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EXHIBIT D -2 ENCROACHMENT PERMIT THIS ENCROACHMENT PERMIT (this "Permit "), dated as of , 2009 for reference purposes, is made by and between the CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation ( "Permittee "), acting by and through its Public Utilities Commission ( "SFPUC "), and the CITY OF REDWOOD CITY, a municipal corporation ( ►'City"). RECITALS A. Permittee, acting by and through the SFPUC owns and operates a regional water system that serves San Francisco and twenty -seven (27) wholesale water customers , including City, located in San Mateo, Santa Clara, and Alameda counties in the Bay Area. B. SFPUC has developed a Water System Improvement Program ( "WSIP ") with the goals of increasing the system's ability to withstand major seismic events and prolonged droughts and to reliably meet future water demands. As part of WSIP, Permittee proposed the Bay Division Pipeline No. 5 Project (the "Project "), which includes, among other improvements, the installation of an additional pipeline within Permittee's right of way, for the purpose of improving the seismic reliability, water delivery, and drought- management goals outlined in WSIP, for the benefit of City and its residents and businesses. C. Construction of the Project is anticipated to involve installation of Permittee's pipelines and related appurtenances in parcels owned by City in which Permittee seeks rights to construct and maintain its pipeline and related appurtenances in connection with the Project. D. Permittee desires City's license to install, operate, and maintain its pipeline and related appurtenances in parcels where Permittee has no current real estate rights to do. NOW, THEREFORE, in consideration of their mutual covenants in this Permit, the parties agree as follows: 1. License. City confers to Permittee a nontransferable, nonexclusive, and nonpossessory privilege to enter upon and use those parcels of real property owned by City situated in the County of San Mateo, State of California, each more particularly described in the attached Exhibit A and generally depicted on the attached Exhibit A -1 (such parcels shall be collectively referred to as the "City Owned Parcels "), for the purpose of installing, constructing, operating, inspecting, maintaining, repairing, and replacing water pipelines and related appurtenances owned and operated by Permittee as part of its water enterprise (the "Permitted Improvements "), subject to the terms, conditions, and restrictions stated in this Permit and its incorporated exhibits. This Permit gives Permittee a license only and, notwithstanding anything to the contrary in this Permit, does not constitute a grant by City of any ownership, leasehold, easement, or other property interest or estate whatsoever in any portion of the City Owned Parcels. Permittee's execution of this Permit shall not be deemed a waiver by Permittee of any preexisting real property or other rights Permittee may have to use or occupy the land that is the subject of this Permit. D -2 -1 City of Redwood City MOA ver 030910