planning Commission of the COUNTY. ae. PLANNING DEPARTMENT. "Planning Department" shall mean the Planning Department of the COUNTY. 7 af. PROJECT. "Project" shall mean that agricultural lot community and its various components, also including but not limited to the lodge, golf course, golf clubhouse, and the coastline park, and more fully described and shown in Exhibit "J" attached hereto and incorporated herein by reference. Project shall not include the Bypass Highway. ag. PROPERTY. "Property" shall mean any and all conservation lands and areas which are the lands under the Change of Zone Approvals: (1) accepted by the County Council on June 15, 1994 as Bill 182, Draft 6, signed into law by the Mayor on June 28, 1994 as Ordinance No. 94-73 attached hereto as Exhibit "S", and amended and superseded by Bill 181, Draft 6, accepted by the County Council on January 3, 1996, and signed into law by the Mayor on January 15, 1996 as Ordinance No. 96-8 attached hereto as Exhibit "B"; and (2) accepted by the County Council on January 3, 1996 as Bill 158, Draft 5, and signed into law by the Mayor on January 15, 1996 as Ordinance No. 96-7 attached hereto as Exhibit "C"; that is, those lands which include the 711.2 acres of land (more or less) located on and in the Island and County of Hawaii, identified as Tax Map Key No. 7-9-12: 03, and the 580.63 acres of land (more or less) located on and in the Island and County of Hawaii and identified as Tax Map Key No. 8-1-04: 03 (portion), both of which OCEANSIDE owns in fee simple; and 260.8 acres of land (more or less) located on and in the Island and County of Hawaii, identified as Tar Map Key Nos. 7-9-12: 04 and 7-9-12: 11, and more fully described and shown in Exhibit "K" attached hereto and incorporated herein by this reference, which OCEANSIDE leases from Ackerman Ranch under the development lease dated July 28, 1989, a short form of which is attached hereto as Exhibit "L", and incorporated herein by this reference. ah. PUBLIC ACCESS PLAN. "Public Access Plan", also known as the "Public Shoreline Access Plan", shall mean that plan, developed in consultation with community groups and submitted to and to be approved by the Director, as required by the COUNTY pursuant to Condition 8 of SMA Permit No. 345, Condition H of Ordinance No. 96-8, and Condition K of Ordinance No. 96-7, and subject to the terms and conditions as set forth in this Agreement. ai. PUBLIC HEARING. "Public Hearing" shall mean the public hearing held for purposes of receiving public comments regarding the draft of this Agreement as required pursuant to Rule 1-6(d) of the Development Agreement Rules. aj. RiGHT-OF-WAY. "Right-of=Way" shall mean the route required for construction of the Bypass Highway. ak. SEGMENT(S). "Segment(s)" shall mean that portion of Right(s)-of-Way falling within a parcel or parcels of land owned by Seller(s). 8 al. SMALL-LOT SUBDIVISION. "Small-lot Subdivision" shall mean the subdivision by OCEANSIDE of the Property into lots less than twenty (20) acres in size. am. STATE. "State" shall mean the State of Hawaii. an. TERM. "Term" shall mean the term of this Agreement as determined in Paragraph (3), herein. ao. UNIT OF CREDIT. "Unit of Credit" shall mean the present value of past or future payments or contributions, including, but not limited to the dedication of land or construction of roadway improvements toward the cost of existing or future public facility capital improvements being issued in lieu of payment for Segment(s) of the Right-of-Way. One (1) Unit of Credit shall be issued for each $3,101.68 value of land contributed toward the Bypass Highway. The value of the unit of credit shall be equivalent to the amount of roadway fair share contribution or road impact fee required to be paid for each dwelling or lodge unit at the time of redemption. The recipient of a Unit of Credit may redeem the Unit of Credit toward any roadway fair share contribution or toward any roadway impact fee should the COUNTY adopt such an impact fee ordinance. ap. ZONING CODE. "Zoning Code" shall mean HCC chapter 25 as it exists as of the date of this Agreement. aq. OTHER DEFINITIONS. Unless otherwise provided herein, other words and terms shall have the meaning set forth in the Zoning Code. To the extent that the definitions in the Zoning Code conflict with the definitions contained in this Agreement, the definitions in this Agreement shall be controlling. 3. EFFECTIVE DATE; TERM. The Term of this Agreement shall commence on the effective date of the Enacting Resolution and shall terminate on IMONTH, DAY, YEAR], [30 years from date of Enacting Resolution] unless sooner terminated: a. By agreement of the parties to this Agreement that the parties have satisfied all of the terms and conditions of this Agreement, as further evidenced by a resolution of the County Council pursuant to Paragraph (50), herein; provided that, OCEANSIDE has been reimbursed for the construction costs it incurred for the Bypass Highway pursuant to Paragraph (15); b. As a result of a material breach of OCEANSIDE pursuant to Paragraph (25), herein; or c. By cancellation of this Agreement pursuant to Paragraph (27), herein; or unless subsequently extended by mutual agreement of the COUNTY and OCEANSIDE; or d. By reimbursement of construction costs for the Bypass Highway paid to OCEANSIDE pursuant to Paragraph (15), herein; provided, however, that the parties to this Agreement have 9 agreed that both parties have satisfied all of the terms and conditions of this Agreement as further evidenced by a resolution of the County Council pursuant to Paragraph (48), herein. 4. AFFECTED LAND. The Property that is the land subject to this Agreement and the Right-of-Way for the Bypass Highway. 5. PERMITTED USES OF THE PROPERTY. Permitted uses of the Property shall be all uses permitted under the Land Use Regulations and Approvals, including, without limitation, the permitted uses in Chapter 205, HRS, the Zoning Code section 25-5-72, and all supplemental uses allowed under Zoning Code sections 25-4-1 through 25-4-14. 6. DENSITY OF USE. With the exception of that use described under Zoning Code section 25-4-9, one (1) dwelling unit per building site is permitted on the Property pursuant to Zoning Code section 25-5-72(a)(9). 7. MAXIMUM HEIGHT OF PROPOSED BUILDINGS. The height of the buildings proposed for the Property shall be limited to the maximum height restrictions contained in the Zoning Code. 8. MAXIMUM SIZE OF PROPOSED BUILDINGS. The size of buildings proposed for the Property shall be limited to the maximum size restrictions, if any, contained in the Zoning Code. 9. BENEFITS. The COUNTY acknowledges that OCEANSIDE is providing the benefits to the County and/or the Community. 