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2003 CP Development/Centre Point DDAPLEASE COMPLETE THIS INFORMATION RECORDING REQUESTED BY: JUNE S. GREEK, City Clerk AND WHEN RECORDED MAIL TO: CITY OF LA QUINTA Attn: June Greek P. O. Box 1504 78-495 Calle Tampico La Quinta, CA 92253 HOC a 2004-000smss 01/05/2004 08:00A Fee:NC Page 1 of 372 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk 8 Recorder I!lIII IINlI III IIIII illll ��II IIIII III III II11 IIII DISPOSITION AND DEVELOPMENT AGREEMENT by and between LA QUINTA REDEVELOPMENT AGENCY & CP DEVELOPMENT LA QUINTA, LLC Title of Document THIS AREA FOR RECORDER'S USE ONLY THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION ($3.00 Additional Recording Fee Applies) C:\MYDATA\W PDOCS\FORMS\Recorder.wpd J DISPOSITION AND DEVELOPMENT AGREEMENT By and Between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company 882/015610-0061 380889.09 al2/17/03 TABLE OF CONTENTS Page 100. DEFINITIONS..................................................................................................................1 200. CONVEYANCE OF THE PROPERTY.........................................................................12 201. Disposition of the Property.................................................................................12 201.1 Option "A"..............................................................................................12 201.2 Option "B„..............................................................................................13 202. Escrow.................................................................................................................14 202.1 Costs of Escrow......................................................................................14 202.2 Payment of Purchase Price......................................................................15 202.3 Escrow Instructions.................................................................................15 202.4 Authority of Escrow Agent.....................................................................15 202.5 Closing....................................................................................................16 202.6 Termination.............................................................................................16 202.7 Closing Procedure...................................................................................17 203. Review of Title of Property................................................................................17 204. Title Insurance....................................................................................................18 205. Conditions of Closing.........................................................................................18 205.1 Agency's Conditions of Closing.............................................................19 205.2 Developer's Conditions of Closing.........................................................21 206. Studies and Reports.............................................................................................22 206.1 Access to Property..................................................................................22 206.2 Indemnification....................................................................................... 23 207. Condition of the Property....................................................................................24 207.1 Disclosure...............................................................................................24 207.2 Investigation of Property.........................................................................24 207.3 No Further Warranties As To Property; Release of Agency ..................24 207.4 Developer Precautions After the Closing...............................................25 207.5 Developer Indemnity..............................................................................25 300. DEVELOPMENT OF THE PROJECT..........................................................................26 301. Scope of Development........................................................................................26 302. Design Review....................................................................................................26 302.1 Developer Submissions...........................................................................26 302.2 City Review and Approval......................................................................26 302.3 Revisions.................................................................................................26 302.4 Defects in Plans.......................................................................................26 302.5 Land Use Approvals...............................................................................26 303. Schedule of Performance....................................................................................27 304. Cost of Construction...........................................................................................27 305. Developer's Early Entry onto the Property.........................................................27 306. Insurance Requirements......................................................................................27 307. Indemnity............................................................................................................ 28 308. Rights of Access.................................................................................................29 882/015610-0061 380889.09 a12/17/03 _1_ Page 309. Compliance With Laws; Payment of Taxes........................................................29 309.1 Compliance with Laws...........................................................................29 309.2 Taxes and Assessments...........................................................................29 310. Release of Construction Covenants....................................................................29 311. Financing of the Project......................................................................................30 311.1 Approval of Financing............................................................................30 311.2 Changes Requested by Lenders.............................................................. 31 311.3 Notice of Default to Mortgagee or Deed of Trust Holders; Right toCure.....................................................................................................31 311.4 Failure of Holder to Complete Project....................................................32 311.5 Right of the Agency to Cure Mortgage or Deed of Trust Default .......... 32 311.6 Holder Not Obligated to Construct Project.............................................33 312. Landscape Parcel C, Landscape Parcel E, Landscape Parcel H, and LandscapeParcel I..............................................................................................33 400. AGENCY LOAN; HOMEBUYER ASSISTANCE.......................................................33 401. Agency Loan; Disbursement...............................................................................33 402. Developer's Homebuyer Credit; Homebuyer Loan ............................................34 403. Agency Note; Agency Deed of Trust.................................................................. 34 404. Buyer Affordable Housing Documents..............................................................34 500. USE OF THE PROPERTY.............................................................................................35 501. Use in Accordance with Redevelopment Plan ....................................................35 502. Maintenance Covenants......................................................................................35 503. Nondiscrimination Covenants.............................................................................35 504. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction...................................................................... 36 505. Representations and Warranties..........................................................................37 505.1 Agency Representations..........................................................................37 505.2 Developer's Representations..................................................................38 600. DEFAULTS AND REMEDIES.....................................................................................39 601. Default Remedies................................................................................................39 602. Institution of Legal Actions................................................................................39 603. Termination Prior to the Close of the Property Escrow or the Initial Escrow................................................................................................................. 39 603.1 Termination Under Option "A".............................................................. 39 603.2 Termination Under Option `B"..............................................................40 604. Termination Prior to Subsequent Parcel Conveyance........................................41 604.1 Termination by the Developer................................................................ 41 604.2 Termination by the Agency....................................................................41 605. Agency Option to Acquire Plans........................................................................42 606. Option Agreement...............................................................................................42 607. Right to Reverter and Power of Termination......................................................42 608. Acceptance of Service of Process.......................................................................43 609. Rights and Remedies Are Cumulative................................................................43 882/015610-0061 380889,09 a12/17/03 -11- Pau 610. Inaction Not a Waiver of Default........................................................................43 611. Applicable Law................................................................................................... 43 612. Non -Liability of Officials and Employees of the Agency..................................43 613. Attorneys' Fees................................................................................................... 43 700. GENERAL PROVISIONS.............................................................................................43 701. Notices, Demands and Communications Between the Parties ...........................43 702. Enforced Delay; Extension of Times of Performance........................................44 703. Transfers of Interest in Property or Agreement..................................................45 703.1 Prohibition...............................................................................................45 703.2 Transfers Prior to Completion of Project................................................45 703.3 Assignment and Assumption of Obligations..........................................46 703.4 Successors and Assigns...........................................................................46 703.5 Assignment by Agency...........................................................................47 704. Relationship Between Agency and Developer...................................................47 705. Agency Approvals and Actions..........................................................................47 706. Counterparts........................................................................................................47 707. Integration........................................................................................................... 47 708. Real Estate Brokerage Commission....................................................................47 709. Titles and Captions.............................................................................................48 710. Interpretation....................................................................................................... 48 711. No Waiver...........................................................................................................48 712. Modifications...................................................................................................... 48 713. Severability.........................................................................................................48 714. Computation of Time..........................................................................................48 715. Legal Advice.......................................................................................................48 716. Time of Essence.................................................................................................. 48 717. Cooperation.........................................................................................................49 718. Conflicts of Interest.............................................................................................49 719. Time for Acceptance of Agreement by Agency ................................................. 49 882/015610-0061 380889.09 a12/17/03 -111- List of Attachments 1. Property Legal Description 2. Site Map 3. Purchase Price 4. Form of Grant Deed 5. Disbursement Schedule 6. Affordable Homes Mix 7. Parcel 7 Residential Development Site Map 8. Scope of Development 9. Promissory Note 10. Deed of Trust 11. Early Entry Agreement 12. Easement Agreement 13. Development Agreement 14. Form of Option Agreement 15. Declaration 16. Release of Construction Covenants 17. Preliminary Budget 18. Form of Buyer Affordable Housing Documents 19. Affordable Housing Cost 20. Schedule of Performance 882/015610-0061 380889.09 a12/17/03 -iv- DISPOSITION AND DEVELOPMENT AGREEMENT THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement") is entered into as of Dec. i& , 2003 ("Effective Date"), by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company (the "Developer"). RECITALS The following recitals are a substantive part of this Agreement: A. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (Health & Safety Code Section 33000, et seq.). B. Developer is a California limited liability company, specializing in the development of multi -use commercial projects. C. Agency owns fee title to that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Property"). The Property is located in La Quinta Redevelopment Project No. 2 (the "Project Area"), which Project Area is located in the City of La Quinta, California. D. The Agency and the Developer desire by this Agreement for Developer to purchase the Property from Agency and to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to "Eligible Buyers" at an "Affordable Housing Cost" (as those terms are defined below) (collectively, the "Project"). E. The Agency's disposition of the Property to the Developer, and the Developer's subsequent construction, completion and operation of the Project thereon, pursuant to the terms of this Agreement, are in the vital and best interest of the City of La Quinta and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state, and local laws and requirements. NOW, THEREFORE, the Agency and Developer hereby agree as follows: 100. DEFINITIONS "Affordable Homes" means the forty (40) single family homes in the Affordable Housing Component of the Parcel 7 Residential Development that are restricted for sale to Eligible Buyers. Any individual such home shall be referred to as an "Affordable Home." "Affordable Homes Mix" means the mix of Affordable Homes, which is attached hereto and incorporated herein as Attachment No. 6. 982/015610-0061 380889.09 a12/17/03 "Affordable Housing Component" means the component of the Parcel 7 Residential Development that consists of Developer's construction on a portion of Residential Parcel 7 of forty (40) single family homes restricted for sale to Eligible Buyers at an Affordable Housing Cost, as further described in the Scope of Development. "Affordable Housing Cost" means a purchase price which would result in monthly housing payments, including the cost for a thirty (30) year mortgage for that portion of the purchase price which is to be paid in the form of loan proceeds under currently prevailing mortgage loan rates or the interest rate of any below -market mortgage program for which such purchaser has obtained a first trust deed loan, of (i) not less than twenty-eight percent (28%) of the gross income of the household, nor more than thirty-five percent (35%) of one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate for the home, if the household earns not more than one hundred ten percent (110%) of Riverside County median income; or (ii) not more than thirty-five percent (35%) of the actual gross income of the household, if the gross income of the household exceeds one hundred ten percent (110%) of Riverside County median income. Sample calculations of an Affordable Housing Cost for the Affordable Homes are set forth in Attachment No. 19 hereto and in Exhibit B to the Declaration. "Agency" means the La Quinta Redevelopment Agency, a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California, Health and Safety Code, Section 33000, et seq., and any assignee of or successor to its rights, powers and responsibilities. "Agency Loan" is defined in Section 401 hereof. "Agency Loan Amount" is defined in Section 401 hereof. "Agency's Conditions Precedent to Closing" means the conditions precedent to a Closing to the benefit of Agency, as set forth in Section 205.1 hereof. "Agreement" means this Disposition and Development Agreement between the Agency and the Developer. "Best Knowledge" or "Actual Knowledge" means, for purposes of a representation or warranty given hereunder, that such party has conducted a reasonable review of its files and has made reasonable inquiry of its employees and agents responsible for the acquisition, development and disposition of Sanctuary Villas Parcel 8, Sanctuary Villas Parcel9, Casitas Parcel 2, Casitas Parcel 3, Casitas Parcel 4, Landscape Parcel C, Landscape Parcel E, Medical Office/Surgical Facility Parcel10, Medical Office/Surgical Facility Parcel11, Medical Office/Surgical Facility Parcel 12, Medical Office/Surgical Facility Parcel A, Residential Parcel 5, Residential Parcel 7, Restaurant Parcel 1, Restaurant Parcel 13, Seeley Drive Parcel, or Suites Hotel Parcel. "Buyer Affordable Housing Documents" means those documents substantially in the form attached hereto and incorporated herein as Attachment No. 18, a complete set of which shall be required to be executed by each Eligible Buyer of one of the Affordable Homes. 882/015610-0061 380889.09 a12/17/03 -2- "Caritas Development" means the component of the Project that consists, collectively, of Developer's construction and subsequent operation on Casitas Parcel 2 of the Parcel 2 Casitas Development Component, on Casitas Parcel 3 of the Parcel 3 Casitas Development Component, and on Casitas Parcel 4 of the Parcel 4 Casitas Development Component. The Casitas Development shall contain approximately one hundred thirty-six (136) resort -style condominium/casitas units, as further described in the Scope of Development. "Casitas Parce12" means that approximately 2.27 acres of real property on which the Developer shall construct the Parcel 2 Casitas Development Component. Casitas Parcel 2 is depicted in the Site Map. "Casitas Parcel 3" means that approximately 3.44 acres of real property on which the Developer shall construct the Parcel 3 Casitas Development Component. Casitas Parcel 3 is depicted in the Site Map. "Casitas Parcel 4" means that approximately 2.91 acres of real property on which Developer shall construct the Parcel 4 Casitas Development Component. Casitas Parcel 4 is depicted in the Site Map. "City" means the City of La Quinta, a California municipal corporation. "Closing" means the close of escrow for the conveyance from the Agency to the Developer of (i) the Property, if Developer elects to purchase the Property pursuant to Option "A", or (ii) one or more Parcels, if Developer elects to purchase the Property pursuant to Option "B", as set forth in Section 202.5 hereof. "Closing Date" means the date Escrow closes for the conveyance from the Agency to the Developer of (i) the Property, if Developer elects to purchase the Property pursuant to Option "A", or (ii) one or more Parcels, if Developer elects to purchase the Property pursuant to Option "B", as set forth in Section 202.5 hereof. "Completion of Construction Date" is defined in Section 306 hereof. "Condition of Property Title" is defined in Section 203 hereof. "Contractor Bonds" means payment and performance bonds ensuring the completion of a Phase of Development. "Declaration" means that certain Declaration of Covenants, Conditions, and Restrictions for Property substantially in the form attached hereto and incorporated herein as Attachment No. 15, which Developer is required to execute as one of Agency's Conditions precedent to the Closing pursuant to which Agency shall convey to Developer Residential Parcel7. The Declaration shall be recorded against Residential Parcel 7 at said Closing. "Deed of Trust" means that certain Deed of Trust with Assignment of Rents and Rider Attached Hereto substantially in the form attached hereto and incorporated herein as Attachment No. 10, which secures Developer's repayment to Agency of the Agency Loan. The Deed of 882/015610-0061 380889.09 a12/17/03 -3- Trust shall be recorded against Residential Parcel 7 at the Closing pursuant to which Agency conveys said Parcel to Developer. "Default" means the failure of a party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure, as set forth in Section 601 hereof. "Design Development Drawings" means those plans and drawings to be submitted to the City with respect to the development of each Phase of Development, as set forth in Section 302 hereof. "Developer" means CP Development La Quinta, LLC, a California limited liability company, and its successors and assigns. "Developer Representatives" means, collectively, Developer's directors, engineers, analysts, officials, employees, agents, contractors, representatives, attorneys, advisers, and consultants, including an Environmental Consultant. "Developer's Conditions Precedent to Closing" means the conditions precedent to a Closing to the benefit of Developer, as set forth in Section 205.2. "Development Agreement" means the Development Agreement, substantially in the form attached hereto and incorporated herein as Attachment No. 13, which Developer is required to execute as one of Agency's Conditions Precedent to the Closing for, (i) the Property Escrow, if Developer elects to purchase the Property pursuant to Option "A", or (ii) the Initial Escrow, if Developer elects to purchase the Property pursuant to Option `B". "Disbursement Schedule" means that certain disbursement schedule, attached hereto and incorporated herein as Attachment No. 5, which sets forth the disbursement schedule and terms of disbursement of the Agency Loan. "Early Entry Agreement" means an Early Entry Agreement substantially in the form attached hereto and incorporated herein as Attachment No. 11. "Easement Agreement" means an Easement Agreement substantially in the form attached hereto and incorporated herein as Attachment No. 12, which Agency and Developer shall execute and record at or prior to the Closing for (i) the Property Escrow, if Developer elects to purchase the Property pursuant to Option "A", or (ii) the Initial Escrow, if Developer elects to purchase the Property pursuant to Option `B". "Eligible Buyer" means a buyer of one of the Affordable Homes that qualifies as a "person or family of moderate income" within the meaning of Health and Safety Code Section 50093 (i.e., household whose income, adjusted for family size appropriate to the home, does not exceed one hundred twenty percent (120%) of the Riverside County median income). "Environmental Consultant" means a consultant engaged by Developer, at Developer's sole cost and expense, which conducts the environmental investigations of the Property pursuant to Section 207.2 hereof. 882/015610-0061 380889.09 a12/17/03 -4- "Escrow" is defined in Section 201 hereof. "Escrow Agent" is defined in Section 202 hereof. "Evidence of Financial Capability" means evidence reasonably satisfactory to Agency's Executive Director that Developer has the financial resources and commitments necessary for the acquisition of the Property and the subsequent development of each respective Phase of Development, as further described in Section 311. "FIRPTA" means the Foreign Investment in Real Property Transfer Act. "Good Funds" means a confirmed wire transfer of immediately available funds, cashier's or certified check drawn on or issued by the office of a financial institution located in Riverside County, or cash. "Governmental Requirements" means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State of California, the County of Riverside, the City, or any other political subdivision in which the Property, or any portion thereof, is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the Agency, the Developer, and/or the Property, or any portion thereof. "Grant Deed" means a grant deed, substantially in the form attached hereto and incorporated herein by this reference as Attachment No. 4, pursuant to which Agency shall convey to Developer title to (i) the Property, if Developer elects to purchase the Property pursuant to Option "A", or (ii) one or more Parcels, if Developer elects to purchase the Property pursuant to Option "B". "Hazardous Materials" means any substance, material, or waste which is, or becomes, regulated by any local governmental authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste", "extremely hazardous waste", or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) methyl tertiary butyl ether, (ix) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (x) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. §1317), (xi) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903) or (xii) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §9601 et seq. 882/015610-0061 380889.09 a12/17/03 -5- "Initial Escrow" is defined in Section 201.2. "Landscape Parcel C" shall mean that approximately .33 acres of Agency -owned real property on which City intends to install landscaping, upon City's receipt of the Landscaping Grants, and which Developer shall be required to maintain, subsequent thereto, as further described in Section 312. Landscape Parcel C is depicted in the Site Map. "Landscape Parcel E" shall mean that approximately .13 acres of Agency -owned real property on which City intends to install landscaping, upon City's receipt of the Landscaping Grants, and which Developer shall be required to maintain, subsequent thereto, as further described in Section 312. Landscape Parcel E is depicted in the Site Map. "Landscape Parcel H" shall mean that approximately .54 acres of Agency -owned real property on which City intends to install landscaping, upon City's receipt of the Landscaping Grants, and which Developer shall be required to maintain, subsequent thereto, as further described in Section 312. Landscape Parcel H is depicted in the Site Map. "Landscape Parcel 1" shall mean that approximately .12 acres of Agency -owned real property on which City intends to install landscaping, upon City's receipt of the Landscaping Grants, and which Developer shall be required to maintain, subsequent thereto, as further described in Section 312. Landscape Parcel I is depicted in the Site Map. "Medical Office/Surgical Facility" means the component of the Project that consists of Developer's construction and subsequent operation on Medical Office/Surgical Facility Parcel 10 of the Parcel 10 Medical Office/Surgical Facility Component, on Medical Office/Surgical Facility Parcel 11 of the Parcel 11 Medical Office/Surgical Facility Component, on Medical Office/Surgical Facility Parcel 12 of the Parcel 12 Medical Office/Surgical Facility Component, and on Medical Office/Surgical Facility Parcel A of the Parcel A Medical Office/Surgical Facility Component. The Medical Office/Surgical Facility shall be a medical office and clinic that offers specialized medical services, as further described in the Scope of Development. "Medical Office/Surgical Facility Parcel A" means that certain approximately 6.47 acres of real property on which Developer shall construct the Parcel A Medical Office/Surgical Facility Component. Medical Office/Surgical Facility Parcel A is depicted in the Site Map. "Medical Office/Surgical Facility Parcel 10" means that certain approximately .73 acres of real property on which Developer shall construct the Parcel 10 Medical Office/Surgical Facility Component. Medical Office/Surgical Facility Parcel 10 is depicted in the Site Map. "Medical Office/Surgical Facility Parcel 11" means that certain approximately 1.23 acres of real property on which Developer shall construct the Parcel 1 l Medical Office/Surgical Facility Component. Medical Office/Surgical Facility Parcel 11 is depicted in the Site Map. "Medical Office/Surgical Facility Parcel 12" means that certain approximately .73 acres of real property on which Developer shall construct the Parcel 12 Medical Office/Surgical Facility Medical Component. Medical Office/Surgical Facility Parcel 12 is depicted in the Site Map. 882/015610-0061 380889.09 a12/17/03 -6- "Notice" shall mean a notice in the form prescribed by Section 701 hereof. "Option 'A"' means Developer's option to purchase all of the Property, pursuant to the Property Escrow, as further described in Section 201.1 hereof. "Option Agreement" means the option agreement substantially in the form attached hereto and incorporated herein as (i) Attachment No. 14A, if Developer elects to purchase the Property pursuant to Option "A", or (ii) Attachment No. 14B, if Developer elects to purchase the Property pursuant to Option "B". In the event the Developer elects to purchase the Property pursuant to Option "A", the Option Agreement shall be recorded against the Property at the close of the Property Escrow. In the event the Developer elects to purchase the Property pursuant to Option `B", the Option Agreement shall be recorded against each set of Related Parcels, at the first close of Escrow that includes any one of such Parcels. "Option `B "' means Developer's option to purchase the Property in multiple phases, as further described in Section 201.2 hereof. "Outside Date for Closing" means the last date Escrow may close for the conveyance from Agency to Developer of, (i) the Property, if Developer elects to purchase the Property pursuant to Option "A", or (ii) each Parcel, if Developer elects to purchase the Property pursuant to Option `B". The Outside Date for Closing is referenced in Section 202.5 hereof and is set forth in the Schedule of Performance. "Parcel" means �y of the following: Casitas Parcel 2, Casitas Parcel 3, Casitas Parcel 4, Landscape Parcel C, Landscape Parcel E, Landscape Parcel H, Landscape Parcel I, Medical Office/Surgical Facility Parcel A, Medical Office/Surgical Facility Parcel 10, Medical Office/Surgical Facility Parcel11, Medical Office/Surgical Facility Parcel12, Residential Parcel5, Residential Parcel7, Restaurant Parcel1, Restaurant Parcel13, Sanctuary Villas Parcel 8, Sanctuary Villas Parcel 9, Seeley Drive Parcel, Suites Hotel Parcel, or the Well Site Parcel. The term "Parcels" means all of the Parcels described in the immediately preceding sentence. "Parcel A Medical Office/Surgical Facility Component" means the component of the Project that consists of Developer's construction and subsequent operation on Medical Office/Surgical Facility Parcel A of a portion of the Medical Office/Surgical Facility, as further described in the Scope of Development. "Parcel I Restaurant" means the component of the Project that consists of Developer's construction and subsequent operation on Restaurant Parcel 1 of a sit-down restaurant, as further described in the Scope of Development. "Parcel2 Casitas Development Component" means the component of the Project that consists of Developer's construction and subsequent operation on Casitas Parcel 2 of a portion of the Casitas Development, as further described in the Scope of Development. "Parcel3 Casitas Development Component" means the component of the Project that consists of Developer's construction and subsequent operation on Casitas Parcel 3 of a portion of the Casitas Development, as further described in the Scope of Development. 892/015610-0061 380889.09 al2/17/03 —7— "Parcel4 Casitas Development Component" means the component of the Project that consists of Developer's construction and subsequent operation on Casitas Parcel 4 of a portion of the Casitas Development, as further described in the Scope of Development. "Parcel S Residential Development" means the component of the Project that consists of Developer's construction and subsequent operation on Residential Parcel 5 of a single-family residential development containing thirteen (13) single-family homes. "Parcel 7Residential Development" means the component of the Project that consists of Developer's construction and subsequent operation on Residential Parcel 7 of a single family residential development containing fifty-four (54) single family homes, forty (40) of which shall be the Affordable Homes. "Parcel 7 Residential Development Site Map" means the map of the Parcel 7 Residential Development, which map identifies the location of each of the homes to be constructed on Residential Parcel 7. The Parcel 7 Residential Development Site Map is attached hereto and incorporated herein as Attachment No. 7. "Parcel 8 Sanctuary Villas Component" means the component of the Project that consists of Developer's construction and subsequent operation on Sanctuary Villas Parcel 8 of a portion of the Sanctuary Villas Development, as further described in the Scope of Development. "Parcel 9 Sanctuary Villas Component" means the component of the Project that consists of Developer's construction and subsequent operation on Sanctuary Villas Parcel 9 of a portion of the Sanctuary Villas Development, as further described in the Scope of Development. "Parcel 10 Medical Office/Surgical Facility Component" means the component of the Project that consists of Developer's construction and subsequent operation on Medical Office/Surgical Facility Parcel 10 of a portion of the Medical Office/Surgical Facility, as further described in the Scope of Development. "Parcel 11 Medical Office/Surgical Facility Component" means the component of the Project that consists of Developer's construction and subsequent operation on Medical Office/Surgical Facility Parcel 11 of a portion of the Medical Office/Surgical Facility, as further described in the Scope of Development. "Parcel 12 Medical Office/Surgical Facility Component" means the component of the Project that consists of Developer's construction and subsequent operation on Medical Office/Surgical Facility Parcel 12 of a portion of the Medical Office/Surgical Facility, as further described in the Scope of Development. "Parcel 13 Restaurant" means the component of the Project that consists of Developer's construction and subsequent operation on Restaurant Parcel 13 of a sit-down restaurant, as further described in the Scope of Development. "Phase of Development" means any of the following components of the Project: Parcel A Medical Office/Surgical Facility Component, Parcel 1 Restaurant, Parcel 2 Casitas Development Component, Parcel 3 Casitas Development Component, Parcel 4 Casitas 882/015610-0061 390889.09 al2/17/03 -8- Development Component, Parcel 5 Residential Development, Parcel 7 Residential Development, Parcel 8 Sanctuary Villas Component, Parcel 9 Sanctuary Villas Component, Parcel 10 Medical Office/Surgical Facility Component, Parcel 11 Medical Office/Surgical Facility Component, Parcel 12 Medical Office/Surgical Facility Component, or Parcel 13 Restaurant. "Preliminary Development Budget" means the preliminary budget attached hereto as Attachment No. 17 and incorporated herein by this reference. "Preliminary Title Report" means the preliminary title report issued by the Title Company that covers the Property, as described in Section 203. "Project" means the commercial development to be constructed on the Property that consists of a medical office/surgical facility ("Medical Office/Surgical Facility"); a development containing approximately twenty-six (26) sanctuary villas ("Sanctuary Villas Development"); a mid -price suites hotel containing approximately one hundred thirty-four (134) guest rooms ("Suites Hotel"); a resort -style condominium/casitas project containing approximately one hundred thirty-six (136) condominium/casitas units ("Casitas Development"); two (2) sit-down restaurants; a residential development containing thirteen (13) single-family homes ("Parcel 5 Residential Development"); and a residential development containing fifty-four (54) single- family homes ("Parcel 7 Residential Development"), forty (40) of which shall be restricted for sale to Eligible Buyers at an Affordable Housing Cost ("the Affordable Housing Component"). "Promissory Note" or "Note" means that certain Promissory Note substantially in the form attached hereto and incorporated herein as Attachment No. 9, which sets forth the terms and conditions for Developer's repayment to Agency of the Agency Loan. "Project Area" means the La Quinta Redevelopment Project No. 2, adopted by the City pursuant to the Redevelopment Plan. "Property" means that approximately 42.47 acres of real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253. The Property is legally described in the Property Legal Description and depicted in the Site Map. "Property Environmental Reports" means the collective environmental investigations of the Property conducted pursuant to Section 207.2 hereof. "Property Escrow" is defined in Section 201.1 hereof. "Property Exceptions" is defined in Section 203. "Property Legal Description" means the description of the Property which is attached hereto as Attachment No. 1 and incorporated herein by this reference. "Purchase Price" means the price to be paid by Developer to the Agency in consideration of the Agency's conveyance to Developer of fee title to (i) the Property, if Developer elects to purchase the Property pursuant to Option "A", or (ii) a Parcel, if Developer elects to purchase the Property pursuant to Option `B". The Purchase Price is referenced in 882/015610-0061 380889.09 al2/17/03 -9- Section 202.2 hereof. The Purchase Price for the Property and for each Parcel is set forth in Attachment No. 3 hereto. "Redevelopment Plan" means the Redevelopment Plan for the Project Area, adopted on May 16, 1989, by Ordinance No. 139, of the City Council of the City of La Quinta, which Redevelopment Plan is incorporated herein by reference. "Related Parcel" means a Parcel that has a substantially similar use as another Parcel. The following are groupings of Parcels deemed to be Related Parcels: (1) Sanctuary Villas Parcel 8 and Sanctuary Villas Parcel 9; (2) Casitas Parcel 2, Casitas Parcel 3, and Casitas Parcel 4; (3) Medical Office/Surgical Facility Parcel A, Medical Office/Surgical Facility Parcel 10, Medical Office/Surgical Facility Parcel 11, and Medical Office/Surgical Facility Parcel 12; (4) Residential Parcel 5 and6 Residential Parcel 7; and (5) Suites Hotel Parcel, Restaurant Parcel 1, and Restaurant Parcel 13. "Release of Construction Covenants" means the document which evidences the Developer's satisfactory completion of a Phase of Development, as set forth in Section 310 hereof, substantially in the form of Attachment No. 16 hereto which is incorporated herein by this reference. "Residential Parcel S" means that certain approximately 2.19 acres of real property on which Developer shall construct the Parcel 5 Residential Development. Residential Parcel 5 is depicted in the Site Map. "Residential Parcel T" means that approximately 8.99 acres of real property on which Developer shall construct the Parcel 7 Residential Development. Parcel 7 is depicted in the Site Map and in the Parcel 7 Residential Development Site Map. "Restaurant Parcel I" means that approximately .92 acres of real property on which Developer shall construct the Parcel 1 Restaurant. Restaurant Parcel 1 is depicted in the Site Map. "Restaurant Parcel 13" means that approximately 1.12 acres of real property on which Developer shall construct the Parcel 13 Restaurant. Restaurant Parcel 13 is depicted in the Site Map. "Sanctuary Villas" means the component of the Project that consists, collectively, of Developer's construction and subsequent operation on Sanctuary Villas Parcel 8 of the Parcel 8 Sanctuary Villas Component and on Sanctuary Villas Parcel 9 of the Parcel 9 Sanctuary Villas Component. The Sanctuary Villas Development shall contain approximately twenty-six (26) villas, as further described in the Scope of Development. "Sanctuary Villas Parcel 8" means that certain approximately 3.74 acres of real property on which Developer shall construct and subsequently operate the Parcel 8 Sanctuary Villas Component. Sanctuary Villas Parcel 8 is depicted in the Site Map. 882/015610-0061 380889.09 a12/17/03 -10- "Sanctuary Villas Parcel 9" means that certain approximately 1.10 acres of real property on which Developer shall construct and subsequently operate the Parcel 9 Sanctuary Villas Component. Sanctuary Villas Parcel 9 is depicted on the Site Map. "Schedule of Performance" means the Schedule of Performance attached hereto and incorporated herein as Attachment No. 20, setting out the dates and/or time periods by which certain obligations set forth in this Agreement must be accomplished. "Scope of Development" means the Scope of Development attached hereto and incorporated herein as Attachment No. 8, which describes the scope, amount and quality of development of the Project to be constructed by the Developer pursuant to the terms and conditions of this Agreement. "Seeley Drive" means the component of the Project which consists of Developer's development on the Seeley Drive Parcel of a public right of way, as further described in the Scope of Development. "Seeley Drive Parcel" means that approximately 2.76 acres of real property on which Developer shall construct a right-of-way and which shall subsequently be conveyed to the City, as a public right of way. The Seeley Drive Parcel is depicted in the Site Map. "Site Map" means the map of the Property, which is attached hereto as Attachment No. 2 and incorporated herein by this reference. The Site Map is not a tract map and the parcels depicted thereon are not legal parcels. Upon Developer's preparation of a tract map that creates legal parcels substantially consistent with the Site Map, Developer shall prepare legal descriptions for each Parcel, and Agency and Developer shall cooperate to attach such legal descriptions to any document where such descriptions are required. "Suites Hotel" means that component of the Project that consists of Developer's construction and subsequent operation on the Suites Hotel Parcel of a Hilton Homewood Suites, or such other comparable suites hotel that has a national reservation system, such as a Hawthorne Suites or a Staybridge Suites Hotel by Holiday Inn. The Suites Hotel shall contain approximately one hundred thirty-four (134) guest rooms, as further described in the Scope of Development. "Suites Hotel Parcel" means that approximately 3.35 acres of real property on which Developer shall construct the Suites Hotel. The Suites Hotel Parcel is depicted in the Site Map. "Title Company" is defined in Section 203 hereof. "Title Policy" is defined in Section 204 hereof. "Transfer" is defined in Section 703.1 hereof. "Unrestricted Homes" means the fourteen (14) single-family homes in the Parcel 7 Residential Development that are not restricted for sale to Eligible Buyers. Any individual such home shall be referred to herein as an "Unrestricted Home". 882/015610-0061 380889.09 a12/17/03 -11- "Updated Report" means an update to the Preliminary Title Report, as described in Section 203. "Well Site ParceP' means that approximately .52 acres of real property which Developer shall dedicate to the Coachella Valley Water District. 200. CONVEYANCE OF THE PROPERTY 201. Disposition of the Property. Developer agrees to purchase the Property from the Agency, and the Agency agrees to sell to the Developer the Property, in accordance with and subject to all of the terms, covenants, and conditions of this Agreement. Developer shall have the election of (i) purchasing the Property from Agency all at once ("Option `A"') or, alternatively, (ii) purchasing the Property from Agency in multiple phases, with each phase containing one or more Parcels ("Option `B"'). If Developer elects to purchase the Property pursuant to Option "A", the terms and conditions of Section 201.1 shall apply. If Developer elects to purchase the Property pursuant to Option `B", the terms and conditions of Section 201.2 shall apply. The purchase price for the Property, and the purchase price for each of the individual Parcels, is set forth in Attachment No. 3 hereof (each, a "Purchase Price"). Each such Purchase Price represents the fair market value of the Property or the Parcel, as applicable. 201.1 Option "A" If Developer elects Option "A", Developer shall purchase the Property from Agency all at once, through one escrow (the "Property Escrow"), in accordance with the escrow provisions of Section 202 hereto. Notwithstanding the use of the term "Property Escrow" in this Section 201.1, all of the general requirements for each Escrow, as set forth in Section 202, shall apply to the Property Escrow, and every reference to an "Escrow" in this Agreement shall be deemed to include the "Property Escrow". Notwithstanding Developer's ownership of all of the Property, Developer shall be required to comply with the following limitations regarding its construction of the Project (for purposes of this Section 201.1, the term "construction" shall not include grading the Property and/or installing wet and dry utilities, all of which activities Developer shall be entitled to undertake pursuant to the Early Entry Agreement, as described in Section 305 hereof): (a) The First Permitted Phase of Construction. Upon Developer's acquisition of the Property, Developer may construct only the Suites Hotel, the Parcel 2 Casitas Development Component, the Parcel 3 Casitas Development Component, the Parcel 4 Casitas Development Component, the Parcel 8 Sanctuary Villas Component, the Parcel 9 Sanctuary Villas Component, the Parcel 1 Restaurant, the Parcel 13 Restaurant, and Seeley Drive (the "First Permitted Phase of Construction"). (b) The Second Permitted Phase of Construction. Upon Developer's completion of (i) the installation of the foundation for the Suites Hotel, as determined by City's Building Inspector, and (ii) the first pavement lift and the curbs and gutters of Seeley Drive, as verified by the City Engineer, Developer may construct, in addition to those items permitted to be constructed as part of the First Permitted Phase of Construction, (a) the Parcel A Medical Office/Surgical Facility Component, (b) any one (1) of the Parcel 10 Medical Office/Surgical Facility Component, the Parcel 11 Medical Office/Surgical Facility Component, or the Parcel 12 Medical Office/Surgical Facility Component, and (c) twenty (20) of the Affordable Homes on 882/015610-0061 380889.09 a12/17/03 -12- Residential Parcel 7 (the "Second Permitted Phase of Construction"). Notwithstanding anything herein to the contrary, Developer shall construct on Medical Office/Surgical Facility Parcel A one-third of the parking spaces to be developed thereon with the development of each of the Parcel 10 Medical Office/Surgical Facility Component, the Parcel 11 Medical Office/Surgical Facility Component, and the Parcel 12 Medical Office/Surgical Facility Component, whether such development occurs during this Second Permitted Phase of Construction or any subsequent phase of construction. (c) The Third Permitted Phase of Construction. Upon Developer's completion of the framing of all of the exterior walls of the Suites Hotel, as determined by the City's Building Inspector, Developer may construct, in addition to those items permitted to be constructed as part of the First Permitted Phase of Construction and the Second Permitted Phase of Construction, (i) the remaining twenty (20) Affordable Homes on Residential Parcel 7, and (ii) any one (1) of the Parcel 10 Medical Office/Surgical Facility Component, the Parcel 11 Medical Office/Surgical Facility Component, or the Parcel 12 Medical Office/Surgical Facility Component (the "Third Permitted Phase of Construction"). (d) The Fourth Permitted Phase of Construction. Upon Developer's completion of the construction of the exterior walls and roof of the Suites Hotel, as verified by Developer's project architect for the Suites Hotel and confirmed by City's Building Inspector, Developer may construct, in addition to those items permitted to be constructed as part of the First Permitted Phase of Construction, the Second Permitted Phase of Construction, and the Third Permitted Phase of Construction, (i) the Parcel 5 Residential Development, (ii) any or all of the Parcel 10 Medical Office/Surgical Facility Component, the Parcel 11 Medical Office/Surgical Facility Component, or the Parcel 12 Medical Office/Surgical Facility Component, and (iii) the Unrestricted Homes on Residential Parcel 7. 201.2 Option "B" If Developer elects Option "B", Developer shall be entitled to purchase the Parcels, and commence construction thereon of the applicable Phase of Development, in the order set forth in this Section 201.2; provided, however, that nothing herein is intended to permit Developer to elect not to purchase any or all of the Parcels. For purposes of this Section 201.2, the term "construction" shall not include grading the Property and/or installing wet and dry utilities, all of which activities Developer shall be entitled to undertake pursuant to the Early Entry Agreement, as described in Section 305 hereof. Notwithstanding anything herein to the contrary, each conveyance by Agency to Developer of one or more Parcels shall be effected through an escrow ("Escrow") in accordance with the provisions of Section 202 hereto. With the exception of the "Initial Escrow" (as that term is described in paragraph (a) below), which shall be opened within the time set forth in the Schedule of Performance, each such Escrow shall be opened within the time reasonably required to affect each applicable conveyance. (a) The Initial Escrow. Within the time set forth in the Schedule of Performance, Developer and Agency shall open an escrow for Agency's conveyance to Developer of the Seeley Drive Parcel, the Suites Hotel Parcel, Casitas Parcel 2, and the Well Site Parcel (the "Initial Escrow"). Pursuant to the Initial Escrow, Developer may, at its election, also purchase any or all of Casitas Parcel 3, Casitas Parcel 4, Sanctuary Villas Parcel 8, Sanctuary Villas Parcel 9, Restaurant Parcel 1 and/or Restaurant Parcel 13 (collectively, the "Initial Escrow 882/015610-0061 380889.09 a12/17/03 -13 - Permitted Parcels"). In the event Developer elects not to purchase any or all of the Initial Escrow Permitted Parcels at the Initial Escrow, Developer may purchase any or all of such Parcels at any subsequent Escrow permitted by this Agreement. Notwithstanding the use of the term "Initial Escrow" in this Section 201.2, all of the general requirements for each Escrow, as set forth in Section 202, shall apply to the Initial Escrow, and each reference to an "Escrow" in this Agreement shall be deemed to include the Initial Escrow. (b) The Second Permitted Phase. Upon Developer's completion of (i) the installation of the foundation for the Suites Hotel, as determined by City's Building Inspector, and (ii) the first pavement lift and the curbs and gutters of Seeley Drive, as verified by the City Engineer, Developer may purchase (a) Residential Parcel 7, (b) Medical Office/Surgical Facility Parcel A, and (c) any one (1) of Medical Office/Surgical Facility Parcel 10, Medical Office/Surgical Facility Parcel 11, or Medical Office/Surgical Facility Parcel 12. Notwithstanding Developer's acquisition of Residential Parcel 7, Developer shall be limited to the construction of twenty (20) of the Affordable Homes on Residential Parcel 7 until all of the exterior walls of the Suites Hotel have been framed, as determined by the City's Building Inspector ("Completion of the Suites Hotel Framing"). Notwithstanding anything herein to the contrary, Developer shall construct on Medical Office/Surgical Facility Parcel A one-third of the parking spaces to be developed thereon with the development of each of the Parcel 10 Medical Office/Surgical Facility Component, the Parcel 11 Medical Office/Surgical Facility Component, and the Parcel 12 Medical Office/Surgical Facility Component, whether such development occurs during this phase of construction or any subsequent phase of construction. (c) The Third Permitted Phase. Upon Developer's completion of the Suites Hotel Framing, Developer may construct the remaining twenty (20) Affordable Homes on Residential Parcel 7 and may purchase any one (1) of Medical Office/Surgical Facility Parcel 10, Medical Office/Surgical Facility Parcel 11, or Medical Office/Surgical Facility Parcel 12. (d) The Fourth Permitted Phase. Upon Developer's completion of the construction of the exterior walls and roof of the Suites Hotel, as verified by Developer's project architect for the Suites Hotel and confirmed by City's Building Inspector, Developer may purchase (i) Residential Parcel 5 and (ii) any or all of Medical Office/Surgical Facility Parcel 10, Medical Office/Surgical Facility Parcel 11, or Medical Office/Surgical Facility Parcel 12, and may construct the Unrestricted Homes on Residential Parcel 7. 202. Escrow. The parties shall open each Escrow with First American Title Company, at its office located at 3625 Fourteenth Street, Riverside, California 92502-0986, or another escrow company mutually satisfactory to both parties (the "Escrow Agent"). 202.1 Costs of Escrow. (i) Agency shall pay the premium attributable to the ALTA standard form policy of title insurance for the Property or the applicable Parcel(s), as set forth in Section 204 hereof, (ii) Developer shall pay for the documentary transfer taxes, if any, due with respect to the conveyance of the Property or said Parcel(s), as applicable, and (iii) Developer and Agency each agree to pay one-half of all other usual fees, charges, and costs which arise from the Escrow. 882/015610-0061 380889.09 al2/17/03 -14- 202.2 Payment of Purchase Price. On or before 5:00 p.m. on the business day preceding the applicable Closing Date (or such earlier time as required by Escrow) for the Property or one or more of the Parcels, Developer shall deposit with Escrow Agent the applicable Purchase Price in Good Funds, and such additional funds as may be required to meet Developer's portion of the closing costs as hereinafter provided. 202.3 Escrow Instructions. This Agreement constitutes the joint escrow instructions of Developer and Agency for each Escrow described herein, and the Escrow Agent to whom instructions are delivered is hereby empowered to act under this Agreement. Insurance policies for fire or casualty are not to be transferred, and Agency will cancel its own policies after the applicable Closing. All funds received in the Escrow shall be deposited with other escrow funds in a general escrow account(s) and may be transferred to any other such escrow trust account in any State or National Bank doing business in the State of California. All disbursements shall be made by check from such account. If in the opinion of either party and/or the construction lender it is necessary or convenient in order to accomplish the Closing of the Property, or of any of the Parcels, and to specify the order of recording of closing and loan documents, such party may require that the parties sign supplemental escrow instructions; provided that if there is any inconsistency between this Agreement and the supplemental escrow instructions, then the provisions of this Agreement shall control. The parties agree to execute such other and further documents as may be reasonably necessary, helpful or appropriate to effectuate the provisions of this Agreement. Each Closing hereunder shall take place within thirty (30) days after the date when both the Agency's Conditions Precedent to the Closing and the Developer's Conditions Precedent to the Closing as set forth in Section 205 have been satisfied or waived by the respective parties. Escrow Agent is instructed to release Agency's escrow closing and Developer's escrow closing statements to the respective parties. 