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1 SETTLEMENT AGREEMENT FOR THE CONVENTION CENTER PHASE III EXPANSION AND EXPANSION HOTEL PROJECT BY AND BETWEEN: CITY OF SAN DIEGO BRIGETTE BROWNING SERGIO GONZALES UNITE HERE LOCAL cv UHL

2 SETTLEMENT AGREEMENT This Settlement Agreement ("Agreement") is made effective as of this ("'~ay of /JuJQ..AALaA (the "Effective Date") by the following parties: the City of San Diego ("City"), Brigette Browning ("Browning"), Sergio Gonzales ("Gonzales"), and Unite Here Local 30 ("Unite Here") (Browning, Gonzales, and Unite Here are collectively referred to herein as "Plaintiffs"). The parties to this Agreement are collectively referred to herein as the "Parties" and individually as a "Party." RECITALS WHEREAS, the City took a number of actions to establish a taxing district for the purpose of levying a special tax to facilitate funding of the expansion of the San Diego Convention Center ("Funding Approvals"), including the following actions (collectively, "The Resolutions"): a. On December 15, 2011, the City adopted Resolution R , which declares the City's intent to establish the San Diego Convention Center Facilities District No ("CCFD") and to levy a special tax within the CCFD to finance expenditures related to the convention center expansion (the "Project"). b. On January 24, 2012, the City adopted Resolution R , which established the CCFD, and wherein the City resolved that it would submit the question of whether to give the City authority to levy the special tax and whether to incur the indebtedness to the electors of the CCFD in a special mailed-ballot election. c. Also on January 24, 2012, the City adopted Resolutions R and R Pursuant to Resolution R , the City Council declared that the public convenience and necessity require that a bonded indebtedness of no more than $575,000,000 be incurred to finance the expenses related to the convention center expansion. Pursuant to Resolution R , the City Council authorized the City Clerk to conduct the special mailed-ballot election for the purpose of deciding whether to grant the City authority to levy the special tax and to determine whether the City could incur the indebtedness. d. On May 7, 2012, the City adopted Resolution R , declaring the results ofthe special mailed-ballot election within the CCFD. Over 92% ofthe votes cast were in favor of levying the special tax and incurring the indebtedness. Thus, the City determined that the matters of the special tax and incurring of debt had been approved by the electorate. 2

3 WHEREAS, on or about February 24, 2012, Plaintiffs filed a Petition For Writ of Mandate in the Superior Court of San Diego, styled Browning, Gonzales, and Unite Here Local 30 v. City of San Diego, Case No CU-WM CTL (the "Writ"), challenging the formation of the CCFD and legality of the special tax. The Writ is currently pending before the California Court of Appeal, Fourth Appellate District, Case No. D (the "Appeal"). WHEREAS, on or about March 29, 2012, Plaintiffs filed a Reverse Validation Action in the Superior Court of San Diego, styled Browning, Gonzales, and Unite Here Local 30 v. City of San Diego, Case No CU-MC-CTL (the "Reverse Validation Action"), challenging the validity of the special tax authorized by the Convention Center Facilities District; the validity of the authorization to issue bonds to be secured and repaid by the special tax; the establishment of the appropriations limit for the Convention Center Facilities District; and the validity of the landowner election. WHEREAS, on or about May 10, 2012, City filed a Validation Action in the Superior Court of San Diego, styled City of San Diego v. ALL PERSONS INTERESTED IN THE MATTER of the validity of the proceedings forming Convention Center Facilities District No , City of San Diego, County of San Diego, State of California; the validity of the special tax authorized by the Convention Center Facilities District; the validity of the authorization to issue bonds to be secured and repaid by the special tax; the establishment of the appropriations limit for the Convention Center Facilities District; including the validity of the landowner election, Case No CU-MC-CTL (the "Validation Lawsuit"), seeking to adjudicate the validity of the Funding Approvals. WHEREAS, another lawsuit challenging the validity of the Funding Approvals has been filed by a group of individuals and labor unions, styled Coalition for Responsible Convention Center Planning; Lutnich; Brown; Michaelson; International Brotherhood of Electrical Worhers Local 569; United Ass. of Plumbers & Steamfitters Local 230; Sheetmetal Worhers Local 206; and Ironworhers Local 229 v. City of San Diego, Case No CU-TT-CTL (the "CEQA Action"). WHEREAS, the Validation Lawsuit, the Reverse Validation Lawsuit, and the pending CEQA Action have been consolidated, with the Reverse Validation Lawsuit as the lead case. Plaintiffs contend that the manner in which City formed the Convention Center Facilities District was improper and that Resolution R , Resolution R , Resolution R , and Resolution R improperly fail to submit imposition of the special tax to a two-thirds vote of the citizens of San Diego in accordance with the California Constitution; City contends that the formation of the CCFD, the Resolutions, and imposition of the special tax was proper. Plaintiffs are not parties to the CEQA action. WHEREAS, the Parties now mutually acknowledge the potential benefits of the Project, including the Phase III Expansion, and desire to work together to move the Project forward for the mutual benefit of the Parties; 3