10. ACQUISITION AND DEDICATION OF LAND FOR BYPASS HIGHWAY. a. The Bypass Highway has been determined by the COUNTY as providing a regional public purpose and will therefore benefit the COUNTY. OCEANSIDE shall be deemed to have satisfied the requirements of Condition M(2) of Ordinance 96-7 and Condition L(2) of Ordinance 96-8, if and when it has: (i) acquired all Segments of Right-of-way, or (ii) acquired one or more Segment(s) of Right-of-Way and the remaining Segments have been requested by OCEANSIDE for the COUNTY to condemn. b. OCEANSIDE shall attempt to negotiate a purchase price with any and all [Sellers] Persons. Should OCEANSIDE and any [Seller]Person be unable to negotiate a mutually agreeable purchase price, then OCEANSIDE shall provide to [Seller] the Person a list containing no less than three (3) and no more than five (5) qualified Appraisers to appraise the value of the [Seller's] Person's Segment(s) of the Right-of-Way. From the list of Appraisers, the [Seller]Person shall select one (1) Appraiser to assess the value of the Segment(s). OCEANSIDE may offer to purchase the fee simple interest in the Segment(s) from [Seller]the Person for a price at or near the appraisal value as determined by the Appraiser. Should OCEANSIDE and [Seller] the Person be unable to select an Appraiser or if [Seller] the Person and OCEANSIDE cannot decide on a price recommended by mutually selected Appraiser, then upon written 10 request to the Mayor, the COUNTY shall be required to use its condemnation powers to acquire the Segment(s) from the [Seller] Person pursuant to Paragraph (11). C. Notwithstanding Paragraph (10.b), if [Seller] the Person fails to participate in negotiations with OCEANSIDE for the purchase of Segment(s) of the Right-of-Way from [Seller] the Person despite OCEANSIDE's good faith attempts to negotiate, then OCEANSIDE may, in its sole discretion, submit a letter to the Mayor to have the COUNTY utilize its condemnation powers. Upon receipt of the written request, the COUNTY shall be required to use its condemnation powers to acquire the Segment(s) from the [Seller] Person pursuant to Paragraph (11). 11. CONDEMNATION OF LAND FOR BYPASS HIGHWAY. Should [Seller] the Person fail to participate in negotiations with OCEANSIDE over the purchase of Segment(s) of the Right-of-Way from [Seller] the Person or should OCEANSIDE and [Seller] the Person be unable to agree, during their negotiations, to the purchase of the Segment(s) because of their failure to agree upon an Appraiser or on the purchase price of the Segment(s) or on the terms of the purchase, the condemnation powers of the COUNTY shall be required for the acquisition of the Segment(s). a. Upon OCEANSIDE's tender of a requirement of condemnation by letter to the COUNTY, the COUNTY shall within thirty (30) days begin to immediately and expeditiously exercise the same pursuant to HRS Chapter 101. OCEANSIDE's tender of such requirement of condemnation to the COUNTY shall constitute a "formal initiation of condemnation action" as the term is used in Condition L(2) of Ordinance 96-8 and Condition M(2) of Ordinance 96-7 and shall relieve OCEANSIDE of all further liability or obligation to purchase Segment(s) of the Right-of-Way directly from such [Seller] Person. b. The COUNTY shall submit to OCEANSIDE a written request for payment of any and all reasonable costs and expenses incurred by the COUNTY for the acquisition of the condemned land in conjunction with the COUNTY'S exercise of its condemnation powers when OCEANSIDE has determined in its sole and absolute discretion that there is a need for possession or in the event that a Court orders payment for the acquired land. Within forty-five (45) days of written notice from the COUNTY, OCEANSIDE shall reimburse the COUNTY for any and all reasonable costs and expenses incurred by the COUNTY for the acquisition of the condemned land in conjunction with the COUNTY's exercise of its condemnation powers. OCEANSIDE shall not be responsible to reimburse the COUNTY for any and all costs relating to the salary of County personnel and administration and overhead, including but not limited to independent contractors and legal counsel, and any interest payments incurred by COUNTY as a result of COUNTY's failure to pay compensation to [Seller] the Person within thirty (30) days of final judgment in the condemnation action. The written notice described herein from the COUNTY to OCEANSIDE shall contain a detailed verifiable accounting of any and all such costs and expenses. 11 C. [Nothwithstanding Paragraph (II.b), OCEANSIDE shall not be obligated to reimburse the COUNTY for any costs it incurred for the condemned land if such costs exceed the appraised value of the Segment(s) of the Right(s)-of-Way as determined by an Appraiser selected by OCEANSIDE ("Appraised Value"). OCEANSIDE may waive this requirement if the COUNTY informs OCEANSIDE of the cost of the condemned land prior to having incurred such costs and provided that OCEANSIDE approved such cost in writing. The COUNTY agrees that OCEANSIDE shall have the discretion and the right to withhold the difference between the cost of the condemned land as determined by a court of law and the Appraised Value if OCEANSIDE's approval was not first received or for those services that OCEANSIDE deems unreasonable, unnecessary or excessive. In such a case, OCEANSIDE shall provide to the COUNTY a written notice of OCEANSIDE'S objections within thirty (30) calendar days from the receipt of COUNTY's written request for payment. d.] Should a dispute arise over the amount of monies owed by OCEANSIDE to the COUNTY, then both parties agree to first pursue settlement of the dispute by arbitration pursuant to HRS Chapter 658. OCEANSIDE shall submit to the COUNTY a list of arbitrators to hear the dispute. The COUNTY hasten (10) calendar days to select one (1) arbitrator from OCEANS] DE's list. If the COUNTY fails to select an arbitrator, then OCEANSIDE may select an arbitrator to hear the dispute. 12. DONATION OF RIGHT-OF-WAY. Notwithstanding anything herein to the contrary, should a Person donate the Segment(s) of the Right-of-Way to OCEANSIDE for no consideration, the COUNTY shall: a. Grant the Person who contributes their land towards the Bypass Highway units of credit which may be used by the Person to off -set future roadway fair share assessment or impact fee requirements. Each unit of credit shall off-set the roadway fair share assessment or impact fee requirement for one (1) dwelling or lodge unit. The amount of credits shall be the total value of the Segment(s) for Right- of-Way divided by the per lot fair share assessment or impact fee requirement to mitigate road impacts for each $3,101.68 value of land contributed. The total value of the Segment(s) for Right-of-Way shall be based on the appraised value of the Segment(s) at the time the Person dedicates and/or donates the Segment(s) to OCEANSIDE as determined by the Appraiser selected using the procedures outlined in subparagraph (]0.b). b. The COUNTY shall grant a density credit to Persons whose lands are donated for the Segment(s) of the Right-of-Way. The density credit is equal to the area of land that is utilized. The density credit shall be added to the Person's remaining property at the time the Person obtains land use approvals from the COUNTY. The density credit allows the Person to develop the total number of units that would be permitted under the applicable zoning at the time the Person obtains land use approvals as if the Person had not contributed land for the Right-of-Way 12 C. The COUNTY shall impose no additional fair share assessments or any impact fee ordinance requirements relating to Regional highway Impacts on Persons whose lands have been donated to the County or sold for the Right-of-Way and who develop their lands in conformance with existing zoning. 