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SCHOOL FUNDING AND MITIGATION AGREEMENT

This School Funding and Mitigation Agreement (“Agreement”) is made and entered into by and between the Palo Alto Unified School District (“District”) and the Board of Trustees of the Leland Stanford Junior University (“Stanford”) as of the date the second of the parties hereto executes and approves the Agreement (the “Effective Date”).

RECITALS

A. Stanford has applied to the County of Santa Clara, California (the “County”) for a new General Use Permit governing development on its lands within the unincorporated County. The proposed 2018 General Use Permit would authorize an increment of campus growth and land development, anticipated to take place over a period that would extend from approximately 2019 through 2035, or longer if development activity takes place at a slower pace than historically has occurred. Stanford also has applied to the County for related amendments to the Stanford Community Plan and County Zoning map. The proposed 2018 General Use Permit would allow:

2,275,000 net new square feet of Academic and Academic Support Facilities plus any Academic and Academic Support Facility square footage remaining under the 2000 General Use Permit (“Academic and Academic Support Facilities” broadly encompasses all non-residential construction permitted by the County on Stanford land within the unincorporated County);

3,150 net new housing units/ beds of which up to 550 units would be available for faculty, staff, postdoctoral scholars and medical residents (Housing units that may be occupied only by undergraduate students, graduate students and postdoctoral scholars are called “Student Beds”; housing units that may be occupied by faculty, staff, postdoctoral scholars and medical residents are called “Faculty/ Staff Units”);

40,000 net new square feet of childcare center space, and other space that reduces vehicle trips (e.g., transit hub);

utilization of up to 50,000 square feet of construction surge space authorized under the 2000 General Use Permit;

utilization of the remaining unbuilt parking authorized under the 2000 General Use Permit (estimated at 1,480 parking spaces remaining after completion of the Escondido Village Graduate Residences and associated parking in 2020);

creation of a parking reserve for up to 2,000 net new parking spaces (with County Planning Commission approval); and

associated infrastructure.

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B. Many of the individual building projects that will be developed pursuant to the proposed 2018 General Use Permit will require subsequent review and approval by the County, including Architecture and Site Approval, Grading Approval, Grading Permits, and/or Building Permits (together “Subsequent Approvals”).

C. County staff has published a framework for conditions of approval (“Framework COA”) for the proposed 2018 General Use Permit that the staff states it intends to recommend to the County Board of Supervisors. The Framework COA includes, among other conditions, a requirement proposed by County staff that Stanford construct a minimum of 4,772 net new housing units/ beds and a maximum of 5,699 net new housing units/ beds. These amounts are greater than the 3,150 new housing units/ beds that Stanford has proposed for County approval. The final conditions of approval, including any associated requirements to provide housing, are not yet known. The Framework COA states that most of the housing units proposed by County staff would be constructed on the Stanford campus in the unincorporated County; however, the Framework COA states that some of these units could be constructed within a six-mile radius of the Stanford Community Plan boundary, rather than on land within the unincorporated County. It is possible that, in its final conditions of approval, the County may allow some portion of the housing units required to satisfy the conditions of approval to be built over a larger geographic area. For purposes of this Agreement, the term “2018 General Use Permit” refers to the final 2018 General Use Permit as that permit is approved by the County Board of Supervisors, including the County Board of Supervisors’ adopted conditions of approval.

D. The County evaluated the environmental effects of the proposed 2018 General Use Permit and related amendments to the Stanford Community Plan and County Zoning map in the Stanford University 2018 General Use Permit Final Environmental Impact Report, which Environmental Impact Report may be modified prior to certification by the County Board of Supervisors (collectively, “2018 Final EIR”). The 2018 Final EIR also includes the County’s evaluation of the environmental effects of two Additional Housing Alternatives, A and B. Under its discussion of Additional Housing Alternative A, the 2018 Final EIR evaluates the environmental effects of the proposed 2018 General Use Permit’s Academic and Academic Support Facilities plus the 5,699 net new housing units/ beds that are referenced in the Framework COA published by County staff.

E. The District, through its legal counsel, submitted two letters commenting on the adequacy of the publicly circulated Draft of the 2018 Final EIR and the Recirculated Portions of the Draft of the 2018 Final EIR.

F. Stanford is engaged in negotiations with the County to attempt to reach agreement on a mutually beneficial Development Agreement pursuant to California Government Code sections 65864-65869.5. A Development Agreement provides assurance to the applicant for a development project that, upon approval of the project, the applicant may proceed with the project in accordance with existing policies, rules and regulations, and subject to specified conditions of approval. In exchange for such assurance, the applicant often agrees to a negotiated set of community benefits. If Stanford and the County reach agreement, the Development Agreement would govern Stanford’s development activities and operations under the proposed 2018 General Use Permit, as modified by the final conditions of approval adopted

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by the County Board of Supervisors and any other obligations specified by the Development Agreement (the “Stanford-County Development Agreement”).