4 NOW THEREFORE, in consideration of the terms, covenants, conditions and promises contained herein, the Parties hereto fully settle, compromise and resolve all disputes and controversies between them related to the Project. Following negotiations, a settlement of all claims between the Parties was agreed to, the terms of which are set forth below I. PROJECT SUPPORT: TERMS A. The Plaintiffs agree to dismiss all litigation related to formation of the Convention Center Facilities District, the Resolutions, and the special tax and Project (as described above) and refrain from filing future lawsuits related to the Project. B. The Parties agree to work together to promote the Project. In conjunction therewith, the Plaintiffs will affirmatively support the Project, by timely submission of written acknowledgements of support and by personal appearance, in all legislative and administrative actions after the date of this agreement before the Port District, Board of Port Commissioners, the San Diego City Council, the California Coastal Commission and any other government agency identified as a "responsible agency" in the FEIR with respect to any aspect of the Project. C. The Plaintiffs will not participate in any meetings or hearings on behalf of themselves or through their officers, representatives, business manager, affiliated unions, agents or attorneys to challenge, oppose or contest the Project Approvals or the Project, and they will not challenge, oppose, contest, take adverse actions or bring suit, administratively or judicially, regarding the Project. The Plaintiffs will cease and desist from supporting, and to refrain from supporting in the future, financially or otherwise, directly or indirectly through the efforts of any person, firm or organization, to oppose or challenge the Project in any (a) administrative action before any government agency related to any aspect of the Project or (b) litigation currently filed or to be filed in the future with respect to the Project. D. In light of the Plaintiffs' agreement to support the Project, the Plaintiffs agree and acknowledge that it would be against their interests if their counsel continued to oppose the formation of the Convention Center Facilities District, the Resolutions, Funding Approvals, and/or Project. The Plaintiffs agree they will not waive any conflicts of interest between themselves and their counsel that would allow their counsel to proceed in some manner that opposes formation of the Convention Center Facilities District, the Resolutions, Funding Approvals, and/or Project. E. City agrees to pay the Plaintiffs $30,000.00, representing all legal fees and costs incurred by, or on behalf of, the Plaintiffs in the Reverse Validation Action and Validation Lawsuit. 4

5 II. MUTUAL RELEASES Except for the obligations provided herein, the City and each of its representatives, agents, attorneys, successors and assigns hereby unconditionally release, acquit and forever discharge the Plaintiffs and each of their representatives, agents, attorneys, successors and assigns (collectively, "Released Plaintiffs' Group") from any claims, demands, injuries, actions, causes of action, either at law or in equity or of any kind, nature or description, known or unknown, which the City has had in the past or has up through the Effective Date against the "Released Plaintiffs' Group" arising out of the matters described herein. Except for the obligations provided herein, the Plaintiffs, their representatives, agents, attorneys, successors and assigns, and each of them, hereby unconditionally release, acquit and forever discharge the City and each of its representatives, attorneys, agents, successors and assigns (collectively, "Released City Group") from any claims, demands, injuries, actions, causes of action, either at law or in equity or of any kind, nature or description, known or unknown, which the Plaintiffs have against the "Released City Group" arising out of the matters described herein. The Parties are aware that facts may be discovered later that are different from and/or in addition to those that the Parties now know or believe to be true. The Parties acknowledge that they have been informed by their attorneys regarding, and are familiar with, California Civil Code section 1542 which provides: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. The Parties expressly waive all rights under Civil Code section 1542 and intend that the foregoing releases and discharges extend to all claims any Party has had or has up through the Effective Date regarding the Approvals. III. PROSPECTIVE CLAIMS The releases in this Agreement are limited releases that apply only to claims relating to the Project and shall not apply to any claims, demands, obligations, responsibilities, suits, actions or causes of action arising out of the failure of any Party to perform its obligations as set forth in this Agreement or relating to any other contractual arrangement or obligation between the Parties and/or their affiliates, including any contracts covering the provision of labor or services related to the Project. 5