13. CONSTRUCTION OF THE BYPASS HIGHWAY. The Bypass Highway shall consist of two (2) lanes with sufficient Right-of-Way for a total of four (4) lanes. The Bypass Highway shall be constructed to standards set forth by the Department of Public Works with such modifications as may be deemed necessary by the Department of Public Works; provided, however, that the expansion of the Bypass Highway from two (2) to four (4) lanes shall not be the responsibility of OCEANSIDE. a. OCEANSIDE shall obtain final approval from the County Department of Public Works for any and all necessary construction plans for the Bypass Highway. OCEANSIDE shall construct the Bypass Highway to the standards set forth in Exhibit "M" by the Department of Public Works for Alii Highway with such modifications as may be deemed necessary by the County Department of Public Works and by OCEANSIDE. As required by the chief engineer of the County Department of Public Works, OCEANSIDE shall provide a landscape buffer along highway sections where the highway is within five hundred (500) feet of dwellings existing as of January 1, 1998. b. Prior to the issuance of the first final Small-lot Subdivision approval for any portion of the Property, OCEANSIDE shall: (1) Post a bond in favor of the COUNTY to assure that the infrastructure improvements for the Bypass Highway and for the channelization and signalization of the Mamalahoa Highway-Haleki'i Street intersection will be constructed; (2) Determine the final Right-of-Way for the alignment of the entire Bypass Highway, including the intersection areas. OCEANSIDE shall provide the Director with a metes and bounds description of each Segment of the Right-of-Way involved and evidence of ownership or control as deemed necessary by the Director. In lieu of OCEANSIDE obtaining or acquiring ownership or control of any segment of the Bypass Highway, the requirement shall be deemed fulfilled upon the COUNTY's formal initiation of condemnation action(s) pursuant to Paragraph (11) for such Segments. The COUNTY shall issue a letter attached as Exhibit "N" that acknowledges OCEANSIDE's satisfaction of the requirement to obtain or acquire ownership or control of the Right-of-Way for the entire length of the Bypass Highway, including those portions that the County has initiated condemnation proceedings and/or has ownership or control over, which removes the requirement from OCEANSIDE. (3) Provide a bond for relevant phases of the extension of Haleki'i Street, through the subject property as generally reflected in Exhibit "O", which phasing of improvements shall be approved by the COUNTY Department of Public Works. 13 C. Prior to occupancy of any dwelling unit within the Property or prior to the issuance of an occupancy permit for the lodge, whichever occurs first, OCEANSIDE shall: (1) Complete construction of the roadway section from Keauhou to the makai extension of Haleki'i Street; and (2) Install a barricade or breakaway gate meeting with the requirements of the COUNTY Department of Public Works if, before the completion and opening of the entire Bypass Highway, a portion of said bypass is completed and opened, and said portion provides a connection to Haleki'i Street; d. In any event from the time construction commences, the entire Bypass Highway shall be completed within five (5) years provided that those certain circumstances as articulated in Paragraph (39) do not exist. 14. DEDICATION OF BYPASS HIGHWAY. The Bypass Highway shall be dedicated to the COUNTY in phases, if any, upon completion and the COUNTY shall accept said dedication within sixty (60) calendar days; provided that the Bypass Highway, as constructed, complies with plans and specifications for said highway as approved by the County. Following dedication of the Bypass Highway to the COUNTY, the COUNTY shall assume all responsibility and costs for operation, maintenance, repair or reconstruction of the Bypass Highway. 15. REIMBURSEMENT OF CONSTRUCTION COSTS FOR THE BYPASS HIGHWAY. a. Responsibility of Developer. OCEANSIDE shall be responsible for all costs associated with the design, land acquisition, construction of the Bypass Highway, including, without limitation, the costs associated with obtaining any necessary Approvals associated with the same ("Total Cost"); provided that, nothing herein shall be construed as preventing OCEANSIDE from seeking reimbursement for such costs and the total amount of reimbursement received by OCEANSIDE shall not exceed the difference between the Total Cost of the Bypass Highway and the "Project Impact Cost", as described in further detail in Paragraph (15.a.1). (1) Based on a development constituting seven hundred thirty (730) lots and eighty (80) lodge units ("Project Unit Count"), the Project constitutes approximately thirty-eight (38) percent of the total capacity of the Bypass Highway based upon a Level of Service "D" ("Project Impact"). Should OCEANSIDE develop less or more than the Project Unit Count, then the percentage of traffic attributable to the Project shall be adjusted accordingly. The Total Cost of the Bypass Highway multiplied by the Project Impact shall determine the Project Impact Cost. For example, if the Total Cost of the Bypass Highway is $1.0 million and the Project Impact is thirty-eight (38%) percent, the Project Impact Cost is $380,000.00. In such a case, OCEANSIDE shall then be eligible to receive no more than $620,000 of reimbursement ($1.0 million minus $380,000). 