G. On November 14, 2018, the District’s Board of Trustees unanimously passed Resolution 2018-19.07. The Board of Trustees’ resolution recognizes that the District, founded in 1893, and Stanford, founded in 1885, are both long-standing and successful educational institutions, which place the highest value on providing outstanding educational opportunities to the students in their community. The resolution states that, based on County planning staff’s projections, the 2018 General Use Permit-related housing is expected to generate between 275 and 1,445 additional students for the District. The resolution states that adding hundreds of new students with little or no additional property tax revenue would result in significant and permanent District budget shortfalls, class size increases, and program reductions, which would irreparably damage the quality of education for all District students, including those coming from Stanford itself. For these and other reasons stated by the resolution, the resolution requests that the County Board of Supervisors require Stanford to mitigate the impact on the District of its housing expansion by:

contractually committing to annual payments to the District or a related party, such as Palo Alto Partners in Education, with the payment amount based on the number of students actually attending District schools who reside in tax-exempt eligible housing owned by Stanford;

setting aside a parcel of four acres or greater on or near the Sand Hill/ Quarry Road corridor for the District to build a neighborhood elementary school, primarily to serve the families of Stanford affiliates residing in Stanford housing; and

making a direct contribution above the mandated developer fees to mitigate the cost of building a new school.

H. Stanford contends that it financially supports the District’s schools through payment of state-mandated school fees and property tax revenues generated by its lands devoted to commercial uses and long-term residential ground leases. Stanford also supports a range of programs that serve local educators and K-12 students. These include professional development for local teachers, summer programs for teachers and students, placing teachers in neighboring communities, and free art museums and outdoor installations.

I. Stanford is a nonprofit entity exempt from property and certain other taxes. The parties understand that this is a one-time agreement, acknowledge Stanford’s tax-exempt status and agree that nothing herein affects that status and nothing herein sets a precedent for future agreements.

J. The parties intend that the implementation of this Agreement will fully mitigate the impacts of development pursuant to the 2018 General Use Permit on the District and shall be in lieu of any fees, dedications, exactions or other requirements intended to mitigate impacts on the District of development pursuant to the 2018 General Use Permit, whether imposed pursuant to Education Code section 17620, Government Code sections 65864-65869.5 or otherwise. This

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Agreement is also intended to fully satisfy the District’s requests that the County Board of Supervisors require Stanford to mitigate the impact on the District of Stanford’s housing expansion. Further, this Agreement is intended to resolve any and all objections by the District to: (1) the 2018 Final EIR; (2) any findings pertaining to the 2018 Final EIR that may be adopted by the County pursuant to the California Environmental Quality Act; (3) the County’s approval of the 2018 General Use Permit; (4) the County’s approval of related amendments to the Stanford Community Plan and County Zoning map; and (5) the County’s approval of the Stanford-County Development Agreement (collectively, the “Dispute”).

K. The District and Stanford support each institution’s goals of expanding academic facilities and opportunities to offer a high-quality education to their students. The District and Stanford are looking forward to partnering together to maintain and enhance their students’ experiences and academic excellence.

NOW, THEREFORE, the parties agree as follows:

1. Condition Precedent. This Agreement is conditioned upon Stanford and the County Board of Supervisors reaching agreement upon and executing a Stanford-County Development Agreement. If Stanford and the County Board of Supervisors do not execute a Stanford-County Development Agreement within one (1) year after the County Board of Supervisors approves the 2018 General Use Permit, this Agreement shall be null and void and shall have no legal or practical effect. The District understands that the Stanford-County Development Agreement may address matters beyond the scope of this Agreement, including but not limited to a final set of conditions of approval for the 2018 General Use Permit that the County and Stanford each determine to be acceptable and agreeable, and community benefits that the County and Stanford determine to be fair and beneficial. The District further understands that it is not certain that the County and Stanford will reach agreement and execute a Stanford-County Development Agreement.

2. Funding for Innovative Space. Stanford and the District will work together to create an innovative space on District-owned lands where students, teachers and faculty can expand their collaborations. Potential areas of collaboration will require careful exploration, involving many different participants within in each institution, to address considerations including, without limitation, consistency with each institution’s mission and purpose, existing and/or competing priorities, availability of resources (financial and otherwise), feasibility, and regulatory and legal requirements. Preliminary work is likely to include identification of existing relationships, many of which may be ad hoc now capable of becoming more formally organized and expanded. Illustrative examples of existing collaborations include the following:

Workshops and lectures for parents and community members

Stanford Teacher Education Program

The Center to Support Excellence in Teaching

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Illustrative examples of possible new opportunities include the following:

Expansion of the PAUSD Advanced Authentic Research program

Stanford Office of Science Outreach

Haas Center for Public Service joint opportunities

Extension of the School of Medicine 101 program to other Stanford schools or departments (e.g. Law, Engineering)