202.4 Authority of Escrow Agent. At each Closing, Escrow Agent is authorized to, and shall: (a) Pay and charge Developer and Agency for their respective shares of the premium of the applicable Title Policy and any endorsements thereto as set forth in Section 204 and any amount necessary to place title in the condition necessary to satisfy Section 203 of this Agreement. (b) Pay and charge Developer and Agency for their respective shares of any escrow fees, charges, and costs payable under Section 202.1 of this Agreement. - (c) Disburse funds, deliver one or more executed Option Agreement(s) to the Agency, and deliver and record the applicable Grant Deed(s) and the applicable Option Agreement(s) when both the Developer's Conditions Precedent to the Closing and the Agency's Conditions Precedent to the Closing have been fulfilled or waived by Developer and Agency. (d) At the Closing for, as applicable, the Property Escrow or the Initial Escrow only, deliver the executed Easement Agreement and Development Agreement to the Agency, and deliver and record the Easement Agreement and Development Agreement when 882/015610-0061 380889.09 a12/17/03 -15- both the Developer's Conditions Precedent to the Closing and the Agency's Conditions Precedent to the Closing have been fulfilled or waived by Developer and Agency. (e) At the Closing which includes Residential Parcel 7, deliver the executed Promissory Note, Deed of Trust, and Declaration to the Agency, and deliver and record the Deed of Trust and Declaration when both the Developer's Conditions Precedent to the Closing and the Agency's Conditions Precedent to the Closing for said Parcel have been fulfilled or waived by Developer and Agency. (f) Do such other actions as necessary, including obtaining the applicable Title Policy, to fulfill its obligations under this Agreement. (g) Within the discretion of Escrow Agent, direct Agency and Developer to execute and deliver any instrument, affidavit and statement, and to perform any act reasonably necessary to comply with the provisions of the Foreign Investment in Real Property Transactions Act ("FIRPTA") and any similar state act and regulation promulgated thereunder. Agency agrees to execute a Certificate of Non -Foreign Status by individual transferor and/or a Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act as may be required by Escrow Agent, on the form to be supplied by Escrow Agent. (h) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an IRS 1099-S form, and be responsible for withholding taxes, if any such forms are provided for or required by law. 202.5 Closing. Each transaction shall close ("Closing") within thirty (30) days after the parties' satisfaction of all of Agency's Conditions Precedent to the Closing and all of the Developer's Conditions Precedent to the Closing as set forth in Section 205 hereof, but in no event later than the applicable Outside Date for Closing, which is set forth in the Schedule of Performance. The Outside Date for Closing for the Property or each Parcel, as applicable, may be extended for up to six (6) months, by mutual agreement of Agency and Developer. Subject to the provisions in this Section 202.5, Closing shall occur at a time reasonably agreed on by the parties. A "Closing" shall mean the time and day the applicable Grant Deed(s) is recorded with the Riverside County Recorder. A "Closing Date" shall mean the day on which the applicable Closing occurs. 202.6 Termination. If an Escrow is not in condition to close by the applicable Outside Date for Closing, then either party which has fully performed under this Agreement may, in writing, demand the return of money or property and terminate such Escrow. If either party makes a written demand for return of documents or properties, the Escrow shall not terminate until ten (10) days after Escrow Agent shall have delivered copies of such demand to all other parties at the respective addresses shown in this Agreement. If any objections are raised within said ten (10) day period, Escrow Agent is authorized to hold all papers and documents until instructed by a court of competent jurisdiction or by mutual written instructions of the parties. Developer, however, shall have the sole option to withdraw any money deposited by it with respect to the Closing less Developer's share of costs of the Escrow. Termination of said Escrow shall be without prejudice as to whatever legal rights either party may have against the 882/015610-0061 380889.09 a12/17/03 -16- other arising from this Agreement. If no demands are made, the Escrow Agent shall proceed with the applicable Closing as soon as possible. 202.7 Closing Procedure. Escrow Agent shall close each Escrow as follows: (a) (i) Record the applicable Grant Deed(s), the applicable Option Agreement(s), deeds of trust and other security instruments securing Developer's construction financing, (ii) at the Property Escrow or the Initial Escrow (as applicable) only, record the Development Agreement and the Easement Agreement, (iii) at the Closing which includes Residential Parcel 7, record the Deed of Trust and the Declaration, and (iv) deliver copies of each of the documents listed in clauses (i) through (iii) above, showing recording information to Agency and Developer; (b) Deliver (i) the Option Agreement(s), (ii) at the Property Escrow or the Initial Escrow (as applicable) only, the Development Agreement and the Easement Agreement, and (iii) at the Closing which includes Residential Parcel 7, the Promissory Note, Deed of Trust, and Declaration to the Agency and a copy to Developer; (c) Deliver the applicable Title Policy and Grant Deed(s) to Developer, (d) File any informational reports required by Internal Revenue Code Section 6045(e), as amended and any other applicable requirements; and (e) Deliver the FIRPTA Certificate, if any, to Developer; and (f) Forward to both Developer and Agency a separate accounting of all funds received and disbursed for each party and copies of all executed and recorded or filed documents deposited into the Escrow, with such recording and filing date and information endorsed thereon. 203. Review of Title of Property. The Agency shall cause First American Title Company, or another title company mutually agreeable to both parties (the "Title Company"), to deliver to Developer a standard preliminary title report dated no earlier than the Effective Date (the "Preliminary Title Report") with respect to the title to the Property, together with legible copies of the documents underlying the exceptions ("Property Exceptions") set forth in the Preliminary Title Report, within thirty (30) days after the Effective Date. The Developer shall have the right to approve or disapprove the Property Exceptions and any proposed encumbrances to the Property in the exercise of its sole discretion; provided, however, that the Developer hereby approves the following Property Exceptions: (a) The Redevelopment Plan. (b) The lien of any non -delinquent property taxes and assessments (to be prorated at close of each respective Escrow. (c) All documents to be recorded at the close of the applicable Escrow. 882/015610-0061 380889.09 al2/17/03 -17- Developer shall have fifteen (15) days after the later of (i) the date of its receipt of the Preliminary Title Report, or (ii) the date Developer receives the documents underlying the Property Exceptions to give written notice to Agency and Escrow Holder of Developer's approval or disapproval of any of such Property Exceptions. Developer's failure to give written disapproval of the Preliminary Title Report within such time limit shall be deemed approval of the Preliminary Title Report. If Developer notifies Agency of its disapproval of any Property Exceptions in the Preliminary Title Report, Agency shall have the right, but not the obligation, to remove any disapproved Property Exceptions within thirty (30) days after receiving written notice of Developer's disapproval or provide assurances satisfactory to Developer that such Property Exception(s) will be removed on or before the applicable Closing. If Agency cannot or does not agree to remove any of the disapproved Property Exceptions before the applicable Closing, Developer shall have fifteen (15) days after the expiration of such thirty (30) day period to either give the Agency written notice that Developer elects to proceed with the purchase of the Property subject to the disapproved Property Exceptions or to give the Agency written notice that the Developer elects to terminate this Agreement. Developer's failure to give written notice of its election within such fifteen (15) day period shall be deemed to be an election to proceed with the purchase of the Property subject to the disapproved Property Exceptions. The condition of title, including all of the Property Exceptions to title approved by Developer as provided herein shall hereinafter be referred to as the "Condition of Property Title". From and after the Effective Date hereof, and continuing until the earlier of (i) the Close of Escrow for the last portion of the Property Developer intends to acquire from Agency, or (ii) termination of this Agreement, Agency shall not further encumber the Property with additional Property Exceptions without the Developer's prior written consent. Developer shall have the right to approve or disapprove any further Property Exceptions reported by the Title Company after Developer has approved the Condition of Property Title (which are not created by Developer). Developer and the Executive Director of the Agency, on behalf of the Agency, shall have the authority to extend the foregoing fifteen (15) day period by written agreement. 204. Title Insurance. Concurrently with recordation of the applicable Grant Deed(s) conveying title to the Property or one or more of the Parcels (as applicable), there shall be issued to Developer a CLTA owner's policy of title insurance (the "Title Policy"), together with such endorsements as are reasonably requested by the Developer, issued by the Title Company insuring that the title to the Property or the Parcel, as applicable, is vested in Developer in the Condition of Property Title approved by Developer pursuant to Section 203 of this Agreement (except that if the Developer elects to purchase the Property pursuant to Option `B", such Title Policy shall only reflect the applicable Parcels and the Property Exceptions applicable thereto). Agency shall pay the title insurance premium attributable to the CLTA owner's form policy of title insurance. The Title Company shall, if requested by Developer, increase the amount of the title insurance policy or provide the Developer with an extended policy, coverages, or endorsements. Developer shall pay the portion of the premium associated with such extended or additional coverages or endorsements, and the costs of preparation of a current survey of the Property, if requested by Developer. The Title Company shall provide the Agency with a copy of the Title Policy. 205. Conditions of Closing. Each Closing is conditioned upon the satisfaction of the following terms and conditions within the times designated below: 882/015610-0061 380889.09 a12/17/03 -18- 205.1 Agency's Conditions of Closins7. Agency's obligation to proceed with each Closing is subject to the fulfillment or waiver by Agency of each and all of the conditions precedent (a) through (1), inclusive, described below ("Agency's Conditions Precedent to the Closing"), which are solely for the benefit of Agency, and which shall be fulfilled or waived by the time periods provided for herein: (a) No Default. Prior to the close of each Escrow, Developer shall not be in default of any of its obligations under the terms of this Agreement with respect to said Escrow and all representations and warranties of Developer contained herein shall be true and correct in all material respects. (b) Execution of Documents. Developer shall have executed and delivered into the Escrow (i) the applicable Grant Deed(s), the applicable Option Agreement(s), and any other documents required hereunder, (ii) at the Property Escrow or the Initial Escrow (as applicable) only, the Easement Agreement and the Development Agreement, and (iii) at the Closing that includes Residential Parcel 7, the Promissory Note, Deed of Trust, and Declaration. (c) Payment of Funds. Prior to each Closing, Developer shall have paid all of its required costs of the Closing into the applicable Escrow in accordance with Section 202 hereof. (d) Design Approvals. If Developer elects to purchase the Property pursuant to Option "A", Developer shall have obtained approval by the City of the Design Development Drawings for the Suites Hotel, the Parcel 2 Casitas Development Component, and Seeley Drive, as set forth in Section 302 herein. If Developer elects to purchase the Property pursuant to Option `B", Developer shall have obtained approval by the City of the Design Development Drawings for the Phase of Development applicable to each Parcel to be acquired at the Closing, as set forth in Section 302 hereof. (e) Land Use Approvals. If Developer elects to purchase the Property pursuant to Option "A", Developer shall have received all land use approvals and other discretionary permits and approvals required for the Suites Hotel, the Parcel 2 Casitas Development Component, and Seeley Drive, pursuant to Section 302.5 hereof. If Developer elects to purchase the Property pursuant to Option `B", Developer shall have received all land use approvals and other discretionary permits and approvals required for the Phase of Development applicable to each Parcel to be acquired at the Closing, pursuant to Section 302.5 hereof. (f) Insurance. Developer shall have provided proof of insurance as required by Section 306 hereof and Agency shall have approved of the same. (g) Financing. As provided in Section 311.1 hereof, if (i) Developer elects to purchase the Property pursuant to Option "A", the Agency shall have approved Developer's financing for the development of the Suites Hotel, the Parcel 2 Casitas Development Component, and Seeley Drive and, (ii) if Developer elects to purchase the Property pursuant to Option `B", the Agency shall have approved Developer's financing for the Phase of 882/015610-0061 380889.09 a12/17/03 -19- Development applicable to each Parcel to be acquired at the Closing, and such financing shall close and be available to the Developer upon the Closing. (h) Grading_ Plans and Permits. If Developer elects to purchase the Property pursuant to Option "A", Developer shall have obtained City approval of its final grading plans for the Property, and grading permits shall be ready to be issued (upon payment of necessary fees, posting of required security, and similar items). If Developer elects to purchase the Property pursuant to Option `B", Developer shall have obtained City approval of its final grading plans for the Phase of Development applicable to each Parcel to be acquired at the Closing, and grading permits shall be ready to be issued (on payment of necessary fees, posting of required security, and similar items). (i) Building Plans and Permits. If Developer elects to purchase the Property pursuant to Option "A", Developer shall have obtained City approval of its building plans for the Suites Hotel, the Parcel 2 Casitas Development Component, and Seeley Drive, and building permits shall be ready to be issued (on payment of necessary fees, posting of required security, and similar items). If Developer elects to purchase the Property pursuant to Option "B", Developer shall have obtained City approval of its building plans for the Phase of Development applicable to each Parcel to be acquired at the Closing, and building permits shall be ready to be issued (on payment of necessary fees, posting of required security, and similar items). (j) Construction Costs and Contract. The Agency shall have approved the Preliminary Development Budget pursuant to Section 304 hereof, and the Developer shall have provided the Agency Executive Director a copy of the proposed contract, certified by the Developer to be a true and correct copy thereof, between the Developer and one or more duly licensed general contractors reasonably acceptable to the Agency for the construction of (i) the Suites Hotel, the Parcel 2 Casitas Development Component, and Seeley Drive, if Developer has elected to purchase the Property pursuant to Option "A", or (ii) the Phase of Development applicable to each Parcel to be acquired at the Closing, if Developer has elected to purchase the Property pursuant to Option `B". (k) Performance Bond. The Developer shall have obtained from Developer's contractor and delivered to the Agency evidence, in a form satisfactory to Agency, that said contractor has obtained Contractor Bonds for the completion of the construction of (i) the Suites Hotel, the Parcel 2 Casitas Development Component, and Seeley Drive, if Developer has elected to purchase the Property pursuant to Option "A", or (ii) the Phase of Development applicable to each Parcel to be acquired at the Closing, if Developer has elected to purchase the Property pursuant to Option "B". Said Contractor Bonds shall provide that the Agency is authorized to enforce the same as a third party beneficiary. (1) Franchise Agreement. At the Initial Escrow or the Property Escrow (as applicable) only, Developer shall have submitted to Agency and Agency shall have approved, a franchise agreement or operating agreement with Hilton Homewood Suites, or a comparable mid -price suites hotel that uses a national reservation system. 882/015610-0061 380889.09 a]2/17/03 -20- 205.2 Developer's Conditions of Closing. Developer's obligation to proceed with the purchase of the Property or each Parcel (as applicable) is subject to the fulfillment or waiver by Developer of each and all of the conditions precedent (a) through (i), inclusive, described below ("Developer's Conditions Precedent to the Closing"), which are solely for the benefit of Developer, and which shall be fulfilled or waived by the time periods provided for herein: (a) No Default. Prior to the applicable Closing, Agency shall not be in default of any of its obligations under the terms of this Agreement and all representations and warranties of Agency contained herein shall be true and correct in all material respects. (b) Execution of Documents. Agency shall have executed (i) the applicable Grant Deed(s), the applicable Option Agreement(s), and any other documents required hereunder, (ii) at the Property Escrow or the Initial Escrow (as applicable) only, the Easement Agreement, the Development Agreement, and (iii) at the Closing that includes Residential Parcel 7, the Promissory Note, Deed of Trust, and Declaration, and delivered all such documents into the Escrow. (c) Review and Approval of Title. Developer shall have reviewed and approved the Condition of Property Title, as provided in Section 203 hereof. (d) Title Policy. The Title Company shall, upon payment of Title Company's regularly scheduled premium, have agreed to provide to the Developer a Title Policy at the applicable Closing, in accordance with Section 204 hereof. (e) Environmental. The Developer shall have approved the environmental condition of the Property, or applicable portion thereof, and shall not have elected to terminate this Agreement with respect to the Property, or applicable portion thereof, pursuant to Section 207.2 hereof. (f) Design Approvals. If Developer elects to purchase the Property pursuant to Option "A", Developer shall have obtained approval by the City of the Design Development Drawings for the Suites Hotel, the Parcel 2 Casitas Development Component, and Seeley Drive, as set forth in Section 302 herein. If Developer elects to purchase the Property pursuant to Option `B", Developer shall have obtained approval by the City of the Design Development Drawings for the Phase of Development applicable to each Parcel to be acquired at the Closing, as set forth in Section 302 hereof. (g) Land Use Approvals. If Developer elects to purchase the Property pursuant to Option "A", Developer shall have received all land use approvals and other discretionary permits and approvals required for the Suites Hotel, the Parcel 2 Casitas Development Component, and Seeley Drive, pursuant to Section 302.5 hereof. If Developer elects to purchase the Property pursuant to Option `B", Developer shall have received all land use approvals and other discretionary permits and approvals required for the Phase of Development applicable to each Parcel to be acquired at the Closing, pursuant to Section 302.5 hereof. 882/015610-0061 380889.09 a12/17/03 -21- (h) Grading and Building Permits. If Developer elects to purchase the Property pursuant to Option "A", all grading permits required for the Property, and all building Permits required for the Suites Hotel, the Parcel 2 Casitas Development Component, and Seeley Drive, shall be available for issuance upon the payment of applicable fees. If Developer elects to purchase the Property pursuant to Option `B", all grading and building permits required for the construction of the Phase of Development applicable to each Parcel to be acquired at the Closing shall be available for issuance upon the payment of applicable permit fees. (i) Financing. As provided in Section 311.1 hereof, if (i) Developer elects to purchase the Property pursuant to Option "A", Developer shall have obtained and the Agency shall have approved Developer's financing for the development of the Suites Hotel, the Parcel 2 Casitas Development Component, and Seeley Drive and, (ii) if Developer elects to purchase the Property pursuant to Option `B", Developer shall have obtained and the Agency shall have approved Developer's financing for the Phase of Development applicable to each Parcel to be acquired at the Closing, and such financing shall close and be available to the Developer upon the applicable Closing. 206. Studies and Reports. 206.1 Access to Property. Prior to the Closing for the Property Escrow or the Initial Escrow (as applicable), Agency shall provide representatives of Developer the right of access to all portions of the Property for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement, including without limitation the investigation of the environmental condition of the Property pursuant to Section 207 hereof. Any preliminary work undertaken on the Property by Developer prior to the Closing for the Initial Escrow or the Property Escrow (as applicable) shall be done at the sole expense of the Developer. In no event shall Developer conduct any intrusive testing procedures on the Property without the prior written consent of Agency, which consent shall not be unreasonably withheld. Such investigations may be made by Developer or any of the Developer Representatives during any normal business hours. Developer shall also have the right to investigate all matters relating to the zoning, use and compliance with other applicable laws, codes, and ordinances which relate to the use and occupancy of the Property. Agency shall cooperate to assist Developer in completing such inspections and special investigations at no cost or expense to Agency. Such inspections and investigations shall be conducted only upon no less than twenty-four (24) hours' notice to Agency and shall be conducted at such times and in such a manner as to minimize any disruption to the Property. Agency shall have the right, but not the obligation, to accompany Developer during such investigations and/or inspections. As a condition to any such entry, Developer shall (i) conduct all work or studies in a diligent, expeditious and safe manner and not allow any dangerous or hazardous conditions to occur on the Property during or after such investigation; (ii) comply with all applicable laws and governmental regulations; (iii) keep the Property free and clear of all materialmen's liens, lis pendens and other liens arising out of the entry and work performed under this paragraph; (iv) maintain or assure maintenance of workers' compensation insurance (or state approved self-insurance) on all persons entering the property in the amounts required by the State of California; (v) provide to Agency prior to initial entry a certificate of insurance evidencing that Developer and/or the persons entering the Property have procured and have in effect the insurance required by Section 306. Any preliminary work undertaken pursuant to this Section 206 shall be undertaken only after securing any necessary 882/015610-0061 380889.09 a12/17/03 -22- permits from the appropriate governmental agencies. The Developer's approval of the environmental and soils condition of the Property shall be a Developer's Condition Precedent to the Closing, as set forth in Section 205.2 hereof. If the Developer, based upon the above tests, reports and review, disapproves the environmental or soils condition of the Property, or any part thereof, in its sole and absolute discretion, then the Developer may (i) remediate the Property, or any specific contaminated portion thereof, to an acceptable condition, (ii) terminate this Agreement with respect to those portions of the Property which Developer has disapproved, as a result of the environmental or soils condition thereof; or (iii) terminate this Agreement by written Notice to the Agency pursuant to Section 603 hereof. Notwithstanding anything herein to the contrary, if the Developer elects to terminate this Agreement with respect to certain contaminated portions of the Property, in accordance with clause (ii) above, Developer may not elect not to purchase the Suites Hotel Parcel or Residential Parcel 7. From and after the Effective Date hereof, and continuing until the earlier of (a) the Close of Escrow for the last portion of the Property Developer intends to acquire from Agency, or (b) termination of this Agreement, Agency shall not take any affirmative action to affect the condition of the Property without the Developer's prior written consent. 206.2 Indemnification. Developer shall protect, defend, indemnify and hold harmless Agency and City and Agency's and City's respective officers, officials, members, employees, agents, and representatives (any of the foregoing shall be known individually as "Indemnitee" and collectively as "Indemnitees"), and each of them, jointly and severally, against and from any and all claims, demands, causes of action, damages, costs, expenses, losses and liabilities, at law or in equity, of every kind or nature whatsoever, including attorneys' fees and expert witness fees, but excluding those resulting from environmental contamination of the Property or other defects on the Property existing prior to Developer's entry thereon or not otherwise caused by Developer or any of the Developer Representatives, but including, without limitation, injury to or death of any person or persons and damage to or destruction of any property, threatened, brought or instituted ("Claims"), arising out of or in any manner directly or indirectly connected with the entry upon the Property by Developer or any of the Developer Representatives pursuant to this Section or Section 207, below, including without limitation: (a) any damage to the Property and any liability to any third party incurred by reason of any acts or omission of, or any commission of any negligent or tortious acts, by Developer or the Developer Representatives; (b) any mechanics' or materialmen's liens, claims, demands, actions or suits arising (directly or indirectly) from (i) any work performed or materials supplied to or for Developer, or (ii) any activities of any of the Developer Representatives on or relating to the Property (including, without limitation, any claims by any of such Developer Representatives); and (c) any costs of removing Developer or the Developer Representatives from the Property after the expiration of the term hereof unless Developer is otherwise entitled to possession of the Property at such time. 882/015610-0061 380999.09 a12/17/03 -23- 207. Condition of the Property 207.1 Disclosure. The Agency shall, within the time set forth in the Schedule of Performance, provide to the Developer copies of any environmental studies and reports with respect to the Property which it has in its possession. 207.2 Investigation of Property. Pursuant to Section 206 hereof, the Developer may engage an Environmental Consultant to make such investigations as Developer deems necessary, including any "Phase 1" and/or "Phase 2" investigations of the Property, and the Agency shall promptly be provided a copy of all reports and test results provided by the Environmental Consultant (the "Property Environmental Reports"). The Developer shall be permitted to make such inspections of the Property pursuant to the requirements of Section 206. The Developer shall approve or disapprove of the environmental condition of the Property, or portion thereof, in the Developer's sole discretion, not later than thirty (30) days prior to the scheduled date for the Closing of the Initial Escrow or the Property Escrow (as applicable). The Developer's approval of the environmental condition of the Property shall be a Developer's Condition Precedent to the Closing, as set forth in Section 205 hereof. If the Developer, based upon the Property Environmental Reports, disapproves the environmental condition of the Property for any reason, in the Developer's sole discretion, then the Developer may (i) remediate the Property, or any specific contaminated portion thereof, to an acceptable condition, (ii) terminate the Agreement with respect to those portions of the Property in which Developer has disapproved, as a result of the environmental or soils condition thereof; or (iii) terminate this Agreement by written Notice to the Agency pursuant to Section 603 hereof. Notwithstanding anything herein to the contrary, if the Developer elects to terminate this Agreement with respect to certain contaminated portions of the Property, in accordance with clause (ii) above, Developer may not elect not to purchase the Suites Hotel Parcel or Residential Parcel 7. 207.3 No Further Warranties As To Property: Release of Agency. The physical condition, possession and title of the Property is and shall be delivered from Agency to Developer in an "as -is" "where is" "with all faults" condition, with no warranty expressed or implied by Agency, including without limitation, the presence of Hazardous Materials or the condition of the soil, its geology, the presence of known or unknown seismic faults, or the suitability of the Property for the development purposes intended hereunder. Upon the Agency's conveyance of fee title to the Property to Developer, Developer shall be deemed to have waived, released and discharged forever the Agency and the City, and their employees, officers, agents, members and representatives, from all present and future claims, demands, suits, legal and administrative proceedings and from all liability for damages, losses, costs, liabilities, fees and expenses, present and future, arising out of or in any way connected with the condition of the Property, any Hazardous Materials on the Property, or the existence of Hazardous Materials contamination due to the generation of Hazardous Materials from the Property, however they came to be placed there, except that arising out of the negligence or intentional misconduct of the Agency, the City, or their employees, officers, agents or representatives. The Developer acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides as follows: 882/015610-0061 -24_ 380889.09 a]2/17/03 "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor". Only with respect to the condition of the Property as set forth in this Section 207.3, the Developer hereby waives and relinquishes all rights and benefits which it may have under Section 1542 of the California Civil Code. /M Developer's Initials Notwithstanding anything herein to the contrary, if Developer elects to purchase the Property pursuant to Option `B", the release set forth in this Section 207.3 shall become effective as to the individual Parcels comprising the Property on the date Developer acquires fee title to each of said Parcel(s). 207.4 Developer Precautions After the Closing. Upon the Closing for the Property or for one or more Parcels (as applicable), the Developer shall take all necessary precautions to prevent the release into the environment of any Hazardous Materials which are located in, on or under the Property or such Parcels. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, the Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with commercially reasonable standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials. 207.5 Developer Indemnity. Upon the Closing for the Property, or for one or more Parcels (as applicable), Developer agrees to indemnify, defend and hold Agency harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorneys' fees), resulting from, arising out of, or based upon (i) the presence, release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Property or the Parcels (as applicable) which occurs after the Closing for the Property or such Parcels, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about to or from, the Property or the applicable Parcels which occurs after the Closing for the Property or such Parcels. This indemnity shall include, without limitation, any damage, liability, fine, penalty, cost or expense arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment. At the request of the Developer, the Agency shall cooperate with and assist the Developer in its defense of any such claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense; provided that the Agency shall not be obligated to incur any expense in connection with such cooperation or assistance. 882/015610-0061 380889.09 a12/17/03 -25- 300. DEVELOPMENT OF THE PROJECT 301. Scope of Development. The Developer shall develop or cause the development of the Project in accordance with the Scope of Development, the City Municipal Code, and the plans, drawings and documents submitted by the Developer and approved by the Agency as set forth herein. Prior to commencement of construction of any Phase of Development the Developer shall obtain and deliver to the Agency evidence of Contractor Bonds covering the applicable Phase of Development, in an amount sufficient to complete the construction of said Phase of Development, in the form approved by the Agency pursuant to Section 205.1(k), and which provide that the Agency is authorized to enforce such completion bond as the primary beneficiary or as a third party beneficiary. 302. Design Review. 302.1 Developer Submissions. Before commencement of construction of any Phase of Development, and as a condition precedent to close of escrow pursuant to Section 205.1(d), and at or prior to the time set forth herein, the Developer shall submit to the City any plans and drawings (collectively, the "Design Development Drawings") which may be required by the City with respect to any permits and entitlements which are required to be obtained to develop a Phase of Development, and such plans for the Phase of Development as required by the City in order for the Developer to obtain building and grading permits for the Phase of Development. Within thirty (30) days after the City's disapproval or conditional approval of such plans, the Developer shall revise the portions of such plans identified by the City as requiring revisions and resubmit the revised plans to the City. 302.2 City Review and Approval. The City shall have all rights to review and approve or disapprove all Design Development Drawings and other required submittals in accordance with the City Municipal Code, and nothing set forth in this Agreement shall be construed as the City's approval of any or all of the Design Development Drawings. 302.3 Revisions. Any and all change orders or revisions required by the City and its inspectors which are required under the City Municipal Code and all other applicable Uniform Codes (e.g. Building, Plumbing, Fire, Electrical, etc.) and under other applicable laws and regulations shall be included by the Developer in its Design Development Drawings and other required submittals and shall be completed during the construction of the applicable Phase of Development. 302.4 Defects in Plans. The Agency and the City shall not be responsible either to the Developer or to third parties in any way for any defects in any of the Design Development Drawings, nor for any structural or other defects in any work done according to the approved Design Development Drawings, nor for any delays reasonably caused by the review and approval processes established by this Section 302. 302.5 Land Use Approvals. Before commencement of construction of any Phase of Development or other works of improvement upon the Property, the Developer shall, at its own expense, secure or cause to be secured any and all land use and other entitlements, permits and approvals which may be required for the applicable Phase of Development or work of '82/015610-0061 380889.09 a12/17/03 -26- improvement by the City or any other governmental agency affected by such construction or work, including but not limited to, any environmental studies and documents required pursuant to the California Environmental Quality Act. 303. Schedule of Performance. The Developer shall submit all Design Development Drawings, commence and complete all construction of the Project, and satisfy all other obligations and conditions of this Agreement, within the times established therefor in the Schedule of Performance; provided, however, Developer's commencement of construction of each Phase of Development shall be in compliance with (i) Section 201.1, if Developer elects to purchase the Property pursuant to Option "A", and (ii) Section 201.2, if Developer elects to purchase the Property pursuant to Option `B". 304. Cost of Construction. Attached hereto as Attachment No. 17 is a preliminary development budget for the Project, which sets forth the proposed development costs in detail (the "Preliminary Development Budget"). All of the cost of planning, designing, developing and constructing the Project, site preparation and grading shall be borne solely by the Developer. 305. Developer's Early Entry onto the Property. Within the time set forth in the Schedule of Performance, Developer and Agency shall execute the Early Entry Agreement, pursuant to which Agency shall permit Developer to enter upon the Property for purposes of grading the Property, or any portion thereof, installing wet and dry utilities, and developing Seeley Drive, in accordance with the terms and conditions set forth therein. 306. Insurance Requirements. The Developer shall indemnify, defend, and hold harmless the Agency and the City, and their respective officers, officials, employees, agents, and representatives, from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including expert witness fees, attorneys fees, and costs), which may be caused by any of the Developer's activities under this Agreement. Commencing with the Effective Date hereof and ending on the date Agency issues a Release of Construction for the final Phase of Development to be constructed on the Property (the "Completion of Construction Date"), Developer shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to the Executive Director, the following policies of insurance: A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (A) for death and bodily injury, either (i) a combined single limit of Three Million Dollars ($3,000,000.00) or (ii) Three Million Dollars ($3,000,000.00) per person and Three Million Dollars ($3,000,000.00) per occurrence, and Three Million Dollars ($3,000,000.00) in the aggregate, and (B) for property damage, Three Million Dollars ($3,000,000.00) per occurrence. A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both the Developer and Agency against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Developer in the course of carrying out the work or services contemplated in this Agreement. 882/015610-0061 380889.09 al2/17/03 -27- A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of Three Million Dollars ($3,000,000.00) per person and Three Million Dollars ($3,000,000.00) per occurrence, and property damage liability limits of Three Million Dollars ($3,000,000.00) per occurrence and Three Million Dollars ($3,000,000.00) in the aggregate or (ii) combined single limit liability of Three Million Dollars ($3,000,000.00). Said policy shall include coverage for owned, non - owned, leased, and hired cars. The following additional requirements shall apply to all of the above policies of insurance: All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation insurance, shall name Agency, City, and their respective officers, officials, members, employees, agents, and representatives as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against Agency, City, and their officers, officials, members, employees, agents, and representatives, and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to Agency and City. In the event any of said policies of insurance are cancelled, the Developer shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the Executive Director. Not later than the Effective Date of this Agreement, Developer shall provide the Executive Director with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the Executive Director. The policies of insurance required by this Agreement shall not require Developer to meet a deductible of more than Twenty -Five Thousand Dollars ($25,000) unless approved in writing by Agency's Executive Director in his or her sole and absolute discretion. Developer agrees that the provisions of this Section shall not be construed as limiting in any way the extent to which Developer may be held responsible for the payment of damages to any persons or property resulting from the Developer's activities or the activities of any person or persons for which the Developer is otherwise responsible. 307. Indemnity. Commencing on the Effective Date and ending on the Completion of Construction Date, the Developer shall defend, indemnify, assume all responsibility for, and hold the Agency and the City, and their representatives, volunteers, officers, employees and agents, harmless from all claims, demands, damages, defense costs or liability of any kind for damage to property or injuries to persons, including accidental death (including attorneys' fees and costs), which may be caused by any acts or omissions of the Developer under this Agreement, whether such activities or performance thereof be by the Developer or by anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement including, but not limited to, Developer's failure to pay, if required, prevailing wages on the construction and development of any Phase of Development. The Developer shall not be liable for property damage or bodily injury occasioned by the negligence or willful misconduct of the Agency, the City or their respective agents or employees. 882/015610-0061 -28- 380889.09 a12/17/03 308. Rights of Access. Prior to the Completion of Construction Date, for purposes of assuring compliance with this Agreement, representatives of the Agency shall have the right of access to the Property, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including but not limited to, the inspection of the work being performed in constructing the Project so long as Agency representatives comply with all safety rules and do not interfere with construction. The Agency (or its representatives) shall, except in emergency situations, notify the Developer prior to exercising its rights pursuant to this Section 308. Agency shall indemnify, defend, and hold Developer harmless from and against all costs, claims, liability and judgments arising from the Agency's exercise of its right of access hereunder. 309. Compliance With Laws; Payment of Taxes. 309.1 Compliance with Laws. The Developer shall carry out the design, construction and operation of the Project and each Phase of Development in conformity with all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, at seq., and the Unruh Civil Rights Act, Civil Code Section 51, at seq. 309.2 Taxes and Assessments. The Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Property (after such time that Developer acquires fee title to each of the Parcels composing the Property), subject to the Developer's right to contest in good faith any such taxes. The Developer shall not apply for or receive any exemption from the payment of property taxes or assessments on any interest in or to the Project or any of the Parcels composing the Property. The Developer shall not take action, including any assessment appeal, to decrease the assessed value of any of the Property (including the value of each respective Phase of Development) below the final assessed value at the time the development of the Property or a Phase of Development (as applicable) is completed. The foregoing restriction shall not apply to individual homeowners who have purchased homes within the Parcel 5 Residential Development or the Parcel 7 Residential Development. 310. Release of Construction Covenants. Upon the City's issuance of the last and final certificate of occupancy for a Phase of Development, the Developer may request that the Agency furnish the Developer with a Release of Construction Covenants for the applicable Phase of Development. The Agency shall not unreasonably withhold any such Release of Construction Covenants, and if the Developer is entitled thereto shall furnish to Developer a Release of Construction Covenants for the applicable Phase of Development within fifteen (15) days after Developer's request thereof. The Release of Construction Covenants shall be a conclusive determination of satisfactory completion of the applicable Phase of Development and the Release of Construction Covenants shall so state. Any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the real property for which a Release Construction Covenants has been issued shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement except for those continuing covenants as described in Article 400 of this Agreement. 882/015610-0061 -29- 380889.09 a12/17/03 If the Agency refuses or fails to furnish a Release of Construction Covenants after written request from the Developer, the Agency shall, within fifteen (15) days after written request therefor, provide the Developer with a written statement of the reasons the Agency refused or failed to furnish a Release of Construction Covenants. The statement shall also contain the Agency's opinion of the actions the Developer must take to obtain a Release of Construction Covenants for the applicable Phase of Development. A Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the applicable Phase of Development, or any part thereof. The Release of Construction Covenants is not a notice of completion as referred to in Section 309.3 of the California Civil Code. For purposes of this Section 310 only, the term "Phase of Development" shall refer to Developer's construction of any of, the Casitas Development, the Sanctuary Villas Development, the Medical Office/Surgical Facility, the Suites Hotel, the Parcel 1 Restaurant, the Parcel 13 Restaurant, the Parcel 5 Residential Development, the Parcel 7 Residential Development, and Seeley Drive. Notwithstanding anything in this Section 310 to the contrary, Developer shall not be entitled to a Release of Construction Covenants for the final Phase of Development to be constructed on the Property until Developer has completed the final pavement lift of Seeley Drive, as verified by the City Engineer. 311. Financing of the Project. 311.1 Approval of Financing. (a) If the Developer elects to purchase the Property pursuant to Option "A", the following shall apply: Within the time set forth in the Schedule of Performance, and as one of Agency's Conditions Precedent to the Closing for the Property Escrow, Developer shall submit to Agency evidence that Developer has obtained (i) commitments for construction financing from a commercial lender necessary to undertake the development of the Suites Hotel Parcel, Casitas Parcel 2, and the Seeley Drive Parcel, and the construction of the Suites Hotel, the Parcel 2 Casitas Development Component, and Seeley Drive, in accordance with this Agreement (the "Construction Loan"); (ii) "Mezzanine" financing in a form acceptable to Agency; and (iii) sufficient equity capital to cover the difference between (a) the sum of the Construction Loan and the Mezzanine financing and (b) the total cost of developing the Suites Hotel, the Parcel 2 Casitas Development Component, and Seeley Drive ("Developer's Equity Contribution"). The Agency shall approve or disapprove such evidence of financing commitments within thirty (30) days after receipt of a complete submission. Approval shall not be unreasonably withheld or conditioned. If Agency shall disapprove any such evidence of financing, Agency shall do so by Notice to Developer stating the reasons for such disapproval and Developer shall promptly obtain and submit to Agency new evidence of financing. Agency shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section 311.1(a) for the approval or disapproval of the evidence of financing as initially submitted to Agency. Such evidence of financing shall include the following: (a) a copy of a loan commitment(s) obtained by Developer from one or more financial institutions for the Construction Loan, subject to such lenders' reasonable, customary and normal conditions and terms, and (b) documentation satisfactory to the Agency as evidence of the "Mezzanine" financing and Developer's Equity Contribution. As a condition to Developer's commencement of construction of any subsequent Phase of Development, Developer shall have, 882/015610-0061 380889.09 al2/17/03 -30- as a condition to the receipt of building permits from the City, submitted to Agency and obtained Agency's approval of, all of the items listed in clauses (i) through (iii) above, as they pertain to the development of said Phase of Development, (b) If the Developer elects to purchase the Property pursuant to Option "B", the following shall apply: Within the times set forth in the Schedule of Performance, and as one of Agency's Conditions Precedent to the Closing for each Escrow, Developer shall submit to Agency evidence that Developer has obtained (i) commitments for construction financing from a commercial lender necessary to undertake the development of the applicable Parcel, and the construction of the applicable Phase of Development, in accordance with this Agreement (a "Construction Loan"); (ii) "Mezzanine" financing in a form acceptable to Agency; and (iii) sufficient equity capital to cover the difference between (a) the sum of the Construction Loan and the Mezzanine financing and (b) the total cost of developing the applicable Phase of Development ("Developer's Equity Contribution"). The Agency shall approve or disapprove such evidence of financing commitments within thirty (30) days after receipt of a complete submission for the applicable Phase of Development. Approval shall not be unreasonably withheld or conditioned. If Agency shall disapprove any such evidence of financing, Agency shall do so by Notice to Developer stating the reasons for such disapproval and Developer shall promptly obtain and submit to Agency new evidence of financing. Agency shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section 311.1(b) for the approval or disapproval of the evidence of financing as initially submitted to Agency. Developer shall close each approved Construction Loan prior to or concurrently with the real estate closing for the applicable Phase of Development. Such evidence of financing shall include the following: (a) a copy of a loan commitment(s) obtained by Developer from one or more financial institutions for the Construction Loan, subject to such lenders' reasonable, customary and normal conditions and terms, and (b) documentation satisfactory to the Agency as evidence of the "Mezzanine" financing and Developer's Equity Contribution. 311.2 Changes Requested by Lenders. In the event that a lender which has been approved pursuant to Section 311.1 hereof requires one or more amendments to this Agreement, or any of the attachments hereto, which amendments are reasonably acceptable to the Agency Executive Director and do not materially affect Agency's interest hereunder, the Agency Executive Director or his or her designee is hereby authorized to make such amendments without further authorization from the Agency; provided, however, that the foregoing is not intended to restrict or limit the Agency's legislative discretion. 311.3 Notice of Default to Mortgagee or Deed of Trust Holders, Right to Cure. With respect to any mortgage or deed of trust granted by Developer, whenever the Agency may deliver any notice or demand to Developer with respect to any breach or default by the Developer in completion of construction of the Project or any Phase of Development, the Agency shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage or deed of trust which has previously requested such notice in writing. Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. It is 882/015610-0061 -31- 380889.09 a12/17/03 understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Property (or portion thereof] if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. 311.4 Failure of Holder to Complete Project. In any case where, sixty (60) days after the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Property or any part thereof receives a notice from Agency of a default by the Developer in completion of construction of the Project, or any Phase of Development under this Agreement, and such holder has not elected to construct as set forth in this Section 311, or if it has exercised the option but has defaulted hereunder and failed to timely cure such default, the Agency may purchase the mortgage or deed of trust by payment to the holder of the amount of the unpaid mortgage or deed of trust debt, including principal and interest and all other sums secured by the mortgage or deed of trust. If the ownership of the Property or any part thereof has vested in the holder, the Agency, if it so desires, shall be entitled to a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: (a) The unpaid mortgage or deed of trust debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); (b) All expenses with respect to foreclosure including reasonable attorneys' fees; (c) The net expense, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent management of the Property or part thereof; (d) The costs of any improvements made by such holder; (e) An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency; and (f) Any customary prepayment charges imposed by the lender pursuant to its loan documents and agreed to by the Developer. 311.5 Right of the Agency to Cure Mortgage or Deed of Trust Default. In the event of a mortgage or deed of trust default or breach by the Developer prior to the completion of the construction of the Project or any Phase of Development, Developer shall immediately deliver to Agency a copy of any mortgage holder's notice of default. If the holder of any mortgage or deed of trust has not elected to construct, the Agency shall have the right but no obligation to cure the default. In such event, the Agency shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the Agency in curing such default. The Agency shall also be entitled to a lien upon the Property, or portion of the Property against which the mortgage or deed of trust is recorded, to the extent of such costs and disbursements. 882/015610-0061 380889.09 a12/17/03 -32- 311.6 Holder Not Obligated to Construct Project. The holder of any mortgage or deed of trust encumbering the Property shall not be obligated by the provisions of this Agreement to construct or complete the Project, or any portion thereof, or to guaranty such construction or completion; nor shall any such covenant or any other provision in this Agreement be construed so to obligate such holder. 