14 (2) The remaining balance of the Total Cost of the Bypass Highway after deducting OCEANSIDE's and Kealakekua Development Corporation's share shall be reimbursed to OCEANSIDE with funds from income sources identified in Paragraph (15.c.1) for costs incurred by OCEANSIDE in the land acquisition, design, planning, construction, development and approval of the Bypass Highway. b. Adoption of a Impact Fee Ordinance. Should the County Council adopt a Impact Fee Ordinance, OCEANSIDE shall receive one (1) unit of credit for every $3,101.68 it has spent toward the construction of the Bypass Highway and the Haleki'i Street intersection improvements. The credits may be applied toward the requirements of an Impact Fee Ordinance. C. Funds for Reimbursement. During the course of this Agreement, if the COUNTY approves new rezonings in the vicinity of Mamalahoa Highway, then the COUNTY shall assess those new developments a "Fair Share" contribution in accordance with Council Policy, or similar fee, to address the regional impacts of their development on road facilities. In the event that the COUNTY collects funds for such "Fair Share" contributions, or similar fees, as may be allowed by the rezoning ordinances, and as identified in Paragraphs (15.c. I. and 15.c.2. herein) from developers and landowners whom the County has determined as benefitting from the Bypass Highway, the COUNTY shall reimburse OCEANSIDE from such funds as they are collected. (1) Funds to reimburse OCEANSIDE shall be from, but not limited to, the following sources: (a) "Fair Share" contributions paid to the COUNTY to address potential regional impacts of their development on road facilities; (b) Upon the adoption of a Impact Fee Ordinance that assesses or imposes an impact fee either for the COUNTY as a whole or for the region extending from Keauhou to [South Point) Milolii, that portion of the impact fee necessary to address potential regional impacts on road facilities; (c) Any other monetary contribution paid to the COUNTY from developers or land owners, whom the COUNTY determines as benefiting from the Bypass Highway, to address potential regional impacts of such developer's or land owner's development on road facilities; (2) In addition to the reimbursement funds identified in Paragraph (15.c.1), OCEANSIDE shall be entitled to "Fair Share" contributions in the amount of $3.6 million, as may be adjusted from time to time, paid to the COUNTY by Kealakekua Development Corporation or its successors to address potential regional impacts of Kealakekua Development Corporation's project, less $1.3 million 15 representing contributions toward Mamalahoa Highway Improvements and improvements to Greenwell Park as required by Conditions K and N(2), respectively, of Ordinance 95-70, as may be amended. (3) Should the COUNTY Council adopt an Impact Fee Ordinance, developers and land owners whom the COUNTY determined as benefitting from the Bypass Highway shall receive Highway Credits to be applied toward the requirements of a Impact Fee Ordinance. (4) [SO]AS long as the COUNTY shall assess those new rezonings in the vicinity of Mamalahoa Highway a fair share contribution in accordance with Council policy, or if adopted, an impact fee, to address the regional impacts of their developments on road facilities, OCEANSIDE acknowledges and understands that should any funds or options identified in the preceding sections 15.b and c. fail to materialize or fail to meet the remainder of the total cost of the Bypass Highway, the COUNTY shall not be held responsible for any reimbursements. d. "Benefit" to Other Developments. The COUNTY finds that certain geographic portions of Mamalahoa Highway are currently congested and that any new development is severely restricted because of traffic considerations. Developments within the geographic region extending from Keauhou to the north and to [Hawaiian Ocean View Estates] Milolii to the south will benefit in varying degrees from the construction of the Bypass Highway. This benefit is based on the congestion relief provided by the Bypass Highway to Mamalahoa Highway/Kuakini Highway as well as by providing direct access to the land along the Bypass Highway corridor. Accordingly, the amount of the "benefit" of the bypass Highway will vary by geographic region. (1) Amount of Reimbursement to OCEANSIDE. The amount of the COUNTY's reimbursement to OCEANSIDE shall be based on a percentage of those income sources identified in subparagraph (15.c) which are collected or assessed by the COUNTY from other developers and land owners whom the COUNTY has determined as benefitting from the Bypass Highway. The percentage paid shall be in accordance with the geographic areas as described below, and as more particularly shown on Exhibit "P". 16 Area Description Percentaee 1. Keauhou 25%' 2. Honalo-Captain Cook- Existing Mamalahoa Hwy Corridor 80% 3. Honalo-Captain Cook - Mauka Area 100% 4. Honalo-Captain Cook - Makai Area 100% 5. Captain Cook to Milolii 65% "In recognition of the existing Keauhou road and traffic improvements, any "Fair Share" contribution, impact fee or similar fee assessed on new rezonings by the County Council in the Keauhou Area may be satisfied in the form of cash, land and/or facilities, or any combination thereof acceptable to the director. (2) Collection of Funds. Any Reimbursement Funds received by COUNTY shall be held in trust for OCEANSIDE and promptly remitted to OCEANSIDE by the COUNTY no later than ninety (90) days following the COUNTY's receipt of such remittance. e. Private Agreements. The provisions of this Paragraph shall not preclude OCEANSIDE from entering into private agreements with the State and/or such other developers or landowners to allocate the payment of Reimbursement Funds related to the Bypass Highway directly to OCEANSIDE. OCEANSIDE shall submit receipts of such payments to the COUNTY. f Reimbursement Agreement. The provisions for reimbursement contained in this Agreement shall constitute an agreement for reimbursement between COUNTY and OCEANSIDE, which agreement shall satisfy the mandates of Condition L of Ordinance 96-8, and Condition M of Ordinance 96-7. 16. ROADWAY STUB-OUTS. OCEANSIDE shall provide roadway stub-outs, generally shown in Exhibit "Q", to provide future connections between the Property and its adjacent north and south boundaries. Such roadway stub-outs shall be constructed in phases and in conjunction with the completion of subdivision improvements on adjacent Property. 17. PUBLIC ACCESS PLAN. OCEANSIDE shall develop, in consultation with community groups, a final comprehensive Public Access Plan. The Public Access Plan shall be submitted to and approved by the Director prior to final subdivision approval of the first small-lot subdivision. a. The final comprehensive Public Access Plan shall be developed in consultation with the Director and the Hawaii State Department of Land and Natural Resources ("DLNR") and shall include mauka-makai and lateral shoreline accesses, parking area(s), signage, emergency response considerations, restrictions on use (if any), provision of recreational and restroom facilities at appropriate locations, and related improvements. 17 b. In accordance with Ordinance 96-7 and 96-8, the Public Access Plan shall also integrate at the trail heads, shoreline access parks and the historical park, any public accessway(s) to the interpretive trail system(s) and to the historical and archaeological sites. Such a Public Access Plan shall be approved by the Director, in consultation with the DLNR. In developing the Public Access Plan, OCEANSIDE should attempt to protect both land and ocean resources and natural conditions, as reasonably practicable. 