6 IV. NO PRIOR ASSIGNMENTS The Parties hereto represent and warrant that they have not heretofore assigned or transferred, or purported to assign or transfer, to any other person, entity, firm or corporation whatsoever, any claim, debt, liability, demand, obligation, expense, action or causes of action herein released. V. SETTLEMENT OF DISPUTED CLAIMS The Parties hereto understand and agree that this Agreement is a final, binding settlement to resolve all issues related to the Funding Approvals and Project, which the Parties dispute in whole or in part, and is not an admission of any wrongdoing or liability by the City, City Council, or the Plaintiffs. VI. FACTUAL INVESTIGATION Each Party has conducted its own factual investigation and is not relying on the other Parties. VII. UNDERSTANDING OF TERMS The Parties hereto each hereby affirm and acknowledge that they have read this Agreement, that they know and understand its terms, and have signed it voluntarily and on the advice of counsel. The Parties have had a full and unhindered opportunity to consult with their attorneys, accountants, financial advisors and such other consultants as they may have desired prior to executing this Agreement. VIII. AGREEMENT MAY BE PLEADED AS A DEFENSE This Agreement may be pleaded as a defense by the Parties hereto and may be used as the basis for an injunction against any action challenging the Approvals in violation of this Agreement. IX. ENFORCEMENT This Agreement shall be interpreted under the laws of the State of California. The Parties agree that money damages would be an inadequate remedy for any breach (or threatened breach) of this Agreement, and agree that this Agreement may be enforced without the requirement of posting a bond by a preliminary or permanent, mandatory or prohibitory injunction, by a decree of specific performance, or other such order or decree of a court of competent jurisdiction. The agreed remedies set forth herein shall not be construed to limit or derogate from any legal or equitable remedy authorized by applicable law. 6

7 X. AUTHORITY TO EXECUTE AGREEMENT Each person signing this Agreement warrants that he or she has authority to execute this Agreement and to thereby bind the Party on whose behalf he or she is signing to the terms of this Agreement. XI. LEGAL FEES AND COSTS Except as set forth above under Section I, Subsection E of the TERMS of this Agreement, each Party shall bear its own legal fees and costs resulting from the Writ, the Appeal, and from the preparation, negotiation and execution of this Agreement. XII. MATERIALITY OF BREACH Any breach of this Agreement, at the option of any Party, shall be treated as material and a complete failure of consideration. XIII. WAIVER The waiver of any provision or term of this Agreement shall not be deemed as a waiver of any other provision or term of this Agreement. The mere passage of time, or failure to act upon a breach, shall not be deemed as a waiver of any provision or term of this Agreement. XIV. AMENDMENTS No provision of this Agreement may be modified, unless in writing and signed by the Party against whom the enforcement of such modification is sought. XV. PARAGRAPH HEADINGS Paragraph headings are provided herein for convenience only and shall not serve as a basis for interpretation or construction of this Agreement, nor as evidence of the intention of the Parties. XVI. SEVERABILITY If any portion of this Agreement as applied to either Party or to any circumstance shall be adjudged by a court to be void or unenforceable, the same shall in no way affect any other provision of this Agreement, the application of any such provision in another circumstance, or the validity or enforceability of this Agreement as a whole. 7

8 XVII. INTEGRATION The undersigned, and each of them, acknowledge and represent that no promise or inducement not expressed in this Agreement has been made in connection with this Agreement. This Agreement contains the entire agreement and understanding between the Parties as to the subject matter of this Agreement and is intended to be and is a final integration thereof. There are no representations, warranties, agreements, arrangements, undertakings, oral or written, between m among the Parties hereto relating to the terms and conditions of this Agreement that are not fully expressed herein. XVIII. TIME OF THE ESSENCE Time is of the essence in this Agreement. XIX. COUNTERPARTS This Agreement may be signed by the Parties in different counterparts and the signature pages combined to create a document binding on the Parties. IN WITNESS WHEREOF, the Parties have executed one or more copies of this Agreement as of the Effective Date. City of San Diego Unite Here Local 30 <~ - ~ By: P rt! S' / ~ e rt-f- 27- Its: Date:.---LIJ'-fJ--L- z--f-- hl-0:2. = / I Brigette Browning Sergio Gonzales Date: 11 l o1{,"t. [MORE SIGNATURES TO FOLLOW]

9 APPROVED as to form and content: San Diego City Attorney's Ofiice ~ Mayers, John H. Stephens Patrick Prindle Date: L\/ol / L2~