312. Landscape Parcel C Landscape Parcel E Landscape Parcel H, and Landscape Parcel I. In accordance with, and as further described in, the Development Agreement, the City of La Quinta has applied for certain grants (the "Landscaping Grants") to partially fund the cost of certain landscaping improvements (the "Landscaping Improvements") the City desires to install on certain parkways adjacent to the Property (the "Parkway Areas"), and on Landscape Parcel C, Landscape Parcel E, Landscape Parcel H, and Landscape Parcel I. Upon the City's receipt of the Landscaping Grants and the City's subsequent installation of the Landscaping Improvements, the Developer will be responsible for maintaining the Landscaping Improvements. If the City does not obtain the Landscaping Grants by March 1, 2004„ Developer shall be obligated to construct landscaping improvements on the Agency Landscape Property, in accordance with the standards set forth in the Landscaping Plan that was approved as part of the various Site Development Permits for the Project (the "Developer Landscape Improvements"). Developer shall complete construction of the Developer Landscape Improvements at the time Developer completes construction of the adjacent phase of Development, and Developer shall not be entitled to a Release of Construction Covenants until it has completed the applicable landscaping. For example, the Developer must complete the Developer Landscape Improvements within Landscape Parcel I prior to or at the same time the Developer is required to complete the Parcel 5 Residential Development, and Developer shall not be entitled to a Release of Construction Covenants for the Parcel 5 Residential Development until Developer has installed the Developer Landscape Improvements within Landscape Parcel I, as evidenced by a City inspection and approval of same. At the Closing of the Initial Escrow or the Property Escrow, as applicable, Agency and Developer shall execute the Easement Agreement, which grants the Developer easements to enter onto the Agency Landscape Property for purposes of (i) installing on the Agency Landscape Property the Developer Landscape Improvements (which easement shall automatically terminate if the City obtains the Landscaping Grants before March 1, 2004), and (ii) maintaining the Landscaping Improvements or the Developer Landscape Improvements, as applicable. The Easement Agreement sets forth said maintenance responsibilities. Notwithstanding anything herein to the contrary, the City is not a party to this Agreement and nothing herein is intended to impose any obligations on the City. 400. AGENCY LOAN; HOMEBUYER ASSISTANCE 401. Agency Loan; Disbursement. Subject to the terms and conditions of this Agreement, including, but not limited to, the conditions to disbursement set forth in the Disbursement Schedule, Agency shall assist in the financing of the construction of the Affordable Housing Component by providing Developer with a loan (the "Agency Loan") from the Agency's Low and Moderate Income Housing Fund in the amount of TWO MILLION FIVE 882/015610-0061 380889.09 a12/17/03 -33- HUNDRED TWENTY THOUSAND DOLLARS ($2,520,000.00) (the "Agency Loan Amount"). The Agency Loan shall be disbursed in accordance with the terms of the Disbursement Schedule. 402. Developer's Homebuyer Credit, Homebuyer Loan. Developer shall provide a credit towards the purchase price of each Affordable Home, by reducing the purchase price thereof from the market price to a purchase price that constitutes an Affordable Housing Cost to an Eligible Buyer (each, a "Developer Credit"). Each Developer Credit shall, upon the close of escrow for such Affordable Home, be converted into a loan from the Agency to said Eligible Buyer (a "Homebuyer Loan"), to be repaid, if at all, in accordance with the terms of the "Buyer Promissory Note," as described in Section 404 below, and in the Declaration. Notwithstanding anything herein to the contrary, in the event Developer provides Developer Credits in a cumulative amount up to or exceeding the Agency Loan Amount prior to the time the last Affordable Home has been sold to an Eligible Buyer, Developer shall continue to provide a Developer Credit to Eligible Buyers of the remaining Affordable Homes. Developer shall not be entitled to any reimbursement or setoff from Agency for any such Developer Credits that are provided in excess of the Agency Loan Amount. 403. Agency Note; Agency Deed of Trust. The Agency Loan shall be evidenced by the Agency Note and Agency Deed of Trust. Interest, in the amount of seven percent (7%) per annum, shall accrue on the Agency Loan in accordance with the provisions set forth in the Agency Note. Repayment of the Agency Loan shall be in accordance with the terms of the Agency Note. Repayment of the Agency Note shall be partially secured by the Deed of Trust. Notwithstanding any of the foregoing, however, (i) the Agency Loan Amount shall be automatically reduced by the amount of each Developer Credit provided by Developer to an Eligible Buyer, (ii) the Deed of Trust shall be reconveyed with respect to each single family home that has been sold and conveyed by Developer to an individual purchaser, and (iii) at such time when Developer has provided Developer Credits in a cumulative amount that equals or exceeds the Agency Loan Amount, the Agency Note shall be cancelled and the Deed of Trust reconveyed. 404. Buyer Affordable Housing Documents. Each buyer of an Affordable Home shall be required to execute all of the following to assure the affordability of the Affordable Home to Eligible Buyers for a period of forty-five (45) years following the date of transfer of said Affordable Home from Developer to an Eligible Buyer ("Covenant Period"): (i) an affordable housing agreement that prohibits during the Covenant Period the resale of the Affordable Home except to an Eligible Buyer and grants the Agency an option to purchase the Affordable Home ("Option to Purchase") in the event the then -owner is unable to locate an Eligible Buyer ("Buyer Affordable Housing Agreement"); (ii) a memorandum reciting Agency's Option to Purchase (`Buyer Memorandum Re Option to Purchase"); (iii) a promissory note ("Buyer Promissory Note") whose terms shall include, (a) principal in the amount of the Homebuyer Loan, (b) seven percent (7%) interest per annum, compounded annually, (c) a 45-year term, (d) that no payments shall be due unless an "Event of Acceleration" (as that term is defined in the Declaration) occurs, triggering acceleration and repayment of the Homebuyer Loan amount, (e) assumability by an Eligible Buyer, and (f) full credit of all payments at end of term if all conditions, covenants and restrictions have been satisfied; (iv) a second deed of trust securing the Buyer Promissory Note 892/015610-0061 380889.09 a12/17/03 -34- ("Buyer Second Trust Deed"); and (v) a disclosure statement acknowledging and consenting to all of the affordability and resale restrictions contained in the aforementioned documents ("Buyer Disclosure Statement'). The documents listed in clauses (i)-(v) above shall be collectively referred to herein as the "Buyer Affordable Housing Documents." Current sample forms of each of the Buyer Affordable Housing Documents are attached hereto and incorporated herein as Attachment No. 18. Said forms shall be subject to change to conform with this Agreement and all applicable Fannie Mae, HUD or other government or lender requirements. 500. USE OF THE PROPERTY 501. Use in Accordance with Redevelopment Plan. 501.1 The Developer covenants and agrees for itself, its successors, assigns, and every successor in interest to the Property or any part thereof, that upon the Developer's acquisition of the Property and during construction and operation of the Project, and thereafter, the Developer shall devote the Property to the uses specified in the Redevelopment Plan and this Agreement for the term of the land use controls of the Redevelopment Plan. 501.2 All uses conducted on the Property, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to the Redevelopment Plan and all applicable provisions of the City Municipal Code. The foregoing covenants shall run with the land until the expiration of the land use controls of the Redevelopment Plan. 502. Maintenance Covenants. The Developer shall maintain the Property and all improvements thereon, including all landscaping, in compliance with the terms of the Redevelopment Plan, and with all applicable provisions of the City Municipal Code. 503. Nondiscrimination Covenants. The Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any part thereof, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the Property or portion thereof on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, 882/015610-0061 380889.09 a12/17/03 -35- establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land". (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased". (c) In contracts relating to the disposition of the realty: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises". 504. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction. The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Property or the Project Area. The Agency shall have the right, if this Agreement or the covenants herein are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches and to avail itself of the rights granted herein to which it may be entitled, except as may be otherwise set forth in this Agreement. The covenants contained in this Agreement shall not benefit or be enforceable by any owner of any other real property within or outside the Project Area, or any person or entity having an interest in such other real property. The covenants contained in this Agreement shall remain in effect for the periods described herein, specifically including, without limitation, the following: (a) The environmental covenants set forth in Sections 207.3, 207.4, and 207.5 shall remain in effect in perpetuity. (b) The covenants pertaining to use of the Property which are set forth in Section 501 shall remain in effect until the expiration of the land use controls of the Redevelopment Plan. 882/015610-0061 380889.09 a12/17/03 -36- (c) The covenants pertaining to maintenance of the Property, and all improvements thereon, as set forth in Section 502, shall remain in effect until the expiration of the land use controls of the Redevelopment Plan. (d) The covenants against discrimination, as set forth in Section 503, shall remain in effect in perpetuity. (e) The indemnity obligations, as set forth in Section 307 hereof, shall remain in effect for the time period set forth in Section 307. (f) The indemnity obligations, as set forth in Section 207.5 hereof, shall remain in effect in perpetuity. 505. Representations and Warranties. 505.1 Agency Representations. Agency represents and warrants to Developer as follows: (a) Authority. Agency is a public body, corporate and politic, existing pursuant to the California Community Redevelopment Law (California Health and Safety Code Section 33000), which has been authorized to transact business pursuant to action of the City. Agency has full right, power and lawful authority to acquire, grant, sell and convey the Property as provided herein, and the execution, performance and delivery of this Agreement by Agency has been fully authorized by all requisite actions on the part of Agency. (b) FIRPTA. Agency is not a "foreign person" within the parameters of FIRPTA or any similar state statute, or is exempt from the provisions of FIRPTA or any similar state statute, or has complied and will comply with all the requirements under FIRPTA or any similar state statute. (c) No Conflict. To the Agency's best knowledge, Agency's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Agency is a party or by which it is bound. (d) Conformance with Redevelopment Plan. The development and use of the Project as required hereunder is in conformance with the Redevelopment Plan. Until the Closing for the Property, or for any of the Parcels (as applicable), Agency shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 505.1 not to be true as of the respective Closing, immediately give written notice of such fact or condition to Developer. Such exception(s) to a representation shall not be deemed a breach by Agency hereunder, but shall constitute an exception which Developer shall have a right to approve or disapprove. If Developer elects to close the applicable Escrow following disclosure of such information, Agency's representations and warranties contained herein shall be deemed to have been made as of the applicable Closing, subject to such exception(s). If, following the disclosure of such information, Developer elects to not close the applicable Escrow, then this Agreement as to the applicable Escrow shall automatically 882/015610-0061 380889.09 a12/17/03 -37- terminate, and neither party shall have any further rights, obligations or liabilities hereunder; provided, however, that in the event the Developer elects to purchase the Property pursuant to Option `B", and the Initial Escrow closes, a failure to close any subsequent Escrow shall not terminate this Agreement. In the event Developer elects to purchase the Property pursuant to Option `B", and the Initial Escrow fails to close, this Agreement shall automatically terminate and neither party shall have any further rights or obligations hereunder, except that both parties agree to take whatever actions are reasonably necessary to terminate any other agreements that may have been executed in furtherance hereof. The representations and warranties set forth in this Section 505.1 shall survive each of the real estate closings provided for herein. 505.2 Developer's Representations. Developer represents and warrants to Agency as follows: (a) Authodly. Developer is a duly organized limited liability company formed within and in good standing under the laws of the State of California. Developer has full right, power and lawful authority to purchase and accept the conveyance of each of the Parcels, and to undertake all obligations as provided herein and the execution, performance and delivery of this Agreement by Developer has been fully authorized by all requisite actions on the part of the Developer. (b) Experience. The Developer is experienced in the development of the type of commercial projects which would satisfy the development requirements set forth herein. (c) No Conflict. To the best of Developer's knowledge, Developer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which the Developer is a party or by which it is bound. (d) No Developer Bankruptcy. Developer is not the subject of a current or pending bankruptcy proceeding. Until the Closing for the Property or any of the Parcels (as applicable), Developer shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 505.2 not to be true as of the respective closing, immediately give written notice of such fact or condition to Agency. Such exception(s) to a representation shall not be deemed a breach by Developer hereunder, but shall constitute an exception which Agency shall have a right to approve or disapprove. If Agency elects to close the applicable Escrow following disclosure of such information, Developer's representations and warranties contained herein shall be deemed to have been made as of the applicable Closing, subject to such exception(s). If, following the disclosure of such information, Agency elects to not close the applicable Escrow, then this Agreement as to the applicable Escrow shall automatically terminate, and neither party shall have any further rights, obligations or liabilities hereunder; provided, however, that in the event Developer elects to purchase the Property pursuant to Option `B", and the Initial Escrow closes, a failure to close any subsequent Escrow shall not terminate this Agreement. In the event Developer elects to purchase the Property pursuant to Option `B", and the Initial Escrow fails to close, this Agreement shall automatically terminate 882/015610-0061 380889.09 a12/17/03 -38- and neither party shall have any further rights or obligations hereunder, except that both parties agree to take whatever actions are reasonably required to terminate any other agreements that may have been executed in furtherance hereof. The representations and warranties set forth in this Section 505.2 shall survive each of the real estate closings provided for herein. 600. DEFAULTS AND REMEDIES 601. Default Remedies. Subject to the extensions of time set forth in Section 702 of this Agreement, failure by either party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A party claiming a Default shall give written notice of Default to the other party specifying the Default complained of. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other party shall not be in Default if such party cures such default within thirty (30) days from receipt of such notice, or if the nature of such default is that it cannot reasonably be expected to be cured within such thirty (30) day period, if such party, with due diligence, commences to cure, correct or remedy such failure or delay within thirty (30) days from receipt of such notice, and completes such cure, correction or remedy with diligence. 602. Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, either party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, or to obtain any other remedy consistent with the purpose of this Agreement. Agency shall also have, separate and independent from its Deed of Trust, the right to pursue damages up to the amount of the Agency Loan Amount, for Developer's defaults; provided, however, that in no event shall the Agency be entitled to consequential damages for any Developer breach. For purposes of this Agreement, "consequential damages" shall include, but not be limited to, potential loss of anticipated tax revenues from the Project or any component thereof. Notwithstanding the foregoing, however, in no event shall the Developer be entitled to damages of any kind from Agency, including damages for economic loss, lost profits, or any other losses or consequential damages of any kind. Such legal actions must be instituted in the Superior Court of the County of Riverside, State of California, in an appropriate municipal court in that county, or in the District of the United States District Court in which such county is located. 603. Termination Prior to the Close of the Property Escrow or the Initial Escrow. 603.1 Termination Under Option "A". In the event Developer elects to purchase the Property pursuant to Option "A", the following termination provisions shall apply. (a) Termination by Developer. In the event that prior to the close of the Property Escrow (a) the Agency does not tender title to the Property pursuant to the applicable Grant Deed in the manner and condition and by the date provided in this Agreement, or (b) one or more of the Developer's Conditions Precedent to the Closing for the Property Escrow is not fulfilled on or before the time set forth in the Schedule of Performance and such failure is not caused by the Developer, or (c) any default of the Agency under this Agreement prior to the close of the Property Escrow is not cured within the time set forth in Section 601 '82/015610-0061 380889.09 a12/17/03 -39- hereof, after written demand by the Developer, or (d) the Developer timely disapproves the environmental condition of all or a portion of the Property pursuant to Section 207 hereof, then this Agreement may, at the option of the Developer, be terminated by written Notice thereof to the Agency. From the date of the written Notice of termination of this Agreement by the Developer to the Agency and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties with respect to the Property, or any portion thereof, by virtue of or with respect to this Agreement. In the event of Developer's disapproval of the environmental condition of a portion of the Property, pursuant to clause (d) above, Developer may, as an alternative to terminating this Agreement in its entirety, terminate this Agreement with respect to those portions of the Property which Developer has disapproved as a result of the environmental or soils condition thereof, by written Notice thereof to Agency; provided, however, Developer may not elect to terminate this Agreement with respect to the Suites Hotel Parcel or Residential Parcel 7 unless Developer terminates this entire Agreement. Upon such partial termination of this Agreement, there shall be no further rights or obligations between the parties with respect to the portions of the Property covered by said termination. (b) Termination by Agency. In the event that prior to the close of the Property Escrow (a) the Developer (or any successor in interest) assigns the Agreement or any rights herein or in the Property, or any portion thereof, in violation of this Agreement; or (b) one or more of the Agency's Conditions Precedent to the Closing is not fulfilled on or before the Outside Date for Closing (as it may be extended) and such failure is not caused by the Agency; or (c) the Developer is otherwise in default of this Agreement and fails to cure such default within the time set forth in Section 601 hereof, after written demand by the Agency; or (d) the Developer is the subject of a bankruptcy proceeding, whether voluntarily or involuntarily commenced, then this Agreement shall, at the option of the Agency, be terminated by the Agency by written Notice thereof to the Developer. From the date of the written Notice of termination of this Agreement by the Agency to the Developer and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties. 603.2 Termination Under Option `B". In the event Developer elects to purchase the Property pursuant to Option `B", the following termination provisions shall apply. (a) Termination by Developer. In the event that prior to the close of the Initial Escrow (a) the Agency does not tender title to the Suites Hotel Parcel, Casitas Parcel 2, and/or any of the Initial Escrow Permitted Parcels Developer has elected to purchase at the Initial Escrow pursuant to the applicable Grant Deed(s) in the manner and condition and by the date provided in this Agreement, or (b) one or more of the Developer's Conditions Precedent to the Closing for the Initial Escrow is not fulfilled on or before the time set forth in the Schedule of Performance and such failure is not caused by the Developer, or (c) any default of the Agency under this Agreement prior to the close of the Initial Escrow is not cured within the time set forth in Section 601 hereof, after written demand by the Developer, or (d) the Developer timely disapproves the environmental condition of the Property pursuant to Section 207 hereof, then this Agreement may, at the option of the Developer, be terminated by written Notice thereof to the Agency. From the date of the written Notice of termination of this Agreement by the Developer to the Agency and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties with respect to the Property, or any portion thereof, by virtue of or with respect to this Agreement. 882/015610-0061 380889.09 a12/17/03 -40- (b) Termination by Agency. In the event that prior to the close of the Initial Escrow (a) the Developer (or any successor in interest) assigns the Agreement or any rights herein or in the Suites Hotel Parcel, Casitas parcel 2, and/or any of the Initial Escrow Permitted Parcels Developer has elected to purchase at the Initial Escrow in violation of this Agreement; or (b) one or more of the Agency's Conditions Precedent to the Closing is not fulfilled on or before the Outside Date for Closing (as it may be extended) and such failure is not caused by the Agency; or (c) the Developer is otherwise in default of this Agreement and fails to cure such default within the time set forth in Section 601 hereof, after written demand by the Agency; or (d) the Developer is the subject of a bankruptcy proceeding, whether voluntarily or involuntarily commenced, then this Agreement shall, at the option of the Agency, be terminated by the Agency by written Notice thereof to the Developer. From the date of the written Notice of termination of this Agreement by the Agency to the Developer and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties. 604. Termination Prior to Subsequent Parcel Conveyance. In the event Developer elects to purchase the Property pursuant to Option `B", the following termination provisions shall apply to each Escrow subsequent to the Initial Escrow. 604.1 Termination by the Developer. In the event that, after the close of the Initial Escrow but prior to the close of any subsequent Escrow (a) the Agency does not tender title to the applicable Parcel(s) pursuant to the applicable Grant Deed in the manner and condition and by the date provided in this Agreement, or (b) one or more of the Developer's Conditions Precedent to the Closing for the applicable Escrow is not fulfilled on or before the time set forth in the Schedule of Performance and such failure is not caused by the Developer, or (c) any default of the Agency under this Agreement prior to the Closing is not cured within the time set forth in Section 601 hereof, after written demand by the Developer, then this Agreement with respect to that Escrow may, at the option of the Developer, be terminated by written Notice thereof to the Agency. From the date of the written Notice of termination of this Agreement by the Developer to the Agency, this Agreement shall be deemed terminated with respect to such Escrow and there shall be no further rights or obligations between the parties with respect to said Parcel(s) by virtue of or with respect to this Agreement; provided, however, that termination of this Agreement with respect to the terminated Escrow shall not relieve the Developer of its obligations to construct the Suites Hotel and the Casitas Development, and to purchase from Agency Residential Parcel 7 pursuant to the terms of this Agreement, which shall survive said termination. 604.2 Termination by the Agency. In the event that, after the close of the Initial Escrow but prior to the close of any subsequent Escrow (a) the Developer (or any successor in interest) assigns the Agreement or any rights herein or in the applicable Parcel(s) in violation of this Agreement; or (b) one or more of the Agency's Conditions Precedent to the Closing for the applicable Escrow is not fulfilled on or before the applicable Outside Date for Closing (as it may be extended) and such failure is not caused by the Agency; or (c) the Developer is otherwise in default of this Agreement and fails to cure such default within the time set forth in Section 601 hereof, after written demand by the Agency; or (d) the Developer is the subject of a bankruptcy proceeding, whether voluntarily or involuntarily commenced, then this Agreement with respect to that Escrow shall, at the option of the Agency, be terminated by the Agency by written Notice thereof to the Developer. From the date of the written Notice of termination of this Agreement 882/015610-0061 380889.09 a12/17/03 -41- by the Agency to the Developer, this Agreement with respect to the such Escrow shall be deemed terminated and there shall be no further rights or obligations between the parties with respect to said Parcel(s) by virtue of or with respect to this Agreement; provided, however, that termination of this Agreement with respect to the terminated Escrow shall not relieve the Developer of its obligations to construct the Suites Hotel and the Casitas Development, and to purchase from Agency Residential Parcel 7 pursuant to the terms of this Agreement, all of which shall survive said termination. 605. Agency Option to Acquire Plans. If, at any time after the close of the Initial Escrow or the Property Escrow (as applicable), this Agreement is terminated by the Agency as a result of a default by the Developer, at the option of the Agency and without any additional consideration, which option may be exercised in the Agency's sole and absolute discretion, the Developer shall deliver to the Agency an executed assignment in a form reasonably acceptable to the Agency of the Developer's right to use all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to the construction of the Project on the Property (the "Plans"), together with copies of all of the Plans, as have been prepared for the development of the Project to date of the termination. Notwithstanding the foregoing, however, Developer does not covenant to convey to the Agency the copyright or other ownership rights of third parties. Agency understands and agrees that the assignment to Agency under this Section 605 is subject and subordinate to any assignment which Developer may make to a lender providing financing for the project, and Agency agrees to execute any documents required by such lender acknowledging and effectuating such subordination of Agency's rights in and to the assignment. Agency's acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall assume all risks in the use of the Plans. 606. Option Agreement. In addition to any rights and remedies available to Agency hereunder, Agency shall be entitled, in its sole and absolute discretion, to repurchase the Property, or a portion thereof, with all of the improvements thereon, from Developer in the event that, (i) Developer fails to commence construction of a Phase of Development within certain specified timeframes, (ii) after commencement of construction, Developer fails to continuously proceed with, and complete, construction of a Phase of Development within certain specified timeframes, or (iii) Developer transfers or suffers an involuntary transfer of the Property, or a portion thereof, in violation of the terms hereof. Said repurchase rights shall be as set forth in an option agreement to be recorded, at the applicable closing, (a) against the Property, if Developer elects to purchase the Property pursuant to Option "A", or (b) against each set of Related Parcels, if Developer elects to purchase the Property pursuant to Option `B". The form of the Option Agreement is attached hereto and incorporated herein as Attachment No. 14 ("Option Agreement"). 607. Right to Reverter and Power of Termination. In addition to any rights and remedies available to Agency hereunder, Agency shall be entitled, in its sole and absolute discretion, to reenter and take possession of the Property, or a portion thereof, with all of the improvements thereon, from Developer in the event that (i) Developer fails to commence construction of a Phase of Development within certain specified timeframes, (ii) after 882/015610-0061 380889.09 a12/17/03 42- commencement of construction, Developer fails to continuously proceed with and complete, construction of the Phase of Development within certain, specified timeframes, or (iii) Developer transfers or suffers an involuntary transfer of the Property, or a portion thereof, in violation of the terms hereof. Said rights shall be as set forth in each Grant Deed pursuant to which Agency shall convey the Property or a Parcel (as applicable) to Developer. 608. Acceptance of Service of Process. In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director of the Agency or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service upon any officer of the Developer, whether made within or outside the State of California, or in such other manner as may be provided by law. 609. Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 610. Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 611. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 612. Non -Liability of Officials and Employees of the Agency. No member, official or employee of the Agency or the City shall be personally liable to the Developer, or any successor in interest, in the event of any Default or breach by the Agency (or the City) or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. 613. Attorneys' Fees. In any action between the parties to interpret, enforce, reform, modify, rescind, or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled, in addition to damages, injunctive relief, or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs, reasonable attorneys' fees and expert witness fees. 700. GENERAL PROVISIONS 701. Notices, Demands and Communications Between the Parties. Any approval, disapproval, demand, document or other notice ("Notice") which either party may desire to give to the other party under this Agreement must be in writing and may be given by any commercially acceptable means to the party to whom the Notice is directed at the address of the party as set forth below, or at any other address as that party may later designate by Notice. 882/015610-0061 390889.09 a12/17/03 -43- To Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Phone No.: 760-777-7031 Facsimile No.: 760-777-7101 Attention: Assistant Executive Director To Developer: CP Development La Quinta, LLC 77-900 Avenue of the States Palm Desert, California 92211 Phone No.: 760-776-9900 Facsimile No.: 760-776-9971 Attention: Richard Oliphant With copies to: Selzer, Ealy, Hemphill & Blasdel, LLP 777 Tahquitz Canyon Way, Suite 328 Palm Springs, California 92262 Phone No.: 760-320-5977 Facsimile No.: 760-320-9507 Attention: Emily Perri Hemphill, Esq. and Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, California 92210 Phone No.: 760-360-7886 Facsimile No.: 760-345-7175 Attention: Francis A. Wong With a copy to: Rutan & Tucker, LLP 611 Anton, Suite 1400 P.O. Box 1950 Costa Mesa, California 92628 Phone No.: 714-641-5100 Facsimile No.: 714-546-9035 Attention: M. Katherine Jenson, Esq. Any written notice, demand or communication shall be deemed received upon delivery if delivered by hand, and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mall. 702. Enforced Delay: Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to causes beyond the control or without the fault of the party claiming an extension of time to perform, which may include the following: war; insurrection; 882/015610-0061 380889.09 a12/17/03 -44- strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; or acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of the Agency which shall not excuse performance by the Agency). Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and Developer. Notwithstanding any provision of this Agreement to the contrary, the lack of funding to complete the Project or any Phase of Development shall not constitute grounds of enforced delay pursuant to this Section 702. 703. Transfers of Interest in Property or Agreement. 703.1 Prohibition. The qualifications and identity of the Developer as the developer of high quality commercial developments are of particular concern to the Agency. Furthermore, the parties acknowledge that the Agency has negotiated the terms of this Agreement in contemplation of the development and operation of the Project on the Property and the property tax increment and transient occupancy tax revenues to be generated by the operation of the Project on the Property. Accordingly, until the Completion of Construction Date, (a) no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement, (b) nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Property or the Project thereon (collectively referred to herein as a "Transfer"), except as provided in this Section 703. 703.2 Transfers Prior to Completion of Project. Prior to the Completion of Construction Date, the Agency may approve or disapprove a proposed Transfer in its sole and absolute discretion; provided that the Agency agrees to reasonably consider a proposed Transfer to an entity in which the Developer or Dick Oliphant retains a minimum of fifty-one percent (51 %) of the ownership or beneficial interest and retains management and control of the transferee entity. The Agency may condition its approval of such a proposed Transfer prior to the Completion of Construction Date (other than transfers approved pursuant to the immediately preceding sentence) upon the payment of one-half of the net proceeds of the Transfer. Notwithstanding the foregoing, Agency approval of a Transfer prior to the Completion of Construction Date shall not be required in connection with any of the following: (a) The conveyance or dedication of any portion of the Property to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Project (as defined herein). (b) Any assignment for financing purposes (subject to such financing being permitted pursuant to Section 311 herein), including the grant of a deed of trust to secure 882/015610-0061 380889.09 a12/17/03 -45- the funds necessary for land acquisition, construction and permanent financing of the Project or of a Phase of Development. (c) A transfer of any of the Suites Hotel, the Suites Hotel Parcel, the Parcel 2 Casitas Development Component, Casitas Parcel 2, the Parcel 3 Casitas Development Component, Casitas Parcel 3, the Parcel 4 Casitas Development Component and/or Casitas Parcel 4 to Center Point Hotel Development, LLC, a California limited liability company. (d) A transfer of any of the Parcel 8 Sanctuary Villas Component, Sanctuary Villas Parcel 8, the Parcel 9 Sanctuary Villas Component, and/or Sanctuary Villas Parcel 9 to Center Point Sanctuary, LLC, a California limited liability company. (e) A transfer of any of the Parcel A Medical Office/Surgical Facility Component, Medical Office/Surgical Facility Parcel A, Parcel 10 Medical Office/Surgical Facility Component, Medical Office/Surgical Facility Parcel 10, Parcel 11 Medical Office/Surgical Facility Component, Medical Office/Surgical Facility Parcel 11, Parcel 12 Medical Office/Surgical Facility Component, and/or Medical Office/Surgical Facility Parcel 12 to Medical Service Center of La Quinta, LLC, a California limited liability company intended to be formed by Developer. (f) A transfer of any of the Parcel 5 Residential Development, Residential Parcel 5, the Parcel 7 Residential Development, and/or Residential Parcel 7 to (i) Ehline Development Co., a California corporation ("Ehline"), or (ii) a limited liability company or limited partnership to be formed by Ehline, and in which Ehline is the managing member of the liability company or the general partner of the limited partnership. In the event of a Transfer by Developer under subparagraphs (a), (b), (c), (d), (e), or (f) above not requiring the Agency's prior approval, Developer nevertheless agrees that at least thirty (30) days prior to such Transfer it shall give written notice to Agency of such assignment and satisfactory evidence that the assignee has assumed in writing through an assignment and assumption agreement of all of the obligations of this Agreement. In the event such transfer is under subparagraph (e) or (f) above (other than a transfer to Ehline), Developer shall, along with the notice required to be given pursuant to the immediately preceding sentence, provide Agency with evidence that such proposed transferee entity has been duly formed in accordance with the laws of the State of California. Any Transfer by Developer under subparagraph (f) above may include the right to receive disbursements of the Agency Loan pursuant to the terms of this Agreement. 703.3 Assignment and Assumption of Obligations., An assignment and assumption agreement in form reasonably satisfactory to the Agency's legal counsel shall also be required for all proposed Transfers requiring the Agency's approval. 703.4 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon the Developer and its permitted successors and assigns. Whenever the term "Developer" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. 882/015610-0061 380889.09 a12/17/03 -46- 703.5 Assignment by Agency. The Agency may assign or transfer any of its rights or obligations under this Agreement with the approval of the Developer, which approval shall not be unreasonably withheld; provided, however, that the Agency may assign or transfer any of its interests hereunder to the City at any time without the consent of the Developer. 704. Relationship Between Agency and Developer. It is hereby acknowledged that the relationship between the Agency and the Developer is not that of a partnership or joint venture and that the Agency and the Developer shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the Attachments hereto, the Agency shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Project. 705. Agency Approvals and Actions. The Agency shall maintain authority of this Agreement and the authority to implement this Agreement through the Agency Executive Director (or his duly authorized representative). Any reference to the Agency Executive Director herein shall be deemed to include such authorized representative. The Agency Executive Director, or his or her designee, shall have the authority to make approvals, issue interpretations, waive provisions, and/or enter into amendments of this Agreement on behalf of the Agency so long as such actions do not materially or substantially change the uses or development permitted on the Property, or materially or substantially add to the costs incurred or to be incurred by the Agency as specified herein, and such approvals, interpretations, waivers and/or amendments may include extensions of time to perform as specified in the Schedule of Performance. All other material and/or substantial interpretations, waivers, or amendments shall require the consideration, action and written consent of the Agency Board. 706. Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. This Agreement is executed in two (2) originals, each of which is deemed to be an original. 707. Integration. This Agreement contains the entire understanding between the parties relating to the transaction contemplated by this Agreement, notwithstanding any previous negotiations or agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. This Agreement includes Attachment Nos. 1 through 20, which are incorporated herein. 708. Real Estate Brokerage Commission. The Agency and the Developer each represent and warrant to the other that no broker or finder is entitled to any commission or finder's fee in connection with the Developer's acquisition of the Property from the Agency. The parties agree to defend and hold harmless the other party from any claim to any such commission or fee from any other broker, agent or finder with respect to this Agreement which is payable by such party as a result of the actions of the indemnifying party. 882/015610-0061 380889.09 a12/17/03 -47- 709. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. Reference to section numbers are to sections in this Agreement, unless expressly stated otherwise. 710. Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation". This Agreement shall be interpreted as though prepared jointly by both parties. 711. No Waiver. A waiver by either party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 712. Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party. 713. Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. 714. Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Standard Zone Time. 715. Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 716. Time of Essence. Time is expressly made of the essence with respect to the performance by the Agency and the Developer of each and every obligation and condition of this Agreement. 882/015610-0061 380989.09 a12/17/03 -48- 717. Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. 718. Conflicts of Interest. No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. 719. Time for Acceptance of Agreement by Agency. This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency on or before forty-five (45) days after signing and delivery of this Agreement by the Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. 882/015610-0061 380889.09 a12/17/03 -49- IN WITNESS WHEREOF, the Agency and the Developer have executed this Disposition and Development Agreement as of the date set forth above. AGENCY: LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and polit( ice...,, By: "4 Executive Director ATTEST: ZRc'Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP M. Katherine Jenson Agency Counsel DEVELOPER: CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: �L- X, — Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President 882/015610-0061 _ S Q_ 380889.09 a12/17/03 Dec-17-03 11:35am From-RUTAN & TUCKER LLP 714-546-9035 T-293 P.07/17 F-582 IN WITNESS WHEREOF, the Agency and the Developer have executed this Disposition and Development Agreement as of the date set forth above. AGENCY: LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and poi By: Executive Director APPROVED AS TO FORM: RUTAN & TU KER, LLP M. Katherine Benson Agency Counsel DEVELOPER: CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member � � r Hy: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: --� Lu V Richard R. Oliphant its: President s82v0i Snlu-0Ool —50- 380uv 09 u2n7103 STATE OF CALIFORNIA ) ) ss COUNTY OF ) On ^Dsra., l4 .1, e`3 , before me, ..��v�s.. 5 • �►� •.e-.� personally appeared i c� ar i to�r`•� personally known to me or proved to me on the basis of satisfactory evidence) to be the rson whose name( sre subscribed to the within instrument and acknowledged to me that they executed the same in her/their authorized capacityksT, and that by( er/their signature on the instrument the personX or the entity upon behalf of which the persona j acted, executed the instrument. Witness my hand and official seal. r JUNE S. GREEK [SEAL] CMM*dM IZ7Jneo MftV n,or -ono STATE OF CALIFORNIA ) ) ss COUNTY OF Ri'.4 ears td On 19 -1caa , before me, JK-yn e. S • Gw AAt J personally appeared T. w.a.s" (�e VUQ'4est,. personally known to me (or proved to me on the basis of satisfactory evidence) to be the personO whose name(p%?are subscribed to the within instrument and acknowledged to me that &he/they executed the same in (E&her/their authorized capacity(ie< and that by ii er/their signatureXon the instrument the person or the entity upon behalf of, which the persona'f acted, executed the instrument. Witness my hand and official seal. ' JUNE S. GREEK [SEAL] # Iz� avenuew 0�h►CMMespiesJw,X=4 394/015610-0061 390243.13 a12/17/03 -26- ATTACHMENT NO. 1 PROPERTY LEGAL DESCRIPTION IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO. 23971-1, ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 0002738" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026'40" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 89033'22" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 00026'40" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41 °42'33", AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044'32" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45027'41 ", AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 108979, O.R. THENCE SOUTH 00012'13" EAST ALONG SAID EASTERLY LINE, A DISTANCE OF 790.73 FEET TO AN ANGLE POINT THEREIN; 882/015610-0061 380889.09 a12/17/03 THENCE SOUTH 43056'42' WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42059'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 02057'46", AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C" AND ITS NORTHWESTERLY PROLONGATION NORTH 64021'03" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO.255528, O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 86011'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 005'41 ", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 75033'02" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17°33'23" EAST; THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00032'28", AN ARC DISTANCE OF 23.61 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT B, SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; 882/015610-0061 390889.09 a12/17/03 -2- THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06", AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006'56" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013' 18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02012'44", AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 67006-56" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001' 12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19058'08", AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028'37" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36°57'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18°51'35", AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (1,850,000 SQUARE FEET), MORE OR LESS. 882/015610-0061 380889.09 a12/17/03 -3- R P.O.C. CTR. 1 /4 COR. SEC. 19 S 00'2T38"_E - .MILES. AVENUE 75.00• N 89'31' 3" E 487.01' N 89'3; N 00'28'37" W 153.41 u) T.P.oJL sy2 in to L6 960.27' �� L7 £ - S 00'26.40" E 112.88' n S 44'44'32" E 90.06' cy oy N 66'Oi•12" SITE N 8239.56'" E �' tR AREA•42.47 AC. L4 PORTION OF THE S. 1 /2 OF SEC. 19, T.5S., R.7E., S.B.M. "®" (R) C1� L5 N 75'53'46" E ✓ R 1411R\-5 L3 PT. B Ck I � R LINE DATA ,,01 NUMBER I DIRECTION DISTANCE Lt S 00'18'01. E 397.49 L2 N 48`09 56 W 22.ov L3 N 75 33'02" E 4.22' L4 N 6T06'56 E 20.00' L5 S 67'O6 56" W 20.00• L6 N 00'26'40" W 20.00' L7 N 89'33 22" E 80.00' EXCEPTION � I� PARCEL J1 74. PT. A J �" N .(R) i CURVE DATA I. NUMBER DELTA RADIUS ARC LENGTH TANGENT C1 41'42'33' 440.00 320.30 167.62 C2 45'27'41 80.00 63.48 33.52 C3 0757*46" 4565.17 236.07 118.06 C4 19'24'03" . 2500.00 846.52 427.35 C5 11-05'.41" 2072.00 401.22 201.24 C6 19'58 08" 2092.00 729.11 368.29 C7 02712.44" 2072.00 , 80.00 40.01 C8 07*41'OV 2092.00 280.60 140.51 C9 00'32.28' 2500.00 23.61 11.81 C10 18-51 3V' 2500 00 822.91 415.21 w 4�4 84. L2 ey��F yq� F9r� J.N. 1612 882/015610-0061 380889.09 a12/17/03 '4- ATTACHMENT NO.2 SITE MAP The Site Map is not a tract map and the parcels depicted thereon are not legal parcels. Upon Developer's preparation of a tract map that creates legal parcels substantially consistent with the Site Map, Developer shall prepare legal descriptions for each Parcel, and Agency and Developer shall cooperate to attach such legal descriptions to any document where such descriptions are required. LOTS LAND USE -- LOT - RESTAURANT LOT 2 RESORT CASITAS *LOT 'D' 1"30 . r. 0.34 s LOT 3 RESORT. CASITAS LOT 1 1N ..r. -. LOT 4 - RESORT CASITAS 0.22 - LOT 5 RESIDENTIAL *LOT 8 PARK .LOT 7 RESIDENTIAL - *LOT •C' 14297 ar. LOT 8 - THE SANCTUARY 0.22 LOT. 9 - THE SANCTUARY LOT K) - MEDICAL OFFICE BUILDINGS "' LOT It - - MEDICAL OFFICE BUILDINGS LOT 12 MEDICAL OFFICE. BUILDINGS LOT 13 ' - RESTAURANT LOT 14 ' HOTEL * LO' s.; 0.1 CIO (y�ON LOTS LAND USE LOT *W _ _ - - _ MEDICAL OFFICE PARKING / LANDSCAPE LOT 'B- - - SEELEY DRIVE *LOT-'C' - - - - 20' PARKWAY (WASHNGTON STREET)_ -* LOT 'D'.. - - - - - CRY LANDSCAPE ENTRY "* LOT 'E'. - - - _ 20' PARKWAY (WASHINGTON STREET) LOT -F• - - - WELLSITE * LOT 'G' - - _ - - WELLSITE (N.A.PJ * LOT'H' - - - - - - - 2W PARKWAY (MILES AVENUE) * LOT 'I'. _ - - - - - - 20' PARKWAY (MILES AVENUE) *LOT 'H aai;.`ar We La t RUffM iCCUMIOPERCU[ AgW6Y- They are depicted an this Site Map for convenience of refeae+nce only. N.T.S. NOVEMBER 21. 2003 882/015610-0061 380889.09 a12/17/03 ATTACHMENT NO.3 PURCHASE PRICE Sanctuary Villas Parcel 8 $ 841,193.42 Sanctuary Villas Parcel 9 247,409.82 Casitas Parcel 2 510,563.92 Casitas Parcel 3 773,718.02 Casitas Parcel 4 654,511.46 Landscape Parcel C 0 Landscape Parcel E 0 Landscape Parcel H 0 Landscape Parcel I 0 Medical Office/Surgical Facility A 1,455,219.64 Medical Office/Surgical Facility 10 164,190.15 Medical Office/Surgical Facility 11 276,649.17 Medical Office/Surgical Facility 12 164,190.15 Residential Parcel 5 135,694.34 Residential Parcel 7 557,028.39 Restaurant Parcel 1 206,924.58 Restaurant Parcel 13 251,908.18 Seeley Drive Parcel 0 Suites Hotel Parcel 753,475.39 Well Site Parcel 116,957.37 Property $7,109,634.00 882/015610-0061 380889.09 a12/17/03 ATTACHMENT NO. 4 FORM OF GRANT DEED [See Following Pages] 882/015610-0061 380889.09 a12/17/03 RECORDING REQUESTED BY, MAIL TAX STATEMENTS TO AND WHEN RECORDED MAIL TO: CP DEVELOPMENT LA QUINTA, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant This document is exempt from payment of a recording fee pursuant to Government Code Section 27383 GRANT DEED [Parcel/Property] For valuable consideration, receipt of which is hereby acknowledged, The LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), acting to carry out the Redevelopment Plan ("Redevelopment Plan") for the La Quinta Redevelopment Project No. 2 (the "Project Area"), under the Community Redevelopment Law of California, hereby grants to CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"), the real property hereinafter referred to as the "[Parcel/Property]," described in Exhibit A attached hereto and incorporated herein, subject to the existing easements, restrictions and covenants of record described there. 1. Reservation of Mineral Rights. Agency excepts and reserves from the conveyance herein described all interest of the Agency in oil, gas, hydrocarbon substances and minerals of every kind and character lying more than five hundred (500) feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the [Parcel/Property] lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals from said [Parcel/Property] or other lands, but without, however, any right to use either the surface of the [Parcel/Property] or any portion thereof within five hundred (500) feet of the surface for any purpose or purposes whatsoever, or to use the [Parcel/Property] in such a manner as to create a disturbance to the use or enjoyment of the [Parcel/Property]. 2. [Parcel/Property] Conveyance in Accordance With Redevelopment Plan, Disposition and Development Agreement. The [Parcel/Property] is conveyed in accordance with and subject to the Redevelopment Plan for the La Quinta Redevelopment Project No. 2 ("Redevelopment Plan") which was approved and adopted by Ordinance No. 139, on May 16, 1989, of the City Council of the City of La Quinta, and a Disposition and Development Agreement entered into between Agency and Developer dated , 2003 (the "DDA"), a copy of which is on file with the Agency at its offices as a public record and which is incorporated herein by reference. The DDA generally requires the Developer to construct and operate on the [Parcel/Property] a [Project Description] (the "[Phase of Development/Project]"), and other requirements as set forth therein. All terms used herein shall have the same meaning as those used in the DDA. 3. Permitted Uses. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the [Parcel/Property] or any part thereof, that upon 882/015610-0061 380889.09 a12/17/03 the date of this Grant Deed ([Parcel/Property]) ("Grant Deed") and during construction through completion of development and thereafter, the Developer shall devote the [Parcel/Property] to the uses specified in the Redevelopment Plan for the periods of time specified therein. All uses conducted on the [Parcel/Property], including, without limitation, all activities undertaken by the Developer pursuant to the DDA, shall conform to the DDA, the Redevelopment Plan, and all applicable provisions of the City Municipal Code. The foregoing covenants shall run with the land. 4. Restrictions on Transfer. The Developer further agrees that for the period commencing upon the date of this Grant Deed and until the date Developer obtains a Release of Construction Covenants for the [Phase of Development/final Phase of Development to be constructed on the Property], no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under the DDA or this Grant Deed, nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the [Parcel/Property] or the [Phase of Development/Project] thereon, except as permitted or approved by the Agency pursuant to Section 703 of the DDA. 5. Binding on Successors. All of the terms, covenants and conditions of this Grant Deed shall be binding upon the Developer and the permitted successors and assigns of the Developer. Whenever the term "Developer" is used in this Grant Deed, such term shall include any other successors and assigns as herein provided. 6. Nondiscrimination. The Developer herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the Developer itself or any person claiming under or through Developer, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the [Parcel/Property] on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land". 882/015610-0061 380889.09 al2/17/03 -2- (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased". (c) In contracts relating to the disposition of the realty: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises". 