Stanford shall pay the District’s actual costs of constructing and furnishing the innovative space where two institutions can expand their collaborations (“Facility Funding Payments”) in a total amount not to exceed fifteen million dollars ($15 million). Stanford shall provide Facility Funding Payments to the District within sixty (60) calendar days of receiving from the District contracts, estimates, or other information reasonably necessary for Stanford to confirm the actual cost that the District expects to incur in constructing and furnishing the innovative space. Within sixty (60) calendar days following completion of the innovative space, the District shall provide to Stanford an accounting of the receipts or other information reasonably necessary for Stanford to confirm the actual costs that the District incurred in constructing and funding the innovative space, and at that same time the District shall reimburse to Stanford the amount of any Facility Funding Payments that exceeded the actual costs that the District’s incurred in constructing and furnishing the innovative space. Upon written request by Stanford, the District shall allow Stanford to audit the District’s expenditures for constructing and furnishing the innovative space. In no event shall Facility Funding Payments be due or payable to the District unless and until the Stanford-County Development Agreement is “Final and Irrevocable.” For purposes of this Agreement, “Final and Irrevocable” with respect to the Stanford-County Development Agreement means: (1) either the time to file a judicial action to challenge the Stanford-County Development Agreement has expired and no such judicial action has been filed or any and all judicial actions challenging the Stanford-County Development Agreement have been fully and finally resolved by all applicable courts of law in a manner that upholds the validity of the Stanford-County Development Agreement in all respects; and (2) either the time to file a referendum petition to subject the Stanford-County Development Agreement to a vote of the electorate has expired or the referendum process has been completed in a manner that approves and upholds the validity of the Stanford-County Development Agreement in all respects. The District shall own and operate the innovative space at its sole expense.

3. Developer School Fees. The Facility Funding Payments described in Paragraph 2, above, shall fully satisfy Stanford’s obligation to pay the school facilities impact fees pursuant to Education Code sections 17620 et seq. and Government Code sections 65995 et seq. and any other existing or later-enacted law or regulation (“Developer School Fees”) that otherwise would or could be assessed by the District for new residential and commercial construction, as those terms are defined by Education Code section 17620 and Government Code section 65995, where such new residential and commercial construction is subject to the requirements of the 2018 General Use Permit or satisfies one or more conditions of approval of the 2018 General Use Permit. The District shall not assess Developer School Fees for construction of the following types of improvements on Stanford-owned land in the

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unincorporated County that are subject to the requirements of the 2018 General Use Permit: Academic and Academic Support Facilities; Student Beds; Faculty/Staff Units; childcare center space and other space that reduces vehicle trips; construction surge space; parking; and associated infrastructure. In addition, the District shall not assess Developer School Fees for any residential or commercial construction at any other location where such residential or commercial construction satisfies a requirement imposed by one or more conditions of approval of the 2018 General Use Permit, including but not limited to any condition requiring Stanford to construct, fund or provide on or off-campus housing. For example, and not by way of limitation:

Assume, by way of illustration, that the 2018 General Use Permit conditions of approval require Stanford to provide a minimum of 1,000 housing units beyond any Student Beds;

Further assume Stanford satisfies this condition by constructing 850 of those housing units as Faculty Staff Units on Stanford-owned land in the unincorporated County and by constructing, funding or otherwise facilitating 150 of those housing units outside Stanford’s unincorporated County land, in the City of Palo Alto;

Under this example, the District would not assess Developer School Fees upon construction of the 850 Faculty Staff Units on Stanford-owned land in the unincorporated County;

Under this same example, the District also would not assess Developer School Fees upon construction of the 150 housing units in the City of Palo Alto;

Further, under this example, the District would not assess Developer School Fees upon any of the Academic and Academic Support Facilities, Student Beds, and non-residential development that Stanford undertakes pursuant to the 2018 General Use Permit.

4. Per Pupil Payments. On an annual basis, Stanford will pay the District $5,800 per pupil for each student enrolled as a K-12 student in a school operated by the District, who resides in housing on Stanford-owned land for which Stanford claims a property tax exemption, subject to and according to the following provisions of this Paragraph 4 (“Per Pupil Payment”):

a. Baseline Enrollment. The parties will work together to identify, as of the 14th day of the District’s 2019-2020 academic year, the existing number of students who are enrolled in the District’s K-12 schools and reside in housing on Stanford-owned land within the unincorporated County for which Stanford claims a property tax exemption (“Baseline Enrollment”). To assist in identification of the Baseline Enrollment, by August 1, 2019, Stanford shall provide to the District the addresses of all residences on Stanford-owned land in the unincorporated County for which Stanford has claimed a property tax exemption during the 2019 calendar year. By November 1, 2019, the District shall determine the Baseline Enrollment and provide such determination to Stanford along with supporting data and information reasonably necessary for Stanford to confirm the accuracy of the District’s determination (“Reasonable Supporting Data”).