18. COASTLINE PARK. OCEANSIDE shall develop the portion of its lands in the Property located in the Conservation District for use as a Coastline Park for the benefit of the public pursuant to the Approvals. a. Construction and Development of the Coastline Park. OCEANSIDE shall be responsible for any and all costs associated with the design, operation and maintenance, construction and development of the Coastline Park, including, without limitation, the costs associated with obtaining any necessary Approvals associated with the same. Notwithstanding the foregoing, OCEANSIDE may transfer it obligations, in whole or in part, under this paragraph to the Project's "Homeowner Association" or other similar entity formed for the purpose of serving as the governing body for all the members and owners of the Project for the protection, improvement, alteration, maintenance, repair, replacement, administration and operation of the common areas, for the assessment of expenses, for the payment of losses, and for other matters as may be provided for in the Project's Declaration, the Homeowner Association's Articles of Incorporation, the Homeowner Association's By-laws, or the Project's Design Guidelines, The Declaration shall contain language providing for the perpetuity of the Coastline Park and its availability to the public for use in accordance with certain rules and guidelines that will be established in the public access plan as required under SMA Permit No. 345 to be submitted by OCEANSIDE to the Director for approval. Additionally, if requested by OCEANSIDE or the Homeowner Association, and if approved by the COUNTY, which approval shall not be unreasonably withheld, said Developer or the Homeowner Association may assign its responsibilities, in whole or in part, under this paragraph to a foundation or other entity to assume the duties and obligations stated herein. b. The construction and development of the Coastline Park shall be completed in phases roughly proportional to the phases of the Project's development as may be approved by the Director pursuant to the Approvals and shall be subject to the obtaining of all necessary discretionary permits (e.g. Conservation District Use Approval, Special Management Area Use Permit, etc.). (1) An area comprising twenty five percent (25%) of the total Coastline Park as shown on Exhibit "R" attached hereto and incorporated herein by this reference, shall be developed and 18 improved by OCEANSIDE in phases within five (5) years from the date final Small-lot Subdivision Approval is obtained on any portion of the Property. (2) The first phase of the Coastline Park shall be opened to the public within thirty (30) days following the opening of the golf course. (3) In accordance with Ordinance 96-7 and 96-8, upon opening the first phase of the park area, OCEANSIDE shall provide: (a) a minimum of twenty-five (25) public parking stalls, with separate parking stalls for residents and their guests, and separate parking stalls for the Coastline Park's employees. As may be imposed in permits necessary to complete the Coastline Park's improvements, the parking stalls shall, at OCEANSIDE's discretion, either be within the Coastline Park and/or within OCEANSIDE's adjacent lands. The number of parking stalls shall be increased commensurately with the approval of additional park phases in accordance with the public access plan; (b) signage and provisions for public access for night fishing and marine food gathering purposes subject to restrictions which limit said uses to non-commercial and recreation uses only; and (c) other restrictions which provide for the health and safety of the public. C. In accordance with SMA Permit No. 345, upon the approval of the final comprehensive public access plan, draft covenants which detail the rights, obligations and privileges of the public, the County of Hawaii and OCEANSIDE, its successors or assigns shall be submitted to the Director for approval. The approved covenants shall be recorded in the manner required pursuant to SMA Permit No. 345. d. Prior to receiving final approval of the first Small-lot Subdivision, OCEANSIDE shall convey to COUNTY a perpetual easement for public access over and recreational use of the Coastline Park area pursuant to such restrictions as may be established by OCEANSIDE with the approval of the Director, to promote public health and safety and the general security of the Coastline Park for residents and guests of the Project, to protect the area's natural condition, and to minimize any liability to OCEANSIDE, pursuant to HRS Chapter 520. C. OCEANSIDE's fee simple interest in the land area of the Coastline Park shall be retained by OCEANSIDE, who shall own and manage the Coastline Park; provided that OCEANSIDE, in its sole discretion, may transfer management responsibilities for the Coastline Park to any homeowners' association or other entity which may be formed for the Project subject to the aforementioned covenants. 19 19. GUEST HOUSES. Nothing herein shall be construed as prohibiting the construction of "guest houses" within the Project as the term is defined in Zoning Code section 25-1-5(55), as allowed under Zoning Code section 25-4-9, and pursuant to Chapter 205-6, HRS. 20. GENERAL DEVELOPMENT OF THE PROJECT. OCEANSIDE shall have the right to develop the Project, the Bypass Highway and the Coastline Park in accordance with the terms and conditions of this Agreement and the Approvals, and the parties shall have the right to enforce the provisions of this Agreement. The parties hereto acknowledge that this Agreement is intended to implement the intent of the parties and that OCEANSIDE shall have the right to develop the Project, the Bypass Highway and the Coastline Park pursuant to the Land Use Regulations and Approvals, subject to its adherence to and performance of all terms and conditions of this Agreement. In the event that a question arises regarding OCEANSIDE's and the COUNTY's responsibilities or their intent, the parties shall look toward this Agreement to clarify such issues. 