7. Agency's Right of Reverter and Power of Termination. The Agency has the right, at its election, to reenter and take possession of the [Parcel/Property], with all improvements thereon, and terminate and revest in the Agency the estate conveyed to the Developer if after the closing and prior to the Agency's issuance of the Release of Construction Covenants for the [Phase of Development/final Phase of Development to be constructed on the Property], the Developer (or its successors in interest) shall: a. fail to start construction of the [Phase of Development/Project] as required by the DDA for a period of ninety (90) days after written notice thereof from the Agency; or b. abandon or substantially suspend construction of the [Phase of Development/Project] required by the DDA and fail to resume construction within ninety (90) days after written notice thereof from the Agency; or C. contrary to the provisions of Section 703 of the DDA Transfer or suffer any involuntary Transfer in violation of the DDA, and such Transfer is not rescinded within sixty (60) days of notice thereof from the Agency. For purposes of this Grant Deed, the term "construction" shall mean excavation work or physical construction, but shall not include any grading work completed by Developer on the [Parcel/Property] prior to the execution date hereof. Such right to reenter, terminate,and revest shall be subject to and be limited by, shall not defeat, render invalid or limit, and shall be subordinate to: Any mortgage or deed of trust permitted by the DDA; or 882/015610-0061 380889.09 a12/17/03 _3 2. Any rights or interests provided in the DDA for the protection of the holders of such mortgages or deeds of trust. Upon the revesting in the Agency of title to the [Parcel/Property] as provided in this Section 7, the Agency shall, pursuant to its responsibilities under state law, use its reasonable efforts to resell the [Parcel/Property] as soon and in such manner as the Agency shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan, as it exists or may be amended, to a qualified and responsible party or parties (as determined by the Agency) who will assume the obligation of making or completing the [Phase of Development/Project], or such improvements in their stead as shall be satisfactory to the Agency and in accordance with the uses specified for such [Parcel/Property] or part thereof in the Redevelopment Plan. Upon such resale of the [Parcel/Property], the net proceeds thereof after repayment of any mortgage or deed of trust encumbering the [Parcel/Property] which is permitted by the DDA, shall be applied: i. First, to reimburse the Agency, on its own behalf or on behalf of the City, all costs and expenses incurred by the Agency, excluding City and Agency staff costs, but specifically, including, but not limited to, any expenditures by the Agency or the City in connection with the recapture, management and resale of the [Parcel/Property] or part thereof (but less any income derived by the Agency from the [Parcel/Property] or part thereof in connection with such management); all taxes, assessments and water or sewer charges with respect to the [Parcel/Property] or part thereof which the Developer has not paid; any payments made or necessary to be made to discharge any encumbrances or liens existing on the [Parcel/Property] or part thereof at the time or revesting of title thereto in the Agency, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Developer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the [Parcel/Property], or part thereof; and any amounts otherwise owing the Agency, and in the event additional proceeds are thereafter available, then ii. Second, to reimburse the Developer, its successor or transferee, up to the amount equal to the sum of (a) the costs incurred by Developer for the acquisition and development of the [Parcel/Property] and for the improvements existing on the [Parcel/Property] at the time of the reentry and possession, less (b) any gains or income withdrawn or made by the Developer from the [Parcel/Property] or the improvements thereon. Any balance remaining after such reimbursements shall be retained by the Agency as its property. The rights established in this Section 7 are not intended to be exclusive of any other right, power or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy authorized herein or now or hereafter existing at law or in equity. These rights are to be interpreted in light of the fact that the Agency will have conveyed the [Parcel/Property] to the Developer for redevelopment purposes, particularly for development of the [Phase of Development/Project], and not for speculation in undeveloped land. 8. Violations Do Not Impair Liens. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or '82/015610-0061 380889.09 a]2/17/03 -4- render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest permitted by Section 703 of the DDA. 9. Covenants Run With Land. All covenants contained in this Grant Deed shall be covenants running with the land. All of Developer's obligations hereunder, except as otherwise provided hereunder, shall terminate and shall become null and void upon the expiration of the effectiveness of the Redevelopment Plan. Every covenant contained in this Grant Deed against discrimination contained in paragraph 6 of this Grant Deed shall remain in effect in perpetuity. 10. Covenants For Benefit of Agency. All covenants without regard to technical classification or designation shall be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire period during which such covenants shall be in force and effect, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. The Agency, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. 11. Revisions to Grant Deed. Both Agency, its successors and assigns, and Developer and the successors and assigns of Developer in and to all or any part of the fee title to the [Parcel/Property] shall have the right with the mutual consent of the parties to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements or restrictions contained in this Grant Deed without the consent of any tenant, lessee, easement holder, licensee, mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the [Parcel/Property]. However, Developer and Agency are obligated to give written notice to and obtain the consent of any first mortgagee prior to consent or agreement between the parties concerning such changes to this Grant Deed. The covenants contained in this Grant Deed, without regard to technical classification, shall not benefit or be enforceable by any owner of any other real property within or outside the Project Area, or any person or entity having any interest in any other such realty. No amendment to the Redevelopment Plan shall require the consent of the Developer, but no such amendment shall diminish or restrict the Developer's rights or expand the Developer's obligations hereunder or under the DDA without the Developer's consent. AGENCY: LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Date: , 2003 By: Executive Director ATTEST: Secretary of the Agency 982/015610-0061 380889.09 a12/17/03 -5- APPROVED AS TO FORM: RUTAN & TUCKER, LLP M. Katherine Jenson Agency Counsel Date: DEVELOPER: CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member 2003 By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager Its: Richard R. Oliphant President 882/015610-0061 380889.09 a12/17/03 -6- STATE OF CALIFORNIA ) ) ss COUNTY OF ) On personally appeared before me, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] STATE OF CALIFORNIA ) ) ss COUNTY OF ) On personally appeared Notary Public before me, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 380989.09 a12/17/03 -7- EXHIBIT A LEGAL DESCRIPTION OF [Parcel/Property] [TO BE INSERTED] 882/015610-0061 380889.09 a]2/17/03 ATTACHMENT NO.5 DISBURSEMENT SCHEDULE AND PROCEDURES A. DISBURSEMENT OF AGENCY LOAN [All disbursements subject to the Disbursement Procedures below] Notwithstanding the timeframes listed below for the disbursements to Developer of portions of the Agency Loan, no portion of the Agency Loan shall be disbursed to Developer until the latest of the following dates: (i) the date Developer (a) completes the installation of the foundation of the Suites Hotel, (b) completes the first pavement lift of Seeley Drive, and (c) constructs all of the required curbs and gutters along Seeley Drive; (ii) the date Developer acquires fee title to Residential Parcel 7 from the Agency; and (iii) the date Ehline Development Co., a California corporation, purchases Residential Parcel 7 from Developer, and assumes all of Developer's right, title, and interest in and to this Agreement with respect to the development of the Parcel 7 Residential Development on Residential Parcel 7, thereby becoming the "Developer" with respect to the development of the Parcel 7 Residential Development. 1. Architectural Structural Engineerings Component of the Agency Loan. Developer shall be entitled to receive, at the time periods specified in this Section 1, portions of the Agency Loan (referred to herein as the "Architectural and Structural Engineering Component of the Agency Loan") for purposes of reimbursing Developer for (i) architectural and structural engineering costs that have been incurred by Developer in its preparation of plans and drawings for the Affordable Housing Component ("Affordable Housing Component Plans and Drawings"), and (ii) costs Developer incurs to cause the Affordable Housing Component Plans and Drawings to be in compliance with Title 24 of the Uniform Building Code, which has been incorporated by reference into the La Quinta Municipal Code. a. As of the date that is sixty (60) days after the Effective Date, Developer shall be entitled to a portion of the Architectural and Structural Engineering Component of the Agency Loan in an amount up to, but not exceeding, Fifty -Two Thousand Dollars ($52,000). b. As of the date that is one hundred fifty (150) days after the Effective Date, Developer shall be entitled to a portion of the Architectural and Structural Engineering Component of the Agency Loan in an amount up to, but not exceeding, Ninety -Eight Thousand Dollars ($98,000). 2. Civil/Soil Engineering Component of the Agency Loan. Developer shall be entitled to receive, at the time periods specified in this Section 2, portions of the Agency Loan (referred to herein as the Civil/Soil Engineering Component of the Agency Loan") for purposes of reimbursing Developer for civil engineering and soil engineering costs that have been incurred by Developer in its preparation of Residential Parcel 7 for development of the Affordable Housing Component. 882/015610-0061 380889.09 a12/17/03 a. As of the date that is sixty (60) days after the Effective Date, Developer shall be entitled to a portion of the Civil/Soil Engineering Component of the Agency Loan in an amount up to, but not exceeding, Seven Thousand Dollars ($7,000). b. As of the date that is ninety (90) days after the Effective Date, Developer shall be entitled to a portion of the Civil/Soil Engineering Component of the Agency Loan in an amount up to, but not exceeding, Twenty Thousand Dollars ($20,000). C. As of the date that is one hundred eighty (180) days after the Effective Date, Developer shall be entitled to a portion of the Civil/Soil Engineering Component of the Agency Loan in an amount up to, but not exceeding, ten Thousand Dollars ($10,000). d. As of the date that is two hundred ten (210) days after the Effective Date, Developer shall be entitled to a portion of the Civil/Soil Engineering Component of the Agency Loan in an amount up to, but not exceeding, Eighty -Five Thousand Dollars ($85,000). e. As of the date that is two hundred forty (240) days after the Effective Date, Developer shall be entitled to a portion of the Civil/Soil Engineering Component of the Agency Loan in an amount up to, but not exceeding, Fifteen Thousand Dollars ($15,000). 3. Permits/Fees Component of the Agency Loan. Developer shall be entitled to receive, at the time periods specified in this Section 3, portions of the Agency Loan (referred to herein as the "Permits/Fees Component of the Agency Loan") for purposes of reimbursing Developer for permit costs incurred, and building permit fees paid, for development of the Affordable Housing Component. a. As of the date that is one hundred eighty (180) days after the Effective Date, Developer shall be entitled to a portion of the Permits/Fees Component of the Agency Loan in an amount up to, but not exceeding, One Hundred Fifty Thousand Dollars ($150,000). b. As of the date that is two hundred ten (210) days after the Effective Date, Developer shall be entitled to a portion of the Permits/Fees Component of the Agency Loan in an amount up to, but not exceeding, One Hundred Fifty Thousand Dollars ($150,000). C. As of the date that is two hundred forty (240) days after the Effective Date, Developer shall be entitled to a portion of the Permits/Fees Component of the Agency Loan in an amount up to, but not exceeding, One Hundred Fifty -Two Thousand Dollars ($152,000). 4. Acquisition Costs Component of the Agency Loan. As of the date that is three hundred days after the Effective Date, Developer shall be entitled to a portion of '82/015610-0061 380889.09 a12/17/03 -2- the Agency Loan in an amount up to, but not exceeding, One Million Four Hundred Seven Thousand Dollars ($1,407,000) for purposes of reimbursing Developer for a portion of the costs Developer incurred in acquiring Residential Parcel 7 from CP Development La Quinta, LLC, a California limited liability company. 5. Construction Costs Component of the Agency Loan. As of the date that is three hundred ninety (390) days after the Effective Date, Developer shall be entitled to a portion of the Agency Loan, in an amount up to, but not exceeding, Three Hundred Seventy -Four Thousand Dollars ($374,000) for purposes of reimbursing Developer for the costs incurred in constructing the Affordable Housing Component. B. DISBURSEMENT PROCEDURES AND REQUIREMENTS 1. Conditions for Each Disbursement. Prior to each and every disbursement of a portion of the Agency Loan, the following conditions shall be satisfied: a. Promissory Note, Deed of Trust. Developer shall have executed the Promissory Note and Deed of Trust, and shall have delivered to Agency the Deed of Trust for recordation in the Official Records of the County of Riverside. b. Agency's Title Policy. Agency shall have accepted the Title Policy for Residential Parcel 7, in accordance with Section 204 of the Agreement. C. Evidence of Insurance. Developer shall have timely submitted to the Agency's Executive Director, and obtained approval from same, of Developer's evidence of insurance. d. Declaration. Developer shall have signed the Declaration and delivered same to Agency for recordation. e. No Default. Developer shall not be in default of its obligations under the Agreement or under the Declaration. f. Land Use Entitlements. Developer shall have obtained all of the necessary land use entitlements to construct the Parcel 7 Residential Development. g. Application. Developer shall have delivered the Application attached hereto as Exhibit "A", including supporting documentation showing the work performed and the actual cost thereof to the Agency Executive Director at least fifteen (15) business days prior to the requested disbursement. The Application shall be completed and certified to be accurate by Developer. The Application shall specifically identify the nature of each expense, and shall identify the status of completion of such construction. 892/015610-0061 380889.09 a]2/17/03 -3- h. Approval of Application. The Executive Director shall review and approve the Application and accompanying documents, and the Executive Director shall determine that the work is reimbursable pursuant to this Attachment No. 5 within ten (10) business days. The Executive Director shall advise Developer of any issues within the ten (10) day period and shall pay by check all uncontested amounts requested by the Application within twenty (20) days of the receipt of the Application. i. Lien Waivers. Agency shall have received unconditional releases of mechanics' and materialmen's lien rights and stop notice rights, pursuant to the California Civil Code, executed by all contractors, subcontractors, and other persons rendering services or delivering materials covered by the requests made in the Application. j. Frequency. Agency shall not be obligated to make disbursements more frequently than once per month. k. Use of Disbursements. Developer shall use or apply all of the assistance set forth in this Attachment No. 5 solely for reimbursement or payment of the items described in the Application pursuant to which the disbursement was made. 882/015610-0061 380889.09 a12/17/03 -4- EXHIBIT "A" FORM OF APPLICATION FOR DISBURSEMENT [SEE FOLLOWING PAGES] 882/015610-0061 380889.09 a]2/17/03 TO: La Quinta Redevelopment Agency ("Agency") REQUEST NO. DATE: "DEVELOPER": CP DEVELOPMENT LA QUINTA, LLC PROJECT: CENTER POINT DEVELOPMENT PROJECT: AFFORDABLE HOUSING COMPONENT Pursuant to a Disposition and Development Agreement dated as of (the "Agreement") between Developer and Agency, Developer hereby requests that Agency disburse $ of the financial assistance identified in Attachment No. 5 to the Agreement. This advance is requested to pay for the expenses set forth below as described in Attachment No. 5. Developer hereby certifies that the amounts shown on the attached schedule and the accompanying invoices represent costs incurred for improvements identified which are eligible for reimbursement at this time in accordance with the provisions of Attachment No. 5 and the Agreement. SUBMITTED BY: REVIEWED AND APPROVED BY: Item of Cost Date: Agency Inspector Date: DISBURSEMENT SCHEDULE Maximum Reimbursement Amount Amount Previously Amount Requested Disbursed this Disbursement 882/015610-0061 380889.09 a12/17/03 ATTACHMENT NO.6 AFFORDABLE HOMES MIX ParkPlace at Centre Pointe Washington Miles AFFORDABLE HOMES One Story Single Family Homes (Number of Units) # of Bedrooms / Square Footage # of Bathrooms 1430 1672 1778 3bd/21/2ba 7 7 4 Two Story "Cluster" Homes (Number of Units) # of Bedrooms / # of Bathrooms Square Footage 1270 1295 1400 1520 3bd/2ba 4 3bd/2%2ba 5 7 4bd/2ba 1 6 882/015610-0061 380889.09 a12/17/03 ATTACHMENT NO.7 RESIDENTIAL PARCEL 7 SITE MAP 882/015610-0061 380889.09 a12/17/03 ATTACHMENT NO.8 SCOPE OF DEVELOPMENT I. GENERAL SUMMARY This document outlines the general requirements for the improvements to be constructed on the Property. Specific details are addressed in the Center Point Project Specific Plan SP2001- 055, as amended by Resolution No. 2003-35, which was duly adopted by the City Council on June 3, 2003 ("Specific Plan"), and in the construction plans that will be prepared for the development. The Property is identified as APN 604-04-12, APN 604-04-13, APN 604-04-23, and APN 604-04-37, located southeast of the intersection of Miles Avenue and Washington Street in the City of La Quinta, and is approximately 43.58 acres in size. The Specific Plan provides for the development of a commercial development project that contains all of the following: (i) a medical office/surgical facility ("Medical Office/Surgical Facility"), (ii) a sanctuary villas development containing approximately 26 villas ("Sanctuary Villas Development"), (iii) a mid -price suites hotel containing approximately 134 guest rooms ("Suites Hotel"), (iv) a resort -style condominium/casitas project containing approximately 136 casitas units ("Casitas Development"), (v) 2 sit-down restaurants (the "Restaurants"), and (vi) two single family residential developments containing, collectively, approximately 67 units ("Single Family Developments"), all as further described below. II. PROJECT COMPONENTS A. Medical Office/Surgical Facility The Medical Office/Surgical Facility, which will be constructed on approximately 9.2 acres, will contain approximately 120,000 square feet, in the aggregate, and house a medical office and surgical center, which will provide medical screening, testing, diagnosis, and treatment, in several medical disciplines, including the areas of neurosurgery, orthopedic and vascular care, and pain management. The facility will provide individual offices for physicians associated with the facility, as well as areas for patient treatment and diagnosis, approximately 5 operating theaters, and a recovery room containing beds for short term stays. The facility will not include emergency room facilities, and all patient care will be on a pre -arranged basis. The maximum height of the Medical Office/Surgical Facility buildings will be two stories. B. Sanctuary Villas Development The Sanctuary Villas Development, which will be constructed on approximately 5.5 acres, will feature a spa and approximately 26 villas, each containing 1200 square feet or more. Each of the buildings in the Sanctuary Villas Development will be one story in height, with the units constructed in a configuration to maximize privacy and views. The Wellness Center, located in the center of the Sanctuary Villas Development, will be two stories in height. Villas within the Sanctuary Villas Development will be individually sold, however, individual owners will be encouraged to rent their units to transient guests when not being used by the owners. All such transient occupancies will be subject to the City's transient occupancy tax ordinance. 882/015610-0061 380889.09 ai2/17/03 C. Suites Hotel The Suites Hotel, which will be constructed on approximately 3.8 acres, will consist of a three-story, "extended stay" hotel having approximately 134 units. The Suites Hotel will be branded as a Homewood Suites by Hilton, or another national brand which has a centralized reservation system, such as a Hawthorne Suites or a Staybridge Suites Hotel by Holiday Inn, and will offer both parlor and one bedroom suites, all of which will include fully equipped kitchens. The Suites Hotel will also have a public lobby area, a pool and an exercise facility. The Suites Hotel will be one of the components of the Project that will be constructed in the first phase of development of the overall Project. The Suites Hotel will have approximately 132 parking spaces for hotel guests, and the parking area landscaping will provide shading. D. Casitas Development The Casitas Development, which will be constructed on approximately 7.6 acres, will consist of the construction of approximately 136 condominiums, which will be built in three phases and located adjacent to the Suites Hotel. The buildings within the Casitas Development will be one and two stories in height. Each of the condominium units is expected to contain two bedrooms. The Casitas Development will also contain pool areas for the use of condominium owners and guests. Each condominium unit will be individually sold, fully furnished, to a private owner. All owners will be encouraged to make their unit available for transient rentals when not in use, and all such transient uses will be subject to the City's transient occupancy tax ordinance. The Casitas Development is expected to be constructed in three phases, with the first phase including approximately 40 units. This first phase will be constructed concurrently with the Suites Hotel, as part of the first phase of the overall Project. The Casitas Development will have approximately 210 parking spaces, and the parking area landscaping will provide shading in accordance with the Specific Plan. E. Restaurants (Parcel 1 Restaurant; Parcel 13 Restaurant) The overall Project includes two Restaurant pads, with one pad on approximately .98 acres, and the other pad on approximately 1.22 acres. One of the pads will be used for the construction of a "dinner house" Restaurant to provide a quality dining experience for owners and guests within the Project. The second Restaurant will be a full -service, sit-down style Restaurant offering, at a minimum, breakfast and lunch. The individual design and construction of the Restaurants will be determined when the operators are identified. Neither Restaurant will be of the "fast food" or "quick serve" type, and neither will be permitted to have a drive through. F. Single Family Developments The Project will contain two Single Family Developments. The first of the Single Family Developments, which is referred to in the Agreement as the "Parcel 5 Residential Development," will be constructed on approximately 2.2 acres, and will consist of 13 one and two story "cluster courtyard villas." The second of the Single Family Developments, which is referred to in the Agreement as the "Parcel 7 Residential Development," will be constructed on approximately 8.9 acres, and will consist of 54 single-family homes, with 25 one-story single-family homes on the perimeter of the development, and 29 courtyard single family homes in the interior of the 882/015610-0061 380889.09 a12/17/03 -2- development. Forty of the homes in the Parcel 7 Residential Development will be restricted for sale to moderate -income families at an affordable housing cost. The residential units within the Single Family Developments will range in size from 1250 square feet to 2800 square feet. All units will have two car garages with the exception of approximately 6 of the cluster courtyard villas, each of which will have single car garages. Each of the Single Family Developments will include common area with pools, barbeque areas and passive play areas. III. DEVELOPMENT CONCEPT The Property shall be improved by the Developer in accordance with the provisions of this Agreement, the Specific Plan, and all applicable codes, ordinances, and statutes including requirements and procedures set forth in the La Quinta Municipal Code, and the Redevelopment Plan regulations adopted in conjunction with or subsequent to execution of this Agreement. IV. ON -SITE DEVELOPMENT AND IMPROVEMENTS Developer shall prepare such plans, reports, and studies, and obtain such permits and approvals as required, including, but not limited to, grading plans for construction of the Project. Plans shall be prepared by a licensed civil engineer in good standing and subject to the approval of the Director of Public Works. Developer shall grant and permit all necessary and appropriate utility easements and rights for the development of the Project, including but not limited to sanitary sewers, storm drains, water, electrical power, telecommunications, natural gas, cable television, etc. V. LANDSCAPING Developer shall be responsible to fully landscape the Project in accordance with the Specific Plan and landscape plans approved by the City. Developer shall also be responsible for the maintenance obligations set forth in the Easement Agreement that pertain to Landscape Parcel C, Landscape Parcel E, Landscape Parcel H, Landscape Parcel I, and the Parkway Areas. VI. PUBLIC IMPROVEMENTS Developer shall be responsible for the construction of Seeley Drive, the interim street through the Project, and all other public improvements that may be identified per the Specific Plan including, but not limited to, all required internal utilities. All such construction shall be done to City specification. Additionally, Developer shall be responsible for obtaining and delivering to the City such bonds or other improvement security as City may require in accordance with applicable law, including but not limited to payment and performance bonds. Upon Developer's completion of Seeley Drive, Developer shall dedicate the same to the City for use as a public street. VII. DEVELOPMENT STANDARDS All development on the Property shall conform to the development standards set forth in the Specific Plan, and other applicable City codes and development standards. 882/015610-0061 380889.09 a12/17/03 -3- ATTACHMENT NO.9 PROMISSORY NOTE [See Following Pages] 812/015610-0061 380889.09 a12/17/03 NOTE , 2003 ("Note Date") $2,520,000 ("Loan Amount") FOR VALUE RECEIVED, the undersigned (herein, the "Maker") hereby promises to pay to the order of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Holder" or "Agency"), at a place designated by Holder, the principal sum of TWO MILLION FIVE HUNDRED TWENTY THOUSAND DOLLARS ($2,520,000) ("Loan Amount"), plus accrued interest, or such lesser amount which shall from time to time be owing hereunder pursuant to the terms hereof. The principal sum hereof shall be disbursed pursuant to the terms and conditions set forth herein and in that certain Disposition and Development Agreement by and among Maker and Holder, dated ("DDA"), pertaining to Maker's redevelopment of certain real property defined in the DDA as the "Property". Reference is also made to the following additional agreements and documents, of even date herewith, involving Maker and Holder and/or pertaining to the Property: (i) Deed of Trust with Assignment of Rents and Rider Attached Hereto by and between Maker as borrower, Holder as beneficiary, and First American Title Insurance Company as Trustee, and recorded in the Office of the Riverside County Recorder ("Agency Deed of Trust"). The Agency Deed of Trust partially secures repayment of this Note. (ii) Declaration of Covenants, Conditions, and Restrictions for Property, by and between Maker and Holder, for the benefit of Holder, and recorded in the Office of the Riverside County Recorder ("Declaration"). The DDA, Agency Deed of Trust, and Declaration are referred to herein collectively as the "Agency Agreements". The Agency Agreements are incorporated herein as though fully set forth. Except as otherwise provided herein, the defined terms used in this Note shall have the same meaning as set forth in the DDA. 1. Purpose of Loan. The loan evidenced by this Note is a loan for the purpose of assisting Maker with a portion of Maker's Property acquisition costs and for a portion of Maker's costs for constructing the Project on the Property in accordance with the DDA. 2. Principal Amount. The principal amount of this loan shall be TWO MILLION FIVE HUNDRED TWENTY THOUSAND DOLLARS ($2,520,000) ("Loan Amount"). Simple interest shall accrue on the outstanding principal amount at seven percent (7%) per annum, compounded annually. Interest shall accrue as set forth in Section 4 in the event of a Maker default. 3. Disbursement of Agency Loan. 3.1 The Agency Loan shall be disbursed in accordance with the Disbursement Schedule attached to the DDA as Attachment No. 5. 882/015610-0061 380889.09 a12/17/03 -2- 4. Term of Note, Repayment. Repayment of the Loan Amount, as adjusted and redefined as the "Adjusted Loan Amount" pursuant to this Section 4, shall be through monthly installment repayment amounts. 4.1 Subject to the provisions of (a) Section 5 herein which provide for acceleration of the then outstanding principal and accrued interest and immediate payment thereof in the event of a default by Maker and (b) Sections 4.2 through 4.4 below, which provide for the cancellation of this Note in the event certain specified conditions are met: (A) Maker shall not be required to make any payments of principal or interest on this Note until the earlier of, (i) such time as Maker has sold all of the Affordable Homes or (ii) such time as Maker has sold all of the homes in the Parcel 7 Residential Development (the first to occur is hereinafter referred to as the "Final Sale Date"). Within thirty (30) days after the Final Sale Date (the "Maker Repayment Date"), any outstanding balance remaining on the Note shall be due and payable to Holder in accordance with paragraph (B) below. (B) Maker agrees that interest shall accrue on any amounts of the Agency Loan that have been disbursed, and not transferred to Eligible Buyers in the form of Developer Credits, prior to the Maker Repayment Date, and that as a result thereof, the outstanding principal and accrued interest to date due Holder on the Maker Repayment Date shall be adjusted to reflect said accrual ("Adjusted Loan Amount"). 4.2 Notwithstanding the foregoing, this Note shall be deemed paid in full when Maker has repaid the Holder an amount equal to the Adjusted Loan Amount, as set forth in this Note. 4.3 Notwithstanding anything to the contrary herein, (i) the Loan Amount shall be automatically reduced by the amount of each Developer Credit provided by Developer to an Eligible Buyer, (ii) the Deed of Trust shall be reconveyed with respect to each Affordable Home that has been sold and conveyed to an Eligible Buyer, and (iii) at such time when Developer has provided Developer Credits in a cumulative amount that equals or exceeds the Loan Amount, this Note shall be cancelled, as evidenced by Holder's return to Maker of the original of this Note marked "cancelled," and the Deed of Trust shall be immediately reconveyed, all as described more fully in Sections 4.2 and 4.3 of the DDA. 4.4 Maker shall have the right to prepay all or any portion of this Note at any time without penalty, and upon such repayment the Agency Deed of Trust shall be reconveyed. Prepayment shall not affect the Declaration or the term of the Declaration. 4.5 Any cash payments made by Maker in payment of this Note shall be applied in the following order: (i) first to the interest then accrued and due on the unpaid principal balance under this Note, (ii) second to reduction of the principal balance of this Note. 5. Default; Acceleration, Cross -Default. In the event: 5.1 Maker fails to timely make a payment required by this Note within ten (10) days following the due date of any payment due hereunder; or 882/015610-0061 380889.09 a12/17/03 -3- 5.1 Maker fails to timely make any other payment due hereunder within ten (10) days after notice thereof from Holder; or 5.2 Maker is in material default of any of the covenants, terms, or provisions of this Note, or any of the Agency Agreements, including, without limitation, Maker's sale of an Affordable Home to a buyer that does not qualify as an Eligible Buyer, and Maker fails to timely cure such default under the terms of the applicable agreement, it being understood and agreed by Maker that a default of this Note, or of any of the Agency Agreements (beyond any applicable cure period) shall be a default of all of the foregoing listed documents; then Maker shall be in default of this Note, and all portions of the Loan Amount that have been disbursed to Maker and all accrued interest thereon shall become immediately due and payable. The rate of interest applicable to periods of default for the defaults set forth in this Section 5 shall be calculated at the lesser of ten percent (10%) per annum or the maximum legal rate, and shall accrue as of the date such payment was originally due. 6. Collection Costs; Attorneys' Fees. If, because of any event of default under this Note or any of the Agency Agreements, any attorney is engaged by Holder to enforce or defend any provision of this instrument, whether or not suit is filed hereon, then Maker shall pay upon demand reasonable attorneys' fees, expert witness fees and all costs so incurred by Holder together with interest thereon until paid at the applicable rate of interest payable hereunder, as if such fees and costs had been added to the principal owing hereunder. 7. Waivers by Maker. Maker and all endorsers, guarantors and persons liable or to become liable on this Note waive presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this Note and any and all other notices or matters of a like nature, and consent to any and all renewals and extensions near the time of payment hereof and agree further that at any time and from time to time without notice, the terms of payment herein may be modified or the security described in any documents securing this Note released in whole or in part, or increased, changed or exchanged by agreement between Holder and any owner of the premises affected by said documents securing this Note, without in any way affecting the liability of any party to this Note or any persons liable or to become liable with respect to any indebtedness evidenced hereby. 8. Severability. The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 9. Modifications. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Maker and Holder. No delay or omission on the part of Holder in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Note. 10. No Waiver by Holder. No waiver of any breach, default or failure of condition under the terms of this Note shall be implied from any failure of the Holder of this Note to take, or any 882/015610-0061 380889.09 a12/17/03 -4- delay be implied from any failure by the Holder in taking action with respect to such breach, default or failure from any prior waiver of any similar or unrelated breach, default or failure. 11. Usm. Notwithstanding any provision in this Note, the total liability for payment in the nature of interest shall not exceed the limit imposed by applicable laws of the State of California. 12. Nonassi n�Z ability. Maker may only Transfer (as that term is defined in the DDA) this Note in accordance with provisions and restrictions pertaining to a transfer of the DDA as set forth in the DDA. Holder may freely Transfer Holder's interest in this Note in any manner, at Holder's sole discretion; provided, that at the time of such Transfer Holder also transfers the DDA to such transferee. 13. Governing Law. This Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. 14. Time of Essence. Time is of the essence in the performance of the obligations and provisions set forth in this Note. IN WITNESS WHEREOF, Maker has executed this Note as of the Note Date. "MAKER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President 882/015610-0061 380889.09 a12/17103 �5' ATTACHMENT 10 DEED OF TRUST [See Following Pages] Recording Requested By And When Recorded Return to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director SPACE ABOVE THIS LINE FOR RECORDER'S USE EXEMPT FROM RECORDING FEE PER GOV. CODE § 27383 DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO NOTE: RIDER ATTACHED TO THIS DEED OF TRUST CONTAINING TERMS INCLUDING SECURITY AGREEMENT AND FIXTURE FILING. This DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO ("Deed of Trust"), is made , between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company, herein called TRUSTOR, whose address is First American Title Insurance Company, a California corporation, herein called TRUSTEE, and LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein called BENEFICIARY. WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, Trustor's estate, dated on or about the date hereof, in that property in the City of La Quinta, County of Riverside, State of California, described in Exhibit "A" (the "Property"), together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of TWO MILLION FIVE HUNDRED TWENTY THOUSAND DOLLARS ($2,520,000), with interest thereon according to the terms of a promissory note or notes of even date herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof; (2) the performance of each agreement of Trustor incorporated by reference or contained herein; and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130-31 Lake 437 110 Plumas 166 1307 Siskiyou 506 762 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621 Butte 1330 513 Los Angeles T-3878 874 Sacramento 5039 124 Sonoma 2067 427 Calaveras 185 338 Madera 911 136 San Benito 300 405 Stanislaus 1970 56 Colusa 323 391 Marin 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 El Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 108 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Ventura 2607 237 Humboldt 801 83 Monterey 357 239 Santa Clara 6626 664 Yolo 769 16 Imperial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 Inyo 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774 882/015610-0061 7 380889.09 al2/17/03 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. Notwithstanding anything herein to the contrary, this Deed of Trust shall be reconveyed with respect to each lot comprising the Property that has been developed with a single family home and sold by Trustor to an individual purchaser. Beneficiary agrees to execute the document(s) necessary to effect any such partial reconveyance. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. SEE RIDER ATTACHED TO THIS DEED OF TRUST STATE OF CALIFORNIA COUNTY OF Signature of Trustor } CP DEVELOPMENT LA QUINTA, LLC } a California limited liability company On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (This area for official notarial seal) By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Its: Richard R. Oliphant President 882/015610-0061 8 380889.09 a12/17/03 DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed ofTrust, Trustor agrees: 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials famished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not are or waive any default or notice of default hereunder or invalidate any ad done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten (10) days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same is such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; arid, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and ID pay for any statement provided for bylaw in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: 1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so seared or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto". 5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default (beyond any applicable cure period, and during the continuance of such default), Beneficiary may at any time without notice, either in person, by agent, or be a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default ornotice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the courty or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO TRUSTEE: The undersigned is the legal owner and holder of the note or notes and of all indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, an all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terns of said Deed of Trust, all the estate now held by you under the same. Dated Please mail Deed of Trust, Note and Reconveyance to Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. 882/015610-0061 380889.09 a12/17/03 LEGAL DESCRIPTION OF PROPERTY [The legal description of the Property will be inserted prior to recordation of this Deed of Trust. The term "Property" refers to that certain parcel of real property identified as "Residential Parcel 7" in that certain Disposition and Development Agreement executed by and between Trustor and Beneficiary on or about .J RIDER TO SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS THIS RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is executed this day of 9 , by CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company, herein "Trustor," in favor of the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein "Beneficiary," the same parties to that certain form Deed of Trust With Assignment of Rents, of even date hereto, to which this Rider is attached. This Rider is made a part of and is incorporated into said Deed of Trust. This Rider shall supersede any conflicting term or provision of the form Deed of Trust to which it is attached. Reference is made to (i) that certain Note by and between Trustor and Beneficiary, dated on or about the date set forth above, the repayment of which by Trustor is secured by this Deed of Trust ("Agency Note"), and (ii) to the Agency Agreements which are described in the Agency Note. The parties hereto agree: 1. Pro e . The estate subject to this Deed of Trust is Trustor's fee estate in the real property legally described in the foregoing Deed of Trust to which this Rider is attached (the "Property"). 2. Obligations Secured. Trustor makes this grant and assignment for the purpose of securing the following obligations ("Secured Obligations"): a. Payment to Beneficiary of all indebtedness at any time owing under the terms of the Note; b. Payment and performance of all obligations of Trustor under this Deed of Trust; C. Payment and performance of all obligations of Trustor under the Agency Agreements. d. Payment and performance of all future advances and other obligations of Trustor or any other person, firm, or entity with the approval of Trustor, may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when the obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; and e. All modifications, extensions and renewals of any of the obligations secured hereby, however evidenced. 3. Obligations. The term "obligations" is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges, prepayment charges, late charges and fees at any time accruing or assessed on any of the Secured Obligations. 4. Subordination. Beneficiary agrees to subordinate this Deed of Trust to Trustor's construction loan and subsequent permanent and/or construction loans, provided that (i) the maximum cumulative principal amount of the construction and/or permanent loan shall not exceed ninety percent (90%) of the lender's appraised value of the Property upon completion of the affordable housing project ("Project") described in the Agency Agreements, which amount shall be verified in writing to Beneficiary's Executive Director's reasonable satisfaction; (ii) the loan(s) shall obligate Trustor to expend loan proceeds for no other purpose than the Project or refinance of a loan secured by the Project that was previously subordinated to by the Beneficiary; and (iii) the loan(s) shall be entered into in connection with execution by Agency of a subordination agreement that has been approved by Beneficiary's legal counsel (which form Beneficiary agrees to promptly execute and deliver upon Trustor's request therefor) ("Subordination Agreement"). Beneficiary agrees that the lender may, during the period of default, proceed with its rights and remedies against Trustor as a result of such default, subject only to the cure rights provided in the Subordination Agreement. In agreeing to provide the subordination referred to in the preceding sentence, Beneficiary hereby incorporates the finding required to be made in accordance with Health and Safety Code Section 33334.14. 5. Incorporation. All terms of the Agency Note, Agency Agreements, and the Secured Obligations are incorporated herein by this reference. All persons who may have or acquire an interest in the Property shall be deemed to have notice of the terms of all of the foregoing documents. 6. Mortgagee -in -Possession. Neither the assignment of rents set forth in the Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder shall be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property, unless Beneficiary, in person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver for the Property by any court at the request of Beneficiary or by agreement with Trustor, or the entering into possession of the Property by such receiver, be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property. 7. No Cure. In the event Beneficiary collects and receives any rents under the Deed of Trust upon any default hereof, such collection or receipt shall in no way constitute a curing of the default, except if and to the extent the same are sufficient to cure all monetary defaults and no other defaults then exist. 8. Possession Upon Default. Upon the occurrence of and during the continuation of a default, Beneficiary, after having given notice and the applicable cure periods having expired with the default having not been cured (hereinafter, a "default"), may, at its option, without any action on its part being required and without in any way waiving such default, take possession of the Property in accordance with applicable law and have, hold, manage, lease and operate the same, on such terms and for such period of time as Beneficiary may deem proper, and may collect and receive all rents and profits, with full power to make, from time to time, all commercially reasonable alterations, renovations, repairs or replacements thereto as may seem proper to Beneficiary, and to apply such rents and profits to the payment of (a) the cost of all 882/015610-0061 2 380889.09 a12/17/03 such alterations, renovations, repairs and replacements, and all costs and expenses incident to taking and retaining possession of the Property, and the management and operation thereof, and keeping the same properly insured; (b) all taxes, charges, claims, assessments, and any other liens which may be prior in lien or payment of the Note, and premiums for insurance, with interest on all such items; and (c) the indebtedness secured hereby, together with all costs and attorney's fees, in such order or priority as to any of such items as Beneficiary in its sole discretion may determine, any statute, law, custom or use to the contrary notwithstanding. Any amounts received by Beneficiary or its agents in the performance of any acts prohibited by the terms of this assignment, including, but not limited to, any amounts received in connection with any cancellation, modification or amendment of any lease prohibited by the terms of this assignment and any rents and profits received by Trustor after the occurrence of a default shall be held by Trustor as trustee for Beneficiary and all such amounts shall be accounted for to Beneficiary and shall not be commingled with other funds of the Trustor. Any person receiving any portion of such trust funds shall receive the same in trust for Beneficiary as if such person had actual or constructive notice that such funds were impressed with a trust in accordance therewith. 9. Receiver. In addition to any and all other remedies of Beneficiary set forth under this Deed of Trust or permitted at law or in equity, if a default shall have occurred and not have been cured within any applicable cure period, Beneficiary, to the extent permitted by law and without regard to the value, adequacy or occupancy of the security for the Note and other sums secured hereby, shall be entitled as a matter of right if it so elects to the appointment of a receiver to enter upon and take possession of the Property and to collect all rents and profits and apply the same as the court may direct, and such receiver may be appointed by any court of competent jurisdiction by ex parte application and without notice, notice of hearing being hereby expressly waived. The expenses, including receiver's fees, attorneys' fees, costs and agent's compensation, incurred pursuant to the power herein contained shall be secured by this Deed of Trust. 10. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary addressed to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92263 Attn: Executive Director [SIGNATURE ON NEXT PAGE] 882/015610-0061 3 380889.09 al2/17/03 IN WITNESS WHEREOF, Trustor has executed this Rider on the date of Trustor's acknowledgment herein below, to be effective for all purposes as of the day and year first set forth above. TRUSTOR: CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President 882/015610-0061 4 380889.09 a12/17/03 STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] '82/015610-0061 380889.09 a12/17/03 ATTACHMENT NO. 11 EARLY ENTRY AGREEMENT [See Following Pages] 882/015610-0061 380889.09 a12/17/03 EARLY ENTRY AGREEMENT This Early Entry Agreement ("Agreement") is entered into as of , 2003, by and among the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency") and CP DEVELOPMENT LA QUINTA, LLC., a California limited liability company ("Developer"), with reference to the following facts: RECITALS A. Agency is the present owner of that certain property located in La Quinta, California, described on Exhibit "A" hereto (herein "Property"). B. Agency has executed that certain Disposition and Development Agreement with Developer ("DDA"), pursuant to which Agency shall sell to Developer the Property for Developer's development thereon of a commercial project consisting of mid -price suites hotel, two restaurants, a sanctuary villas development, a condominium/casitas development, a medical facility, and two single-family residential developments (collectively, the "Project"). C. Developer has requested the right to enter onto and about the Property to perform certain work specified herein, and Agency is willing to allow such entry on the terms and conditions hereinafter specified. NOW, THEREFORE, in consideration of the covenants and agreements contained herein and other valuable consideration, the sufficiency and receipt of which are hereby acknowledged by the parties hereto, the parties covenant and agree as follows: 1. Grant of License. Agency hereby grants to Developer and its employees, agents, consultants, and contractors ("Related Parties") a license for the term set forth in Paragraph 3 ("License") to enter upon the Property between the hours of 8:00 a.m. and 5:00 p.m., Monday through Friday, for the purposes of (i) grading on all or any portion of the Property, (ii) installing wet and dry utilities on all or any portion of the Property, (iii) installing signs on the Property, provided such installation is in accordance with Section 9.160.070 of the City of La Quinta Municipal Code (Permitted Semipermanent Signs), and (iv) paving Seeley Drive, an interior street to be developed by Developer and subsequently conveyed to the City of La Quinta ("City") for City's use thereafter as a public street (collectively, the "Permitted Work") in connection with the proposed development of the Project. Notwithstanding the above, at least forty-eight (48) hours prior to any of the Related Parties' first entry onto the Property to commence the Permitted Work, Developer shall notify Agency of its intention of the same, and shall thereafter provide such notice before again entering the Property if there is an interruption of such initial entry for a period of even (7) consecutive days (excluding interruptions for events of force majeure). Said notice shall be provided by facsimile, addressed to the person listed in Section 8.8 hereof at the number provided therein. Agency may reject any proposed entry by providing telephonic notification to Developer to the person listed in Section 8.8 hereof, at the number provided therein, at any time prior to the time of the proposed entry. Agency has full right, title and authority to grant Developer the License for the Permitted Work, and no third party permission or consent is needed in connection therewith. Such License 882/015610-0061 380889.09 a12/17/03 -2- shall be non -revocable for the Term defined in Paragraph 3 below, except as otherwise set forth herein. Agency specifically agrees that Developer shall have access to and be entitled to perform the Permitted Work on all portions of the Property, provided, however, that neither Developer nor any of the Related Parties shall interfere with any other real or personal property, or enter upon any other real property, without first obtaining the written consent of the owner(s) of such other real or personal property. 2. Agency's Authority to Revoke. Agency may revoke this License upon two (2) days written notice to Developer delivered in accordance with Subparagraph 8.8 below in the event: (i) in the reasonable judgment of Agency, such revocation is necessary to protect the public health, safety, or welfare pursuant to the exercise of Agency's police powers; or (ii) Developer is in violation of the terms of this Agreement or any applicable law, statute, ordinance, rule, or regulation pertaining to the Permitted Work or Developer's or the Related Parties' entry upon the Property pursuant to this Agreement, and Developer has failed to cure such violation within two (2) days following Developer's receipt of notice of such violation from Agency. 3. Term. Unless earlier revoked or terminated pursuant to the provisions of this Agreement, the term of the License shall commence on full execution hereof and shall terminate on the earlier of (i) as to each portion of the Property, the date Developer acquires such portion from Agency, or (ii) one hundred eighty-five (185) days from the date hereof. 4. Repair and Restoration of Property. Developer shall repair any damage it causes to the Property in the course of performing the Permitted Work pursuant hereto and shall, except for the actual Permitted Work allowed hereby, restore the Property to the condition existing prior to Developer's or Related Parties' entry onto the Property, unless this requirement is waived by the Agency Executive Director or the Community Development Director in his or her sole and absolute discretion. 5. Compliance with Laws. Developer shall obtain, at is sole cost and expense, all governmental permits and authorizations required by any governmental agencies for the Permitted Work. Developer shall comply with, and shall cause all of its Related Parties to comply with, all applicable governmental laws, rules, regulations and requirements governing the Permitted Work. Prior to Developer's or any of the Related Parties' entry onto the Property to perform any of the Permitted Work, Developer shall have prepared, obtained approval from the City thereof, and implemented, a dust control program. 6. Indemnity. Developer shall protect, defend, indemnify and hold harmless Agency and City and their respective officers, officials, members, employees, agents, and representatives (any of the foregoing shall be known individually as "Indemnitee" and collectively as "Indemnitees"), and each of them, jointly and severally, against and from any and all claims, demands, causes of action, damages, costs, expenses, losses and liabilities, at law or in equity, of every kind or nature whatsoever, including attorneys' fees and expert witness fees (hereinafter "Claims"), brought in connection with any death or personal injury to any person or persons or damage or destruction of any property arising out of or in any manner directly or indirectly connected with the entry upon the Property by Developer or any of its Related Parties or the activities on the Property (including but not limited to the Permitted Work) by Developer or any 882/015610-0061 380889.09 a]2/17/03 -3- of its Related Parties, but excluding from the foregoing any Claims resulting from environmental contamination of the Property or other defects on the Property existing prior to Developer's entry thereon and not otherwise caused by Developer or any of the Related Parties. The foregoing indemnification shall also cover: (a) any mechanics' or materialmen's liens, claims, demands, actions or suits arising (directly or indirectly) from (i) any work performed or materials supplied to or for Developer, or (ii) any activities of any of its Related Parties on or relating to the Property (including, without limitation, any claims by any of such Related Parties); and (b) any costs of removing Developer or its Related Parties from the Property after the expiration of the term hereof unless Developer is otherwise entitled to be on the Property at such time under this Agreement. 