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b. Annual Enrollment. On an annual basis commencing with the District’s first academic year that immediately follows the date that the Stanford-County Development Agreement is Final and Irrevocable (“Year 1”) and continuing through the 40th academic year following the date that the Stanford-County Development Agreement is Final and Irrevocable (“Years 2-40”), the parties will work together to identify the number of students, as of the 14th day of the District’s applicable academic year, who are enrolled in the District’s K-12 schools and either (1) reside in housing on Stanford-owned land within the unincorporated County for which Stanford claims a property tax exemption, provided that such housing existed or was authorized prior to Year 1 or was constructed pursuant to the 2018 General Use Permit; or (2) reside in housing that is not in the unincorporated County that satisfies one or more conditions of approval of the 2018 General Use Permit and for which Stanford claims a property tax exemption (collectively, the “Annual Enrollment”). For purposes of the immediately preceding clauses (1) and (2), Annual Enrollment shall not include any housing constructed after the 14th day of the District’s 2019-2020 academic year that is either not constructed pursuant to the 2018 General Use Permit or does not satisfy one or more conditions of approval of the 2018 General Use Permit, even if Stanford claims its property tax exemption for such housing. To assist in determination of the Annual Enrollment, by August 1 of each of Years 1 through 40, Stanford shall provide to the District the addresses of all residences located in the unincorporated County for which Stanford has claimed a property tax exemption during the applicable calendar year, and Stanford shall provide to the District the addresses of all residences that are not located in the unincorporated County that satisfies one or more conditions of approval of the 2018 General Use Permit, and for which Stanford has claimed a property tax exemption during the applicable calendar year. By November 1 of each of Years 1 through 40, the District shall determine the Annual Enrollment and provide such determination to Stanford along with Reasonable Supporting Data.

c. Payment Calculation. On an annual basis, within sixty (60) calendar days of receiving the District’s Annual Enrollment determination and Reasonable Supporting Data, (subject to the dispute resolution provisions as provided herein), Stanford shall provide the Per Pupil Payment to the District. The Per Pupil Payment shall be calculated as follows:

(1) The Baseline Enrollment shall be subtracted from the applicable year’s Annual Enrollment to determine the incremental increase in Annual Enrollment over Baseline Enrollment (“Incremental Increased Enrollment”). For example, and not by way of limitation:

If the Baseline Enrollment was 100 K-12 students, and the Annual Enrollment in Year 1 is 110 K-12 students, the Incremental Increased Enrollment in Year 1 would be 10 K-12 students (110 minus 100).

If the Annual Enrollment in Year 2 was 150 K-12 students, the Incremental Increased Enrollment in Year 2 would be 50 K-12 students (150 minus 100).

In each case, the fixed Baseline Enrollment is subtracted from the applicable academic year’s Annual Enrollment. In the event that the Incremental Increased Enrollment for any applicable academic year is determined to be a negative number, then the Incremental Increased Enrollment for such academic year shall be deemed to equal zero.

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(2) The Incremental Increased Enrollment shall be multiplied by the following “Per Pupil Rate”:

(i) In Year 1, the Per Pupil Rate shall be five thousand eight hundred dollars ($5,800).

(ii) In each of Years 2 through 20, the Per Pupil Rate shall be increased by two (2) percent over the prior year’s Per Pupil Rate. For example:

In Year 2, the Per Pupil Rate shall be five thousand nine hundred sixteen dollars ($5,916);

In Year 3, the Per Pupil Rate shall be six thousand thirty-four dollars and thirty-two cents ($6,034.32).

(iii) In each of Years 21 through 40, the Per Pupil Rate shall be decreased by two (2) percent below the prior year’s Per Pupil Rate until the Per Pupil Rate returns to five thousand eight hundred dollars ($5,800) and shall thereafter by fixed at five thousand eight hundred dollars ($5,800).

(iv) Unless the parties reach a new or amended agreement extending the obligations of this Paragraph 4 and its sub-paragraphs (any such new or amended agreement to be within the sole and absolute discretion of each party), (1) Stanford’s obligation to pay Per Pupil Payments to the District shall cease following the District’s receipt of the Per Pupil Payment in Year 40; and (2) except as set forth in Paragraph 4(d), below, Stanford shall not owe the District a Per Pupil Payment for any students who are enrolled in the District’s K-12 schools during any calendar year (including Years 1 through 40) who reside in (a) housing for which Stanford does not claim a property tax exemption; or (b) housing that (i) did not yet exist or was not authorized prior to implementation of the 2018 General Use Permit, (ii) was not constructed pursuant to the 2018 General Use Permit, or (iii) does not satisfy one or more conditions of approval of the 2018 General Use Permit. For example, and not by way of limitation:

Assume that in Year 25, Stanford obtains a new General Use Permit from the County that authorizes an increment of development above and beyond the amount authorized the 2018 General Use Permit. Assume that in Year 27, Stanford constructs housing pursuant to that new General Use Permit and claims a property tax exemption for such housing. Under this example, Stanford will owe no Per Pupil Payment to the District for students residing in such housing absent a new or amended agreement between the parties. However, under this example, Stanford would pay the Per Pupil Payment for students who are enrolled in the District’s K-12 schools and reside in housing for which Stanford claims a property tax exemption that (a) existed or was authorized prior to implementation of the 2018 General Use Permit, (b) was constructed in unincorporated Santa Clara County pursuant to the 2018 General Use Permit, or (c) was constructed outside unincorporated Santa Clara County to satisfy one or more conditions of approval of the 2018 General Use Permit.

