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ATTACHMENT B SETTLEMENT AGREEMENT This Settlement Agreement and Covenant Not to Sue ( "Settlement Agreement ") is entered into by and among Plaintiffs URBAN HABITAT PROGRAM and SANDRA DE (iREGORIO, Intervenor PEOPLE OF THE STATE OF CALIFORNIA, EX REL. EDMUND G. BROWN JR., ATTORNEY GENERAL and Defendants CITY OF PLEASANTON and CITY COUNCIL OF PLEASANTON. RECITALS This Settlement Agreement is entered into based upon the following facts: 1.1 On or about June 20, 2006, Plaintiffs sent a letter to the City of Pleasanton asserting various shortcomings in the City's compliance with affordable housing laws, and requesting a meeting to resolve the issues identified. A meeting was held on or about August 22, 2006, but the parties could not resolve the matter at the time. 1.2 After further informal discussions proved unsuccessful, on or about October 17, 2006, Plaintiffs Urban Habitat Program and Sandra De Gregorio tiled an action in Alameda Superior Court known as Urban Habitat Program, et al. v. City of Pleasanton, et al., Case No. RC; 06 293831 ( "Urban Habitat Litigation "). The Complaint alleged, among other things, and the City denies, that the City had failed to complete the rezoning of sites for affordable housing, that certain City ordinances and housing practices, including the City's 29,000-unit "Housing Cap," conflicted with State law, and that certain acts and omissions of the City unlawfully discriminated against housing for lower- income households and against lower- income families with children. The Complaint asserted, and the City denies, eight causes of action, alleging violations of State statutes and the State Constitution. 1.3 On or about May 17, 2007, after a previous demurrer had been sustained with leave to amend, the Superior Court sustained the City's demurrer to the First Amended Complaint without leave to amend. The Court held that all eight causes of action were time - barred and that three causes of action were unripe. 1.4 On or about June 20, 2008, the Court of Appeal reversed the Superior Court, reinstating six of the eight causes of action asserted. Urban Habitat Program v. City ()Pleasanton, 164 Cal. App. 4th 1561 (2008). The California Supreme Court denied the C'ity's petition for review on or about October 22, 2008. 1.5 On rernittitur to the Superior Court, Plaintiffs filed a Second Supplemental and Amended Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief on or about May 1, 2009. The Second Amended Complaint included causes of action, which the City contests, for writ of Settlement Agreement and Covenant Not to Sue - Page I of 15 25U6199.1