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<br />WHEREAS, time is of the essence for completion of the San Carlos Levee Project before <br />FEMA's deadline and the Parties agree diligently to pursue their respective duties and obligations <br />hereunder; <br />NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: <br />1. The foregoing recitals are incorporated herein as true statements of fact. <br />2. The Parties agree that San Carlos shall act as the Lead Agency under the California <br />Environmental Quality Act ("CEQA;" Pub. Res. C. 921000, et seq.) for the San Carlos Levee <br />Project. Redwood City shall be responsible for the Project design, preparation of plans, <br />specifications and related documents therefor and for the construction thereof, including <br />administration and inspection. <br />3. San Carlos shall apply for all permits, any other entitlements and amendments to prior <br />permits/entitlements (collectively, "Permits") from the Regulatory Agencies for construction of the <br />San Carlos Levee Project. Redwood City shall cooperate with and assist San Carlos in obtaining <br />Permits for the San Carlos Levee Project. If required by the Regulatory Agencies, Redwood City <br />shall act as a co-applicant for the Permits. <br />4. Redwood City shall assist San Carlos in the preparation of the Levee Certification <br />submittal to FEMA. San Carlos shall be responsible to certify the Levee for full accreditation from <br />FEMA. <br /> <br />5. The Parties acknowledge and agree that the total amount to be reimbursed to <br />Redwood City by San Carlos shall be determined from the actual expenditures incurred for the <br />design, construction, permitting, and certification preparation of the San Carlos Levee Project. <br />6. Redwood City shall submit to San Carlos an invoice for the amount to be reimbursed <br />from San Carlos to Redwood City for the San Carlos Levee Project. The amount to be reimbursed <br />from San Carlos to Redwood City shall be the total of all payments made to consultants for work <br />completed by consultants and payments made to contractors for all work completed by <br />contractors for the San Carlos Levee Project portion of the Project. Redwood City shall provide <br />sufficient evidence that the amounts by consultants and contractors have been paid and that the <br />invoiced amount is for the portion of the Project attributable to the San Carlos Levee Project; said <br />evidence may include approved invoices, description of work or cancelled checks. The San <br />Carlos representative will review the invoice from Redwood City. Upon approval by the San <br />Carlos representative, San Carlos shall pay Redwood City the amount invoiced. San Carlos' <br />reimbursement shall be due and payable within 60 days after receipt of an invoice from Redwood <br />City. However, in no event shall payment from San Carlos be due prior to March 31, 2010 or <br />prior to the formation of an assessment district within the City of San Carlos to provide capital and <br />maintenance funding for the San Carlos Levee Project, whichever occurs latest in time. Exhibit B <br />2 <br />