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Assume that in Year 10, Stanford constructs, funds or facilitates housing in the City of Palo Alto that Stanford does not use to satisfy a condition of approval of the 2018 General Use Permit. Under this example, Stanford will owe no Per Pupil Payment to the District for students residing in such housing absent a new or amended agreement between the parties, even if Stanford claims its property tax exemption for such housing.

d. Adjustment to Per Pupil Payment. For the duration of this Agreement, Stanford intends to claim its property tax exemption for rental, multi-family housing that is constructed pursuant to the 2018 General Use Permit on Stanford-owned land in unincorporated Santa Clara County (“2018 General Use Permit Campus Rental Housing”). If such tax exemption is legally available to Stanford but Stanford voluntarily elects not to claim its property tax exemption for the 2018 General Use Permit Campus Rental Housing, the 2018 General Use Permit Campus Rental Housing shall be treated as housing for which Stanford has claimed a tax exemption for purposes of calculating the Per Pupil Payment due to the District. However, any property tax revenue that the District receives from the property or properties upon which the 2018 General Use Permit Campus Rental Housing is located shall be deducted from the Per Pupil Payment that Stanford owes to the District. For example, and not by way of limitation:

Assume that Stanford constructs 550 multi-family rental housing units in the Quarry Development District. Assume that Stanford legally can claim its property tax exemption for the property upon which such housing is constructed, but Stanford elects not to do so. Such housing would be treated as tax-exempt housing for purposes of calculating the Per Pupil Payment, and K-12 students enrolled in the District who reside in such housing would be included in the calculation of the Annual Enrollment. The property tax revenue that the District receives from such housing would be deducted from the Per Pupil Payment.

5. Safe Routes to Schools. Stanford shall construct or fund a total of up to five hundred thousand dollars ($500,000) in capital improvements for Safe Routes to Schools projects, as provided in this Paragraph 5. The 2018 General Use Permit application includes construction of improvements to school routes on the Stanford campus at an estimated cost of three hundred thousand dollars ($300,000) (“Stanford Campus Routes”), as identified on Exhibit 1. In addition, Stanford shall contribute up to a maximum of two hundred thousand dollars ($200,000) in funding for the actual cost of Safe Routes to School improvements that are located near the Stanford campus, including improvements at the intersection of Stanford Avenue and Bowdoin Street, and that are constructed or otherwise facilitated by the District (“Off-Campus Routes”). Stanford shall use its best efforts to construct the Stanford Campus Routes within five (5) years after the date that the Stanford-County Development Agreement is Final and Irrevocable. Stanford shall provide funding for the Off-Campus Routes to the District within sixty (60) calendar days of receiving from the District an invoice describing the actual cost that the District has incurred in constructing or facilitating the Off-Campus Routes together with such supporting detail as Stanford may reasonably request. In no event shall payments for Off-Campus Routes be due to the District unless and until the Stanford-County Development Agreement is Final and Irrevocable.

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6. Neighborhood School Accommodation. In keeping with the District’s long-standing preference for neighborhood schools, the District shall use its best efforts to accommodate the enrollment of students living in housing on Stanford-owned land within unincorporated Santa Clara County at the District’s Nixon and Escondido Elementary Schools (“Neighborhood School Accommodation”). Stanford shall pay the District up to a maximum of one million dollars ($1 million) for the District’s actual costs of expanding, modifying or relocating school facilities, materials or programs to facilitate the Neighborhood School Accommodation. Stanford shall provide funding for the costs of the Neighborhood School Accommodation to the District within sixty (60) calendar days of receiving from the District an invoice describing the actual cost that the District has incurred for such Neighborhood School Accommodation together with such supporting detail as Stanford may reasonably request. In no event shall payments for Neighborhood School Accommodation be due to the District unless and until the Stanford-County Development Agreement is Final and Irrevocable.

7. Land for a New School. Three (3) years before the date Stanford anticipates it will complete construction of the Academic and Academic Support Facilities authorized by the 2018 General Use Permit, Stanford and the District shall discuss whether there is a need for an additional school site in the vicinity of the Stanford campus and, if so, meet to explore the possibility of a four (4)-acre school site on Stanford land in the City of Palo Alto along Sand Hill Road or at another location outside the academic campus. Such discussions are anticipated to include the potential use of a portion of the land currently occupied by the Oak Creek Apartments for a school site after such land returns to Stanford’s control in 2048; the potential exchange of land between Stanford and the District; and the location, timing, price, and other factors associated with possible use of Stanford-owned land as a school site. This provision does not commit the District to acquire land from Stanford, nor does it commit Stanford to sell, exchange or otherwise provide land to the District; rather, this provision is intended only to clarify the timing and content of exploratory discussions regarding a school site on Stanford lands, as well as a potential general location for such a school site.

8. Annual Meetings. Representatives of Stanford and the District shall meet annually to discuss the implementation of this Agreement, partnership opportunities, and the timing and location of new housing on Stanford lands that may affect enrollment in District schools.

9. Agreement Not to File, Join or Support Judicial Challenges. The District shall not, directly or indirectly, oppose, protest, challenge, or seek other conditions or forms of mitigation in connection with approval and issuance of the 2018 General Use Permit. Further, unless the District terminates this Agreement pursuant to the provisions of Paragraph 13(a), below, the District shall not file, join or support any action or proceeding in any court of law that challenges the legality or legal adequacy of, or otherwise seeks to oppose, rescind or modify: (1) the 2018 Final EIR; (2) any findings pertaining to the 2018 Final EIR that may be adopted by the County or any responsible agencies pursuant to the California Environmental Quality Act; (3) the County’s approval of the 2018 General Use Permit including modifications to the proposed 2018 General Use Permit and the final conditions of approval required by the County; (4) the County’s approval of related amendments to the Stanford Community Plan and County Zoning map; (5) Subsequent Approvals; and (6) the County’s approval of the Stanford-County Development Agreement.