21. SUBSEQUENT CHANGES IN LAND USE REGULATIONS. Any subsequent change in any applicable law adopted by the COUNTY or any other governmental entity or agency party to this Agreement, which alters or amends the Land Use Regulations, including, without limitation, any moratoriums, shall be void as applied to the Property; provided that this Paragraph shall not prevent the COUNTY or any other governmental entity or agency parry to this Agreement from requiring OCEANSIDE to comply with laws, ordinances, resolutions, rules and policies of general applicability and not specific to OCEANSIDE enacted subsequent to the date of this Agreement, if, under prior law, such laws, ordinances, resolutions, rules and policies could have been lawfully applied to the Property or any uses thereof as of the date of this Agreement if the COUNTY or any other governmental entity or agency party to this Agreement finds it necessary to impose the requirements because a failure to do so would place the residents of the Project or the immediate community in a condition perilous to the residents' health or safety, or both. 22. NECESSARY COUNTY APPROVALS. a. With regard to any applications to the COUNTY by OCEANSIDE for any and all appropriate COUNTY Approvals required for the construction or development of the Project, the Bypass Highway and the Coastline Park, the COUNTY shall process such applications under the Land Use Regulations and issue to OCEANSIDE all such approvals; provided that such applications are consistent with and conform to the standards, terms and conditions of this Agreement and the Land Use Regulations; and provided further, that the COUNTY shall not impose on OCEANSIDE any further Exactions or requirements other than those already existing as of the date of the Enacting Resolution under the Approvals. b. The COUNTY shall accept and process expeditiously any application(s) submitted under this Paragraph or otherwise required under the terns of this Agreement within such time frames as 20 specified within the Land Use Regulations; provided, however, that if the Land Use Regulations do not contain a specific time frame for processing such application(s), the application(s) shall be processed within a reasonable amount of time from the date of receipt of a complete application(s) by the COUNTY; and provided further that if, for any reason, the application(s) as submitted by OCEANSIDE is/are not complete, the COUNTY shall promptly request from OCEANSIDE any information or materials necessary to complete the application(s). 23. CONFORMANCE WITH THE COUNTY GENERAL PLAN AND COMMUNITY DEVELOPMENT PLANS. By virtue of the County Council's approval of the Enacting Resolution, the County Council finds that as of the date of this Agreement, this Agreement is consistent with the COUNTY's General Plan as amended, and any applicable community development plans adopted by the County Council and in effect as of the date of this Agreement; provided, however, that in the event of any inconsistency between the County General Plan and any applicable community development plan by ordinance, the County General Plan shall prevail. 24. ANNUAL REVIEW. On or before January 14th of each and every year following the execution of this Agreement, OCEANSIDE shall submit an annual report of its compliance with the terms and conditions of this Agreement to the Planning Department, or such agency as the COUNTY designates in writing to OCEANSIDE; provided further, that the Planning Department or such designated agency shall review such report for adequacy and accuracy and shall forward a copy of the annual report together with its findings and any other comments to the Mayor, County Council, OCEANSIDE and any other parties to this Agreement within sixty (60) days. 25. MATERIAL BREACH BY OCEANSUDE. a. Within thirty (30) days after the Planning Department or the Office of the Mayor determines on the basis of the periodic report that OCEANSIDE has committed a material breach of the terms or conditions of this Agreement, the Planning Department or the Office of the Mayor, as applicable, shall inform OCEANSIDE in writing of the same, setting forth with reasonable particularity the nature of the breach and any and all evidence supporting the finding and determination; provided, however, that OCEANSIDE shall be given a reasonable time period in which to cure any such material breach. b. OCEANSIDE shall have one hundred eighty (180) days to cure the material breach. If OCEANSIDE fails to cure the material breach within that time, the COUNTY may terminate or modify the terns of this Agreement in accordance with HCC section 30-6; provided, however, that the Office of the Mayor shall have first given the OCEANSIDE the opportunity: (1) To rebut the finding and determination by the Office of the Mayor of the existence of the material breach; or 21 (2) To consent to amend this Agreement according to such terms as the Office of the Mayor may elect to propose in order to cure the material breach; provided, however, that such amendments must be accepted and approved by the County Council pursuant to Paragraph (27), herein. C. Upon the mutual agreement of the parties to the Agreement, this Agreement may be terminated by County Council resolution if: (1) OCEANSIDE does not agree to such amendments proposed by the Office of the Mayor or as subsequently modified by the County Council pursuant to Paragraph (27), herein; or (2) The County Council reasonably rejects the amendments proposed by the Office of the Mayor and the County Council states its reasons, in writing, for rejecting the proposed amendments. d. Should the County Council terminate this Agreement, OCEANSIDE will have the right to appeal such a decision to a court of law, in which case the standard of review shall be whether the County Council acted reasonably in its termination of this Agreement. The termination of this Agreement pursuant to this Paragraph shall not preclude any rights or remedies that would have existed had this Agreement not been entered into. 26. EXTENSION OF TIME. a. Pursuant to Ordinances 96-7, 96-8 and 97-36, upon written request of OCEANSIDE to the Director, any dates of commencement or completion for the Bypass Highway or the Coastline Park may be extended by the Director at OCEANSIDE's request. b. Notwithstanding any extension limitations set forth herein, upon written request by either party for an extension of time in which to complete its obligations hereunder which request is made due to a delay in the performance of any of the obligations of either party, a reasonable extension of the commencement, completion, or termination dates shall be granted by the other party for the performance of the terms of this Agreement; provided, however, that the delay in performance must be due to an unforeseeable cause or causes beyond the control and without the fault or negligence of either party, including, without limitation, acts of God, acts of the public enemy, fires, floods, epidemics, quarantine restrictions, strikes or walkouts, freight embargoes, or unusually severe weather. C. Nothing in this Agreement shall be construed to preclude the parties hereto from further extending any commencement, completion or termination date hereunder by mutual agreement, or from entering into subsequent agreements subject to the approval of the County Council. 