CENTEX HOMES AGREEMENT CONCERNING USE OF FEES

Tract 7385 including the installation of "Optima" wall insulation, tankless water heaters, and 2.4 kV photovoltaic systems, up to a maximum cost of $500,000. As Centex installs such energy efficiency improvements in homes within Tract 7385, Centex shall provide the costs thereof to City and City shall reimburse Centex for such improvements up to the $500,000 that Centex has deposited with the City. 5. If the State fails to waive the fees on or before January 31, 2006, then the waiver request shall be terminated and the $500,000 referenced in paragraph 2 shall be used by City toward the relocation costs of the asphalt plant. 6. (a) If the State waives the Williamson Act cancellation fees as described above, Centex has installed $500,000 of energy efficient improvements, and the asphalt plant is not relocated by December 31, 2009, City shall retain the cancellation fees as a donation from Centex or (b) if the State fails to waive the Williamson Act cancellation fees as described above and the asphalt plant is not relocated by December 31, 2009, then City shall retain the $500,000 as a donation from Centex. In either event, the City Council will at that time determine how the Centex donation shall be used. 7. City shall issue to Centex no more than eight building permits for residential units in Tract 7385 until a conservation easement and other disclosure documents, as required by the City, are recorded against the 2.87 acres located east of the Property. 8. City shall not issue a building permit for either Lot 29 or 30 until Centex has adjusted the lot line that will exist between proposed Lot 30 of Tract 7385 and the acreage referenced in paragraph 7. 9. City shall issue no more than 23 building permits for residential units within Tract 7385 until Centex has planted vineyards on Lots 28 and 30 of Tract 7385 and on the acreage referenced in paragraph 7. 10. Phased final maps covering lots 1 through 30 and Parcel A as shown on final Tract Map 7385 (the "Centex Lots") are allowed. The mapping, grading, construction and development of the Centex Lots may proceed entirely independently of the subdivision of the "Lin Parcel" to the west of the Centex Lots. Final subdivision approval of all of the Centex Lots is authorized to proceed at the present time, subject to completion of plan check. 11. City agrees that this agreement satisfies any obligation that Centex may have had under condition 11 of PUD 6 to secure approval of a phasing plan for the Centex Lots. No minor or major modifications have been or will be required in connection with this review, nor will any other discretionary approval be required in connection with the permitting or development of the Centex Lots except as expressly set forth herein. 12. The City agrees that all significant outstanding issues regarding development of the Centex Lots have been resolved. Accordingly, as set forth in Section V. E of the Development Agreement between the parties, the City will exercise its best good faith efforts to carry out all remaining tasks in an expeditious matter. City shall under no circumstances delay issuance of 2