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10. Full Mitigation. The purpose of this Agreement is to establish a comprehensive program for mitigation of all impacts of development pursuant to the 2018 General Use Permit on the District. By entering into this Agreement and complying with its terms, Stanford shall be deemed to have fulfilled and mitigated Stanford’s entire obligation to assist in the mitigation of impacts of development under the 2018 General Use Permit upon the District (including, without limitation, construction or funding school facilities to serve students generated as a result of such development). The District hereby covenants that, other than as specifically set forth in this Agreement, it will not under any circumstances at any time:

a. exercise any power or authority (under the School Facilities Act or any other provision of applicable law) to levy a fee, charge, dedication, assessment, tax, exaction or other form of payment or requirement against any development (including but not limited to commercial, industrial or residential development) under the 2018 General Use Permit for mitigation impacts of such development (“School Mitigation Requirements”);

b. require, cause or cooperate with the County, the City of Palo Alto, or any other governmental entity in, the exercise of any power under Title 7, Division 1, Chapter 4.7 of the California Government Code (commencing with Section 65970) or any other provision of applicable law to impose any School Mitigation Requirements as a condition to development under the 2018 General Use Permit;

c. oppose development under the 2018 General Use Permit or seek other forms of mitigation with respect to the impacts of such development on the District including, but not limited to, the establishment of developer fees, funding of operational costs, interim facilities or administrative facilities, the payment of money by any owner or developer, the dedication of land, or the application of an assessment, special tax or requirement of any nature against any development under the 2018 General Use Permit if the proceeds of such assessment, special tax or other requirement will be used to mitigate impacts of such development on the District; and

d. withhold Certificates of Compliance with respect to the development under the 2018 General Use Permit. As used herein, “Certificate of Compliance” means a certificate issued by the District pursuant to Education Code Section 17620(b) acknowledging that the recipient thereof has (1) complied with all requirements of District for the payment of Developer Fees, alternative school facility fees, or mitigation payments; and/or (2) made adequate provision for school facilities to mitigate the impact of applicable development. Nothing in this Paragraph 10 (and its sub-paragraphs) shall be deemed to constitute a waiver of the District’s statutory powers as to matters unrelated to Stanford’s development pursuant to the 2018 General Use Permit, including but not limited to, the District’s exercise of its power of eminent domain.

11. Dispute Resolution

a. Intent. The parties desire and intend to resolve any dispute, claim or controversy arising out of relating to this Agreement, or the breach, termination, enforcement, interpretation or validity thereof, through reasonable business-like dispute resolution procedures.

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Accordingly, any disputes regarding the matters addressed by this Agreement which arise between the parties shall be resolved in accordance with this Paragraph 11 (and its sub-paragraphs).

b. Opportunity to Cure. As a first step, if either party to this Agreement determines that the other party has failed to perform or breached one or more terms of this Agreement (“Violation”), such party shall provide written notice to the other party describing such apparent violation or breach (the “Violation Notice”), which shall include reasonably detailed written or documentary evidence of the apparent violation. In the event a party receives a Violation Notice from the other party, the receiving party shall have the following periods of time, as applicable, to cure the violation specified in the Violation Notice:

1) Cure Period. The receiving party shall have thirty (30) days from the date of receipt of the Violation Notice (the “Cure Period”) to cure the violation specified in the Violation Notice.

2) Extended Cure Period. If, prior to the close of the Cure Period, the receiving party provides reasonably detailed written or documentary evidence of the need for more than thirty (30) days to cure the violation, and provides reasonably detailed written or documentary evidence of reasonable efforts by the receiving party to cure the violation within the Cure Period and of continuing diligent prosecution by the receiving party of that cure, then the receiving party shall be afforded such additional time as may be reasonably necessary to cure the violation, not to exceed one (1) year absent the parties’ mutual agreement to a later date (the “Extended Cure Period”).

c. Mediation. If the dispute has not been resolved within the applicable Cure Period or Extended Cure Period, any party may, at its option, initiate mediation by delivering written notice to the other party (“Mediation Notice”). Both parties shall attend and participate in the mediation, which shall be non-binding and without prejudice to any other rights or remedies which any party may have. Unless all parties to the dispute agree otherwise, within 30 days after the Mediation Notice is received, the mediation proceeding shall be conducted by JAMS, in accordance with its procedures, at the offices of, JAMS in San Francisco, California or a mutually-agreed upon location. The costs of the first day of mediation shall be borne by the party claiming a violation of the Agreement has occurred; thereafter if both parties elect to continue with mediation the costs shall be borne in the manner agreed upon by the parties. Any voluntary settlement reached as a result of the mediation proceeding shall be reduced to writing. All proceedings under subsections b and c of this Paragraph 11 shall be subject to California Evidence Code Sections 1115 et seq.