7. Insurance. (a) Before entering the Property for any purpose, Developer shall cause the insurance required under this paragraph to be issued and thereafter to be maintained until one (1) year following the end of the Term. Developer shall procure and maintain: (1) A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (i) for death and bodily injury, either (A) a combined single limit of Three Million Dollars ($3,000,000) or (B) Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and Three Million Dollars ($3,000,000) in the aggregate, and (ii) for property damage, Three Million Dollars ($3,000,000) per occurrence. (2) A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both the Developer and City against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Developer in the course of carrying out the work or services contemplated in this Agreement. (3) A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and property damage liability limits of Three Million Dollars ($3,000,000) per occurrence and Three Million Dollars ($3,000,000) in the aggregate or (ii) combined single limit liability of Three Million Dollars ($3,000,000). Said policy shall include coverage for owned, non -owned, leased, and hired cars. (b) The following additional requirements shall apply to all of the above policies of insurance: (1) All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation insurance, shall name City, the Agency, and their 892/015610-0061 380889.09 a12/17/03 -4- respective officers, officials, members, employees, agents, and representatives as additional insureds. (2) The insurer shall waive all rights of subrogation and contribution it may have against City, Agency, and their respective officers, officials, members, employees, agents, and representatives, and their respective insurers. (3) All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to City and Agency. (4) The policies of insurance required by this Agreement shall not require Developer to meet a deductible of more than Twenty -Five Thousand Dollars ($25,000) unless approved in writing by the City Manager in his or her sole and absolute discretion. (c) In the event any of said policies of insurance are cancelled, the Developer shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the City Manager. (d) Not later than the date of this Agreement, Developer shall provide the Agency Executive Director with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the Executive Director. (e) Developer agrees that the provisions of this Section shall not be construed as limiting in any way Developer's indemnity obligations set forth in Section 6 or the extent to which Developer may be held responsible for the payment of damages to any persons or property resulting from the Developer's activities or the activities of any person or persons for which the Developer is otherwise responsible. 8. Miscellaneous. 8.1 Authority. Each signatory hereto warrants to the other party that it has authority to sign on behalf of the party for whom it purports to sign. 8.2 Attorney's Fees. In the event any party hereto brings suit to enforce the terms of this Agreement or on account of breach hereof, the party not prevailing in such suit shall pay all reasonable costs and expenses incurred by the other party in such suit, including, without limitation, court costs, attorneys' fees, and expert witness fees. 8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations, understandings or agreements relating thereto. 8.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. 882/015610-0061 380889.09 al2/17/03 -5- 8.5 Litigation Matters. The Municipal and Superior Courts of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Agreement. This Agreement shall be governed by, and construed under, the laws of the State of California. Service of process on Agency shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. 8.6 Non -liability of Agency Officers and Employ. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Developer, or any successor or assign of same, in the event of any default or breach by Agency, or for any amount which may become due to Developer, or any successor or assign of same, or for breach of any obligation of the terms of this Agreement. 8.7 Covenant Against Discrimination. Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through it, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the performance of this Agreement. 8.8 Notices. Unless other sections of this Agreement allow certain specific notices to be given by other means, all notices required to be delivered under this Agreement or under applicable law shall be delivered by one of the following means: (a) personal delivery; (b) delivery by United States mail, prepaid, certified, return receipt requested; (c) delivery by reputable document delivery service that provides a receipt showing date and time of delivery; or (d) delivery by facsimile provided the sender receives confirmation the facsimile was received. Notices personally delivered or delivered by a document delivery service shall be effective upon receipt. Notices delivered by mail shall be effective at 5:00 p.m. on the second business day following dispatch. Notices delivered by facsimile shall be effective upon receipt provided that any faxed notices which are transmitted at any time other than 8:00 a.m. to 4:30 p.m. Monday through Friday (excluding legal holidays) shall be deemed transmitted as of the next business day. Notices shall be delivered to the following addresses: To Agency: La Quinta Redevelopment Agency Attn: Executive Director 78-495 Calle Tampico La Quinta, CA 92253 Telephone: (760) 777-7000 Facsimile: (760) 777-7101 With a copy to: Rutan & Tucker, LLP Attn: M. Katherine Jenson, Esq. 611 Anton Boulevard, 14th Floor Costa Mesa, CA 92626-1998 Telephone: (714) 641-5100 Facsimile: (714) 546-9035 882/015610-0061 380889.09 a12/17/03 -6- To Developer: CP Development La Quinta, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant Telephone: (760) 776-9900 Facsimile: (760) 776-9971 With copies to: Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Telephone: (760) 360-7886 Facsimile: (760) 345-7175 and Selzer, Ealy, Hemphill & Blasdel, LLP 777 E. Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill, Esq. Telephone: (760) 320-5977 Facsimile: (760) 320-9507 Changes in the address to be used for receipt of notices shall be effected in accordance with this Paragraph 8.8. 8.9 Time of Essence. Time is of the essence in the performance of the Agreement. 892/015610-0061 380889.09 a12/17/03 -7- IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the date first above -written. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member LIN Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager Its: "AGENCY" Richard R. Oliphant President LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Name: Its: Executive Director 882/015610-0061 380889.09 a12/17/03 -8- EXHIBIT "A" TO EARLY ENTRY AGREEMENT LEGAL DESCRIPTION OF PROPERTY IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO. 23971-1, ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 00027'38" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026'40" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 89033'22" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 00026'40" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41042'33", AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044'32" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45027'41 ", AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 108979, O.R. THENCE SOUTH 00012' 13" EAST ALONG SAID EASTERLY LINE, A DISTANCE OF 790.73 FEET TO AN ANGLE POINT THEREIN; 882/015610-0061 380889.09 a12/17/03 -9- THENCE SOUTH 43056'42' WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42059'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 02057'46", AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C" AND ITS NORTHWESTERLY PROLONGATION NORTH 64021'03" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO.255528, O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 86011'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 005'41 ", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 75033'02" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17033'23" EAST; THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00032'28", AN ARC DISTANCE OF 23.61 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT B, SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; 892/015610-0061 390889.09 a12/17/03 -10- THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06", AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006'56" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013'18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02012'44", AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 67006'56" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001' 12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19058'08", AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028'37" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36°57'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18°51'35", AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (1,850,000 SQUARE FEET), MORE OR LESS. 882/015610-0061 380889.09 a12/17/03 -11- P.O.C. CTR. 1 /4 COR. SEC. 19 MILES AVENUE s 0 75.00a"^E 75.00' N 89'31'23` E 487.01' N 89'3: N 00'28'37" W 153.41' LPA.B . !y9 sy to a _ L6 960.27' , L7 S 00'26'40 E 112.88' ^ S 44'44'32" E y� 90.06' C 0w,_ ? "Y SITE " 239.5fi " E S� N 66'01'12" E M (R) AREA-42.47 AC. o L4 PORTION OF THE S. 1 /2 OF n SEC. 19, T.5S., R.7E., S.B.M. W .�� (R) L5 1 "=300' . . N86'1VWE T LINE DATA NUMBER DIRECTION DISTANCE Ll S'Wl8'01' E 397.49' L2 N 48'09'56" W 22.00' L3 N 75'33'02" E 4.22' L4 N 67'06'56 E 20.00 L5 S 6706 56" W 20.00' 1-6 1 N, 00'26'40" --W 20.00' L7 N ..89'33'22" E 60.00' CURVE DATA fV 75'53'46" E bo R) PT. B, 'I EXCEPTION �` I' PARCEL �4. PT. A R u. NUMBER DELTA RADIUS ARC LENGTH TANGENT C1 41'42'33" 440.00 320.30 167.62 C2 45'27 41 " 80.00 63.48 33.52 C3 0757'46" 4565.17 236.07 118.06 C4 1.9'24'03" 2500.00 846.52 427.35 C5 11705'41" 2072.00 401.22 201.24 C6 1 W56'08" 2092.00 t729.11 368.29 C7 _. 02' 12'44" 12072.00 80.00 40.01 C8 OT41'06" 2092.00 280.60 140.51 C9 00'32'28" 12500.00 23.61 11.81 C10 18'51'35" 12500.00 822.9h 415,21 N 42'59'27" E (R) Cy�TE` L2 yeti Fq�F9 J.N. 1612 882/015610-0061 380889.09 a12/17/03 -12- ATTACHMENT NO. 12 EASEMENT AGREEMENT [See Following Pages] 882/015610-0061 380889.09 a12/17/03 Recording Requested By And When Recorded Mail To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Agency Secretary (SPACE ABOVE THIS LINE FOR RECORDER'S USE) (EXEMPT FROM RECORDATION FEE PER GOVERNMENT CODE § 27383) EASEMENT AGREEMENT THIS EASEMENT AGREEMENT ("Agreement") is made this day of , 2003 (the "Effective Date") by and among CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Grantee"), the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency") and CITY OF LA QUINTA, a California municipal corporation ("City"). RECITALS: A. Grantee has entered into a Disposition and Development Agreement ("DDA") dated , 2003 with the Agency, pursuant to which Agency conveyed to Grantee that certain real property located southeast of the Miles Avenue and Washington Street intersections in the City of La Quinta, County of Riverside, State of California (the "Grantee Property") for Grantee's development thereon of a mixed use commercial and residential development project (the "Project"), as further described in the DDA. A legal description of the Grantee Property is attached hereto and incorporated herein as Exhibit "A". B. Agency owns certain real property (collectively, the Agency -Owned Property").identified as Lot C, Lot E, Lot H and Lot I on the site map, which is attached hereto and incorporated herein as Exhibit `B" (the "Site Map"). The Agency -Owned Property is legally described in Exhibit "C". C. City owns certain public rights -of -way located in the City of La Quinta, County of Riverside, State of California, commonly known as Washington Street and Miles Avenue, portions of each of which are adjacent to certain portions of the Grantee Property (the "City Right of Way"). The portions of the City Right of Way that lie between the Agency -Owned Property and the curb located closest to the Grantee Property are hereinafter referred to as the "City -Owned Property." The City -Owned Property is depicted on the (the "Site Map"). D. City has applied for various grants (the "Landscaping Grants") to partially fund the cost of certain landscaping improvements the City desires to make to the City -Owned Property and the Agency -Owned Property (collectively, the "City Landscaping Improvments"). 882/015610-0061 2 390889.09 a12/17/03 E. City now desires to grant to Grantee an easement over the City -Owned Property, and Agency desires to grant to Grantee an easement over the Agency -Owned Property, for purposes of (i) Grantee installing, and thereafter maintaining, certain landscaping improvements, within the City -Owned Property and the Agency -Owned Property, if City does not receive the Landscaping Grants on or before March 1, 2004. Additionally, City, Agency, and Grantee desire to set forth the terms and conditions for Grantee's maintenance of said landscaping improvements. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals, City, Agency, and Grantee agree as follows: Grant of Landscgping Installation Easements. (a) City, on behalf of itself and its heirs, successors, and assigns to all or any part of the City -Owned Property, hereby grants to Grantee and Grantee's heirs, successors, and assigns to Grantee's interest in the Grantee Property, and for the benefit of the City -Owned Property, a non-exclusive easement (the "City -Owned Property Landscaping Installation Easement") for ingress and egress into, upon, over, and across any and all portions of the City -Owned Property for purposes of installing within the City -Owned Property (i) landscaping, in accordance with the standards set forth in the Landscaping Plan that was approved as part of the various Site Development Permits for the Project, and (ii) any and all irrigation equipment necessary for appropriate maintenance of such landscaping (collectively, the "City -Owned Property Developer Landscaping Improvements"). (b) Agency, on behalf of itself and its heirs, successors, and assigns to all or any part of the Agency -Owned Property, hereby grants to Grantee and Grantee's heirs, successors, and assigns to Grantee's interest in the Grantee Property, and for the benefit of the Agency -Owned Property, a non-exclusive easement (the "Agency -Owned Property Landscaping Installation Easement") for ingress and egress into, upon, over, and across any and all portions of the Agency -Owned Property for purposes of installing within the Agency -Owned Property (i) landscaping, in accordance with the standards set forth in the Landscaping Plan that was approved as part of the various Site Development Permits for the Project, and (ii) any and all irrigation equipment necessary for appropriate maintenance of such landscaping (collectively, the "Agency -Owned Property Developer Landscaping Improvements"). (c) City agrees that Grantee is permitted to enter the City -Owned Property to install the City -Owned Property Developer Landscaping Improvements, and Agency agrees that Grantee is permitted to enter the Agency -Owned Property to install the Agency -Owned Property Developer Landscaping Improvements, between the hours of 7 a.m. to 7 p.m., Monday through Saturday; provided, however, that not less than twenty-four (24) hours prior to Grantee's initial entry onto the City -Owned Property or the Agency -Owned Property, Grantee or its agents shall notify City or Agency, respectively, of its intent to do the same. (d) The easements granted pursuant to this Section 1 hereby are intended to be appurtenant easements for the benefit of City and Agency, and their respective successors, and assigns, subject to the provisions set forth herein. 882/015610-0061 380889.09 a12/17/03 -3- (e) City and Agency warrant to Grantee that they have the requisite power and authority to grant the easements described in this Section 1. (f) Upon Grantee's completion of installation of the City -Owned Property Developer Landscaping Improvements and the Agency -Owned Property Developer Landscaping Improvements, as determined by City, the easements described in this Section 1 shall automatically terminate and be of no further force and effect. Said termination shall not affect any of the other provisions in this Agreement, all of which shall survive such termination. (g) In the event City obtains the landscaping Grants on or before March 1, 2004, the easements described in this Section 1 shall automatically terminate and be of no further force and effect. Said termination shall not affect any of the other provisions in this Agreement, all of which shall survive said termination. 2. Grant of Landscaping Maintenance Easements. (a) City, on behalf of itself and its heirs, successors, and assigns to all or any part of the City -Owned Property, hereby grants to Grantee and Grantee's heirs, successors, and assigns to Grantee's interest in the Grantee Property, and for the benefit of the City -Owned Property, a non-exclusive easement (the "City -Owned Property Maintenance Easement") for ingress and egress into, upon, over, and across any and all portions of the City -Owned Property for purposes of maintaining the City -Owned Property Developer Landscaping Improvements or, if the City obtains the Landscaping Grants on or before March 1, 2004, the portion of the City Landscaping Improvements installed within the City -Owned Property. (b) Agency, on behalf of itself and its heirs, successors, and assigns to all or any part of the Agency -Owned Property, hereby grants to Grantee and Grantee's heirs, successors, and assigns to Grantee's interest in the Grantee Property and for the benefit of the Agency -Owned Property, a non-exclusive easement (the "Agency -Owned Property Maintenance Easement") for ingress and egress into, upon, over, and across any and all portions of the Agency -Owned Property for purposes of maintaining the Agency -Owned Property Developer Landscaping Improvements or, if the City obtains the Landscaping Grants on or before March 1, 2004, the portion of the City Landscaping Improvements installed within the Agency -Owned Property. (c) City agrees that Grantee is permitted to enter the City -Owned Property to maintain the City -Owned Property Developer Landscaping Improvements or, if the City obtains the Landscaping Grants on or before March 1, 2004, the portion of the City Landscaping Improvements installed within the City -Owned Property, between the hours of 7 a.m. to 7 p.m., Monday through Saturday. (d) Agency agrees that Grantee is permitted to enter the Agency -Owned Property to maintain the Agency -Owned Property Developer Landscaping Improvements or, if the City obtains the Landscaping Grants on or before March 1, 2004, the portion of the City Landscaping Improvements installed within the Agency -Owned Property, between the hours of 7 a.m. to 7 p.m., Monday through Saturday. 882/015610-0061 380889.09 a12/17/03 -4- (e) The easements granted pursuant to this Section 2 are intended to be an appurtenant easement for the benefit of City and Agency, and their respective successors, and assigns, subject to the provisions set forth herein. (f) City and Agency warrant to Grantee that they have the requisite power and authority to grant the easements described in this Section 2. 3. Grantee's Maintenance Obligations. ions. Grantee agrees, at Grantee's sole cost and expense, to maintain, in a good condition and repair and in compliance with all of City's requirements, (i) the City -Owned Property Developer Landscaping Improvements and the Agency -Owned Property Developer Landscaping Improvements, if City does not obtain the Landscaping Grants on or before March 1, 2004 and Grantee is obligated pursuant to the DDA to install landscaping within the City -Owned Property and the Agency -Owned Property, or (ii) the City Landscaping Improvements, if City obtains the Landscaping Grants on or before March 1, 2004 ("Grantee's Maintenance Obligations"). Under clause (i) above, Grantee's Maintenance Obligations as to any portion of the City -Owned Property Developer Landscaping Improvements and the Agency -Owned Property Developer Landscaping Improvements shall commence on the date Grantee completes installation of such portion of the landscaping improvements. Under clause (ii) above, Grantee's Maintenance Obligations shall commence on the date City notifies Grantee that City has completed installation of the City Landscaping Improvements. Grantor's Maintenance Obligations shall survive termination of the easements granted pursuant to Section 1 and continue throughout the life of the Redevelopment Plan for the La Quinta Redevelopment Project No. 2. 4. City's Use of City -Owned Property' Agency Use of Agency -Owned Property. Nothing herein is intended to limit City's use of the City -Owned Property or Agency's use of the Agency -Owned Property; provided, however, that neither City nor Agency shall make any improvements to the City -Owned Property or the Agency -Owned Property, or take any actions, that would affect Grantee's unimpeded use of the easements granted pursuant to Sections 1 and 2 hereof or damage the City -Owned Property Developer Landscaping Improvements or the Agency -Owned Property Developer Landscaping Improvements, or, if the City obtains the Landscaping Grants on or before March 1, 2004, the City Landscaping Improvements. 5. Indemnification. Grantee shall indemnify, defend, and hold harmless City and Agency from and against any and all claims, obligations, demands, causes of action, damages, losses, liabilities, or expenses incurred in connection with or arising out of the use of the Easement as provided herein by Grantee and/or invitees, contractors, or agents of Grantee performing work on behalf of Grantee. 6. Covenants Run with the Land, Appurtenant Easements. All of the covenants, easements, agreements, conditions and restrictions contained herein, whether affirmative or negative: (a) are made for the direct benefit of the City -Owned Property 882/015610-0061 380889.09 a12/17/03 -5- and the Agency -Owned Property; (b) are covenants running with the land; (c) are appurtenant to and shall not be conveyed or otherwise transferred separately from the City -Owned Property, the Agency -Owned Property, or the Grantee Property; and (d) bind and inure to the burden or benefit, as the case may be, of the respective heirs, personal representatives, successors and assigns of the parties hereto, including, without limitation, successive owners of all or any portion of, respectively, the City -Owned Property, the Agency -Owned Property, and the Grantee Property. 7. General Provisions. (a) Applicable Law The Municipal and Superior Courts of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Agreement. This Agreement shall be governed by, and construed under, the laws of the State of California. In addition to any other rights or remedies, any party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement. The rights and remedies of the parties are cumulative and the exercise by any party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other right or remedies for the same default or any other default by the other party(ies). Service of process shall be made in any manner permitted by law and shall be effective whether served within or outside of California. (b) Attorneys Fees If any party to this Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Agreement, the party prevailing in the final judgment in such action or proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable attorney's fees. Attorney's fees shall include reasonable costs for investigating such action, conducting discovery, retaining expert witnesses, and all other necessary costs the court allows which are incurred in such litigation. (c) Notices Unless otherwise provided herein, all notices required to be delivered under this Agreement or under applicable law shall be (i) personally delivered, or (ii) delivered by United States mail, postage prepaid, certified, return receipt requested, or (iii) delivered by reputable document delivery service that provides a receipt showing date and time of delivery. Notices personally delivered or delivered by a document delivery service shall be effective upon receipt. Notices delivered by mail shall be effective at noon on the second business day following deposit with the United States Postal Service. A party hereto may at any time, by giving ten (10) days' written notice to the other parties hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be delivered to the following addresses: 882/015610-0061 380889.09 a12/17/03 -6- To Grantor: CP Development La Quinta, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant With copies to: Selzer, Ealy, Hemphill & Blasdel, LLP 777 Tahquitz Canyon Way, Suite 528 Palm Springs, CA 92262 Attn: Emily Perri Hemphill, Esq. Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong To City/Agency: City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attention: City Manager With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. (d) Interpretation; Severability The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against any party hereto by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Agreement. Each provision of this Agreement shall be severable from the whole. If any provision of this Agreement shall be found contrary to law, the remainder of this Agreement shall continue in full force. (e) Integration; Amendment It is understood that there are no oral agreements between the parties hereto affecting this Agreement, and this Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements, and understandings, if any, between the parties with respect to the subject matter hereof, and none shall be used to interpret this Agreement. This Agreement may be amended at any time by the mutual consent of the parties by an instrument in writing which is recorded in the official records of Riverside County. 882/015610-0061 380889.09 a12/17/03 -7- 8. Inaction Not a Waiver of Default. Any failures or delays by any party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive any such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 9. Non -Liability of Officials and Employees of City or Agency. No member, official or employee of City or Agency shall be personally liable to the Grantee, or any successor in interest, in the event of any default or breach by the City or Agency or for any amount which may become due to the Grantee or its successors, or on any obligations under the terms of this Agreement. 10 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon the Grantee and its permitted successors and assigns. Whenever the term "Grantee" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. 11. Relationship Between Grantee, City and Agency. It is hereby acknowledged that the relationship between the Grantee and City is not that of a partnership or joint venture and that the Grantee and the City shall not be deemed or construed for any purpose to be the agent of the other. It is hereby acknowledged that the relationship between the Grantee and Agency is not that of a partnership or joint venture and that the Grantee and the Agency shall not be deemed or construed for any purpose to be the agent of the other. 12. Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. 13. No Waiver. A waiver by any party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by any other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 14. Conflicts of Interest. No member, official, representative, or employee of City or Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, representative, official or employee participate in any decision relating to the Agreement which 882/015610-0061 380889.09 a12/17/03 -8- affects his personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first above written. ATTEST: City Clerk "Grantor" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "City" CITY OF LA QUINTA, a California municipal corporation By: Its: "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: [SIGNATURES CONTINUED ON NEXT PAGE] 882/015610-0061 380889.09 a12/17/03 -9- ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP M. Katherine Jenson Attorneys for City of La Quinta [END OF SIGNATURES] 882/015610-0061 380889.09 a12/17/03 -10- EXHIBIT "A" LEGAL DESCRIPTION OF GRANTEE PROPERTY The following described property in the City of La Quinta, County of Riverside, State of California: IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO. 23971-1, ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 0002738" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026'40" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 8903322" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 00026'40" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41°42'33", AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044'32" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45°27'41 ", AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 108979, O.R. 882/015610-0061 380889.09 a12/17/03 THENCE SOUTH 00012' 13" EAST ALONG SAID EASTERLY LINE, A DISTANCE OF 790.73 FEET TO AN ANGLE POINT THEREIN; THENCE SOUTH 43056'42' WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42059'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 02°57'46", AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C" AND ITS NORTHWESTERLY PROLONGATION NORTH 64021'03" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO.255528, O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 860I 1'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 005'41 ", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 75033'02" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17033'23" EAST; THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00032'28", AN ARC DISTANCE OF 23.61 FEET TO A POINT HEREINAFTER 882/015610-0061 380889.09 ai2/17/03 -2- REFERRED TO AS POINT B, SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06", AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006'56" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013' 18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02012'44", AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 67006'56" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001'12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19058'08", AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028'37" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36057'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18051'35", AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (1,850,000 SQUARE FEET), MORE OR LESS. 882/015610-0061 380889.09 a]2/17/03 -3- P.O.C. CTR. 1 /4 COR. SEC. 19 S 00 500' E MILES AVENUE 7.0 N 89'31' 3' E 487.01' N 89'3: N 00'28'37" W 153.41' T.P.O.B. !y9 y to _ L6 _ _ 960.27' -� " L7 _ � _ S 00'26'40" E 112.88' �/1�\ S 44'0.06' E y 90.06' � 0� SITE N 8239.56'y 9-47-47E s� N 6'Ol'12" E n (R AREA-42.47 AC. o • L4 PORTION OF THE S. 1 /2 OF SEC. 19, T.5S., R.7E., S.B.M. La -� Y (R) L5 N 75'53'46" E bb / (R)- to vPFt\E`' L3 PT. 8 N� N 86'11'26" E 1' TR) 23" F Cgc�C �•; -- (R) o. LINE DATA NUMBER DIRECTI DISTANCE L1 S 00'18ON 01'f 397.49 L2 N 48'09'56" W 22.00' L3 N 75733'02' E 4.22' L4 L5 N 6TOS'S6" E S .6T06 56" w 20.00' 20:00' L6 N 00'26'40" W 20.00' L7 N 89'33 22" E 80.00'` CURVE i EXCEPTION PARCEL PT. A �S�.. N 36'57'27' E/ a (R) II 94?' 03• LENGTH TANGENT 982/015610-0061 380889.09 a] 2/17/03 _4_ e��Fiy L2 gNti�� J.N. 1612 EXHIBIT "B" SITE MAP [See Following Page] The Site Map is not a tract map and the parcels depicted thereon are not legal parcels. Upon Grantee's preparation of a tract map that creates legal parcels substantially consistent with the Site Map, Grantee shall prepare legal descriptions for each parcel, and Agency, City, and Grantee shall cooperate to attach the legal description for the Agency -Owned Property to Exhibit "C" hereto. 882/015610-0061 380889.09 a12/17/03 LOTS LAND USE LOT 1 - RESTAURANT LOT 2 - RESORT CASITAS *LOT 14930 0.34 LOT 3 - RESORT CASITAS LOT 4 - RESORT CASITAS LOT 5 - RESIDENTIAL *LOT 6 - PARK LOT 7 = RESIDENTIAL *LOT •C• LOT 8' - 14297 s.f. THE SANCTUARY 0.33 oc. LOT 9 - a THE SANCTUARY LOT 10 - MEDICAL OFFICE BUILDINGS LOT 11 - -MEDICAL OFFICE BUILDINGS LOT 12 -• MEDICAL OFFICE BUILDINGS LOT 13 - RESTAURANT LOT 14 HOTEL COMMONLOTSLAND USE LOT 'A• - - - - - - - MEDICAL OFFICE PARKING / LAN LOT 'B• - - - - - - - SEELEY DRIVE * LOT •C• - - - - - - 20' PARKWAY IWASHINGTON STI * LOT 'D• - - - - - - - CITY LANDSCAPE ENTRY * LOT 'E• - - - - - - - 20' PARKWAY (WASHINGTON' ST LOT 'F` - - - - - - - WELLSITE * LOT' •G• - - - - - - - WELLSITE (N.A.P.) * LOT 'H- - - - - - - - 20' PARKWAY (MILES AVENUE) *LOT •I• - - • - - - - 20' PARKWAY (MILES AVENUE) * Inese par=lb AM uo& WILAS wuvv)w v' the La Quinta Redevelopment Agency. They are depicted on this Site Map for Convenience of reference only. GRANTEE PROPERTY CITY -OWNED PROPERTY AGENCY -OWNED PROPERTY N.T.S. NOVEMBER 21, 2003 F_q I ® EXHIBIT "C" LEGAL DESCRIPTION OF AGENCY -OWNED PROPERTY [To be inserted prior to recordation] 882/015610-0061 380989.09 a12/17/03 -2- ATTACHMENT NO. 13 DEVELOPMENT AGREEMENT [See Following Pages] 882/015610-0061 380989.09 a12/17/03 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attn: City Clerk Space Above This Line for Recorder's Use (Exempt from Recording Fee per Gov't Code § 6103) DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF LA QUINTA I4 Qw CP DEVELOPMENT LA QUINTA, LLC 394/015610-0061 390243.13 a12/17/03 - l - TABLE OF CONTENTS Page 1.0 GENERAL........................................................................................................................ 3 1.1 Term...................................................................................................................... 3 1.2 Effective Date.......................................................................................................3 1.3 Amendment or Cancellation.................................................................................3 1.4 Termination...........................................................................................................3 2.0 DEVELOPER'S RIGHTS AND LIMITATIONS REGARDING CONSTRUCTION OF THE PROJECT...........................................................................3 2.1 Right to Develop................................................................................................... 3 2.2 Additional Applicable Codes and Regulations..................................................... 4 2.3 Permitted Density, Height and Use Limitations...................................................5 3.0 DEVELOPER'S OBLIGATIONS...................:................................................................5 3.1 Development of the Project; Planned Development.............................................5 3.2 Conditions of Approval......................................................................................... 6 3.3 Covenants, Conditions and Restrictions...............................................................6 3.3.1 Recordation of Covenants, Conditions and Restrictions and Establishment of Casitas Development Homeowner Association................................................................................................ 6 3.3.2 Recordation of Covenants, Conditions and Restrictions and Establishment of Sanctuary Villas Development Homeowner Association................................................................................................ 7 3.4 Payments to City by Developer............................................................................ 7 3.4.1 General......................................................................................................7 3.4.2 Developer's Payments of One -Time Mitigation Fees ..............................7 3.4.3 Casitas Development Annual Mitigation Fee; Termination ..................... 8 3.4.4 Sanctuary Villas Development Annual Mitigation Fee; Termination............................................................................................... 8 3.4.5 Payment of Casitas Development Public Facilities Fee...........................9 3.4.6 Payment of Sanctuary Villas Development Public Facilities Fee ............ 9 3.4.7 Consumer Price Index Adjustments..........................................................9 3.4.8 Termination of Sanctuary Villas Development Fees..............................10 3.4.9 Landscape Improvements Payment; Maintenance..................................10 3.4.10 Other F ees and Charges; Assessment Appeals.......................................11 3.5 Park Improvements.............................................................................................11 3.6 Dedications and Improvements...........................................................................11 3.7 Indemnification...................................................................................................12 3.8 Insurance.............................................................................................................12 4.0 CITY'S OBLIGATIONS................................................................................................13 4.1 Scope of Subsequent Review/Confirmation of Compliance Process.................13 4.2 Project Approvals Independent...........................................................................14 4.3 Review for Compliance......................................................................................14 394/015610-0061 390243.13 a12/17/03 -1- Page 5.0 DEFAULT; REMEDIES; DISPUTE RESOLUTION....................................................14 5.1 Notice of Default.................................................................................................14 5.2 Cure of Default...................................................................................................15 5.3 City Remedies.....................................................................................................15 5.4 Developer's Exclusive Remedy..........................................................................15 6.0 MORTGAGEE PROTECTION; CERTAIN RIGHTS OF CURE.................................16 6.1 Encumbrances on the Project Site......................................................................16 6.2 Mortgage Protection............................................................................................16 6.3 Mortgagee Not Obligated...................................................................................16 6.4 Notice of Default to Mortgagee; Right of Mortgagee to Cure ............................16 7.0 TRANSFERS OF INTEREST IN SITE OR AGREEMENT ................... 7.1 Prohibition..................................................................................... 7.2 Transfers Prior to Completion of Project ...................................... 7.3 Assignment and Assumption of Obligations ................................ 7.4 Successors and Assigns................................................................. 7.5 Assignment by City....................................................................... 8.0 MISCELLANEOUS........................................................................... 8.1 Notices.................................................................................... 8.2 Force Majeure . ......................................................................... 8.3 Binding Effect......................................................................... 8.4 Independent Entity.................................................................. 8.5 Agreement Not to Benefit Third Parties ................................. 8.6 Covenants................................................................................ 8.7 Nonliability of City Officers and Employees ......................... 8.8 Covenant Against Discrimination ........................................... 8.9 Amendment of Agreement...................................................... 8.10 No Waiver............................................................................... 8.11 Severability............................................................................. 8.12 Cooperation in Carrying Out Agreement ................................ 8.13 Estoppel Certificate................................................................. 8.14 Construction............................................................................ 8.15 Recordation............................................................................. 8.16 Captions and References......................................................... 8.17 Time........................................................................................ 8.18 Recitals & Exhibits Incorporated; Entire Agreement ............. 8.19 Exhibits................................................................................... 8.20 Counterpart Signature Pages ................................................... 8.21 Authority to Execute............................................................... 8.22 City Approvals and Actions .................................................... 8.23 Governing Law; Litigation Matters ........................................ 8.24 No Brokers.............................................................................. ..........................18 ..........................18 ..........................19 .......................... 20 .......................... 20 .......................... 20 .......................... 20 .......................... 20 .......................... 21 .......................... 21 .......................... 21 .......................... 21 .......................... 21 .......................... 21 .......................... 22 .......................... 22 .......................... 22 .......................... 22 .......................... 22 .......................... 22 .......................... 23 .......................... 23 .......................... 23 .......................... 23 .......................... 23 394/015610-0061 390243.13 a12/17/03 -11- DEVELOPMENT AGREEMENT This Development Agreement (the "Agreement") is entered into as of the day of , 2003 ("Reference Date"), by and between the CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of the California (the "City"), and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company (the "Developer"), with reference to the following: RECITALS. - A. Government Code Sections 65864-65869.5 ("Development Agreement Act") authorize the City to enter into a binding development agreement for the development of real property within its jurisdiction with persons having legal or equitable interest in such real property- B. Pursuant to Section 65865 of the Government Code, the City has adopted its Development Agreement Ordinance (La Quinta Municipal Code Section 9.250.030) establishing procedures and requirements for such development agreements ("Development Agreement Ordinance"). C. Prior to or concurrently with the execution of this Agreement, Developer has entered into a Disposition and Development Agreement (the "DDA") with the La Quinta Redevelopment Agency ("Agency"), pursuant to which (1) the Agency, subject to the terms and conditions set forth in the DDA, has agreed to sell to the Developer, in one or more phases, certain real property located within the City southeast of the Miles Avenue and Washington Street intersection which is legally described in Exhibit A-1 attached hereto and shown on the Site Map attached hereto as Exhibit A-2 (the "Site"); and (2) the Developer has agreed to construct on the Site the "Project," which will consist of a mixed use residential and commercial development, and other permitted uses. The Project is more fully described in, and subject to (i) this Agreement, (ii) the Center Point Specific Plan, also known as Specific Plan No. SP2001-055 as amended by City Council Resolution No. 2003-035 on June 3, 2003 ("Specific Plan"); (iii) the DDA, (iv) the Mitigated Negative Declaration prepared for the Project, dated December 5, 2001, as amended by the Addendum to Mitigated Negative Declaration, approved by the City Council on June 3, 2003, by City Council Resolution No. 2003-035 (collectively, the "Revised Mitigated Negative Declaration"); (v) any future Site Development Permits issued for the Project, including all conditions of approval attached thereto (collectively, the "Project Site Development Permits"); (vi) any future Tract Maps approved for the Project, including all conditions of approval thereto (collectively, the "Project Tract Maps"); and (vii) the conditions of approval associated with each and all of the foregoing approvals (collectively, the "Conditions of Approval"). The documents described in the foregoing clauses (i)-(vi) are collectively referred to herein as the "Development Plan," and are, or when approved or issued shall be, on file with the City Clerk. D. By virtue of the DDA, as of the execution of this Agreement, the Developer has an equitable interest in the Site. By its execution of the consent form attached to this Agreement, the Agency consents to recordation of this Agreement against the Site. 394/015610-0061 390243.13 a12/17/03 -1- E. Consistent with Section 9.250.030 of the La Quinta Municipal Code, City and Developer desire to enter into a binding agreement for purposes of (i) identifying the terms, conditions, and regulations for the construction of the Project, certain components of which constitute a Planned Development (as defined in Civil Code Section 1351(k)); (ii) setting forth a payment schedule for the Developer's payment to the City of certain amounts designed to compensate the City in the event that certain components of the Project fail to generate specified levels of transient occupancy tax (as that term is used in La Quinta Municipal Code Chapter 3.24) (hereinafter, "transient occupancy tax" or "TOT"); (iii) setting forth a payment schedule for the Developer's payment to the City of Three Hundred Forty -Six Thousand Eleven Dollars ($346,011), to cover the Developer's contribution towards the cost of certain landscaping improvements the City desires to install within certain portions of the real property adjacent to the Site; (iv) requiring the Developer, at its sole cost, to construct a neighborhood park on certain real property owned in fee by the City; and (v) setting forth the extent to which Developer may construct, develop, use and operate the Project. F. Among other purposes, this Agreement is intended to be, and shall be construed as, a development agreement within the meaning of the Development Agreement Act. This Agreement will eliminate uncertainty in planning for and secure the orderly development of the Project, ensure a desirable and functional community environment, provide effective and efficient development of public facilities, infrastructure, and services appropriate for the development of the Project, and assure attainment of the maximum effective utilization of resources within the City, by achieving the goals and purposes of the Development Agreement Act. In exchange for these benefits to City, Developer desires to receive the assurance that they may proceed with development of the Project in accordance with the terms and conditions of this Agreement and the Development Plan, all as more particularly set forth herein. G. The City Council has determined that the Project and this Agreement are consistent with the City's General Plan and the Specific Plan, including the goals and objectives thereof. H. All actions taken by City have been duly taken in accordance with all applicable legal requirements, including the California Environmental Quality Act (Public Resources Code Section 21000, et seq.) ("CEQA"), and all other requirements for notice, public hearings, findings, votes and other procedural matters. I. On June 17, 2003, the City Council adopted its Ordinance No. 385 approving this Agreement. AGREEMENT. - NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged, the parties do hereby agree as follows: 394/015610-0061 _ 390243.13 a12/17/03 -2 1.0 GENERAL 1.1 Term. The term of this Agreement shall commence on the Effective Date hereof and shall continue for fifty (50) years thereafter, unless said term is otherwise terminated, modified, or extended by circumstances set forth in this Agreement or by mutual consent of the parties hereto after the satisfaction of all applicable public hearing and related procedural requirements. 1.2 Effective Date. This Agreement shall be effective, and the obligations of the parties hereunder shall be effective, as of July 17, 2003, which is the date that Ordinance No. 385 takes effect ("Effective Date"). 1.3 Amendment or Cancellation. Except as expressly stated to the contrary herein, this Agreement may be amended or canceled in whole or in part only by mutual consent of the parties and in the manner provided for in Government Code Section 65867-65868 and the City's Development Agreement Ordinance. 1.4 Termination. Unless terminated earlier, pursuant to the terms hereof, this Agreement shall automatically terminate and be of no further effect upon the expiration of the Term of this Agreement as set forth in Section 1.1. Termination of this Agreement, for any reason, shall not, by itself, affect any right or duty arising from entitlements or approvals set forth under the Development Plan, as defined in Section 2.1, below. Notwithstanding anything herein to the contrary, in the event the "Initial Escrow" or the "Property Escrow" (as those terms are defined in the DDA), as applicable, fail to close within the time set forth in the DDA, as such time may be extended pursuant to the terms of the DDA, this Agreement shall automatically terminate and the Developer and City agree to execute and record such document as the Title Company (defined in the DDA) reasonably requires to remove this Agreement of record. 2.0 DEVELOPER'S RIGHTS AND LIMITATIONS REGARDING CONSTRUCTION OF THE PROJECT 2.1 Right to Develop. Subject to the terms, conditions, and covenants of this Agreement, Developer's right to develop the Project in accordance with the Development Plan (and subject to the Conditions of Approval which, among other Conditions of Approval associated with future approvals and permits issued by the City, includes but is not limited to the Conditions of Approval set forth in Exhibit "B" attached hereto) shall be deemed vested upon approval of the Development Plan, which vesting shall expire upon the earlier of the following occurrences: (a) termination of this Agreement; (b) termination of the DDA; (c) an uncured material default by Developer of this Agreement or the DDA; (d) as to a particular phase, parcel, or lot comprising a portion of the 394/015610-0061 390243.13 a12/17/03 -3- Site, the earlier of the final approved City inspection of the completed development on such phase, parcel, or lot or the issuance by City of a certificate of occupancy for such phase, parcel, or lot; or (e) as to a particular phase, parcel, lot comprising a portion of the Site, the date set forth in the DDA when Developer was required to have completed the development of all improvements on such phase, parcel, or lot. Except for the expiration set forth in clause (a) of the preceding sentence, the expiration of the vesting right set forth in the preceding sentence shall not terminate the obligations of Developer under this Agreement. Notwithstanding anything in this Agreement to the contrary, the Project shall remain subject to: (i) all ordinances, regulations, rules, laws, plans, policies, and guidelines of the City and its City Council, Planning Commission, and all other City boards, commissions, and committees existing on the Effective Date of this Agreement (collectively, the "Existing Development Regulations"); (ii) all amendments or modifications to Existing Development Regulations after the Effective Date of this Agreement and all ordinances, regulations, rules, laws, plans, policies, and guidelines of the City and its City Council, Planning Commission, and all other City boards, commissions, and committees enacted or adopted after the Effective Date of this Agreement (collectively, "New Laws"), except such New Laws which would prevent or materially impair Developer's ability to develop the Project in accordance with the Development Plan unless such New Laws are (A) adopted by the City on a City-wide basis and applied to the Site in a non-discriminatory manner, (B) required by a non -City entity to be adopted by or applied by the City (or if optional the failure to adopt or apply such non -City law or regulation would cause City to sustain a loss of funds or loss of access to funding or other resources), or (C) New Laws the City reserves the right to apply under this Agreement, including but not limited to Sections 2.2 and 3.4.10; (iii) all subsequent development approvals and the conditions of approval associated therewith, including but not limited to Site Development Permits, Project Tract Maps, and building permits, (iv) the payment of all fees or exactions in the categories and in the amounts as required at the time such fees are due and payable which may be at the time of issuance of building permits, or otherwise as specified by applicable law, as existing at the time such fees are due and payable, and (v) the reservation or dedication of land for public purposes or payment of fees in lieu thereof as required at the time such reservations or dedications or payments in lieu are required under applicable law to be made or paid. 2.2 Additional Applicable Codes and Regulations Notwithstanding any other provision of this Agreement, City also reserves the right to apply the following to the development of the Project: 2.2.1 Building, electrical, mechanical, fire and similar building codes based upon uniform codes adopted in, or incorporated by reference into, the La Quinta Municipal Code, as existing on the Effective Date of this Agreement or as may be enacted or amended thereafter, applied to the Project in a nondiscriminatory manner. 394/015610-0061 _ 390243.13 a12/17/03 -4 2.2.2 In the event of fire or other casualty requiring construction of more than fifty (50%) percent of any building previously constructed hereunder, nothing herein shall prevent the City from applying to such reconstruction all requirements of the City's Building, Electrical, Mechanical, and similar building codes based upon uniform codes adopted in, or incorporated by reference into, the La Quinta Municipal Code, solely to the extent applicable to all development projects in the City. 2.2.3 This Agreement shall not prevent the City from establishing any new City fees, including new development impact fees, or increasing any existing City fees, including existing development impact fees, including but not limited to the Community Facility Fees, as discussed in 3.4 below, and to apply such new or increased fees to the Project or applicable portion thereof where such new or increased fees may be charged. 2.3 Permitted Density Height and Use Limitations. The permitted uses, density and intensity of use, location of uses, maximum height and size of proposed buildings, minimum setbacks, and other standards applicable to the Project shall be those set forth in the Development Plan and this Agreement, whichever is the strictest. 