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owes the City any delta under this Section 2.5, Developer agrees to pay interest at the rate of six percent (6%) per annum of the payment due beyond the forty-five (45) day due date. The obligation to pay the delta and any interest thereon shall survive the termination of this Agreement until paid in full. Section 2.6 Union Labor. Developer agrees to use its best efforts to employ union labor in constructing the Project and shall provide or notify the City of any agreements Developer may execute with any union or labor groups in connection with the Project. Section 2.7 Local Vendor Preference. In order to encourage the purchase of supplies, services, construction materials or equipment from vendors located within the boundaries of the City, Developer agrees to make a good faith effort to use, employ or engage local vendors for any purchase or agreements that exceed Twenty Five Thousand Dollars ($25,000) in value. Developer agrees to provide the City with an annual accounting of local vendors used during the construction of the Project, including the names and the monetary amount paid to any local vendors. ARTICLE 3. EFFECTIVE DATE AND TERM Section 3.1 Effective Date. This Agreement shall become effective thirty (30) days after the date that the Enacting Ordinance is adopted by the City Council (the “Effective Date”). Provided, however, that if a referendum petition receives sufficient signatures to qualify the Enacting Ordinance approving this Agreement for placement on the ballot at a general or special election, the Effective Date shall be the date upon which the election approving the ordinance is certified. Section 3.2 Term. The Term has been established by the Parties as a reasonable estimate of the time required to carry out and develop the Project and provide the Community Benefits of the Project (“Term”). A. Initial Term. The “Initial Term” of this Agreement shall commence on the Effective Date and shall end on the earlier: 1) _______ , 203_ (“Expiration Date”) which is six (6) years from the Effective Date; 2) the date of any termination of this Agreement in accordance with the provisions hereof; or 3) the later occurrence of either the date of issuance by the City of the final estoppel certificate of completion for the Project or the date of issuance of the certificate of occupancy for the Project. B. Extended Term. Subject to the terms and conditions in this Section 3.2.B, Developer shall have the right to request an extension of the Initial Term not to exceed a cumulative term of ten (10) years (inclusive of the Initial Term), as provided in the extension options described below (“Extended Term”). In addition to satisfying the extension criteria provided for each extension option below, the Developer must also demonstrate to the City Manager’s discretion that the Developer is in compliance with all of the terms and conditions of this Agreement and the Project Approvals at the time that each extension request is made. 1. Extension Option 1 Term; Criteria. If the Developer is in compliance with all of the terms of this Agreement and the Project Approvals at the time the request is made, the City Manager shall grant a four (4)-year extension of the Initial Term for a total term of ten (10) years (“Extension Option 1 Term”), if the Developer can demonstrate to ATTY/ORD.0002/CC ORD APPROVING DEVELOPMENT AGREEMENT (901 EL CAMINO REAL) - EXHIBIT A REV: 04-23-25 VR Page 21 of 336