d. Arbitration. If the dispute is not resolved within thirty (30) days after conclusion of the mediation proceeding, either party may, at its option, initiate binding arbitration by delivering written notice to the other party. The parties agree that any dispute, claim or controversy arising out of relating to this Agreement, or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this mutual agreement to arbitrate, shall be determined by arbitration conducted by a neutral evaluator from, and at the offices of, JAMS in San Francisco, California or a mutually-agreed upon location, in accordance with the JAMS Arbitration Rules and Procedures

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most appropriate for the underlying dispute. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The parties agree that, regardless of the rules and procedures that govern the arbitration, the non-prevailing party shall bear the costs and expenses of the arbitration, and the parties shall separately pay their respective attorneys’ fees and expenses, if any. The parties agree that the enforceability of this Agreement shall be governed by the Federal Arbitration Act. The parties each expressly waive the right to a jury trial and any other civil court proceeding and agree that the arbitrator's award shall be final, conclusive and binding on the parties. Should any provision of this arbitration agreement be deemed unenforceable or invalid, such provision shall be severed and the remainder shall be enforceable to the fullest extent of the law.

12. Attorneys’ Fees and Costs. Each party shall bear its own attorneys’ fees and costs incurred prior to the mutual execution of this Agreement. Each party shall bear its own attorneys’ fees and costs incurred in connection with the notice and cure process described in Paragraph 11 of this Agreement (and its sub-paragraphs), with the exception of the costs associated with retention of a mediator as described in Paragraph 11, subsection c, above and costs of arbitration identified in Paragraph 11, subsection d. Each party shall bear its own attorneys’ fees and costs incurred in connection with any mediation or arbitration arising under or in connection with this Agreement.

13. Term of Agreement.

a. Termination of Obligations and Restrictions. This Agreement shall terminate automatically in the event that Stanford and the County Board of Supervisors do not execute a Stanford-County Development Agreement within one (1) year after the County Board of Supervisors approves the 2018 General Use Permit. In addition, this Agreement shall be terminable: (1) unilaterally by either party if the Stanford-County Development Agreement is not executed by Stanford and approved by the County Board of Supervisors within twenty-five (25) calendar days after the County Board of Supervisors approves the 2018 General Use Permit; (2) by mutual written consent of the parties; (3) unilaterally by any party following an uncured Violation by the other party, subject to the cure procedures set forth in Paragraph 11 (and its subparagraphs); (4) unilaterally by Stanford in the event that the Stanford-County Development Agreement is subject to a voter referendum and either the County Board of Supervisors rescinds its approval of the Stanford-County Development Agreement or the electorate does not approve the Stanford-County Development Agreement; (5) unilaterally by Stanford in the event litigation is commenced seeking to rescind the County’s approval of the 2018 General Use Permit or the Stanford-County Development Agreement and such litigation results in the County’s rescission of its approval of the 2018 General Use Permit or the Stanford-County Development Agreement or termination of the Stanford-County Development Agreement; (6) unilaterally by Stanford in the event (i) the County terminates or cancels the Stanford-County Development Agreement prior to Stanford’s completion of the development authorized by the 2018 General Use Permit, or (ii) a judicial order, writ of mandate or judgment, change in applicable law, or action by another government agency has the effect of terminating, canceling or frustrating the purpose of the Stanford-County Development Agreement prior to Stanford’s completion of the development authorized by the 2018 General Use Permit; or (7) unilaterally by Stanford in the event Stanford withdraws its application for the 2018 General Use Permit or declines to accept the 2018 General Use Permit approved by the County.

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b. If this Agreement is not terminated pursuant to Paragraph 13(a), above, all obligations and restrictions arising from this Agreement shall remain in effect until the District’s receipt of the Per Pupil Payment in Year 40, as described in Paragraph 4 of this Agreement (and its sub-paragraphs). Following the District’s receipt of the Per Pupil Payment in Year 40, this Agreement shall automatically expire and shall have no further effect.

14. Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties in relation to the matters addressed by this Agreement and the Dispute. There are no oral understandings, terms, or conditions, and neither party has relied upon any representations, express or implied, not contained in this Agreement. All prior versions and draft of this Agreement and all negotiations or previous agreements, understandings, terms or conditions between the parties with respect to the subject matter hereof are deemed merged into this Agreement and its exhibits.

15. Amendments. This Agreement cannot be changed or supplemented orally, and may be modified or superseded only by written instrument executed by both parties.

16. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

17. No Admission of Liability. This Agreement is entered into by the parties for the purposes of compromising and settling the Dispute. This Agreement does not constitute, nor shall it be construed as, an admission of liability by any party for any purpose.

18. Voluntary Agreement. The parties represent that they have read this Agreement in full and understand and voluntarily agree to all provisions hereof. The parties further declare that prior to signing this Agreement, they apprised themselves of relevant data, through sources of their own selection, including review by their own respective counsel, in deciding whether to execute this Agreement.

19. Binding Effect. This Agreement is for the benefit of and shall be binding on the parties and their respective successors and assigns.