27. AMENDMENT OR CANCELLATION OF AGREEMENT. This Agreement maybe amended or canceled, in whole or in part, by mutual consent of the parties to this Agreement, or their successors in interest, as further evidenced by County Council resolution; provided that if the County Council determines 22 that the proposed amendment would substantially alter the original terms of this Agreement, a public hearing on the amendment shall be held by the County Council before it consents to the proposed amendment. Non-substantive or technical amendments which affect only procedural requirements under this Agreement or do not materially alter the original terms of this Agreement shall only require the approval of the Office of the Mayor, without action by the County Council; and provided further that cancellation of this Agreement pursuant to this Paragraph shall not preclude any rights or remedies that would have existed had this Agreement not been entered into. 28. DISCRETION TO ENCUMBER. This Agreement shall not prevent or limit OCEANSIDE, in any manner and at OCEANSIDE's sole discretion, from encumbering all or any portion of the Property, or any improvement on the Property by any mortgage, deed of trust, or other security device securing financing with respect to the Property or any improvements located thereon. 29. OBLIGATION TO MODIFY. The COUNTY acknowledges that any Lenders providing financing under Paragraph (28), herein, may require certain modifications to this Agreement, and the COUNTY agrees, upon request from time to time, to meet with OCEANSIDE and/or representatives of such lenders to negotiate in good faith any such requirement for modification. The COUNTY shall not unreasonably withhold its consent to any such requested modification, and any such modifications shall be subject to the provisions of Paragraph (27), herein. 30. ENTITLEMENT TO WRITTEN NOTICE OF DEFAULT. The mortgagee of a mortgage or beneficiary of a deed of trust encumbering all or any portion of the Property and their successors and assigns shall, upon written request to the COUNTY, be entitled to receive from the COUNTY written notification of any default by OCEANSIDE of the performance of OCEANSIDE's obligations under this Agreement which has not been cured within such time period as set forth in Paragraph (25), herein. 31. COOPERATION. The COUNTY shall not impede OCEANSIDE in carrying out the transactions contemplated herein and in obtaining all required approvals, authorizations, and clearances. Furthermore, the COUNTY shall cooperate with OCEANSIDE in executing and delivering in recordable form all documents, instruments, or copies thereof, in providing non-financial and/or non-proprietary information deemed reasonably necessary or useful by the other party or parties; in delivering prompt payment of any monies required to be paid to the other party or parties under this Agreement; and to process, in a timely manner, any and all construction, permit or other applications relating to the Project, the Bypass Highway or the Coastline Park. With regard to any application(s) submitted by OCEANSIDE to any other governmental or quasi-governmental agency having jurisdiction over the Project, the Bypass Highway or the Coastline Park for any and all appropriate Approvals required for the construction or development of the 23 Project, the Bypass Highway, or the Coastline Park the COUNTY shall not impede OCEANSIDE in obtaining such Approvals. 32. ASSIGNMENT. OCEANSIDE shall have the right to sell, assign or transfer, in whole or in part, this Agreement, and all of its rights, duties and obligations hereunder, to any entity, subsidiary, or partner of OCEANSIDE at any time during the term of this Agreement upon written notice to the Director. Such a transfer shall be considered a non-substantive or technical amendment that does not alter the material terms of this Agreement and which does not require action by the County Council, nor the approval of the Office of the Mayor. 33. ENFORCEMENT. Unless terminated pursuant to Paragraph (25) or canceled pursuant to Paragraph (27) herein, this Agreement, as amended or modified, shall be enforceable by any party hereto, or its successors in interest or assigns, notwithstanding any change in any applicable law, which alters or amends the Land Use Regulations or Approvals, the Development Agreement Statute, the Development Agreement Code, or the Development Agreement Rules, that is adopted by the COUNTY or any other party to this Agreement after the date of the Enacting Resolution. 34. WAIVER. The failure of any party to this Agreement to insist upon strict performance of any of the covenants or conditions herein, or to exercise any option herein conferred, or the waiver of a breach, shall not be deemed a waiver of such party's right to demand strict compliance by such other party in the future, nor shall it be deemed a relinquishment or waiver for the future of any rights, covenants, conditions or options under this Agreement. 35. GENDER. The terns "COUNTY" and "OCEANSIDE", wherever used herein, or any pronoun used in place thereof, shall mean and include the masculine or feminine or neuter gender, the singular or plural number, jointly and severally, individuals, firms or corporations, and their and each of their respective successors, legal representatives and assigns, according to the context thereof. 36. NO PARTY DEEMED DRAFTER. No party shall be deemed the drafter of this Agreement. If this Agreement is ever construed by a court of law, such court shall not construe any provision thereof against any party as drafter. 37. No PARTNERSHIP. Nothing contained in this Agreement is intended, nor shall be construed to establish an agency relationship, a partnership or a joint venture between the parties hereto. 38. APPLICABLE LAw. This Agreement shall be governed by the laws of the State of Hawaii both as to interpretation and performance. 39. FORCE MA.IEURE. In the event that either party shall be delayed or hindered in or prevented from the performance of any duties, obligations or conditions provided for and required under this Agreement by reason of strikes or other disturbances, lockouts, labor troubles, riots, insurrection, war or civil 24 disturbance, fire or earthquake, tidal wave, acts of God, the elements, government legislation, regulation or controls, or economic controls, making it impossible to complete any duties, obligations, or conditions provided for and required under this Agreement, then performance of such duty, obligation, or condition shall be excused for the period of the delay and the period for the performance of any such duty, obligation, or condition shall be extended for a period equivalent to the period of such delay. Under no circumstances shall this provision operate or be construed to excuse either party from the payment of any sum required to be paid to the other party. OCEANSIDE or the COUNTY shall notify the other in writing of any force majeure event upon which OCEANSIDE or the COUNTY intends to rely upon for an extension of the period for the performance of any such duty, obligation, or condition, and shall also notify the other in writing of the date on which any such force majeure event ended. 