3.0 DEVELOPER'S OBLIGATIONS 3.1 Development of the Project,• Planned Development. Developer shall construct the Project on the Site in accordance with the Development Plan. The Project shall consist of a mixed -use residential and commercial development with the following components: (A) a mid -price suites hotel containing approximately one hundred thirty-four (134) guest rooms ("Suites Hotel") to be constructed on a portion of the Site, as depicted on the Site Map (the "Suites Hotel Parcel"); (B) a resort -style condominium/casitas project containing approximately one hundred thirty-six (136) condominium/casitas units ("Casitas Development") to be constructed on a portion of the Site, as depicted on the Site Map (the "Casitas Development Parcel(s)"); (C) a residential development containing approximately thirteen (13) "courtyard cluster villas" homes ("Villas Residential Development") to be constructed on a portion of the Site, as depicted on the Site Map (the "Villas Residential Development Parcel"); (D) a residential development containing approximately fifty-four (54) homes consisting of approximately twenty-nine (29) "Courtyard Cluster Homes" and approximately twenty-five (25) "Perimeter Homes" (collectively, the "Cluster/Perimeter Residential Development"), to be constructed on a portion of the Site, as depicted on the Site Map ("Cluster/Perimeter Residential Development Parcel"), with (i) fourteen (14) of the homes ("Unrestricted Cluster/Perimeter Component") within the Cluster/Perimeter Residential Development to be sold on a market rate basis; and 394/015610-0061 390243.13 a12/17/03 -5- (ii) forty (40) of the homes ("Affordable Housing Component") within the Cluster/Perimeter Residential Development to be marketed and sold to moderate income buyers at an affordable housing cost (as those terms are defined in Health & Safety Code Section 50093); (E) two (2) restaurants (the "Restaurants"); (F) a medical office/surgical facility ("Medical Office/Surgical Facility") to be constructed on a portion of the Site (the "Medical/Office/Surgical Facility Parcel(s)"); and (G) a development containing approximately twenty-six (26) sanctuary villas ("Sanctuary Villas Development") to be constructed on a portion of the Site, as depicted on the Site Map (the "Sanctuary Villas Parcel(s)"); The Site Map is not a tract map and the parcels depicted there are not legal parcels. Upon Developer's preparation of a tract map that creates legal parcels substantially consistent with the Site Map, Developer shall prepare legal descriptions for each of the Suites Hotel Parcel, the Casitas Development Parcel(s), the Villas Residential Development Parcel, the Cluster/Perimeter Residential Development Parcel, the Medical Office/Surgical Facility Parcel(s), and the Sanctuary Villas Parcel(s), and Agency and Developer shall cooperate to attach such legal descriptions to any document where such legal descriptions are required. The Villas Residential Development, the Cluster/Perimeter Residential Development, the Sanctuary Villas Development, and the Casitas Development shall each constitute a Planned Development, and shall be developed and operated in compliance with Section 1350, et SeMc . of the Civil Code. 3.2 Conditions of Approval. The Conditions of Approval attached hereto as Exhibit "B" include and incorporate the mitigation measures of the Revised Mitigated Negative Declaration so that significant environmental effects will be mitigated or avoided. The Developer shall also comply with the mitigation monitoring program set forth in Exhibit "C" attached hereto (the "Mitigation Monitoring Program"). Developer acknowledges that additional Conditions of Approval beyond those set forth in Exhibit `B" may be applicable to the Project if and as associated with future Project approvals including but not limited to Site Development Permits and Project Tract Maps. 3.3 Covenants. Conditions and Restrictions. 3.3.1 Recordation of Covenants. Conditions and Restrictions and Establish- ment of Casitas Development Homeowner Association. Prior to, and as a condition of, the City's issuance of any building permits for the Casitas Development, the Developer shall submit to the City, obtain approval thereof, and record, covenants, conditions and restrictions against the Casitas Development Parcel which, in addition to the obligations set forth in the Conditions of Approval, shall (i) establish a homeowner's association for the Casitas Development (the "Casitas Development HOA"); (ii) provide for the Casitas Development HOA's payment of the fees described in Sections 3.4.3 and 3.4.5; and (iii) provide for the rental of each of the units in the Casitas Development through a national 394/015610-0061 390243.13 al2/17/03 -6- reservation system (unless Developer provides to the reasonable satisfaction of the City a written, final, and binding determination by a governmental authority with jurisdiction, or the written opinion, subject only to reasonable qualifications, of a qualified legal counsel, that requiring the rental of units in the Casitas Development through a national reservation system would mandate registration of the Casitas Development or the sale of such units as a "security" within the meaning of applicable federal or state law or regulation). 3.3.2 Recordation of Covenants, Conditions and Restrictions and Establishment of Sanctuary Villas Development Homeowner Association. Prior to, and as a condition of, the City's issuance of any building permits for the Sanctuary Villas Development, the Developer shall submit to the City, obtain approval thereof, and record, covenants, conditions and restrictions against the Sanctuary Villas Parcels which, in addition to the obligations set forth in the Conditions of Approval, shall (i) establish a homeowner's association for the Sanctuary Villas Development (the "Sanctuary Villas Development HOA"); (ii) provide for the Sanctuary Villas Development HOA's payment of the fees described in Sections 3.4.4 and 3.4.6; and (iii) provide for the rental of each of the units in the Sanctuary Villas Development through a national reservation system (unless Developer provides to the reasonable satisfaction of the City a written, final, and binding determination by a governmental authority with jurisdiction, or the written opinion of a qualified legal counsel, subject only to reasonable qualifications, that requiring the rental of units in the Sanctuary Villas Development through a national reservation system would mandate registration of the Sanctuary Villas Development or the sale of such units as a "security" within the meaning of applicable federal or state law or regulation). 3.4 Payments to Cily by Developer. 3.4.1 General. During the Term of this Agreement, Developer or the applicable HOA, as applicable, shall make the payments to City described in this Section 3.4. The payments under this Section 3.4 are not the exclusive development impact fees for the Project and nothing in this Section 3.4 shall be construed as a limitation on the right of the City to impose, levy, or assess the Site other development fees as permitted by applicable law. 3.4.2 Developer's Payments of One -Time Mitigation Fees. a. Developer shall pay to the City, for each unit in the Casitas Development, with such payment due upon the first close of escrow for each such unit, the sum of One Thousand Five Hundred Dollars ($1,500). b. Developer shall pay to the City, for each unit in the Sanctuary Villas Development, with such payment due upon the first close of escrow for each such unit, the sum of Two Thousand One Hundred Fifty Dollars ($2,150). 394/015610-0061 390243.13 a12/17/03 -7- 3.4.3 Casitas Development Annual Mitigation Fee, Termination. During the term of this Agreement, on each July 1 st following the Effective Date ("Annual Mitigation Payment Date"), the Casitas Development HOA shall pay to the City an annual mitigation fee ("Casitas Development Annual Mitigation Fee") covering the annual period of the prior July 1 through the June 30 occurring immediately preceding the Annual Mitigation Payment Date (the "Operative Year") [provided, however, the first Operative Year shall commence on the Effective Date of this Agreement and end on the next occurring June 30). The Casitas Development Annual Mitigation Fee shall be the collective sum of One Hundred Fifty Dollars ($150) [as the same may increase by the CPI in accordance with Section 3.4.7] for each unit ("Casitas Development Unit Fee") in the Casitas Development that has been sold to a purchaser, as evidenced by the close of escrow for such unit, prior to the applicable Annual Mitigation Payment Date regardless of when or in which Operative Year the unit was sold. Notwithstanding anything herein to the contrary, the Casitas Development Annual Mitigation Fee shall not be required to be paid for any Operative Year in which the City has received transient occupancy taxes derived from, collectively, the Suites Hotel Parcel, the Casitas Development Parcel, and the Sanctuary Villas Parcel, which equals or exceeds Five Hundred Forty -Six Thousand One Hundred Thirty -One Dollars ($546,131.00) [as the same may increase by the CPI in accordance with Section 3.4.7] (the "Minimum Annual TOT Amount") for the applicable Operative Year. Notwithstanding the paragraph above, if the City has received the Minimum Annual TOT Amount in each of three (3) consecutive Operative Years, the Casitas Development HOA's obligation to pay the Casitas Development Annual Mitigation Fee shall be terminated and shall be of no further force or effect. 3.4.4 Sanctuary Villas Development Annual Mitigation Fee; Termination. During the term of this Agreement, on each Annual Mitigation Payment Date, the Sanctuary Villas Development HOA shall pay to the City an annual mitigation fee ("Sanctuary Villas Development Annual Mitigation Fee") covering the annual period of the prior July 1 through the June 30 occurring immediately preceding the Annual Mitigation Payment Date (the "Operative Year") [provided, however, the first Operative Year shall commence on the Effective Date of this Agreement and end on the next occurring June 30). The Sanctuary Villas Development Annual Mitigation Fee shall be the collective sum of One Hundred Fifty Dollars ($ l 50) ) [as the same may increase by the CPI in accordance with Section 3.4.7] for each unit ("Sanctuary Villas Development Unit Fee") in the Sanctuary Villas Development that has been sold to a purchaser, as evidenced by the close of escrow for such unit, regardless of when or in which Operative Year the unit was sold. Notwithstanding anything herein to the contrary, the Sanctuary Villas Development Annual Mitigation Fee shall not be required to be paid for any Operative Year in which the City has received transient occupancy taxes derived from, collectively, the Suites Hotel Parcel, the Casitas Development Parcel, and the Sanctuary Villas Parcel, which equals or exceeds the Minimum Annual TOT Amount for the applicable Operative Year. Notwithstanding the paragraph above, if the City has received the Minimum Annual TOT Amount in each of three (3) consecutive Operative Years, the Sanctuary Villas Development 394/015610-0061 390243.13 a12/17/03 -8- HOA's obligation to pay the Sanctuary Villas Development Annual Mitigation Fee shall be terminated and shall be of no further force or effect. 3.4.5 Payment of Casitas Development Public Facilities Fee. In addition to the other payments required to be paid pursuant to this Section 3.4, the Casitas Development HOA shall be required to pay to the City the sum of five percent (5%) of any rental amount charged for occupancy of a unit in the Casitas Development which is rented for a period of more than thirty (30) days (the "Casitas Development Public Facilities Fee"). The Casitas Development Public Facilities Fee shall be due and payable to the City within thirty (30) days after any such occupancy terminates, regardless of whether the rent, or any amount thereof, was collected. If the unit is provided free of charge or at a discount, as consideration for a service provided to the owner of the unit or to the Casitas Development HOA and/or for promotional or marketing purposes, the rent shall be deemed to be the higher of (i) the value of the services received; or (ii) the average rent of all of the units in the Casitas Development during the period the unit was provided. Notwithstanding the foregoing, the requirement to pay the Casitas Development Public Facilities Fee shall not apply in the case where an owner of a Casitas Development unit provides his or her Casitas Development unit to a person who is a relative of the owner, for no consideration, for a period of more than thirty (30) days. 3.4.6 Payment of Sanctuary Villas Development Public Facilities Fee. In addition to the other payments required to be paid pursuant to this Section 3.4, the Sanctuary Villas Development HOA shall be required to pay to the City the sum of five percent (5%) of any rental amount charged for occupancy of a unit in the Sanctuary Villas Development which is rented for a period of more than thirty (30) days (the "Sanctuary Villas Development Public Facilities Fee"). The Sanctuary Villas Development Facilities Fee shall be due and payable to the City within thirty (30) days after any such occupancy terminates, regardless of whether the rent, or any amount thereof, was collected. If the unit is provided free of charge or at a discount, as consideration for a service provided to the owner of the unit or to the Sanctuary Villas Development HOA and/or for promotional or marketing purposes, the rent shall be deemed to be the higher of (i) the value of the services received; or (ii) the average rent of all of the units in the Sanctuary Villas Development during the period the unit was provided. Notwithstanding the foregoing, the requirement to pay the Sanctuary Villas Development Public Facilities Fee shall not apply in the case where an owner of a Sanctuary Villas Development unit provides his or her Sanctuary Villas Development unit to a relative of the owner, for no consideration, for a period of more than thirty (30) days. 3.4.7 Consumer Price Index Adjustments. Each of the Casitas Development Annual Mitigation Fee, the Casitas Development Unit Fee, the Sanctuary Villas Development Annual Mitigation Fee, the Sanctuary Villas Development Unit Fee, and the Minimum Annual TOT Amount shall be adjusted annually, on each May 1st during the term of this Agreement, by the Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles -Riverside -Orange County average, All Items, 1982- 84 = 100, published by the United States Department of Labor, Bureau of Labor Statistics (the "CPI"), by comparing the CPI existing on the immediately prior March 1st to the CPI existing on the March Is' of the previous year. No adjustment shall be made in any year in which there has 394/015610-0061 390243.13 a12/17/03 -9- been a decrease in the CPI. If the CPI is no longer published at any point during the Term of this Agreement, a comparable index shall be selected by the parties. 3.4.8 Termination of Sanctuary Villas Development Fees. In the event that, after the Developer constructs the Casitas Development, the escrow pursuant to which the Developer is to acquire the Sanctuary Villas Parcel(s) from the La Quinta Redevelopment Agency is terminated, or the City has otherwise determined that the Developer will not construct the Sanctuary Villas Development, the City and Developer agree to execute and record any document reasonably required by the Riverside County Recorder's Office to terminate the provisions contained in this Development Agreement as they pertain to the Sanctuary Villas Development. From and after such termination the Developer shall have no rights or obligations under this Agreement with respect to the Sanctuary Villas Parcel(s). 3.4.9 Landscape Improvements Payment; Maintenance. The City has applied for various grants (collectively, the "Landscape Grants") to partially fund the cost of certain landscaping improvements (the "Landscaping Improvements") the City desires to make to certain portions of the real property adjacent to the Site (the "Agency and City Landscape Property"). The Landscape Improvements are estimated to cost approximately Nine Hundred Eleven Thousand Two Hundred Forty -Six Dollars ($911,246). The Developer's contribution towards the Landscape Improvements is Three Hundred Forty -Six Thousand Eleven Dollars ($346,011) (the "Developer's Contribution"). In the event the City obtains the Landscape Grants, Developer shall pay to the City the Developer's Contribution, pursuant to the following: (i) Developer shall pay to City One Hundred Fifteen Thousand Three Hundred Thirty -Seven Dollars ($115,337) prior to, and as a condition of, the close of escrow pursuant to which the Developer will purchase the real property on which the Developer will construct the Suites Hotel; (ii) Developer shall pay to City One Hundred Fifteen Thousand Three Hundred Thirty -Seven Dollars ($115,337) prior to, and as a condition of, the close of escrow pursuant to which the Developer will purchase the Sanctuary Villas Parcel(s); and (iii) Developer shall pay to City One Hundred Fifteen Thousand Three Hundred Thirty -Seven Dollars ($115,337) prior to, and as a condition of, the close of escrow pursuant to which the Developer will purchase the first of the Cluster/Perimeter Residential Development Parcel or Villas Residential Parcel. Notwithstanding the payment schedule outlined above, the full amount of the Developer's Contribution shall be due and payable to the City on or before May 20, 2004. Notwithstanding anything in this Agreement to the contrary, if the City does not obtain the Landscape Grants, (i) City shall not be obligated to construct the Landscape Improvements, (ii) Developer shall not be obligated to pay to City the Developer's Contribution, and (iii) Developer shall be obligated to construct on the Agency and City Landscape Property landscape improvements in accordance with the standards set forth in the Landscaping Plan that was 394/015610-0061 390243.13 a12/17/03 -10- approved as part of the various Site Development Permits for the Project, in accordance with Section 312 of the DDA (the "Developer Landscape Improvements"). Developer agrees to maintain, in perpetuity, the Landscape Improvements or the Developer Landscape Improvements, as applicable. City and Developer agree to execute an Easement Agreement, in the form attached to the DDA as Attachment No. 12, for purposes of providing Developer access to the Agency and City Landscape Property in order to perform Developer's obligations pursuant to this Section. 3.4.10 Other Fees and Charges; Assessment Appeals. Nothing set forth in this Agreement is intended or shall be construed to limit or restrict the City's authority to impose its existing, or any new or increased, fees, charges, levies, or assessments for the development of the Site, or to impose or increase, subject to the required procedure, any taxes applicable to the Site including but not limited to transient occupancy taxes, provided nothing set forth herein, subject to the next sentence, is intended or shall be construed to limit or restrict whatever right Developer might otherwise have to challenge any fee, charge, levy, assessment, or tax imposed. Developer agrees that it shall not to take any action, including any assessment appeal, to decrease the assessed value of any of the Site or any portion thereof below the final assessed value at the time the development of the Site or separate parcel thereof is completed; provided, however, the foregoing restriction on challenging or appealing assessments shall not apply to individual homeowners who have purchased units on the Villas Residential Development Parcel or the Cluster/Perimeter Residential Development Parcel. Developer shall timely pay all applicable fees, charges, levies, assessments, and special and general taxes validly imposed in accordance with the Constitution and laws of the State of California, including without limitation school impact fees in accordance with Government Code §§ 65995, et seq. 3.5 Park Improvements. Developer agrees to develop a neighborhood park on that certain City -owned property, which is identified as "Lot 6" in the Site Mhp (the "City Park Property"), in accordance with the list of park improvements set forth in Exhibit "D" hereto (the "Park Improvements") and all applicable City and State laws and regulations. Prior to Developer's entry onto the City Park Property, Developer shall enter into an Early Entry Agreement with the City substantially in the form of which is attached hereto as Exhibit "E". The Park Improvements shall be completed and accepted by the City prior to, and as a condition of, the City's final inspection of the first unit in the earlier of the Villas Residential Development Parcel or the Cluster/Perimeter Residential Development Parcel. 3.6 Dedications and Improvements. Developer shall offer dedications to the City or other applicable public agency, or complete those public improvements in connection with the Project, as specified in the Conditions of Approval. 394/015610-0061 390243.13 a12/17/03 3.7 Indemnification. a. The Developer agrees to and shall indemnify, hold harmless, and defend, the City and the Agency and their respective officers, officials, members, agents, employees, and representatives, from liability or claims for death or personal injury and claims for property damage which may arise from the acts, errors, and/or omissions of the Developer or its contractors, subcontractors, agents, employees or other persons acting on its behalf in relation to the Project and/or this Agreement. The foregoing indemnity applies to all deaths, injuries, and damages, and claims therefor, suffered or alleged to have been suffered by reason of the acts, errors, and/or omissions referred to in this paragraph, regardless of whether or not the City prepared, supplied, or approved plans or specifications, or both, and regardless of whether or not the insurance policies referred to in this Agreement are applicable. In the event of litigation, the City agrees, at no cost to the City, to cooperate with the Developer. b. In the event of any court action or proceeding challenging the validity of this Agreement or the Revised Mitigated Negative Declaration, the Developer shall indemnify, hold harmless, pay all costs and provide defense for the City in said action or proceeding with counsel chosen by Developer and reasonably approved by the City. The City shall, at no cost to the City, cooperate with the Developer in any such defense as Developer may reasonably request. In the event the Developer fails or refuses to provide such defense of any challenge to this Agreement or the Revised Mitigated Negative Declaration, City shall have the right not to defend such challenge, and to resolve such challenge in any manner it chooses in its sole discretion, including terminating this Agreement. 3.8 Insurance. Before beginning construction on the Site, the Developer shall cause the insurance required under this paragraph to be issued and thereafter to be maintained until one (1) year following the later of (i) the date City issues the last certificate of occupancy needed for the initial occupancy of the last portion of the Project, or (ii) the date the. City signs off on the last final inspection of the last of the Project improvements. Developer shall procure and maintain: a, A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (A) for death and bodily injury, either (i) a combined single limit of Three Million Dollars ($3,000,000) or (ii) Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and Three Million Dollars ($3,000,000) in the aggregate, and (B) for property damage, Three Million Dollars ($3,000,000) per occurrence. b. A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both the Developer and City against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Developer in the course of carrying out the work or services contemplated in this Agreement. C. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of Three 394/015610-0061 390243.13 a12/17/03 -12- Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and property damage liability limits of Three Million Dollars ($3,000,000) per occurrence and Three Million Dollars ($3,000,000) in the aggregate or (ii) combined single limit liability of Three Million Dollars ($3,000,000). Said policy shall include coverage for owned, non -owned, leased, and hired cars. The following additional requirements shall apply to all of the above policies of insurance: (i) All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation insurance, shall name City, the Agency, and their respective officers, officials, members, employees, agents, and representatives as additional insureds. (ii) The insurer shall waive all rights of subrogation and contribution it may have against City, Agency, and their respective officers, officials, members, employees, agents, and representatives, and their respective insurers. (iii) All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to City and Agency. (iv) The policies of insurance required by this Agreement shall not require Developer to meet a deductible of more than Twenty -Five Thousand Dollars ($25,000) unless approved in writing by the City Manager in his or her sole and absolute discretion. In the event any of said policies of insurance are cancelled, the Developer shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the City Manager. Not later than the Reference Date of this Agreement, Developer shall provide the City Manager with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the City Manager. Developer agrees that the provisions of this Section shall not be construed as limiting in any way Developer's indemnity obligations set forth in Section 3.7 or the extent to which Developer may be held responsible for the payment of damages to any persons or property resulting from the Developer's activities or the activities of any person or persons for which the Developer is otherwise responsible. 4.0 CITY'S OBLIGATIONS 4.1 Scone of Subseauent Review/Confirmation of Compliance Process. Nothing set forth herein shall impair or interfere with the right of the City to require the processing of building permits as required by law pursuant to the applicable provisions of the La Quinta Municipal Code and the provisions of City's Fire Codes and ordinances, Health and Safety Codes and ordinances, and Building, Electrical, Mechanical, and similar building codes. 394/015610-0061 390243.13 a12/17/03 -13- Prior to each request for a building permit, Developer shall provide City with a Compliance Certificate ("Certificate") in a form created by Developer and approved by the City, which shall describe how all applicable Conditions of Approval have been fully complied with. The Certificate shall be distributed to relevant City departments for checking the representations made by Developer on the Certificate. 4.2 Project Approvals Independent. All approvals required for the Project which may be or have been granted, and all land use entitlements or approvals generally which have been issued or will be issued by the City with respect to the Project, constitute independent actions and approvals by the City. If any provision of this Agreement or the application of any provision of this Agreement to a particular situation is held by a court of competent jurisdiction to be invalid or unenforceable, or if this Agreement terminates for any reason, then such invalidity, unenforceability or termination of this Agreement or any part hereof shall not affect the validity or effectiveness of any such Project approvals or other land use approvals and entitlements. In such cases, such approvals and entitlements will remain in effect pursuant to their own terms, provisions, and the Conditions of Approval. It is understood by the parties to this Agreement that pursuant to existing law, if this Agreement terminates or is held invalid or unenforceable as described above, such approvals and entitlements shall not remain valid for the term of this Agreement, but shall remain valid for the term of such approvals and entitlements. 4.3 Review for Compliance. The City shall review this Agreement at least once during every twelve (12) month period following the Effective Date of this Agreement, in accordance with the City's procedures and standards for such review set forth in the City's Development Agreement Ordinance. During such periodic review by the City, the Developer, upon written request from City, shall be required to demonstrate, and hereby agrees to furnish, evidence of good faith compliance with the terms hereof. The failure of the City to conduct or complete the annual review as provided herein or in accordance with the Development Agreement Act shall not impact the validity of this Agreement. If, at the conclusion of the annual review provided for herein, Developer shall have been found in compliance with this Agreement, City, through the City's Community Development Director, shall, at Developer's written request, issue a Certificate of Compliance to Developer stating that (1) this Agreement remains in full force and effect and (2) Developer is in compliance with this Agreement. The Certificate of Compliance shall be in recordable form, and shall contain information necessary to communicate constructive record notice of the finding of compliance. Developer, at its option and sole cost, may record the Certificate of Compliance. 5.0 DEFAULT, REMEDIES, DISPUTE RESOLUTION. 5.1 Notice of Default. In the event of failure by either party hereto substantially to perform any material term or provision of this Agreement, the non -defaulting party shall have those rights and remedies provided herein, provided that such non -defaulting party has first provided to the defaulting party a written notice of default in the manner required by Section 8.1 hereof identifying with 394/015610-0061 390243.13 a12/17/03 - 1 4- specificity the nature of the alleged default and the manner in which said default may satisfactorily be cured. 5.2 Cure of Default. Upon the receipt of the notice of default, the alleged defaulting party shall promptly commence to cure, correct, or remedy the identified default at the earliest reasonable time after receipt of the notice of default and shall complete the cure, correction or remedy of such default not later than five (5) days [or thirty (30) days for non -monetary defaults] after receipt of the notice of default, or, for such defaults that cannot reasonably be cured, corrected or remedied within five (5) days [or thirty (30) days for non -monetary defaults], such party shall commence to cure, correct, or remedy such default within such five (5) day period [or thirty (30) day period for non -monetary defaults], shall and continuously and diligently prosecute such cure, correction or remedy to completion. 5.3 City Remedies. In the event of an uncured default by Developer of the terms of this Agreement, the City, at its option, may institute legal action in law or in equity to cure, correct, or remedy such default, enjoin any threatened or attempted violation, or enforce the terms of this Agreement; provided, however, that (i) City and Developer agree that City's right to pursue damages is limited to the then -outstanding loan balance under that certain Note, executed by Developer, as "Maker," in favor of Agency, as "Holder," pursuant to the DDA, and (ii) in no event shall City be entitled to consequential damages for any Developer default. For purposes of this Agreement the term "consequential damages" shall include, but not be limited to, potential loss of anticipated tax revenues from the Project or any portion thereof. Furthermore, the City, in addition to or as an alternative to exercising the remedies set forth in this Section 5.3, in the event of a material default by Developer, may give notice of its intent to terminate or modify this Agreement pursuant to the City's Development Agreement Ordinance and/or the Development Agreement Act, in which event the matter shall be scheduled for consideration and review by the City Council in the manner set forth in the City's Development Agreement Ordinance or the Development Agreement Act. 5.4 Developer's Exclusive Remedy. The parties acknowledge that the City would not have entered into this Agreement if it were to be liable in damages under or with respect to this Agreement or any of the matters referred to herein including but not limited to the Development Plan, Conditions of Approvals, the Existing Development Regulations or any future amendments or enactments thereto, or the Project, except as provided in this Section. Accordingly, Developer covenants on behalf of itself and its successors and assigns, not to sue the City for damages or monetary relief for any breach of this Agreement by City or arising out of or connected with any dispute, controversy, or issue between Developer and City regarding this Agreement or any of the matters referred to herein including but not limited to the application, interpretation, or effect of this Agreement, the Development Plan, the Conditions of Approval, the Existing Development Regulations or nay future amendment or enactments thereto, or any land use permit or approval sought in connection with the development of the Project or any component thereof, or use of a parcel or 394/015610-0061 390243.13 a12/17/03 -15- any portion thereof, the parties agreeing that declaratory and injunctive relief, mandate, and specific performance shall be Developer's sole and exclusive judicial remedies. 6.0 MORTGAGEE PROTECTION, CERTAIN RIGHTS OF CURE 6.1 Encumbrances on the Project Site. This Agreement shall not prevent or limit the Developer from encumbering the Site or any portion thereof or any improvements thereon with any mortgage, deed of trust, sale and leaseback arrangement, or any other form of conveyance in which the Site, or a portion thereof or interest therein, is pledged as security, and contracted for in good faith and fair value (a "Mortgage") securing financing with respect to the construction, development, use or operation of the Project. 6.2 Mortgage Protection. This Agreement shall be superior and senior to the lien of any Mortgage. Notwithstanding the foregoing, no breach of this Agreement shall defeat, render invalid, diminish, or impair the lien of any Mortgage made in good faith and for value, and any acquisition or acceptance of title or any right or interest in or with respect to the Site or any portion thereof by a holder of a beneficial interest under a Mortgage, or any successor or assignee to said holder (a "Mortgagee") [whether pursuant to foreclosure, trustee's sale, deed in lieu of foreclosure, lease termination or otherwise] shall be subject to all of the terms and conditions of this Agreement. 6.3 Mortgagee Not Obligated. No Mortgagee will have any obligation or duty under this Agreement to perform the obligations of the Developer or other affirmative covenants of Developer hereunder, or to guarantee such performance, except that (i) the Mortgagee shall have no right to develop or operate the Site, and (ii) to the extent that any covenant to be performed by the Developer is a condition to the performance of a covenant by the City, the performance thereof shall continue to be a condition precedent to the City's performance hereunder. 6.4 Notice of Default to Mortgagee; Right of Mortgagee to Cure. City shall, upon written request to the City, deliver to each Mortgagee a copy of any notice of default given to Developer under the terms of this Agreement, at the same time of sending such notice of default to Developer. The Mortgagee shall have the right, but not the obligation, within five (5) days [or thirty (30) days for non -monetary defaults] after the receipt of such notice from City, to cure, correct, or remedy the default, or, for such defaults that cannot reasonably be cured, corrected, or remedied within five (5) days [thirty (30) days for non - monetary defaults], to commence to cure, correct, or remedy the default within such five (5) day period [or thirty (30) day period for non -monetary defaults], and to continuously and diligently prosecute such cure to completion. If the default is of a nature which can only be remedied or cured by such Mortgagee upon obtaining possession of the Site, such Mortgagee shall have the right to seek to obtain possession with diligence and continuity through foreclosure, a receiver or otherwise, and shall be permitted thereafter to remedy or cure the default within such time as is reasonably necessary to cure or remedy said default but in no event more than thirty (30) days 394/015610-0061 390243.13 a12/17/03 -16- after obtaining possession. If any such default cannot, with diligence, be remedied or cured within such thirty (30) day period, then such period shall be extended to permit the Mortgagee to effect a cure or remedy so long as Mortgagee commences said cure or remedy during such thirty (30) day period, and thereafter diligently pursues and completes such cure. 7.0 TRANSFERS OF INTEREST IN SITE OR AGREEMENT 7.1 Prohibition. The qualifications and identity of the Developer as the developer of high quality commercial developments are of particular concern to the City. Furthermore, the parties acknowledge that the City has negotiated the terms of this Agreement in contemplation of the development and operation of the Project on the Site and the tax revenues to be generated by the operation of the Project on the Site and other benefits accruing to the City from the Project. Accordingly, until the date the Agency, pursuant to the DDA, issues a Release of Construction Covenants for the final Phase of Development (as defined in the DDA) to be constructed on the Site (the "Completion of Construction Date"), (a) no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement, (b) nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Site or the Project thereon (collectively referred to herein as a "Transfer"), except as provided in this Section 7. 7.2 Transfers Prior to Completion of Project. Prior to the Completion of Construction Date, the City may approve or disapprove a proposed Transfer in its sole and absolute discretion; provided that the City agrees to reasonably consider a proposed Transfer to an entity in which the Developer or Richard Oliphant retains a minimum of fifty-one percent (51 %) of the ownership or beneficial interest and retains management and control of the transferee entity. The City may condition its approval of such a proposed Transfer prior to the Completion of Construction Date (other than transfers approved pursuant to the immediately preceding sentence) upon the payment of one-half of the net proceeds of the Transfer. Notwithstanding the foregoing, City approval of a Transfer prior to the Completion of Construction Date shall not be required in connection with any of the following: a. The conveyance or dedication of any portion of the Site to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Project (as defined herein). b. Any assignment for financing purposes (subject to such financing being permitted pursuant to, and subject to, the DDA), including the grant of a deed of trust to secure the funds necessary for land acquisition, construction and permanent financing of the Project or of a Phase of Development. C. A transfer of any of the Suites Hotel, the Suites Hotel Parcel, the Casitas Development, or the Casitas Development Parcel(s), to Center Point Hotel Development, LLC, a California limited liability company. 394/015610-0061 390243.13 a]2/17/03 -17- d. A transfer of the Villas Residential Development Parcel or Cluster/Perimeter Residential Parcel to (i) Ehline Development Co., a California corporation ("Ehline"), or (ii) a limited liability company or limited partnership to be formed by Ehline, and in which Ehline is the managing member of the liability company or the general partner of the limited partnership. e. A transfer of the Sanctuary Villas Development or Sanctuary Villas Parcel(s) to Center Point Sanctuary, LLC, a California limited liability company. f. A transfer of the Medical Office/Clinic or parcel(s) on which that use is developed to Medical Service Center of La Quinta, LLC, a California limited liability company intended to be formed by Developer. In the event of a Transfer by Developer under subparagraphs (a) through (f) above not requiring the City's prior approval, Developer nevertheless agrees that at least thirty (30) days prior to such Transfer it shall give written notice to City of such assignment and satisfactory evidence that the assignee has assumed in writing through an assignment and assumption agreement of all obligations (or specifically listed and defined obligations with respect to Transfers for a portion of the Site) of Developer of this Agreement. In the event such transfer is under subparagraphs (d), or (f) above (other than a transfer to Ehline), Developer shall, along with the notice required to be given pursuant to the immediately preceding sentence, provide City with evidence that such proposed transferee entity has been duly formed in accordance with the laws of the State of California. 7.3 Assignment and Assumption of Obligations. Developer shall provide to City an assignment and assumption agreement in a form reasonably satisfactory to the City's legal counsel for all proposed Transfers requiring the City's approval. 7.4 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon the Developer and its permitted successors and assigns. Whenever the term "Developer" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. 7.5 Assignment by City. City may assign or transfer any of its rights or obligations under this Agreement with the approval of the Developer, which approval shall not be unreasonably withheld. 8.0 MISCELLANEOUS 8.1 Notices. All notices permitted or required hereunder must be in writing and shall be effected by (i) personal delivery, (ii) first class mail, registered or certified, postage fully prepaid, or (iii) reputable same -day or overnight delivery service that provides a receipt showing date and time 394/015610-0061 390243.13 a12/17/03 -18- of delivery, addressed to the following parties, or to such other address as any party may from time to time designate in writing in the manner as provided herein: To City: City of La Quinta 78-495 Calle Tampico La Quinta, California 92253 Attn: Community Development Director With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, California 92626 Attn: M. Katherine Jenson To Developer: CP Development La Quinta, LLC Attn: Richard Oliphant 77-900 Avenue of the States Palm Desert, CA 92211 Telephone: (760) 776-9900 Facsimile: (760) 776-9971 With a copies to: Genesis Hotel Development, LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Telephone: (760) 360-7886 Facsimile: (760) 345-7175 and Selzer, Ealy, Hemphill & Blasdel, LLP 777 E. Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill, Esq. Telephone: (760) 320-5977 Facsimile: (760) 320-9507 Any written notice, demand or communication shall be deemed received immediately if personally delivered or delivered by delivery service, and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 8.2 Force Majeure. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default where delays or failures to perform are due to war, insurrection, strikes, walk -outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, terrorism, epidemics, quarantine restrictions, freight embargoes, governmental restrictions imposed or mandated by other governmental entities, governmental restrictions or priority, unusually severe weather, inability to secure labor, materials, or tools necessary for the Project, delays of any contractor, subcontractor or supplier; acts of another party, acts or the failure to act of any public or governmental agency or entity (except that acts or the failure to act of the City or the Agency shall not excuse performance by the City) or any 394/015610-0061 390243.13 a12/17/03 -19- other causes beyond the control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall only be for the period of the enforced delay, which period shall commence to run from the time of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the City and the Developer. Notwithstanding the paragraph above, Developer is not entitled pursuant to this Section 8.2 to an extension of time to perform because of past, present, or future difficulty in obtaining suitable construction or permanent financing for the development of the Site, or because of economic or market conditions. 8.3 ° Binding Effect. This Agreement, and all of the terms and conditions hereof, shall be binding upon and inure to the benefit of the parties, any subsequent owner of all or any portion of the Project or the Site, and their respective assigns, heirs or successors in interest, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Project or the Site. 8.4 Independent Entity. The parties acknowledge that, in entering into and performing this Agreement, each of the Developer and the City is acting as an independent entity and not as an agent of the other in any respect. 8.5 Agreement Not to Benefit Third Parties. This Agreement is made for the sole benefit of the parties, and no other person shall be deemed to have any privity of contract under this Agreement nor any right to rely on this Agreement to any extent for any purpose whatsoever, nor have any right of action of any kind on this Agreement nor be deemed to be a third party beneficiary under this Agreement. Notwithstanding the immediately preceding sentence, the Agency shall be an intended third party beneficiary to this Agreement. 8.6 Covenants. The provisions of this Agreement shall constitute mutual covenants which shall run with the land comprising the Site for the benefit thereof, and the burdens and benefits hereof shall bind and inure to the benefit of each of the parties hereto and all successors in interest to the parties hereto for the term of this Agreement. 8.7 Nonliabilfty of City Officers and Employees. No official, officer, employee, agent or representative of City, acting in his/her official capacity, shall be personally liable to Developer, or any successor or assign, for any loss, costs, damage, claim, liability, or judgment, arising out of or connection to this Agreement, or for any act or omission on the part of City. 394/015610-0061 _20_ 390243.13 a12/17/03 8.8 Covenant Against Discrimination. Developer and City covenant and agree, for themselves and their respective successors and assigns, that there shall be no discrimination against, or segregation of, any person or group or persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry, or any other impermissible classification, in the performance of this Agreement. Developer shall comply with the Americans with Disabilities Act of 1990, as amended (42 U.S.C. §§ 12101, et seq.). 8.9 Amendment of Agreement. This Agreement may be amended from time to time by mutual consent of the original parties or such parry to which the Developer assigns all or any portion of its interest in this Agreement, in accordance with the provisions of the City's Development Agreement Ordinance and Government Code Sections 65867 and 65868. 8.10 No Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought and referring expressly to this Section. No delay or omission by either party in exercising any right or power accruing upon non-compliance or failure to perform by the other party under any of the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof, except as expressly provided herein. No waiver by either party of any of the covenants or conditions to be performed by the other party shall be construed or deemed a waiver of any succeeding breach or nonperformance of the same or other covenants and conditions hereof. 8.11 Severability. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Agreement shall continue in full force and effect, to the extent that the invalidity or unenforceability does not impair the application of this Agreement as intended by the parties. 8.12 Cooperation in Carrying Out Agreement. Each party shall take such actions and execute and deliver to the other all such further instruments and documents as may be reasonably necessary to carry out this Agreement in order to provide and secure to the other party the full and complete enjoyment of its rights and privileges hereunder. 8.13 Estoppel Certificate. Any party hereunder may, at anytime, deliver written notice to any other party requesting such party to certify in writing that, to the best knowledge of the certifying party, (i) this Agreement is in full force and effect and a binding obligation of the parties, (ii) this Agreement has not been amended or modified either orally or in writing, or if so amended, identifying the amendments, (iii) the requesting party is not in default in the performance of its obligations 394/015610-0061 390243.13 al2/17/03 -21- under this Agreement, or if in default, describing the nature and amount of any such defaults, and (iv) any other reasonable information requested. A party receiving a request hereunder shall execute and return such certificate within ten (10) days following approval of the proposed estoppel certificate by the City Attorney, which approval shall not be unreasonably withheld or delayed. The City Manager, Assistant City Manager, and Community Development Director are each authorized to sign and deliver an estoppel certificate on behalf of the City. City acknowledges that a certificate hereunder may be relied upon by transferees and Mortgagees. 8.14 Construction. This terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. As used in this Agreement, and as the context may require, the singular includes the plural and vice versa, and the masculine gender includes the feminine and vice versa. 8.15 Recordation. This Agreement shall be recorded with Developer's cost, if any, within the period re( Amendments approved by the parties, and any shall be similarly recorded. 8.16 Captions and References. the County Recorder of Riverside County at [uired by Government Code Section 65868.5. cancellation or termination of this Agreement, The captions of the paragraphs and subparagraphs of this Agreement are solely for convenience of reference, and shall be disregarded in the construction and interpretation of this Agreement. Reference herein to a paragraph or exhibit are the paragraphs, subparagraphs and exhibits of this Agreement. 8.17 Time. Time is of the essence in the performance of this Agreement and of each and every term and condition hereof as to which time is an element. 8.18 Recitals & Exhibits Incorporated; Entire Agreement. The Recitals to this Agreement and all of the exhibits and attachments to this Agreement are, by this reference, incorporated into this Agreement and made a part hereof. This Agreement, including all Exhibits attached hereto, constitutes the entire agreement between the parties with respect to the subject matter of this Agreement, and this Agreement supersedes all previous negotiations, discussions and agreements between the parties, and no parole evidence of any prior or other agreement shall be permitted to contradict or vary the terms hereof. 8.19 Exhibits. Exhibits "A" — " E" to which reference is made in this Agreement are deemed appropriated herein in their entirety. Said exhibits are identified as follows: 394/015610-0061 -22- 390243.13 a]2/17/03 A-1 Legal Description of Site A-2 Site Map B Conditions of Approval C Mitigation Monitoring Program D Park Improvements E Early Entry Agreement 8.20 Counterpart Signature Pages. For convenience the parties may execute and acknowledge this agreement in counterparts and when the separate signature pages are attached hereto, shall constitute one and the same complete Agreement. 8.21 Authority to Execute. Developer warrants and represents that (i) it is duly organized and existing, (ii) it is duly authorized to execute and deliver this Agreement, (iii) by so executing this Agreement, Developer is formally bound to the provisions of this Agreement, (iv) Developer's entering into and performance of its obligations set forth in this Agreement do not violate any provision of any other agreement to which Developer is bound, and (v) there is no existing or threatened litigation or legal proceeding of which Developer is aware which could prevent Developer from entering into or performing its obligations set forth in this Agreement. 8.22 City Approvals and Actions. Whenever a reference is made in this Agreement to an action or approval to be undertaken by the City Manager, his or her authorized designee is authorized to act on behalf of the City unless specifically provided otherwise or the law otherwise requires. 8.23 Governing Law, Litigation Matters. The internal laws of the State of California shall govern the interpretation and enforcement of this Agreement without regard to conflicts of law principles. Any action at law or in equity brought by any party hereto for the purpose of enforcing, construing, or interpreting the validity of this Agreement or any provision hereof shall be brought in the Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in said county, and the parties hereto waive all provisions of law providing for the filing, removal, or change of venue to any other court. Service of process on City shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside of California. In the event of any action between the parties hereto seeking enforcement of any of the terms of this Agreement or otherwise arising out of this Agreement, the prevailing party in such litigation shall be awarded, in addition to such relief to which such party is entitled, its reasonable attorney's fees, expert witness fees, and litigation costs and expenses. 8.24 No Brokers. Each of the City and the Developer represents to the other party that it has not engaged the services of any finder or broker and that it is not liable for any real estate commissions, 394/015610-0061 390243.13 a12/17/03 -23- broker's fees, or finder's fees which may accrue by means of this Agreement, and agrees to hold harmless the other party from such commissions or fees as are alleged to be due from the party making such representations. [end — signature page follows] 394/015610-0061 39024113 a12/17/03 -24- IN WITNESS WHEREOF, the Developer and the City have executed this Agreement as of the Reference Date. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "CITY" CITY OF LA QUINTA, a California municipal corporation City Manager ATTEST: June Greek City Clerk APPROVED AS TO FORM RUTAN & TUCKER, LLP M. Katherine Jenson City Attorney 394/015610-0061 390243.13 a12/17/03 -25- EXHIBIT "A-1" LEGAL DESCRIPTION OF SITE IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO. 23971-1, ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 00027'38" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026'40" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 89033'22" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 00026'40" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41042-33", AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044'32" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45027'41 ", AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 108979, O.R. THENCE SOUTH 00012' 13" EAST ALONG SAID EASTERLY LINE, A DISTANCE OF 790.73 FEET TO AN ANGLE POINT THEREIN; 394/015610-0061 390243.13 a12/17/03 4 - THENCE SOUTH 43056'42' WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42059'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 02057'46", AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C" AND ITS NORTHWESTERLY PROLONGATION NORTH 64021'03" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO.255528, O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 86011'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 005'41 ", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 75033'02" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17033'23" EAST; THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00032'28", AN ARC DISTANCE OF 23.61 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT B, SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; 394/015610-0061 _ 390243.13 a12/17/03 -2 THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06", AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006'56" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013' 18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02012'44", AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 67006'56" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001' 12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19058'08", AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028'37" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36057'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18051'35", AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (1,850,000 SQUARE FEET), MORE OR LESS. 394/015610-0061 390243.13 a12/17/03 -3- MILES AVENU447.01V N 89'31' 3" EN 00'28'37 153.41' !L9 oy �• \ N 66'01 (R L4 NR) " (� L5 40V5 L3 N 86'11'26" E ;. R c LINE DATA NUMBER 'DIRECTION DISTANCE L1 S 00' 18 01 "' E 397.49 L2 N 48'09'56" W 22.00' L3 N 75'33'02" E 4.22' L4 N 6706'56" E 20.00' L5 S 6706 56 W 20:00' - L6 IN 00'26'40" W 20.00' L7 I N 89'33'22" E 80.00' ICURVE DATA P.O.C. CTR. 1 /4 COR. SEC. 19 S 0 75.0075.00' N 89'3.' T.P.OJL in _ L6i� 960.27' \ L7__ S 00'26'4O" E 112.88' S 44'44'32" E 90.06' C z N 89'47'47" E SITE 239.56' E AREA-42.47 AC. PORTION OF THE S. 1/2 OF SEC. 19, T.5S., R.7E., S.B.M. NUMBER DELTA- RADIUS ARC LENGTH TANGENT Ti- 41-42'33" 440.00 1320.30 167.62 C2 45'27'41 " 80.00 6348 33.52 C3 0757'46" 4565.17 236.07 118.06 C4 19'24'03' 2500.00 846.52 427.35 C5 11'05'41" 2072.00 401.22 201.24 C6 - 1758'08" 2092.00 729.11 368.29 C7 02' 12'44" 2072.00 . 