20. Execution in Counterparts. This Agreement may be executed in counterparts such that the signatures may appear on separate signature pages. Signatures transmitted electronically shall be deemed original signatures.

21. Interpretation. The language and all parts of this Agreement shall, in all cases, be construed as a whole, according to its fair meaning, and not strictly for or against either party. Both parties have participated in the negotiation of this Agreement, and any rule of construction in favor of one party or another party shall not apply to interpretation of this Agreement.

22. Notices. All notices pursuant to this Agreement shall be in writing and sent either by overnight delivery or personal delivery, properly addressed to the addresses set forth below, in which case all such notices shall be deemed effective upon receipt:

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For District: Superintendent Palo Alto Unified School District 25 Churchill Avenue Palo Alto, CA 94306

with a copy to:

General Counsel Palo Alto Unified School District 25 Churchill Avenue Palo Alto, CA 94306 For Stanford: Vice President, Land Buildings and Real Estate Stanford University 3160 Porter Drive, Suite 200 Palo Alto, CA 94304 with a copy to: General Counsel Stanford University Building 170, Third Floor Main Quad P.O. Box 20386 Stanford, CA 94305

23. Approval Authority. Each signatory to this Agreement attests that he or she has received the necessary authority to execute this Agreement from its governing board.

Dated:

Don Austin, Superintendent Palo Alto Unified School District

Signatures continued on next page.

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Approved as to Form:

Dated:

John Dietrich, Atkinson, Andelson, Loya, Ruud & Romo Counsel for Palo Alto Unified School District

Dated:

Robert Reidy, Vice President Land, Buildings & Real Estate, on behalf of the Board of Trustees of Leland Stanford Junior University

Approved as to Form:

Dated:

Barbara Schussman, Perkins Coie LLP Counsel for the Board of Trustees of Leland Stanford Junior Stanford University

EXHIBIT 1

STOP

AHEAD

SCHOO

L

STOPSTOP

STOP

STOP

STOP

STOP

STOP

AHE

AD

2

3

4

5

6

7

Stanford Avenue a. Improve school area visibility with school area signs and stencilsStanford Avenue at Ryan Court a. Refresh crosswalks with high-visibility yellow markings b. Improve visibility of path crossing at this intersection

Stanford Avenue at Raimundo Way a. Improve visibility of school crossing at this intersectionb. Install signs prohibiting right turn on red during school hours or when children are presentc. Consider way�nding directing to Nixon Elementary

Stanford Avenue at Mears Courta.Install high-visibility crosswalk markings and signage

b. Consider extending existing fence along path to base of hill

Stanford Avenue at Peter Coutts Roada. Improve crosswalks with high-visibility yellow markings

Tolman Lane at Tolman Drivea. Improve crosswalks with high-visibility markings b. Improve visibility of STOP sign on northbound approach`

Tolman Lane at Raimundo Way a. Install high visibility crossing(s) at intersection

Peter Coutts Road at Raimundo Waya. Improve visibility of crosswalks at this location

Raimundo Way at trail crossing between Cottrell Way and Vernier Placea. Improve visibility with high visibility crosswalk with yield lines and RRFB

9

8

1

1

2

7

3

4

5

6

89

Pete

r Cou

tts R

oad

Raim

undo

Way

Am

herst Street

Cedr

o W

ay

Tolman Driv

e

May�eld Avenue

Mears Court

Lathrop Place

Cathcart Way

Bowdoin Street

Santa Fe Avenue

Cottrell Way

College Avenue

Ryan Court

Sonoma Terrace

Casanueva Place

Raimundo Way

Valdez Place

Nor

th To

lman

Lan

e

Page Mill Road

Stanford Avenue

Juni

pero

Ser

ra B

oule

vard

Stanford Avenue

Santa Fe Avenue

NixonElementary

School

Nixon Elementary SchoolStanford proposal based on Palo Alto Safe Routes identi�ed improvements

Observed Biking Routes

Existing Bicycle Parking

Bike Lanes

Pedestrian Path

Improvements not to scale

Multi-Use Path

I

SCHO

OL

I

EscondidoElementary

School

Hanover Street

Califo

rnia

Avenu

e

Escondido Road

Oberlin Street

Cornell Street

Bowdoin Street

Princeton StreetRoss

e Lan

e

Runnin

g Farm

Lane

Pine Hill

Court

Stan

ford

Ave

nue

Olmste

d RoadDartmouth Street

Harvard Street Colle

ge Ave

nue

Escondido Elementary School Stanford proposal based on Palo Alto Safe Routes identi�ed improvements

Observed Biking Routes

Pedestrian/Bicyclist Access Areas

Vehicle Barrier

Existing Bicycle Parking

Class II Bike Lanes

Path IImprovements

not to scale

I

Improvements shown as dashed lines

1

2

Escondido Road mid-block crossinga. Install Enhanced Crosswalk improvements at mid-block crossing on Escondido

RoadBowdoin Streeta. Install asphalt path along the north side of Bowdoin Street from Stanford

Avenue to the school parking lotb. Install bike lanes along Bowdoin Street from Stanford Avenue to Pine Hill

Court c. Consider ‘except Sunday’ signage to allow for church parking

1

2