40. GOOD FAITH. Either party to this Agreement shall perform its duties under this Agreement in good faith. 41. COMPUTATION OF PERIODS. All periods of time referred to in this Agreement shall include all Saturdays, Sundays and state or national holidays; provided, however, that if the date or last date to perform any act or give any notice with respect to this Agreement shall fall on a Saturday, Sunday or state or national holiday, such act or notice may be timely performed or given on the next succeeding day which is not a Saturday, Sunday or state or national holiday. 42. SEVERABILITY. If any provision of this Agreement, or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of any provisions thereof to other persons or circumstances shall not be thereby affected. 43. ENTIRE AGREEMENT. This Agreement embodies the entire agreement of the parties hereto and supersedes any other agreements or understandings with respect to the subject matter hereof that may ever have existed between the parties. 44. SECTION AND PARAGRAPH HEADINGS. Section and paragraph headings are inserted only for convenience and reference and in no way define, limit, extend or describe the scope of intent of this Agreement, or any provisions thereof. 45. ADMINISTRATIVE ACT. The approval of this Agreement shall, under Development Agreement Statute HRS section 46-131, be deemed an administrative act of the COUNTY and any and all governmental agencies or entities party to this Agreement. 46. BINDING EFFECT. The terms and conditions of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to and assigns of the parties hereto, and the covenants contained herein shall run with the land. 25 47. ENTITIES OBLIGATED. Except as provided to the contrary herein, individual lot purchasers or builders, mortgagees or beneficiaries shall not have the obligation or duty under this Agreement to perform the obligations of OCEANSIDE or other affirmative covenants of OCEANSIDE hereunder, or to guarantee such performance. 48. PARTIAL RELEASE. Any terms and restrictions of this Agreement which are satisfied as of the annual review shall be released upon request of OCEANSIDE; provided that any such release shall be in recordable form that OCEANSIDE may record in the Office of the Assistant Registrar of the State of Hawaii and/or the State of Hawaii Bureau of Conveyances, as applicable, within twenty (20) days of the execution of such release. 49. COMPLIANCE CERTIFICATE. If, during the annual review conducted pursuant to Paragraph (24), herein, the Planning Department finds compliance by OCEANSIDE with the terms of this Agreement, the Planning Department shall issue a certificate of compliance in recordable form that OCEANSIDE may record in the Office of the Assistant Registrar of the Land Court of the State of Hawaii and/or the State of Hawaii Bureau of Conveyances, as applicable. 50. SATISFACTION. Upon the satisfaction of the terms and conditions of this Agreement, and upon request by the Office of the Mayor and OCEANSIDE, the County Council shall propose and approve a resolution indicating that this Agreement has been satisfied. 51. FINAL RELEASE. The COUNTY agrees that upon written request of OCEANSIDE and payment of all fees and performance of the obligations of OCEANSIDE under this Agreement with respect to all or any portion of the Property, the COUNTY shall execute and deliver to OCEANSIDE appropriate release(s) of OCEANSIDE from any and all further obligations under this Agreement in such form and substance necessary to effect such release and to record the same with the Office of the Assistant Registrar of the Land Court of the State of Hawaii and/or the State of Hawaii Bureau of Conveyances, as applicable; provided that any such release shall be recorded within twenty (20) days of its execution. 52. ADMINISTRATION OF THIS AGREEMENT. The Planning Department shall be responsible for the overall administration of this Agreement. 53. RECORDATION. The Planning Department, or such other executive agency designated in writing to OCEANSIDE by the Mayor, shall file or record copies of this Agreement and any amendment or modification hereto in the Office of the Assistant Registrar of the Land Court of the State of Hawaii or in the State of Hawaii Bureau of Conveyances, or both, whichever is applicable, within twenty (20) days after the execution of this Agreement, or twenty (20) days after any amendment hereto. 54. COUNTERPARTS. The parties hereto agree that this Agreement may be executed in counterparts, each of which shall be deemed an original, and said counterparts shall together constitute one 26 and the same instrument, binding all of the parties hereto, notwithstanding that all the parties are not signatories to the original or the same counterparts. For all purposes, including, without limitation, the recordation, filing and delivery of this Agreement, duplicate, unexecuted and unacknowledged pages of the counterpart may be discarded and the remaining pages assembled as one (1) document. 55. FACSIMILE DOCUMENTS. The parties agree to accept facsimile executed documents as if they were originally signed documents. Any party submitting facsimile signatures shall provide the other parties with originally signed replacement documents within five (5) business days from the date of receipt by such other parties of the facsimile executed documents. 56. NOTICES. Unless otherwise provided herein, any notice to either party given under this Agreement shall be in writing and given by delivering the same to such party in person, or by sending the same by registered, certified or express mail, return receipt requested, first class postage prepaid, to the party's address as first noted herein, or as otherwise provided through written notice to the other party. 57. PUBLIC DEDICATION. Unless otherwise provided by OCEANSIDE in writing, this Agreement shall not be deemed a gift or dedication of the Project or the Property, or any portion thereof, to the general public, for the general public, or for any public use or purpose whatsoever, it being the intention and understanding of the parties that this Agreement be strictly limited to and for the purposes expressed herein for the development of the Project and the Property as private property. 27 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. COUNTY OF HAWAII "COUNTY" Approved as to form and legality: Corporation Counsel By Its Mayor [OCEANSIDE 1250] 1250 OCEANSIDE PARTNERS "OCEANSIDE" Approved as to form and legality: By RED HILL 1250, INC. Its General Partner Its Legal Counsel By Richard T. Frye Its Vice President R I 28 1