80.00 40.01 68 - 07'41-'06" 12092.00 280.60 140.51 C9 00'32'28" 12500.00 123.61 11.81 C10 ' 18551 `35" 125MOO 1822.91 415.21 N BZ-CIV,4,- woR'w t.1 EXCEPTION PARCEL PT. A - I. \ N 42'59'27" E (R) 6¢ Lygti F44 2 F J.N. 1612 394/015610-0061 390243.13 a12/17/03 -4- EXHIBIT "A-2" SITE MAP The Site Map is not a tract map and the parcels depicted there are not legal parcels. Upon Developer's preparation of a tract map that creates legal parcels substantially consistent with the Site Map, Developer shall prepare legal descriptions for each of the Suites Hotel Parcel, the Casitas Development Parcel(s), the Villas Residential Development Parcel, the Cluster/Perimeter Residential Development Parcel, the Medical Office/Surgical Facility Parcel(s), and the Sanctuary Villas Parcel(s), and Agency and Developer shall cooperate to attach such legal descriptions to any document where such legal descriptions are required. LOTS LAND US LOT 1 - RESTAURANT LOT. 2 - RESORT CASITAS *LOT 'D' xsw J. 0.0s « LOT 3 - RESORT CASITAS - LOT 1 ISO 0. LOT 4 RESORT CASITAS 0.92 «. LOT 5 - RESIDENTIAL *LOT S ' - PARK _ LOT 7 - RESIDENTIAL *LOT 'C' 'LOT B THE SANCTUARY jq au. «r LOT THE SANCTUARY �� LOT 10 - MEDICAL OFFICE BUILDINGS CA� LOT 11 MEDICAL OFFICE BUILDINGS lR LOT 12 - MEDICAL OFFICE. BUILDINGS Y0 n LOT 13 RESTAURANT LOT 14 HOTEL *LOT 'I 54H . 0.13 a COMMON LOTS LAND USE LOT 'A - - - - MEDICAL OFFICE PARKING / LANDSCAPE .. LOT 'B - - - - SEELEY. DRIVE *LOT'C - - 2D' PARKWAY.(WASHINGTON STREET) * LOT '1 - - - CITY LANDSCAPE ENTRY *LOT'E' - - - - 20' PARKWAY .IWASHNGTON STREET) LOT 'F - - - - - WELLSITE *LOT 'G.. - - - - - WELLSITE (N.A.P.) * LOT *H' - - " ' " 20' PARKWAY (MILES AVENUE) *LOT 1' "' " 20' PARKWAY (MILES AVENUE) * These parmta we not bemg conveyed by the 1A Quints Redevelopment Agency. They m depicted on this Site Map for convenience of reference only. Ci S N.T.S. NOVEMBER 21. 2003 394/015610-0061 390243.13 a12/17/03 -1- EXHIBIT `B" CONDITIONS OF APPROVAL CITY COUNCIL RESOLUTION NO.2003-035 CONDITIONS OF APPROVAL - FINAL SPECIFIC PLAN 2001-055, AMENDMENT #1 ADOPTED: JUNE 3, 2003 The Specific Plan document shall be modified to include the following: The developer shall submit five final documents to the Community Development Department prior to issuance of any permits. The Developer agrees to defend, indemnify and hold harmless the City of La Quinta (City), its agents, officers and employees from any claim, action or proceeding to attack, set aside, void, or annul the approval of this Specific Plan, or any other application pertaining thereto. The City shall have sole discretion in selecting its defense counsel. 2. Add to the Development Standards for Tourist Commercial, page 6, and Office Commercial, Page 8, that the first 150 feet along Washington Street is limited to structure heights of 22 feet. 3. Change, on Page 5 of the Specific Plan, Land Use Area I- 19.51 acre to 19.12- acre. 4. Change, on page 6 of the Specific Plan, Land Use Area II- 11.32 acre to 11.10- acre. 5. Add to Page 6 of the Specific Plan, Tourist Commercial Development Standards - "Minimum perimeter building/landscape setback (in feet) from Cluster Villas at the corner of Miles Avenue and Seeley Drive-18/10." 6. Add the following footnote to Page 6 of the Specific Plan, Tourist Commercial Development Standards- Resort Casitas Maximum building height (ft.) 33*; *within the first 60' along Miles Avenue, measured from the south side of the 20' landscape setback parcel, the Maximum height of the Resort Casitas units is 22'; within the next 60' to 150' along Miles Avenue, the Maximum height of the Resort Casitas units is 26'; the height may be 33' outside the 150' setback. 7. Change, on Page 7 of the Specific Plan, Medium Density Residential (RM) Development standards- Attached Dwelling Units to Two-story Courtyard Single Family Homes. 8. Eliminate on Page 7, Two-story Courtyard single family homes standard for the minimum perimeter building/landscape setback from Tourist Commercial (casita units) 5 feet. 394/015610-0061 390243.13 a12/17/03 4 - 9. Add on, Page 7, Two-story Courtyard single-family homes standard, Interior street building/landscape setback 20 feet. 10. Add on, Page 7, Two-story Courtyard single-family homes standard, minimum front yard setback 20 feet. 11. Change, on Page 7A of the Specific Plan, Medium Density Residential (RM) Development standards- Single Family Cluster Courtyard to One- and Two -Story Single Cluster Courtyard Villas. 12. Page 7A. Single Family Cluster Courtyard Dwelling Units Standards. Add an Interior street building/landscape setback of 20 feet. 13. Page 7A. Single Family Cluster Courtyard Units. Change the setback from Tourist Commercial (casita units) from 5 feet to 10 feet. 14. Page 7A. Single Family Cluster Courtyard Dwelling Units Standards. Change the minimum perimeter building/landscape setback from Tourist Commercial District from 5 feet to 10 feet. 15. Add the following footnote to Page 7A of the Specific Plan, Medium Density Residential (RM) Development standards- One- and Two -Story Single Cluster Courtyard Villas Building Height 28 ft*; *within the first 60' along Miles Avenue, measured from the south side of the 20' landscape setback parcel, the Maximum height of the One- and Two -Story Single Cluster Courtyard Villas units is 22'; within the next 60' to 150' along Miles Avenue, the Maximum height of the One- and Two -Story Single Cluster Courtyard Villas units is 26'; the height may be 28' outside the 150' setback.. 16. Page 16. On -Site Improvements. Move the last bullet point, The Public Works Department shall consider the option to install a left turn pocket for Seeley Drive southbound, north of Miles Avenue to the off -site improvement section. 17. Exhibit B and F is for illustrative purposes and is subject to modification based upon the development standards in this Specific Plan and applicable Zoning Development Standards. 18. Page 8. Land Use Area IV. Add C. Prohibited Uses: 1. Helicopter Landing Areas; and, 2. Emergency Center. 19. Change, on Page 8 of the Specific Plan, Land Use Area III- 3.02-acre to 2.68- acre. 20. Change, on page 8 of the Specific Plan, Land Use Area IV- 9.73-acre to 9.22- acre. 21. Comply with the Coachella Valley Water District Letter dated January 30, 2002, Attachment A, unless modified by the District. 394/015610-0061 390243.13 a12/17/03 -2- 22. Streets shall be 28 feet wide with 12 foot setbacks with no parking on one side of the street for the One and Two Story Courtyard Villas located north of Seeley Drive and west of the Park. 23. The grading plan shall be approved with the site development permit by the Planning Commission. 24. The HOA shall maintain all common area landscaping in perpetuity. 25. The landscaping shall comply with the Water Efficiency Ordinance. 26. The boundary between the residential development and the park may be designed with compatible uses. 27. Eliminate the last paragraph on Page 22 under Circulation Element. 28. Add Exhibits B-1 (Concept Plan- Development Parceling), B-2 (Concept Plan - Medical & Surgical Center), and B-3 (Concept Plan- Boutique Hotel) to the Specific Plan 394/015610-0061 390243.13 a12/17/03 -3- Addendum for Environmental Assessment 2001-436 Planning Commission Resolution 2002-017 City Council Resolution 2002-07 La)&c) The proposed project occurs at a high topographic point in the city, and is bordered on the east and north by single family residential development. In order to assess the potential impacts to the viewshed of these single family residential units, a visual impact simulation was conducted.' The simulations were conducted for views from the east and south to the west, and from the north and east to the south and west. The analysis clearly demonstrates that the scale of the proposed project will not eliminate the views of existing or future residential units to the surrounding mountains. The impacts of structures on the project site will be less than significant. III. a) & d) Air quality in the Coachella Valley and the City is primarily affected by vehicular emissions.2 The development of this project could generate up to 6,170 average daily trips. Based on this trip generation, the project at buildout will generate the following nnlliltantc Running Exhaust Emissions(pounds/da ) PM10 PM10 PM10 CO ROC NOx Exhaust Brakes Tires 50 mph 223.1 8.58 45.76 -- 0..95 0.95 Daily Threshold* 550 75 100 150 Based on 6,170 trips/day and average trip length of 7 miles, using EMFAC7G Model provided by California Air Resources Board. Assumes catalytic light autos at 75°F. * Operational thresholds provided by SCAQMD for assistance in determining the significance of a project and the need for an EIR. As demonstrated above, the operational impacts associated with air quality on the project site are expected to be less than significant. The Coachella Valley is a non -attainment area for PM10 (particulate matter of 10 microns or smaller). The construction of the proposed project has the potential to generate dust, which could 'contribute to the PM10 problem in the area. In order to control PM10, the City has imposed standards and requirements on development to control dust. The applicant will be required to submit such a plan prior to initiation of any 1 Visual Impact Simulations, The Keith Companies, December 2001. 2 "La Quinta Gateway Traffic Impact Analysis," prepared by Urban Crossroads, December 2001. 394/015610-0061 390243.13 a12/17/03 -1- earth moving activity at the site. In addition, the potential impacts associated with PM10 can be mitigated by the mitigation measures below. 1. Construction equipment shall be properly maintained and serviced to minimize exhaust emissions. 2. Existing power sources should be utilized where feasible via temporary power poles to avoid on -site power generation. 3. Construction personnel shall be informed of ride sharing and transit opportunities. 4. Cut and fill quantities will be balanced on site. 5. Any portion of the site to be graded shall be pre -watered to a depth of three feet prior to the onset of grading activities. 6. Watering of the site or other soil stabilization method shall be employed on an on- going basis after the initiation of any grading activity on the site. Portions of the site that are actively being graded shall be watered regularly to ensure that a crust is formed on the ground surface, and shall be watered at the end of each work day. 7. All disturbed areas shall be treated to prevent erosion until the site is constructed upon. Pad sites which are to remain undeveloped shall be seeded with either a desert wildflower mix or grass seed, or chemical stabilizer. 8. Landscaped areas shall be installed as soon as possible to reduce the potential for wind erosion. Perimeter landscaping on Avenue 52 and Jefferson Street, and the retention basin landscaping shall be completed with the first phase of development. 9. SCAQMD Rule 403 shall be adhered to, insuring the clean up of construction - related dirt on approach routes to the site. 10. All grading activities shall be suspended during first and second stage ozone episodes or when winds exceed 25 miles per hour. 11 All buildings on the project site shall conform to energy use guidelines in Title 24 of the California Administrative Code. With the implementation of these mitigation measures, the impacts to air quality from buildout will not be significant. IV. a) The proposed project is within the mitigation fee area for the Coachella Valley Fringe - toed Lizard Habitat Conservation Plan, and will be required to pay fees to mitigate the potential impact on this species. The payment of the fees serves to mitigate the impacts to a less than significant level. 394/015610-0061 390243.13 a]2/17/03 -2- V.b)&d) Several cultural resource studies were completed for the subject property. 3 The surveys included extensive testing and the excavation of a cremation site. The work done on the site to date has been comprehensive, but additional resources may be buried within the project area. As a result, to ensure that the potential impacts to cultural resources are mitigated, the following mitigation measure shall be implemented: 1. During any and all earth moving activities on any portion of the project site, a qualified archaeological monitor shall be present. The monitor shall be empowered to stop or redirect activities on the site should a resource be identified. A final report shall be filed with the Community Development Department prior to issuance of a certificate of occupancy for any building on the project site. VI. a) ii) A geotechnical investigation was completed for the project site.4 The site occurs in a seismic Zone IV. The site, as with the balance of the City, will be subject to strong ground shaking during a seismic event. The City has implemented standards in the Uniform Building Code to ensure the highest construction standards are applied to protect against seismic hazard. These standards are expected to ensure that impacts associated with seismic ground shaking are reduced to a less than significant level. IX. b) The proposed General Plan Amendment and Change of Zone will change the land uses on the project site from High Density Residential and Park to Tourist Commercial, Medium Density Residential, and Park. The surrounding land use designations include Park, Low Density Residential and Watercourse. The change in land use represents a natural extension of the land use plan, insofar as it places more intense land use (Tourist Commercial) at the intersection of Miles and Washington, and steps down the land use intensity as it proceeds easterly. The Medium Density Residential will be an effective buffer to the existing and future low density development to the east and south. The existing High Density Residential designation is a relatively intense land use, which would not have been buffered from the Low Density development to the east. The proposed General Plan and Change of Zone will therefore represent a less than significant impact on the land use pattern in the City. 3 "Archaeological Monitoring Report, Miles Avenue Borrow Site," prepared by CRM Tech, July 2001; "Final Report Archaeological Mitigation of Project Effects to a Native American Cremation Found on Parcel Map No. 26860," prepared by CRM Tech, February 2001; "Final Report Archaeological Testing and Site Evaluation on Parcel Map No. 26860," prepared by CRM Tech, June 2000; "Phase I Archaeological Assessment of 54.65 Acres at the Southeast Corner of Washington Street and Miles Avenue," prepared by Archaeological Advisory Group, June 1999. 4 "Geotechnical Engineering Report," prepared by Earth Systems Southwest, November 2001. 394/015610-0061 390243.13 a12/17/03 -3- XI. a) A noise study was completed for the proposed project.5 The project site is currently subject to high noise levels, and will continue to be impacted by noise as the project build out. The noise levels will not be reduced to City standards without mitigation. XIII. a) In order to achieve acceptable noise levels for the hotels and townhomes on the subject property, the noise study proposes several setback areas for the construction of sound walls, depending on the site design. These mitigation measures include sound walls and/or berms ranging from 0 to 10 feet in height, and are variable depending on the finish grade of the individual sites within the project. With the implementation of the mitigation measures included in the noise study, however, noise levels on the site at buildout can be reduced to an acceptable level. Since no Site Development Permit is proposed at this time for any portion of the site, and specific mitigation cannot therefore be evaluated, the following mitigation measures shall be implemented: 1. Any site development permit submitted for any portion of the site shall either: a) Demonstrate conformance with the mitigation measures provided in the "Revised Preliminary Acoustical Analysis" prepared by Gordon Bricken & Associates on December 6, 2001; or b) Submit a noise study specifically prepared for that site development permit which demonstrates that the noise levels can be reduced on the site to the noise standards in effect at the time of submittal of the application. The proposed development will have a less than significant impact on public services. All areas of the proposed Specific Plan will be served by the County Sheriff and Fire Department, acting under City contract. Site development will generate property tax, transient occupancy tax and sales taxes which will offset the costs of added police and fire services. The project will be required to pay the mandated school fees as development occurs. These fees mitigate the students generated, and offset the impacts to schools. The collection of property tax, and the generation of sales tax will generate revenues to the City to offset the added costs associated with the provision of municipal services. The project will be required to participate in the City's Impact Fee Program, which helps to offset roadway improvement costs. XV. a) A traffic study was conducted for the proposed project.6 The study found that buildout of the proposed project would generate up to 6,170 average daily trips, of which 310 would 5 "Revised Preliminary Acoustical Analysis," prepared by Gordon Bricken & Associates, December 2001. 6 "La Quinta Gateway Traffic Impact Analysis," prepared by Urban Crossroads, December 2001. 394/015610-0061 390243.13 a12/17/03 -4- occur during the AM peak, and 465 during the PM peak hour. The volume generated by the proposed project, combined with the growth in traffic volumes on City streets from other project in the area resulted in recommended mitigation measures in the study in order to maintain City level of service standards. These mitigation measures are enumerated below: Miles Avenue and Washington Street shall be constructed to their full half -width right-of-way with development of the first phase of the project. 2. A traffic signal shall be installed at the intersection of Seeley Drive and Miles Avenue in conjunction, as warranted. 3. Access to the project from Washington Street shall be limited to right -in, right -out only. 4. Left turn pocket on Seeley Drive, accessing westbound Miles Avenue, shall be a minimum of 100 feet in length. Left turn pocket on westbound Miles Avenue, accessing southbound Seeley Drive, shall be a minimum of 150 feet in length. With the implementation of these mitigation measures, impacts of the project on the City's circulation system shall be less than significant. XVI. a)-f) The buildout of the site will require service from utility providers. The overall impacts on these services is not expected to be significant, insofar as these suppliers will charge the businesses and residents for their services, and provide improvements to these services as needed. In addition, connection fees will be required at construction of any project. These fees and charges will mitigate the potential impacts to a less than significant level. 394/015610-0061 390243.13 a12/17/03 -5- EXHIBIT "C" MITIGATION MONITORING PROGRAM PROJECT MONITORING CHECKLIST (CEQA Mitigation Measures) CITY OF LA QUINTA MONITORING PROGRAM FOR CEQA COMPLIANCE DATE: December 5, 2001 ASSESSORS PARCEL NO.: CASE NO.: GPA 2001-083, ZC 2001-105, PROJECT LOCATION: SP 2001-055 EA/EIR NO: 2001-436 APPROVAL DATE: APPLICANT: City of La Quinta Southeast corner of Washington Street and Miles Avenue In Process THE FOLLOWING REPRESENTS THE CITY=S MITIGATION MONITORING PROGRAM IN CONNECTION WITH THE MITIGATED NEGATIVE DECLARATION FOR THE ABOVE CASE NUMBER SUMMARY RESPONSIBLE FOR TIMING CRITERIA COMPLIANCE DATE MITIGATION MONITORING CHECKED BY MEASURES Iii. AIR QUALITY Maintain construction Contractor. Project Construction. SCAQMD standards. equipment. Utilize temporary power. City Engineer. Prior to issuance of IID standards. grading permits. Balance cut and fill on site. City Engineer. Project Construction. Municipal Code. Pre -water and stabilize Building Department. Prior to issuance of PM 10 Management soils. building permits. Plan. Provide alternative Community Prior to the issuance of TDM ordinance. transportation. Development grading permits. Department. V. CULTURAL RESOURCES MF.AgITRF.: Archaeological monitor to Community During earth moving. City standards for be on site during earth Development and cultural resource moving. Public Works analysis. Departments. 394/015610-0061 390243.13 a12/17/03 SUMMARY RESPONSIBLE FOR TIMING CRITERIA COMPLIANCE DATE MITIGATION MONITORING CHECKED BY MEA URES XI. NOISE Conform to December 6, Community Site Development Project review, 2001 Gordon Bricken & Development Permit review Plan inspection. Associates noise Department, Building check. miti tion measures. Department. Alteratively, submit Community Site Development Project review. revisednoise analysis, Development Permit review. confo ing to City Department. stand ds. XV. IRAFFIC AND CIRCULATION Construct Miles & City Engineer. Project Construction. Inspection. Wash)ngton to ultimate right-pf--ways. Install traffic signal at City Engineer. Construction or Plan check. Seeley and Miles. warrants. Limit access on City Engineer. Plan Check. City standards for Washington to right -in, access. right -out. Left in pockets to be 100 City Engineer. Plan Check. City standards for foot minimum on Seeley to roadway Miles and 150 foot improvements. minimum on Miles to Seeley. 394/015610-0061 390243.13 a12/17/03 -2- EXHIBIT "D" PARK IMPROVEMENTS The Park Improvements shall include all of the following: 1. Appropriate irrigation, turf, landscaping and walkways. All hardscape shall be handicap accessible. 2. A 20,000 square foot dog park which contains: (1) A six foot high wrought iron fence around the entire park perimeter, with the wrought iron fencing 2 inches on center 2 feet from the bottom, and 4 inches on center 4 feet from the lower section to the top, and which contains a top rail. The fence shall be centered on a 4-inch mow curb. (2) The park area is to be divided, by fencing that meets the specifications listed in (1) above, into two sections, with one section containing approximately 12,000 square feet, and the other section containing approximately 8,000 square feet. (3) A double -entry gate system leading to both sections that is handicap accessible. (4) A 6-foot wide maintenance gate into each section. (5) *Two drinking fountains, to be acquired from Most Dependable Fountains (1- 800-831-3606; Model #400SM), with one fountain to be installed in each section of the dog park. (6) *Two benches, to be acquired from Playworld Systems (1-800-669-2585; Model #ZZXX1410), with one bench to be installed in each section of the dog park. (7) *Two shade structures to be installed over the benches described in (6) above, to be acquired from Shade Structures (1-800-50 SHADE) (must contain dimensions of10'X10'). (8) *Two trash containers, to be acquired from Playworld Systems (Model #ZZXX1414, ZZXX1415, ZZXX1418, or ZZXX8060), with one trash container to be installed in each section of the dog park. 3. A 5,000 square foot playground, which contains: (1) A handicap accessible entry into the play area. (2) *One playground structure designed for ages 2-12 years, to be acquired from Playworld Systems (Model #500-0103). (3) *One arch swing with two bays, to be acquired from Playworld Systems (Model #SWING ARCH 500, #SWING ARCH 500-ADD). (4) One wood product, to be acquired from Sof Fall Engineered Wood Fiber with felt layer and swing/slide mats to be installed to meet industry standards for safety. (5) One spring animal, to be acquired from Playworld Systems (Model #ZZXX0585 Speedy Racer). (6) *One play panel, to be acquired from Playworld Systems (Model #ZZPD-SHOP). (7) *One drinking fountain, to be acquired from Most Dependable Fountains (Model #440SM (Hi Lo)) to be installed near the playground structure. 394/015610-0061 390243.13 al2/17/03 (8) *Two benches, to be acquired from Playworld Systems (Model #ZZXX1410), to be installed facing the playground structure. (9) *Two shade structures to be installed over the benches, to be acquired from Shade Structures (must contain dimensions of 10' X 10'). (10) *One trash container, to be acquired from Playworld Systems (Model #ZZXX1414, ZZXX1415, ZZXX1418, or ZZXX8060), to be installed near the playground structure. *Colors to be determined by City staff at time of order. 394/015610-0061 2 390243.13 a12/17/03 EXHIBIT "E" FORM OF EARLY ENTRY AGREEMENT This Early Entry Agreement ("Agreement") is entered into as of , 2003, by and among the CITY OF LA QUINTA, a municipal corporation and a charter city organized and existing under the Constitution of the State of California ("City"), and CP DEVELOPMENT LA QUINTA, LLC., a California limited liability company ("Developer"), with reference to the following facts: RECITALS: A. City is the present owner of that certain property located in La Quinta, California, identified as "Lot 6" on the site map attached hereto and incorporated herein as Exhibit "A".(the "Property"). B. City and Developer have executed and entered into that certain Development Agreement, with a Reference Date of , 2003, ("Development Agreement") pursuant to which Developer agrees, among other obligations, to enter upon the Property and construct and install the "Park Improvements" as described in Exhibit E to the Development Agreement. C. Pursuant to its obligation under the Development Agreement to construct and install the Park Improvements on the Property, Developer has now requested the right to enter onto and about the Property to perform the Park Improvements (hereinafter, the "Permitted Work") and City is willing to allow such entry on the terms and conditions hereinafter specified. AGREEMENT: NOW, THEREFORE, in consideration of the covenants and agreements contained herein and other valuable consideration, the sufficiency and receipt of which are hereby acknowledged by the parties hereto, the parties covenant and agree as follows: 1. Grant of License. City hereby grants to Developer and its employees, agents, consultants, and contractors ("Related Parties") a license for the term set forth in Paragraph 3 ("License") to enter upon the Property between the hours of 8:00 a.m. and 5:00 p.m., Monday through Friday, for the purposes of the Permitted Work. Notwithstanding the above, at least forty-eight (48) hours prior to any of the Related Parties' first entry onto the Property to commence the Permitted Work, Developer shall notify City of its intention of the same, and shall thereafter provide such notice before again entering the Property if there is an interruption of such initial entry for a period of even (7) consecutive days (excluding interruptions for events of enforced delay as defined in Section 8.2 of the Development Agreement). Said notice shall be provided by facsimile, addressed to the person listed in Section 8.8 hereof at the number provided therein. City may reject any proposed entry by providing telephonic notification to Developer to the person listed in Section 8.8 hereof, at the number provided therein, at any time prior to the time of the proposed entry. City has full right, title and authority to grant Developer the License for the Permitted Work, and no third party permission or consent is needed in connection therewith. Such License 394/015610-0061 3 390243.13 a12/17/03 shall be non -revocable for the Term defined in Paragraph 3 below, except as otherwise set forth herein. City specifically agrees that Developer shall have access to and be entitled to perform the Permitted Work on all portions of the Property, provided, however, that neither Developer nor any of the Related Parties shall interfere with any other real or personal property, or enter upon any other real property, without first obtaining the written consent of the owner(s) of such other real or personal property. 2. City's Authority to Revoke. City may revoke this License upon two (2) days written notice to Developer delivered in accordance with Subparagraph 8.8 below in the event: (i) in the reasonable judgment of City, such revocation is necessary to protect the public health, safety, or welfare pursuant to the exercise of City's police powers; or (ii) Developer is in violation of the terms of this Agreement or any applicable law, statute, ordinance, rule, or regulation pertaining to the Permitted Work or Developer's or the Related Parties' entry upon the Property pursuant to this Agreement, and Developer has failed to cure such violation within two (2) days following Developer's receipt of notice of such violation from City. 3. Term. Unless earlier revoked or terminated pursuant to the provisions of this Agreement, the term of the License shall commence on full execution hereof and shall terminate on the earlier of (i) City's final inspection of and approval of the Permitted Work, or (ii) one hundred twenty (120) days from the date hereof. 4. Repair and Restoration of Property. Developer shall repair any damage it causes to the Property in the course of performing the Permitted Work pursuant hereto and shall, except for the actual Permitted Work allowed hereby, restore the Property to the condition existing prior to Developer's or Related Parties' entry onto the Property, unless this requirement is waived by the City Manager or the Community Development Director in his or her sole and absolute discretion. 5 Compliance with Laws. Developer shall obtain, at is sole cost and expense, all governmental permits and authorizations required by any governmental agencies for the Permitted Work. Developer shall comply with, and shall cause all of its Related Parties to comply with, all applicable governmental laws, rules, regulations and requirements governing the Permitted Work. Prior to Developer's or any of the Related Parties' entry onto the Property to perform any of the Permitted Work, Developer shall have prepared, obtained approval from the City thereof, and implemented, a dust control program. 6. Indemnity. Developer shall protect, defend, indemnify and hold harmless City and the La Quinta Redevelopment Agency ("Agency") and their respective officers, officials, members, employees, agents, and representatives (any of the foregoing shall be known individually as "Indemnitee" and collectively as "Indemnitees"), and each of them, jointly and severally, against and from any and all claims, demands, causes of action, damages, costs, expenses, losses and liabilities, at law or in equity, of every kind or nature whatsoever, including attorneys' fees and expert witness fees (hereinafter "Claims"), brought in connection with any death or personal injury to any person or persons or damage or destruction of any property arising out of or in any manner directly or indirectly connected with the entry upon the Property by Developer or any of its Related Parties or the activities on the Property (including but not limited to the Permitted Work) by Developer or any of its Related Parties, but excluding from the foregoing any Claims resulting from environmental contamination of the Property or other 394/015610-0061 4 390243.13 a12/17/03 defects on the Property existing prior to Developer's entry thereon and not otherwise caused by Developer or any of the Related Parties. The foregoing indemnification shall also cover: (a) any mechanics' or materialmen's liens, claims, demands, actions or suits arising (directly or indirectly) from (i) any work performed or materials supplied to or for Developer, or (ii) any activities of any of its Related Parties on or relating to the Property (including, without limitation, any claims by any of such Related Parties); and (b) any costs of removing Developer or its Related Parties from the Property after the expiration of the term hereof unless Developer is otherwise entitled to be on the Property at such time under this Agreement. 7. Insurance. (a) Before entering the Property for any purpose, Developer shall cause the insurance required under this paragraph to be issued and thereafter to be maintained until one (1) year following the end of the Term. Developer shall procure and maintain: (1) A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (i) for death and bodily injury, either (A) a combined single limit of Three Million Dollars ($3,000,000) or (B) Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and Three Million Dollars ($3,000,000) in the aggregate, and (ii) for property damage, Three Million Dollars ($3,000,000) per occurrence. (2) A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both the Developer and City against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Developer in the course of carrying out the work or services contemplated in this Agreement. (3) A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and property damage liability limits of Three Million Dollars ($3,000,000) per occurrence and Three Million Dollars ($3,000,000) in the aggregate or (ii) combined single limit liability of Three Million Dollars ($3,000,000). Said policy shall include coverage for owned, non -owned, leased, and hired cars. (b) The following additional requirements shall apply to all of the above policies of insurance: (1) All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation insurance, shall name City, the Agency, and their respective officers, officials, members, employees, agents, and representatives as additional insureds. 394/015610-0061 5 390243.13 a12/17/03 (2) The insurer shall waive all rights of subrogation and contribution it may have against City, Agency, and their respective officers, officials, members, employees, agents, and representatives, and their respective insurers. (3) All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to City and Agency. (4) The policies of insurance required by this Agreement shall not require Developer to meet a deductible of more than Twenty -Five Thousand Dollars ($25,000) unless approved in writing by the City Manager, or his or her designee, in his or her sole and absolute discretion. (c) In the event any of said policies of insurance are cancelled, the Developer shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the City Manager, or his or her designee. (d) Not later than the date of this Agreement, Developer shall provide the City Manager with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the City Manager, or his or her designee. (e) Developer agrees that the provisions of this Section shall not be construed as limiting in any way Developer's indemnity obligations set forth in Section 6 or the extent to which Developer may be held responsible for the payment of damages to any persons or property resulting from the Developer's activities or the activities of any person or persons for which the Developer is otherwise responsible. 8. Miscellaneous. 8.1 Authori. Each signatory hereto warrants to the other party that it has authority to sign on behalf of the party for whom it purports to sign. 8.2 Attorney's Fees. In the event any party hereto brings suit to enforce the terms of this Agreement or on account of breach hereof, the party not prevailing in such suit shall pay all reasonable costs and expenses incurred by the other party in such suit, including, without limitation, court costs, attorneys' fees, and expert witness fees. 8.3 Entire A reg ement. This Agreement sets forth the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations, understandings or agreements relating thereto. 8.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. 8.5 Litigation Matters. The Municipal and Superior Courts of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation 394/015610-0061 6 390243.13 a12/17/03 between the parties arising out of this Agreement. This Agreement shall be governed by, and construed under, the laws of the State of California. Service of process on City shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. 8.6 Non -liability of City Officers and Employees. No officer, official, member, employee, agent, or representative of City shall be personally liable to Developer, or any successor or assign of same, in the event of any default or breach by City, or for any amount which may become due to Developer, or any successor or assign of same, or for breach of any obligation of the terms of this Agreement. 8.7 Covenant Against Discrimination. Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through it, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the performance of this Agreement. 8.8 Notices. Unless other sections of this Agreement allow certain specific notices to be given by other means, all notices required to be delivered under this Agreement or under applicable law shall be delivered by one of the following means: (a) personal delivery; (b) delivery by United States mail, prepaid, certified, return receipt requested; (c) delivery by reputable document delivery service that provides a receipt showing date and time of delivery; or (d) delivery by facsimile provided the sender receives confirmation the fax was received. Notices personally delivered or delivered by a document delivery service shall be effective upon receipt. Notices delivered by mail shall be effective at 5:00 p.m. on the second business day following dispatch. Notices delivered by facsimile shall be effective upon receipt provided that any faxed notices which are transmitted at any time other than 8:00 a.m. to 4:30 pm Monday through Friday (excluding legal holidays) shall be deemed transmitted as of the next business day. Notices shall be delivered to the following addresses: To City: City of La Quinta Attn: Community Development Director 78-495 Calle Tampico La Quinta, CA 92253 Telephone: (760) 777-7000 Facsimile: (760) 777-1233 With a copy to: Rutan & Tucker, LLP Attn: M. Katherine Jenson, Esq. 611 Anton Boulevard, 14th Floor Costa Mesa, CA 92626-1998 Telephone: (714) 641-5100 Facsimile: (714) 546-9035 394/015610-0061 7 390243.13 a12/17/03 To Developer: CP Development La Quinta, LLC Attn: Richard Oliphant 44-139 Monterey Avenue, Suite 201 Palm Desert, CA 92260 Telephone: (760) 776-9900 Facsimile: (760) 776-9971 With a copies to: Genesis Hotel Development, LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Telephone: (760) 360-7886 Facsimile: (760) 345-7175 and Selzer, Ealy, Hemphill & Blasdel, LLP 777 E. Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill, Esq. Telephone: (760) 320-5977 Facsimile: (760) 320-9507 Changes in the address to be used for receipt of notices shall be effected in accordance with this Paragraph 8.7. Agreement. 8.8 Time of Essence. Time is of the essence in the performance of the [end — signature page follows] 394/015610-0061 8 390243.13 a12/17/03 IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the date first above -written. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager UA Richard R. Oliphant Its: President "CITY" CITY OF LA QUINTA By: City Manager 394/015610-0061 9 390243.13 a12/17/03 EXHIBIT "A" TO EARLY ENTRY AGREEMENT SITE MAP The Site Map is not a tract map and the parcels depicted there are not legal parcels. Upon Developer's preparation of a tract map that creates legal parcels substantially consistent with the Site Map, Developer shall prepare legal descriptions for each of the Suites Hotel Parcel, the Casitas Development Parcel(s), the Villas Residential Development Parcel, the Cluster/Perimeter Residential Development Parcel, the Medical Office/Surgical Facility Parcel(s), and the Sanctuary Villas Parcel(s), and Agency and Developer shall cooperate to attach such legal descriptions to any document where such legal descriptions are required. LQTS LAND USE LOT - RESTAURANT LOT 2 - RESORT CASITAS *LOT 440M 0.34 LOT 3 - RESORT CASITAS LOT 4 - RESORT CASITAS LOT 5 - RESIDENTIAL *LOT 8 PARK LOT 7 - RESIDENTIAL LOT 8. THE SANCTUARY LOT THE SANCTUARY LOT ID - MEDICAL OFFICE BUILDINGS LOT 11 MEDICAL OFFICE BUILDINGS LOT 12 ' MEDICAL OFFICE BUILDINGS LOT 13 " RESTAURANT LOT 44' HOTEL *LOT H. * LOST .r oa'«I' MILES AVENUE 0.12 «' LOT 3 1 1 34°`2� 1. ..1. LOT 4 2.91..,. LOT 14 14504 —..1. *LOT •C•� 0.33 «. Y * LOT 0.13 0.0 COMMON LOTS LOT •A• - - - - - " - LAND USE MEDICAL OFFICE PARKING / LANDSCAPE LOT •B• - - - - - - - SEELEY DRIVE * LOT •C- - - - - - - 201 PARKWAY (WASHINGTON STREET) * LOT `D- - - - - - - " -CITY LANDSCAPE ENTRY * LOT 'E- - - - - - - - 20' PARKWAY (WASHINGTON STREET) LOT •F• - - - - - - - WELLSITE *LOT •0• - - - - - - - WELLSITE (N.A.P.1 * LOT •H• - - - - - - - 20' PARKWAY (MILES AVENUE) *LOT •I• - " . ' ' ' - 20' PARKWAY (MILES AVENUE) LOT 2 W34 V. 2.27 ae. WLD LOT .,1, LOT 12 .. 311�«l. LOT 11 53441 «I.A• LOT 9 48M 0 * Thm pamis are not beingConveyed by the La QuinoM Redevelopment AB—y They we depicted on this Site Map for convenience of refamw Only. U *LOT •O• +f 2�.n «/. LOOT 5 2.1°«. j X4 W g 1 LOT 8 2.40 W J Oy 4d PJ O 4 a999 �l. J U LOT163122 cf. Se K a 40 N.T.S. NOVEMBER 2% 2003 AGENCY CONSENT TO RECORDATION THE LA QUINTA REDEVELOPMENT AGENCY HEREBY CONSENTS TO THE RECORDATION OF THE FOREGOING DEVELOPMENT AGREEMENT AGAINST THE REAL PROPERTY DESCRIBED IN EXHIBIT "A" TO SAID DEVELOPMENT AGREEMENT. STATE OF CALIFORNIA ) ) ss COUNTY OF ) ,= LA QUINTA REDEVELOPMENT AGENCY Its: before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 394/015610-0061 390243.13 a12/17/03 ATTACHMENT NO. 14A FORM OF OPTION AGREEMENT [SEE FOLLOWING PAGES] 882/015610-0061 380889.09 a]2/17/03 FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director (SPACE ABOVE THIS LINE FOR RECORDING USE) (EXEMPT FROM RECORDING FEE PER GOV. CODE § 27383) OPTION AGREEMENT NOTICE: THIS OPTION AGREEMENT CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS OPTION AGREEMENT ("Option Agreement") is made this _ day of , 2003 (the "Effective Date"), by CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"). RECITALS A. Developer has entered into a Disposition and Development Agreement ("DDA") dated , 2003 (the "DDA Date") with the La Quinta Redevelopment Agency ("Agency"), pursuant to which Agency conveyed to Developer that certain real property located southeast of the Miles Avenue and Washington Street intersection, in the City of La Quinta, County of Riverside, State of California (the "Site"). All defined terms used herein shall have the same meaning as set forth in the DDA unless otherwise stated. The Site is legally described in Exhibit "A" attached hereto and incorporated herein. B. As a condition to the Agency's conveyance of the Site to Developer, Developer was required to grant to Agency an option to repurchase the Site, or a portion thereof, from Developer, if (i) Developer fails to commence, continuously proceed with, or complete construction within certain specified time frames, or (ii) Developer transfers the Site, or portion thereof, in violation of the terms of the DDA, all as further described herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals and all of the terms and conditions contained in the DDA, Developer hereby grants to Agency the following repurchase options: 882/015610-0061 380889.09 a]2/17/03 Repurchase Option I - Failure to Commence Construction Subject to Section 4(f), Developer hereby grants to Agency an exclusive option to repurchase (i) the Site, or any portion thereof, if Developer fails to commence construction of the Project within one hundred thirty (130) days after the Effective Date; or (ii) any of the individual Parcels then -comprising the Site on which Developer has failed to commence construction (as defined below) of the applicable Phase of Development ("Option I Parcel(s)") within the times set forth in the Commencement and Completion Schedule attached hereto and incorporated herein as Exhibit `B" (collectively, "Repurchase Option I"). Agency's Repurchase Option I pursuant to clause (ii) above shall also include the option to purchase any "Related Parcel" to the Option I Parcel(s) on which Developer has not yet commenced construction. For the purposes of this Option Agreement, (a) the term commence construction" shall mean Developer's substantial commencement, and thereafter uninterrupted continuation, of excavation work or physical construction on the Site or applicable Parcel, subject to Section 4(f) below, but shall not include any grading work or utility installation that was completed by Developer prior to the Effective Date hereof, and (b) the term "Related Parcel" shall mean any Parcel that has a substantially similar use as another Parcel, as set forth in Exhibit "C", which is attached hereto and incorporated herein by this reference. In the event of Developer's failure to commence construction of the Project or a specific Phase of Development within the time period described above, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the expiration of the time period described above (after expiration of the cure period described in Sections 4(b) and 4(c) hereof) ("Repurchase Option I Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option I by giving written notice to Developer ("Agency's Notice of Option 1 Exercise"), in accordance with Section 5 of this Option Agreement, prior to the expiration of the Repurchase Option I Period. Notwithstanding anything herein to the contrary, (i) failure of Agency to exercise the Repurchase Option I with respect to Developer's failure to timely commence construction of the Project shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's failure to timely commence construction of the Project, and shall not constitute a waiver of Agency of its exercise of this Repurchase Option I with respect to Developer's failure to timely commence construction of a particular Phase of Development; and (ii) failure of Agency to exercise the Repurchase Option I with respect to Developer's failure to timely commence construction of a particular Phase of Development shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other Agreement for Developer's failure to timely commence construction of that Phase of Development and shall not constitute a waiver of Agency of its exercise of this Repurchase Option I with respect to Developer's failure to timely commence construction of any other Phase of Development. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of any other Developer breach of the terms or conditions of the DDA. 882/015610-0061 380889.09 a12/17/03 -2- (b) Repurchase Price - Repurchase Option I Agency's repurchase price for the Site, or portion thereof, or for the Option I Parcel(s) and any Related Parcels Agency is entitled, and elects, to purchase ("Repurchase Option I Repurchase Price"), shall be seventy-five percent (75%) of Developer's Purchase Price for the Site, portion thereof, or applicable Parcel(s), as set forth in Exhibit "D", which is attached hereto and incorporated herein by this reference. 2. Repurchase Option II - Failure to Continuously Proceed With or Complete Construction Developer hereby grants to Agency an exclusive option to repurchase any individual Parcel then -comprising the Site ("Option II Parcel(s)"), and any Related Parcel(s) to the Option II Parcel(s) on which Developer has not yet commenced construction if, after commencement of construction of the Phase of Development to be constructed on the Option II Parcel(s), Developer fails to continuously proceed with, and complete, construction of such Phase of Development on the Option II Parcel(s) (collectively, "Repurchase Option II"). For purposes of this Option Agreement, "continuously proceed with construction" shall be defined as construction that is interrupted, if at all, for periods of no longer than thirty (30) days; and "completion of construction of the Phase of Development" shall be defined as City's final inspection of the Phase of Development by the date set forth in the Commencement and Completion Schedule, subject to Section 4(f) below ("Completion Deadline"). In the event of Developer's failure to continuously proceed with construction, or to complete construction of any Phase of Development by the Completion Deadline, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the applicable Completion Deadline (after expiration of the cure period described in Sections 4(b) and 4(c) hereof) ("Repurchase Option II Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option II by giving written notice to Developer, in accordance with Section 5 of this Option Agreement, prior to the expiration of the Repurchase Option II Period. Failure of Agency to exercise the Repurchase Option II with respect to a particular Phase of Development shall constitute a waiver by Agency of Developer's breach of its obligation to continuously proceed with and complete construction of that Phase of Development within the time set forth in the Commencement and Completion Schedule. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of Developer's obligation to continuously proceed with and complete construction of any other Phase of Development within the time set forth in the Commencement and Completion Schedule, or of any other Developer breach of the terms or conditions of the DDA. (b) Determination of Repurchase Price - Repurchase Option II Agency's repurchase price for the Option II Parcel(s) and any Related Parcel(s) Agency is entitled, and elects, to purchase ("Repurchase Option II Repurchase Price"), shall be the sum of (a) Developer's Purchase Price for the Option II Parcel(s) plus thirty-three and three -tenths percent (33.3%) of "Developer's Construction Costs," and (b) seventy-five percent (75%) of 882/015610-0061 380889.09 a12/17/03 -3- Developer's Purchase Price for the Related Parcel(s) Developer is entitled, and elects, to purchase. For purposes of this Option Agreement, the term "Developer's Construction Costs" shall mean, with respect to development of the Phase of Development to be constructed on the Option II Parcel(s), the lesser of (i) construction costs actually incurred by Developer for development of said Phase of Development from the DDA Date to the date Agency's exercises this Repurchase Option II (the "Construction Period"), and (ii) the constructions costs for the Construction Period set forth in Developer's Preliminary Budget, as approved by Agency as part of Agency's approval of Developer's financing, in accordance with Section 311 of the DDA, which costs may include (i) the amount paid by Developer to the contractor or contractors performing the works of improvement; (ii) reasonable inspection and testing costs paid by Developer to independent third party engineers or consultants in conjunction with said works of improvement (but not including costs, fees, charges, or profits allocated to Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer; (iii) costs and fees paid by Developer to independent third party engineers or consultants with respect to the planning, design, and engineering of the works of improvement (but not including costs, fees, charges, or profits allocated to the Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer); and (iv) the costs and fees incurred by Developer, if any, to obtain financing for the construction of the works of improvement. 3. Repurchase Option III - Transfer of the Site Developer hereby grants to Agency an exclusive option to repurchase (i) the Site if, prior to the time Agency issues a Release of Construction Covenants for any Phase of Development to be constructed thereon, Developer transfers or suffers an involuntary transfer of the Site in violation of the terms of the DDA; or (ii) any of the individual Parcels then -comprising the Site (the "Option III Parcel(s)") and any Related Parcel(s) to the Option III Parcel(s) on which Developer has not yet commenced construction if, prior to the time Agency issues a Release of Construction Covenants for the Phase of Development to be constructed on the Option III Parcel(s), Developer transfers or suffers an involuntary transfer of the Option III Parcel(s) (collectively, "Repurchase Option III"). In the event of Developer's transfer of the Site or any individual Parcels then -comprising the Site in violation of the DDA, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the transfer that gives rise to Agency's option under this Section ("Repurchase Option III Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option III by giving written notice to Developer ("Agency's Notice of Option III Exercise"), in accordance with Section 5 of this Option Agreement, prior to the expiration of the Repurchase Option III Period. Notwithstanding anything herein to the contrary, (i) failure of Agency to exercise the Repurchase Option III with respect to Developer's transfer or sufferance of an involuntary transfer of the Site shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Site, and (ii) failure of Agency to exercise the Repurchase Option III with respect to Developer's transfer or sufferance of an involuntary transfer of a Parcel shall not constitute a waiver by 882/015610-0061 380889.09 a12/17/03 -4- Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Parcel, and shall not constitute a waiver by Agency of its exercise of this Repurchase Option III with respect to any other Parcel then -comprising the Site. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of any other Developer breach of the terms or conditions of the DDA. (b) Repurchase Price - Repurchase Option III Agency's repurchase price for the Site or for the Option III Parcel(s) and any Related Parcels Agency is entitled, and elects, to purchase ("Repurchase Option III Repurchase Price") shall be as follows: i) In the event Developer has not yet commenced construction of the Project or applicable Phase of Development at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III Price shall be the Repurchase Option I Repurchase Price, as set forth in Section 1(b) of this Option Agreement. ii) In the event Developer has commenced construction of the Project or applicable Phase of Development at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III Repurchase Price shall be (1) for the Option III Parcel(s), the Repurchase Option II Repurchase Price, as set forth in Section 2(b) of this Option Agreement, and (2) for the Related Parcels Agency is entitled, and elects, to purchase, the Repurchase Option I Repurchase Price, as set forth in Section 1(b) of this Option Agreement. 4. Additional Terms Applicable to the Repurchase Options The following additional terms shall apply to Repurchase Option I, Repurchase Option II, and Repurchase Option III: (a) Successors and Assigns. The Repurchase Option I, Repurchase Option II, and Repurchase Option III created hereby shall be irrevocable by Developer and, subject to any subordination by Agency in accordance with paragraph (e) below, shall be binding upon the successors and assigns of Developer. (b) Developer's Right to Cure Certain Defaults. Notwithstanding anything herein to the contrary, Agency shall not be entitled to exercise Repurchase Option I or Repurchase Option II until Agency has provided a written notice to Developer regarding Developer's failure to commence, continuously proceed with, or complete, construction of the Project (with any of the above failures referred to hereinafter as an "Option Triggering Event"), and Developer has not, within sixty (60) days after receipt of such notice, cured, corrected, or remedied such Option Triggering Event, or, for those Option Triggering Events that cannot reasonably be cured, corrected, or remedied within sixty (60) days, commenced to cure, correct or remedy such Option Triggering Event within said sixty (60) day period, and diligently prosecute the same to completion. (c) Notice of Default to Mortgagee or Deed of Trust Holders, Right to Cure. With respect to any mortgage or deed of trust granted by Developer, whenever the Agency may 882/015610-0061 380889.09 a12/17/03 -5- deliver any notice or demand to Developer with respect to an Option Triggering Event, the Agency shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage or deed of trust which has previously requested such notice in writing. Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Property (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. (d) No Agency ag tion. Notwithstanding any covenant, term, or provision in this Section 4 to the contrary, Agency shall not be obligated to exercise Repurchase Option I, Repurchase Option II, or Repurchase Option III. (e) Termination of Option Agreement. In the event Developer commences and completes construction of any particular Phase of Development and Agency has not exercised Repurchase Option I, Repurchase Option II, or Repurchase Option III, Agency shall execute and record a termination of this Option Agreement with respect to the underlying Parcel of said Phase of Development within fifteen (15) business days after the final and permanent Certificate of Occupancy for the Phase of Development is issued by the City. (f) Enforced Delay. Notwithstanding anything to the contrary herein, in addition to specific provisions of this Option Agreement, performance by either parry hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency shall not excuse performance by Agency unless the act or failure is caused by the acts or omissions of Developer); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise commercially reasonable efforts to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within thirty (30) days following the commencement of the cause. The following shall not be considered as events or causes beyond the control of Developer, and shall not entitle Developer to an extension of time to perform: (i) Developer's failure to obtain financing for the Project or for any Phase of Development, (ii) Developer's failure to negotiate agreements with prospective tenants or users for the Project or for any Phase of Development, (iii) interest rates or (iv) economic or market conditions. Times of performance under this Option Agreement may also be extended by mutual written agreement by Agency and Developer. Agency's Executive 882/015610-0061 380889.09 a12/17/03 -6- Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. (g) Subordination. The Agency agrees to subordinate Repurchase Option II and Repurchase Option III to Developer's construction loan(s) for each Phase of Development and to the deed of trust securing Developer's investor's loan for Developer's construction of the Suites Hotel on the Suites Hotel Parcel, the Parcel 2 Casitas Development Component on Casitas Parcel 2, the Parcel 3 Casitas Development Component on Casitas Parcel 3, and the Parcel 4 Casitas Development Component on Casitas Parcel 4, provided all of the following conditions are met: i) Loan Amount. (1) for the Parcel A Medical Office/Surgical Facility Component, the Parcel 1 Restaurant, the Parcel 5 Residential Development, the Parcel 7 Residential Development, the Parcel 8 Sanctuary Villas Component, the Parcel 9 Sanctuary Villas Component, the Parcel 10 Medical Office/Surgical Facility Component, the Parcel 11 Medical Office/Surgical Facility Component, the Parcel 12 Medical Office/Surgical Facility Component, and the Parcel 13 Restaurant, the maximum cumulative principal amount of the construction loan for the applicable Phase of Development shall not exceed ninety percent (90%) of the lender's appraised value of the Parcel on which said Phase of Development shall be constructed, upon completion of the Phase of Development, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction, and (2) for the Suites Hotel, the Parcel 2 Casitas Development Component, the Parcel 3 Casitas Development Component, and the Parcel 4 Casitas Development Component, the maximum cumulative principal amount, collectively, of Developer's construction loan plus Developer's investor's loan, shall not exceed ninety percent (90%) of the lender's appraised value of the Parcel on which the applicable Phase of Development shall be constructed, upon completion of the Phase of Development, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction; ii) Use of Loan Proceeds. The loan(s) shall obligate Developer to expend loan proceeds for no other purpose than the applicable Phase of Development; and iii) Notice and Agency's pportunity to Cure. The loan(s) shall provide that any notice of a Developer breach or default shall also be sent to the Agency at the address listed in Section 5 and that upon receipt of such notice, Agency shall have the right to (A) cure the noticed breach or default, (B) negotiate with the lender regarding the noticed breach or default, and (C) purchase the Site from Developer subject to the construction lender's deed of trust, without the consent of Developer or the holder of the construction lender's deed of trust, and that Agency's exercise of the foregoing rights shall not, in and of itself, give rise to any right on the part of the lender to accelerate the amounts due under the loan. (h) Agency's Investigation of Site. Agency shall have forty-five (45) days after the occurrence of an event that triggers Agency's ability to exercise any of Repurchase Option I, Repurchase Option II, or Repurchase Option III to enter upon the Site (or applicable 882/015610-0061 380889.09 a12/17/03 -7- portion thereof) to conduct any tests, inspections, investigations, or studies of the condition of the Site (or applicable portion thereof). Developer shall permit Agency access to the Site (or applicable portion thereof) for such purposes. Agency's obligation to close "Escrow" (as defined below) shall be subject to Agency's approval of any environmental and other site testing conducted by Agency in Agency's discretion. Agency shall indemnify, defend, and hold harmless Developer and its officers, directors, shareholders, employees, agents, and representatives from and against all claims, liabilities, or damages, and including expert witness fees and reasonable attorney's fees and costs, arising out of any such testing, inspection, or investigatory activity on the Site (or applicable portion thereof). (i) Escrow Provisions. i) Within five (5) business days after Agency has exercised Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable), or as soon thereafter as reasonably practicable, an escrow shall be opened ("Escrow") with an escrow company selected by Agency for the reconveyance of the Site (or applicable portion thereof) to Agency ("Escrow Holder"). Escrow shall be deemed opened on the date that a fully executed copy of this Option Agreement and a notice of exercise of option prepared by Agency are delivered to Escrow Holder ("Opening of Escrow"). Escrow Holder shall notify Developer and Agency in writing of the date of the Opening of Escrow promptly following the opening of the Escrow. ii) Escrow shall close on or before the date that is ninety (90) days after the Opening of Escrow ("Close of Escrow" or "Closing Date"). The terms "Close of Escrow" and "Closing Date" shall mean the date the grant deed conveying fee title to Agency ("Agency Grant Deed") is recorded in the Office of the County Recorder of the County of Riverside, State of California. Possession of the Site, or portion thereof, shall be delivered to Agency at the Close of Escrow. iii) This Option Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of Developer and Agency to Escrow Holder as well as an agreement between Developer and Agency. In the event of any conflict between the provisions of this Option Agreement and Escrow Holder's standard instructions, this Option Agreement shall prevail. iv) The Escrow shall be subject to Agency's approval of a then -current preliminary title report. Any monetary lien(s) or encumbrance(s) shown on such preliminary title report that is (are) created concurrent with or after the close of escrow that conveyed the Site from Agency to Developer shall be removed by Developer at its sole expense prior to the Close of Escrow pursuant to this Section 4(i) unless such exception(s) is (are) accepted by Agency in its sole discretion; provided, however, that Agency shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title existing on the date of recordation of the Grant Deed to the Site (in the form of Attachment No. 4 to the DDA); and (iii) matters shown as printed exceptions in the standard form ALTA policy of title insurance. In the event the Site is encumbered by a mortgage or deed of trust, Agency shall be permitted to unilaterally instruct Escrow Holder to satisfy the indebtedness secured thereby out of the proceeds payable to 882/015610-0061 380889.09 a12/17/03 -8- Developer through the foregoing Escrow. Any additional amount necessary to satisfy such indebtedness shall be paid by Developer. v) On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Agency shall deposit in Escrow (i) the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price; (ii) one-half (1/2) of the escrow fees; (iii) the portion of the title insurance premium attributable to any extra or extended coverages, or any additional charge resulting from Agency's request that the amount of insurance be higher than the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price; and (iv) any and all additional instruments or other documents required from Agency (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Developer shall deposit in Escrow (i) the Agency Grant Deed, executed and acknowledged; (ii) one-half (1 /2) of the escrow fees; and (iii) any and all additional instruments or other documents required from Developer (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. Developer shall also be required to pay for documentary tax stamps, recording fees, and for an ALTA standard form owner's policy of title insurance in the amount of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price (as applicable), showing title vested in Agency free and clear of all liens and encumbrances except those permitted by paragraph (4) above (the "Title Policy"). Agency's receipt of the Title Policy shall be a condition to the Close of Escrow. Any other costs and expenses shall be allocated between the parties in the manner customary for a commercial property conveyance in Riverside County. vi) If, on or before the Closing Date, Escrow Holder has received all of the documents and funds listed in paragraph (5) above, and Escrow Holder is in a position to cause the Title Policy to be issued to Agency, and provided Agency has approved of the condition of the Site, or applicable portion thereof, Escrow Holder shall close the Escrow by taking the following actions: (i) recording the Agency Grant Deed in the office of the County Recorder of the County of Riverside, California, and delivering the recorded Agency Grant Deed to Agency; (ii) causing the Title Policy to be issued to Agency; and (iii) delivering the applicable of the Option I Repurchase Price, the Option II Repurchase Price, or the Option III Repurchase Price to Developer. 0) Agency's Right to Acquire the Site. Notwithstanding anything herein to the contrary, upon Agency's exercise of Repurchase Option I, Repurchase Option II, or Repurchase Option III, Developer's commencement to cure the default that led to Agency's exercise shall not affect Agency's right to close the Escrow and acquire the Site (or applicable portion thereof). (k) Agency's Repurchase of Uncompleted Portions of the Property. Notwithstanding anything herein to the contrary, in the event that as a result of Agency exercising Repurchase Option II or Repurchase Option III Agency acquires Residential Parcel 5 and/or Residential Parcel 7, if Developer has obtained a Certificate of Completion from the City '82/015610-0061 380889.09 a12/17/03 -9- for one or more of the lots that comprise either of said Parcels, (i) the provisions of this Option Agreement shall apply only to that portion of Residential Parcel 5 and/or Residential Parcel 7 (as applicable) for which Certificates of Completion have not been issued ("Uncompleted Portion of the Repurchase Property") and any calculations for determining the Repurchase Option II Repurchase Price or the Repurchase Option III Repurchase Price (as applicable) shall be based solely upon the Uncompleted Portion of the Repurchase Property, and (ii) Developer agrees to cooperate with Agency to effect the subdivision of the Uncompleted Portion of the Repurchase Property from the completed portions of Residential Parcel 5 and/or Residential Parcel 7 (as applicable) (those portions of the Repurchase Property for which Certificates of Completion have been issued). 5. Notices Demands and Communications Between the Parties Formal notices, demands, and communications between Agency and Developer shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to: To Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, California 92626 Attn: M. Katherine Jenson, Esq. To Developer: CP Development La Quinta, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant With copies to: Selzer, Ealy, Hemphill & Blasdell, LLP 777 Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill and Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed in the manner provided above shall be deemed effective on the second business day following deposit in the United States mail. Such written notices, demands, and communications shall be sent in the same manner to such other addresses as either party may from time to time designate by mail. 882/015610-0061 380899.09 a12/17/03 -10- 6. Agency's OQtion to Acquire Plans If Agency exercises Repurchase Option I, Repurchase Option II, or Repurchase Option III in accordance with this Agreement, at the option of the Agency, which may be exercised in the Agency's sole and absolute discretion, the Developer shall deliver to the Agency an executed assignment in a form reasonably acceptable to the Agency of the Developer's right to use all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to (i) the construction of the Project on the Site or (ii) if Agency acquires less than all of the Site, the construction of the Phases(s) of Development applicable to the Parcels which the Agency is acquiring (the "Plans"), together with copies of all of the Plans, as have been prepared for the development of the Site or applicable portion thereof to date of the termination. Notwithstanding the foregoing, however, Developer does not covenant to convey to the Agency the copyright or other ownership rights of third parties. Agency understands and agrees that the assignment to Agency under this Section 6 is subject and subordinate to any assignment which Developer may make to a lender providing financing for the Project or applicable Phase of Development, and Agency agrees to execute any documents required by such lender acknowledging and effectuating such subordination of Agency's rights in and to the assignment. Agency's acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall assume all risks in the use of the Plans. 7. Applicable Law and Forum; Attorneys Fees The Municipal and Superior Courts of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Option Agreement. This Option Agreement shall be governed by, and construed under, the laws of the State of California. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Option Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Option Agreement. The rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Service of process on Agency shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. If either party to this Option Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Option Agreement, the party prevailing in the final judgment in such action or proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable attorney's fees. Attorney's fees shall include reasonable costs for investigating such action, conducting discovery, retaining expert witnesses, and all other necessary costs the court allows which are incurred in such litigation. 892/015610-0061 380889.09 a12/17/03 -11- 8. Nonliabilily of Agency Officials and Employees No officer, official, employee, agent, or representative of Agency shall be personally liable to Developer or any successor in interest, in the event of any default or breach by Agency, or for any amount which may become due to Developer or its successor, or for breach of any obligation of the terms of this Option Agreement. 9. Nondiscrimination Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, or ancestry with respect to this Option Agreement or use of the Site. 10. Interpretation The terms of this Option Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Option Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Option Agreement. 11. Entire Agreement This Option Agreement integrates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Option Agreement must be in writing and signed by the appropriate authorities of the party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of Agency and Developer. 12. Counterparts This Option Agreement may be executed in counterparts, each of which, after all the parties hereto have signed this Option Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 13. Severability In the event any section or portion of this Option Agreement shall be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect, and the parties hereto shall take further actions as may be reasonably necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this Option Agreement. [END - SIGNATURES ON NEXT PAGE] 882/015610-0061 380889.09 a12/17/03 -12- IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first above written. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "AGENCY" LA QUINTA REDEVELOPMENT AGENCY a public body, corporate and politic By: Its: Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency 882/015610-0061 380889.09 a12/17/03 -13- STATE OF CALIFORNIA ) ) ss COUNTY OF ) On personally appeared before me, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ) ss COUNTY OF ) On , before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 380889.09 a12/17/03 -14- EXHIBIT "A" LEGAL DESCRIPTION OF THE SITE IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO. 23971-1, ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 00027'38" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026'40" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 89033'22" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 00026'40" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41 °42'33", AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044'32" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45°27'41 ", AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 108979, O.R. THENCE SOUTH 00012' 13" EAST ALONG SAID EASTERLY LINE, A DISTANCE OF 790.73 FEET TO AN ANGLE POINT THEREIN; 882/015610-0061 380889.09 a12/17/03 -15- THENCE SOUTH 43056'42' WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42059'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 02°5746", AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C" AND ITS NORTHWESTERLY PROLONGATION NORTH 64°21'03" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO.255528, O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 86011'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 005'41 ", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 75033'02" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17°33'23" EAST; THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00032'28", AN ARC DISTANCE OF 23.61 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT B, SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; 882/015610-0061 380889.09 a12/17/03 -16- THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06", AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006'56" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013' 18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02012'44", AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 67006'56" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001' 12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19058'08", AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028'37" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36°57'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18051'35", AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (1,850,000 SQUARE FEET), MORE OR LESS. 882/015610-0061 380889.09 a12/17/03 -17- P.O.C. CTR. 1/4 COR. SEC. 19 MILES AVENUE S 00.27'38"_E� 75.00' N 89'31'23" E 487.01' N 873: N 00.28'37" W 153.41' T.P.O.S. �9 in 0 _ L6 960.27' , . L7 - - S 00'26'40" E 112.88' wwn S 44'44'32" E 90.06' 0w_ �' 2 "v N 89*47*47" E N 66'01'12" E SITE 239.56' tR AREA-42.47 AC. a L4 PORTION OF THE S. 1 /2 OF SEC. 19, T.5S., R.7E., S.B.M. `R) �+ � fV L5 N 75'53'46" E be tR rn vPik\* L3 PT. B 1"=300' C•�WOR/w N 66" 11'26" E 1, p (R) ?3• £ C4C�0 �': LINE DATA NUMBER DIRECTION DISTANCE L1 S W l S.'01 E 397.49' L2 N, 48'09'56" W 22.00' L3 N7533'02" E 4.22' L4 N 67'O6'56" E- 20.00' L5 S 6TO6'56"` W 20.00' . l6 N 00'26'40" W 20.00' L7 N 89'33'22" E 180.00' EXCEPTION 11 ro PARCEL I J 74, PT. A ?psg N •7" ro �R) ' oc CURVE DATA W NUMBER DELTA RADIUS ARC LENGTH TANGENT Cl 41'42'33" 440.00 320.30 167.62 C2 4527 41" 60.00 63.48 33.52 C3 0757'4V 4565.17 236.07 118.06 C4 19'24'03 2500.00 846.52 427.35 C5 11*05'41" 2072.00 401.22 201.24 C6 19'58'08" 2092.00 1729.11 368.29 C7 OT12'44' 2072.00 80.00 40.01 C8 0741'06" 2092.00 280.60 140.51 C9, 00'32'28' 12500.00 23.61 11.81 C10 18'51'35" 12500.00 822.91 415.21 E N 4759'27' E �R) cy�rF o tig4q - J.N. 1612 882/015610-0061 380889.09 a12/17/03 -18- EXHIBIT `B" COMMENCEMENT AND COMPLETION SCHEDULE Time for Completion of Construction (measured from date City issues final building Time for Commencement of permits for applicable Phase of Phase of Development Construction Development) Parcel A Medical Office/Surgical Facility 690 days after DDA Date 36 months Component First Phase of Development of the Medical Office/Surgical Facility Second Phase of Development of the Medical Office/Surgical Facility Third Phase of Development of the Medical Office/Surgical Facility Parcel 1 Restaurant Parcel 2 Casitas Development Component Parcel 3 Casitas Development Component Parcel 4 Casitas Development Component Parcel 5 Residential Development Parcel 7 Residential Development Parcel 8 Sanctuary Villas Component Parcel 9 Sanctuary Villas Component Parcel 13 Restaurant Seeley Drive Suites Hotel 690 days after DDA Date 780 days after DDA Date 870 days after DDA Date 600 days after DDA Date 600 days after DDA Date 600 days after DDA Date 600 days after DDA Date 626 days after DDA Date 626 days after DDA Date 690 days after DDA Date 1230 days after DDA Date 800 days after DDA Date 500 days after DDA Date 600 days after DDA Date 36 months 36 months 36 months 36 months 36 months 36 months 36 months 18 months 18 months 36 months 36 months 36 months 180 days after Developer's completion of Suites Hotel 18 months 882/015610-0061 -19- 380889.09 a12/17/03 EXHIBIT "C" RELATED PARCELS The following are groupings of Parcels which are deemed to be Related Parcels: Sanctuary Villas Parcel 8 and Sanctuary Villas Parcel 9. 2. Casitas Parcel 2, Casitas Parcel 3, and Casitas Parcel 4. 3. Medical Office/Surgical Facility Parcel A, Medical Office/Surgical Facility Parcel 10, Medical Office/Surgical Facility Parcel 11, and Medical Office/Surgical Facility Parcel 12. 4. Residential Parcel 5 and Residential Parcel 7. 5. Suites Hotel Parcel, Restaurant Parcel 1 and Restaurant Parcel 13. 882/015610-0061 380889.09 a12/17/03 "20- EXHIBIT "D" PURCHASE PRICE Sanctuary Villas Parcel 8 $ 841,193.42 Sanctuary Villas Parcel 9 247,409.82 Casitas Parcel 2 510,563.92 Casitas Parcel 3 773,718.02 Casitas Parcel 4 654,511.46 Landscape Parcel C 0 Landscape Parcel E 0 Landscape Parcel H 0 Landscape Parcel I 0 Medical Office/Surgical Facility A 1,455,219.64 Medical Office/Surgical Facility 10 164,190.15 Medical Office/Surgical Facility 11 276,649.17 Medical Office/Surgical Facility 12 164,190.15 Residential Parcel 5 135,694.34 Residential Parcel 7 557,028.39 Restaurant Parcel 1 206,924.58 Restaurant Parcel 13 251,908.18 Seeley Drive Parcel 0 Suites Hotel Parcel 753,475.39 Well Site Parcel 116,957.37 Property $7,109,634.00 '82/015610-0061 380889.09 a12117/03 -21- ATTACHMENT NO.14B FORM OF OPTION AGREEMENT [SEE FOLLOWING PAGES] 82/015610-0061 3:0899.09 a12/17/03 FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director (SPACE ABOVE THIS LINE FOR RECORDING USE) (EXEMPT FROM RECORDING FEE PER GOV. CODE § 27383) OPTION AGREEMENT NOTICE: THIS OPTION AGREEMENT CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS OPTION AGREEMENT ("Option Agreement") is made this _ day of , 2003 (the "Effective Date"), by CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"). RECITALS A. Developer has entered into a Disposition and Development Agreement ("DDA") dated , 2003 (the "DDA Date") with the La Quinta Redevelopment Agency ("Agency"), pursuant to which Agency has agreed to convey to Developer, and has conveyed all or a portion thereof to Developer, that certain real property located southeast of the Miles Avenue and Washington Street intersection, in the City of La Quinta, County of Riverside, State of California (the "Site"). The Site is composed of (__) [Insert applicable number] individual parcels (individually, a "Parcel," and collectively, the "Parcels"), each of which is legally described in Exhibit "A" attached hereto and incorporated herein. The Parcels are identified in the DDA as [Insert applicable Parcels]. All defined terms used herein shall have the same meaning as set forth in the DDA unless otherwise stated. As used herein, the term "Parcel" and "Parcels" shall have the meaning ascribed above. B. As a condition to the Agency's conveyance of any portion of the Site to Developer, Developer was required to grant to Agency an option to repurchase from Developer a Parcel (the "Option Parcel"), and any of the other Parcels which Developer has acquired from Agency if Developer has not yet commenced construction on such Parcels, if (i) Developer fails to commence, continuously proceed with, or complete construction on the Option Parcel within certain specified time frames, or (ii) Developer transfers the Option Parcel in violation of the terms of the DDA, all as further described herein. 882/015610-0061 380889.09 a12/17/03 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals and all of the terms and conditions contained in the DDA, Developer hereby grants to Agency the following repurchase options: 1. Repurchase Option I - Failure to Commence Construction Subject to Section 4(f), Developer hereby grants to Agency an exclusive option to repurchase any Parcel Developer has acquired from Agency if Developer fails to commence construction thereon of the applicable Phase of Development within the time set forth in the Commencement and Completion Schedule attached hereto and incorporated herein as Exhibit "B" ("Repurchase Option I"). Agency's Repurchase Option I shall also include the option to repurchase any other Parcel which Developer has acquired from Agency if Developer has not yet commenced construction thereon. For the purposes of this Option Agreement, "commence construction" shall mean Developer's substantial commencement, and thereafter uninterrupted continuation, of excavation work or physical construction on the applicable Parcel, subject to Section 4(f) below, but shall not include any grading work or utility installation that was completed by Developer prior to the Effective Date hereof. In the event of Developer's failure to commence construction of the applicable Phase of Development within the time period described above, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the expiration of the time period described above (after expiration of the cure period described in Sections 4(b) and 4(c) hereof) ("Repurchase Option I Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option I by giving written notice to Developer ("Agency's Notice of Option 1 Exercise"), in accordance with Section 5 of this Option Agreement, prior to the expiration of the Repurchase Option I Period. Notwithstanding anything herein to the contrary, failure of Agency to exercise the Repurchase Option I with respect to Developer's failure to timely commence construction of a particular Phase of Development shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other Agreement for Developer's failure to timely commence construction of that Phase of Development and shall not constitute a waiver of Agency of its exercise of this Repurchase Option I with respect to Developer's failure to timely commence construction of any other Phase of Development. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of any other Developer breach of the terms or conditions of the DDA. (b) Repurchase Price - Repurchase Option I Agency's repurchase price for any of the Parcels Agency is entitled, and elects, to purchase ("Repurchase Option I Repurchase Price"), shall be seventy-five percent (75%) of Developer's Purchase Price for the applicable Parcel(s), as set forth in Exhibit "C", which is attached hereto and incorporated herein by this reference. '82/015610-0061 380889.09 a12/17/03 -2- 2. Repurchase Option II - Failure to Continuously Proceed With or Complete Construction Developer hereby grants to Agency an exclusive option to repurchase any individual Parcel ("Option II Parcel(s)"), and any other Parcel(s) which Developer has acquired from Agency and on which Developer has not yet commenced construction if, after commencement of construction of the Phase of Development to be constructed on the Option II Parcel(s), Developer fails to continuously proceed with, and complete, construction of such Phase of Development on the Option II Parcel(s) (collectively, "Repurchase Option II"). For purposes of this Option Agreement, "continuously proceed with construction" shall be defined as construction that is interrupted, if at all, for periods of no longer than thirty (30) days; and "completion of construction of the Phase of Development" shall be defined as City's final inspection of the Phase of Development by the date set forth in the Commencement and Completion Schedule, subject to Section 4(f) below ("Completion Deadline"). In the event of Developer's failure to continuously proceed with construction, or to complete construction of any Phase of Development by the Completion Deadline, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the applicable Completion Deadline (after expiration of the cure period described in Sections 4(b) and 4(c) hereof) ("Repurchase Option II Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option II by giving written notice to Developer, in accordance with Section 5 of this Option Agreement, prior to the expiration of the Repurchase Option II Period. Failure of Agency to exercise the Repurchase Option II with respect to a particular Phase of Development shall constitute a waiver by Agency of Developer's breach of its obligation to continuously proceed with and complete construction of that Phase of Development within the time set forth in the Commencement and Completion Schedule. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of Developer's obligation to continuously proceed with and complete construction of any other Phase of Development within the time set forth in the Commencement and Completion Schedule, or of any other Developer breach of the terms or conditions of the DDA. (b) Determination of Repurchase Price - Repurchase Option II Agency's repurchase price for the Option II Parcel(s) and any other Parcel(s) Agency is entitled, and elects, to purchase ("Repurchase Option II Repurchase Price"), shall be the sum of (a) Developer's Purchase Price for the Option II Parcel(s) plus thirty-three and three -tenths percent (33.3%) of "Developer's Construction Costs," and (b) seventy-five percent (75%) of Developer's Purchase Price for the other Parcel(s) Developer is entitled, and elects, to purchase.. For purposes of this Option Agreement, the term "Developer's Construction Costs" shall mean, with respect to development of the Phase of Development to be constructed on the Option II Parcel(s), the lesser of (i) construction costs actually incurred by Developer for development of said Phase of Development from the DDA Date to the date Agency's exercises this Repurchase Option II (the "Construction Period"), and (ii) the constructions costs for the Construction Period set forth in Developer's Preliminary Budget, as approved by Agency as part of Agency's approval of Developer's financing, in accordance with Section 311 of the DDA, which costs may 882/015610-0061 380899.09 a12/17/03 -3- include (i) the amount paid by Developer to the contractor or contractors performing the works of improvement; (ii) reasonable inspection and testing costs paid by Developer to independent third party engineers or consultants in conjunction with said works of improvement (but not including costs, fees, charges, or profits allocated to Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer; (iii) costs and fees paid by Developer to independent third parry engineers or consultants with respect to the planning, design, and engineering of the works of improvement (but not including costs, fees, charges, or profits allocated to the Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer); and (iv) the costs and fees incurred by Developer, if any, to obtain financing for the construction of the works of improvement. 3. Repurchase Option III - Transfer of the Site Developer hereby grants to Agency an exclusive option to repurchase (i) the Site if, prior to the time Agency issues a Release of Construction Covenants for any Phase of Development to be constructed thereon, Developer transfers or suffers an involuntary transfer of the Site in violation of the terms of the DDA; or (ii) any of the Parcels (the "Option III Parcel(s)") and any other Parcel(s) which Developer has acquired from Agency and on which Developer has not yet commenced construction if, prior to the time Agency issues a Release of Construction Covenants for the Phase of Development to be constructed on the Option III Parcel(s), Developer transfers or suffers an involuntary transfer of the Option III Parcel(s) (collectively, "Repurchase Option III"). In the event of Developer's transfer of the Site or any of the Parcels in violation of the DDA, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the transfer that gives rise to Agency's option under this Section ("Repurchase Option III Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option III by giving written notice to Developer ("Agency's Notice of Option III Exercise"), in accordance with Section 5 of this Option Agreement, prior to the expiration of the Repurchase Option III Period. Notwithstanding anything herein to the contrary, (i) failure of Agency to exercise the Repurchase Option III with respect to Developer's transfer or sufferance of an involuntary transfer of the Site shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Site, and (ii) failure of Agency to exercise the Repurchase Option III with respect to Developer's transfer or sufferance of an involuntary transfer of a Parcel shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Parcel, and shall not constitute a waiver by Agency of its exercise of this Repurchase Option III with respect to any of the other Parcels. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of any other Developer breach of the terms or conditions of the DDA. 821015610-0061 3:0889.09 a] 2/17/03 -4- (b) Repurchase Price - Repurchase Option III Agency's repurchase price for the Site or for the Option III Parcel(s) and any other Parcels Agency is entitled, and elects, to purchase ("Repurchase Option III Repurchase Price") shall be as follows: i) In the event Developer has not yet commenced construction of the applicable Phase of Development at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III Price shall be the Repurchase Option I Repurchase Price, as set forth in Section 1(b) of this Option Agreement. ii) In the event Developer has commenced construction of the applicable Phase of Development at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III Repurchase Price shall be (1) for the Option III Parcel(s), the Repurchase Option II Repurchase Price, as set forth in Section 2(b) of this Option Agreement, and (2) for the other Parcels Agency is entitled, and elects, to purchase, the Repurchase Option I Repurchase Price, as set forth in Section 1(b) of this Option Agreement. 4. Additional Terms Applicable to the Repurchase Options The following additional terms shall apply to Repurchase Option I, Repurchase Option II, and Repurchase Option III: (a) The Repurchase Option I, Repurchase Option II, and Repurchase Option III created hereby shall be irrevocable by Developer and, subject to any subordination by Agency in accordance with paragraph (e) below, shall be binding upon the successors and assigns of Developer. (b) Notwithstanding anything herein to the contrary, Agency shall not be entitled to exercise Repurchase Option I or Repurchase Option II until Agency has provided a written notice to Developer regarding Developer's failure to commence, continuously proceed with, or complete, construction of the Project (with each of the above failures referred to hereinafter as an "Option Triggering Event"), and Developer has not, within sixty (60) days after receipt of such notice, cured, corrected, or remedied such Option Triggering Event, or, for those Option Triggering Events that cannot reasonably be cured, corrected, or remedied within sixty (60) days, commenced to cure, correct or remedy such Option Triggering Event within said sixty (60) day period, and diligently prosecute the same to completion. (c) With respect to any mortgage or deed of trust granted by Developer, whenever the Agency may deliver any notice or demand to Developer with respect to an Option Triggering Event, the Agency shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage or deed of trust which has previously requested such notice in writing. Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires 882/015610-0061 380889.09 a12/17/03 -5- title and/or possession of the Property (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. (d) Notwithstanding any covenant, term, or provision in this Section 4 to the contrary, Agency shall not be obligated to exercise Repurchase Option I, Repurchase Option II, or Repurchase Option III. (e) In the event Developer commences and completes construction of any of the Phases of Development to be constructed on the Parcels and Agency has not exercised Repurchase Option I, Repurchase Option II, or Repurchase Option III, Agency shall execute and record a termination of this Option Agreement with respect to the underlying Parcel of said Phase of Development within fifteen (15) business days after the final and permanent Certificate of Occupancy for the Phase of Development is issued by the City. (f) Notwithstanding anything to the contrary herein, in addition to specific provisions of this Option Agreement, performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency shall not excuse performance by Agency unless the act or failure is caused by the acts or omissions of Developer); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise commercially reasonable efforts to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within thirty (30) days following the commencement of the cause. The following shall not be considered as events or causes beyond the control of Developer, and shall not entitle Developer to an extension of time to perform: (i) Developer's failure to obtain financing for any Phase of Development to be constructed on the Site, (ii) Developer's failure to negotiate agreements with prospective tenants or users for any Phase of Development to be constructed on the Site, (iii) interest rates or (iv) economic or market conditions. Times of performance under this Option Agreement may also be extended by mutual written agreement by Agency and Developer. Agency's Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. (g) Subordination. The Agency agrees to subordinate Repurchase Option II and Repurchase Option III to Developer's construction loan(s) for the [Insert applicable Phases of Development] [Insert "and to the deed of trust securing Developer's investor's loan for the (Insert applicable Phases of Development)" if this Option Agreement is recorded against 882/015610-0061 380889.09 a12/17/03 -6- the Suites Hotel Parcel, Casitas Parcel 2, Casitas Parcel 3, or Casitas Parcel 41, provided that (i) the maximum cumulative principal amount of (1) the construction loan for each of the [Insert applicable Phases of Development] [insert "and (2) the collective sum of Developer's construction loan plus Developer's investor's loan for each of the (Insert applicable Phases of Development)" if this Option Agreement is recorded against the Suites Hotel Parcel, Casitas Parcel 2, Casitas Parcel 3, or Casitas Parcel 41 shall not exceed ninety percent (90%) of the lender's appraised value of the Parcel on which said Phase of Development shall be constructed, upon completion of the Phase of Development, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction, (ii) The loan(s) shall obligate Developer to expend loan proceeds for no other purpose than the applicable Phase of Development; and (iii) the loan(s) shall provide that any notice of a Developer breach or default shall also be sent to the Agency at the address listed in Section 5 and that upon receipt of such notice, Agency shall have the right to (A) cure the noticed breach or default, (B) negotiate with the lender regarding the noticed breach or default, and (C) purchase the Site (or applicable Parcel(s)) from Developer subject to the construction lender's deed of trust, without the consent of Developer or the holder of the construction lender's deed of trust, and that Agency's exercise of the foregoing rights shall not, in and of itself, give rise to any right on the part of the lender to accelerate the amounts due under the loan. (h) Agency's Investigation of Site. Agency shall have forty-five (45) days after the occurrence of an event that triggers Agency's ability to exercise any of Repurchase Option I, Repurchase Option II, or Repurchase Option III to enter upon the Site (or applicable Parcel(s)) to conduct any tests, inspections, investigations, or studies of the condition of the Site (or applicable Parcel(s)). Developer shall permit Agency access to the Site (or applicable Parcel(s)) for such purposes. Agency's obligation to close "Escrow" (as defined below) shall be subject to Agency's approval of any environmental and other site testing conducted by Agency in Agency's discretion. Agency shall indemnify, defend, and hold harmless Developer and its officers, directors, shareholders, employees, agents, and representatives from and against all claims, liabilities, or damages, and including expert witness fees and reasonable attorney's fees and costs, arising out of any such testing, inspection, or investigatory activity on the Site (or applicable Parcel(s)). (i) Escrow Provisions. i) Within five (5) business days after Agency has exercised Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable), or as soon thereafter as reasonably practicable, an escrow shall be opened ("Escrow") with an escrow company selected by Agency for the reconveyance of the Site (or applicable Parcel(s)) to Agency ("Escrow Holder"). Escrow shall be deemed opened on the date that a fully executed copy of this Option Agreement and a notice of exercise of option prepared by Agency are delivered to Escrow Holder ("Opening of Escrow"). Escrow Holder shall notify Developer and Agency in writing of the date of the Opening of Escrow promptly following the opening of the Escrow. 882/015610-0061 380889.09 a12/17/03 -7- ii) Escrow shall close on or before the date that is ninety (90) days after the Opening of Escrow ("Close of Escrow" or "Closing Date"). The terms "Close of Escrow" and "Closing Date" shall mean the date the grant deed conveying fee title to Agency ("Agency Grant Deed") is recorded in the Office of the County Recorder of the County of Riverside, State of California. Possession of the Site, or applicable Parcel(s), shall be delivered to Agency at the Close of Escrow. iii) This Option Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of Developer and Agency to Escrow Holder as well as an agreement between Developer and Agency. In the event of any conflict between the provisions of this Option Agreement and Escrow Holder's standard instructions, this Option Agreement shall prevail. iv) The Escrow shall be subject to Agency's approval of a then -current preliminary title report. Any monetary lien(s) or encumbrance(s) shown on such preliminary title report that is (are) created concurrent with or after the close of escrow that conveyed the Site (or applicable Parcel(s)) from Agency to Developer shall be removed by Developer at its sole expense prior to the Close of Escrow pursuant to this Section 4(i) unless such exception(s) is (are) accepted by Agency in its sole discretion; provided, however, that Agency shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title existing on the date of recordation of the Grant Deed to the Site (or applicable Parcel(s)) (in the form of Attachment No. 4 to the DDA); and (iii) matters shown as printed exceptions in the standard form ALTA policy of title insurance. In the event the Site (or applicable Parcel(s)) is encumbered by a mortgage or deed of trust, Agency shall be permitted to unilaterally instruct Escrow Holder to satisfy the indebtedness secured thereby out of the proceeds payable to Developer through the foregoing Escrow. Any additional amount necessary to satisfy such indebtedness shall be paid by Developer. v) On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Agency shall deposit in Escrow (i) the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price; (ii) one-half (1/2) of the escrow fees; (iii) the portion of the title insurance premium attributable to any extra or extended coverages, or any additional charge resulting from Agency's request that the amount of insurance be higher than the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price; and (iv) any and all additional instruments or other documents required from Agency (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable Parcel(s), to Agency. On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Developer shall deposit in Escrow (i) the Agency Grant Deed, executed and acknowledged; (ii) one-half (1/2) of the escrow fees; and (iii) any and all additional instruments or other documents required from Developer (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable Parcel(s), to Agency. Developer shall also be required to pay for documentary tax stamps, recording fees, and for an ALTA standard form owner's policy of title insurance in the amount of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price (as applicable), showing title vested in Agency free and clear of all liens and encumbrances except those 882/015610-0061 380989.09 a12/17/03 -8- permitted by paragraph (4) above (the "Title Policy"). Agency's receipt of the Title Policy shall be a condition to the Close of Escrow. Any other costs and expenses shall be allocated between the parties in the manner customary for a commercial property conveyance in Riverside County. vi) If, on or before the Closing Date, Escrow Holder has received all of the documents and funds listed in paragraph (5) above, and Escrow Holder is in a position to cause the Title Policy to be issued to Agency, and provided Agency has approved of the condition of the Site, or applicable Parcel(s), Escrow Holder shall close the Escrow by taking the following actions: (i) recording the Agency Grant Deed in the office of the County Recorder of the County of Riverside, California, and delivering the recorded Agency Grant Deed to Agency; (ii) causing the Title Policy to be issued to Agency; and (iii) delivering the applicable of the Option I Repurchase Price, the Option II Repurchase Price, or the Option III Repurchase Price to Developer. 0) Notwithstanding anything herein to the contrary, upon Agency's exercise of Repurchase Option I, Repurchase Option II, or Repurchase Option III, Developer's commencement to cure the default that led to Agency's exercise shall not affect Agency's right to close the Escrow and acquire the Site (or applicable portion thereof). (k) [Insert the following if this Option Agreement is recorded against Residential Parcel 5 and Residential Parcel 7: "Notwithstanding anything herein to the contrary, in the event that as a result of Agency exercising Repurchase Option II or Repurchase Option III Agency acquires Residential Parcel 5 and/or Residential Parcel 7, if Developer has obtained a Certificate of Completion from the City for one or more of the lots that comprise either of said Parcels, (i) the provisions of this Option Agreement shall apply only to that portion of Residential Parcel 5 and/or Residential Parcel 7 (as applicable) for which Certificates of Completion have not been issued ("Uncompleted Portion of the Repurchase Property") and any calculations for determining the Repurchase Option II Repurchase Price or the Repurchase Option III Repurchase Price (as applicable) shall be based solely upon the Uncompleted Portion of the Repurchase Property, and (ii) Developer agrees to cooperate with Agency to effect the subdivision of the Uncompleted Portion of the Repurchase Property from the completed portions of Residential Parcel 5 and/or Residential Parcel 7 (as applicable) (those portions of the Repurchase Property for which Certificates of Completion have been issued)." 5. Notices. Demands and Communications Between the Parties Formal notices, demands, and communications between Agency and Developer shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to: To Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director 882/015610-0061 380899.09 a12/17/03 -9- With a copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, California 92626 Attn: M. Katherine Jenson, Esq. To Developer: CP Development La Quinta, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant With copies to: Selzer, Ealy, Hemphill & Blasdell, LLP 777 Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill and Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed in the manner provided above shall be deemed effective on the second business day following deposit in the United States mail. Such written notices, demands, and communications shall be sent in the same manner to such other addresses as either party may from time to time designate by mail. 6. Agency's Option to Acquire Plans If Agency exercises Repurchase Option I, Repurchase Option II, or Repurchase Option III in accordance with this Agreement, at the option of the Agency, which may be exercised in the Agency's sole and absolute discretion, the Developer shall deliver to the Agency an executed assignment in a form reasonably acceptable to the Agency of the Developer's right to use all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to (i) the construction of the [Insert applicable Phases of Development] on the Site or (ii) if Agency acquires less than all of the Site, the construction of the Phases(s) of Development applicable to the Parcels which the Agency is acquiring (the "Plans"), together with copies of all of the Plans, as have been prepared for the development of the Site or applicable Parcel(s) to date of the termination. Notwithstanding the foregoing, however, Developer does not covenant to convey to the Agency the copyright or other ownership rights of third parties. Agency understands and agrees that the assignment to Agency under this Section 6 is subject and subordinate to any assignment which Developer may make to a lender providing financing for the applicable Phase of Development, and Agency agrees to execute any documents required by such lender acknowledging and effectuating such subordination of Agency's rights in and to the assignment. Agency's 882/015610-0061 -1 O- 380889.09 a12/17/03 acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall assume all risks in the use of the Plans. 7. Applicable Law and Forum; Attorney's Fees The Municipal and Superior Courts of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Option Agreement. This Option Agreement shall be governed by, and construed under, the laws of the State of California. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Option Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Option Agreement. The rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Service of process on Agency shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. If either party to this Option Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Option Agreement, the party prevailing in the final judgment in such action or proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable attorney's fees. Attorney's fees shall include reasonable costs for investigating such action, conducting discovery, retaining expert witnesses, and all other necessary costs the court allows which are incurred in such litigation. 8. Nonliability of Agency Officials and Employees No officer, official, employee, agent, or representative of Agency shall be personally liable to Developer or any successor in interest, in the event of any default or breach by Agency, or for any amount which may become due to Developer or its successor, or for breach of any obligation of the terms of this Option Agreement. 9. Nondiscrimination Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, or ancestry with respect to this Option Agreement or use of the Site. 10. Interpretation The terms of this Option Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Option Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Option Agreement. 882/015610-0061 -11- 380889.09 a]2/17/03 11. Entire Agreement This Option Agreement integrates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Option Agreement must be in writing and signed by the appropriate authorities of the party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of Agency and Developer. 12. Counterparts This Option Agreement may be executed in counterparts, each of which, after all the parties hereto have signed this Option Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 13. Severability In the event any section or portion of this Option Agreement shall be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect, and the parties hereto shall take further actions as may be reasonably necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this Option Agreement. [END - SIGNATURES ON NEXT PAGE] 882/015610-0061 380889.09 a12/17/03 -12- IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first above written. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "AGENCY" LA QUINTA REDEVELOPMENT AGENCY a public body, corporate and politic By: Its: Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency 882/015610-0061 380889.09 a] 2/17/03 -13 - STATE OF CALIFORNIA ) ) ss COUNTY OF On personally appeared before me, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ) ss COUNTY OF ) On , before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 982/015610-0061 -14- 380889.09 a]2/17/03 EXHIBIT "A" LEGAL DESCRIPTION OF THE PARCELS [To be inserted prior to recordation] 882/015610-0061 380889.09 a12/17/03 P.O.C. CTR. 1/4 COR. SEC. 19 ;u-) MILES AVENUE75.OG' 0'27'38" E L6 ;V,s £/_N 8931' 3" E487.N 8933'22" E 960.27' L7 N 00'28'37" W S 00'26'40" E 112.88' 153.41' T.P.O.S. r !Z9 sy `!�^\ S 44'44'32" E 90.06' C2 0 A� SITE N 8239.56' E N 6 ' 1'1 " M (R) AREA-42.47 AC. 0 L4 PORTION OF THE S. 1/2 OF °i SEC. 19, T.5S., R.7E., S.B.M. w "®(R) n L5 N 75'53'46" E o (R) 1, cn 141,015 L3 PT. B NF4 1,,_300, ,1 CVwo/R w N� t, TR N 86'11'26* E ?3`F CgC�O p LINE DATA EXCEPTION I� PARCEL N h6�+ lg. PT. A J �� I J 5 (R) N 42'599'27" E N CURVE DATA gg48g, cygMA�,gT F9 Lz •r�� J.N. 1612 NUMBER DIRECTION DISTANCE Lt S00'18'01" E 397.49 L2 N 48'09'S6" W 22.00 L3 N 75'33'02" E 4.22 L4 N 6T06'56" E 20.00' LS S-6TO6'S6" W 20.00' L6 N 00'26'40" W 20.00' L7 N $9'33'22 E 80.00' NUMBER DELTA RADIUS ARC LENGTH TANGENT Cl 41'42'33" 440.00 320.30 167.62 C2 45'27 41" 80.00 63.48 33.52 C3 02'ST46" 4565.17 236.07 882/015610-0061 - 1 6_ 380889.09 a12/17/03 1IRMIRINUM COMMENCEMENT AND COMPLETION SCHEDULE Phase of Development Parcel A Medical Office/Surgical Facility Component First Phase of Development of the Medical Office/Surgical Facility Second Phase of Development of the Medical Office/Surgical Facility Third Phase of Development of the Medical Office/Surgical Facility Parcel 1 Restaurant Parcel 2 Casitas Development Component Parcel 3 Casitas Development Component Parcel 4 Casitas Development Component Parcel 5 Residential Development Parcel 7 Residential Development Parcel 8 Sanctuary Villas Component Parcel 9 Sanctuary Villas Component Parcel 13 Restaurant Seeley Drive Suites Hotel Time for Commencement of Construction 690 days after DDA Date 690 days after DDA Date 780 days after DDA Date 870 days after DDA Date 600 days after DDA Date 600 days after DDA Date 600 days after DDA Date 600 days after DDA Date 626 days after DDA Date 626 days after DDA Date 690 days after DDA Date 1230 days after DDA Date 800 days after DDA Date 500 days after DDA Date 600 days after DDA Date Time for Completion of Construction (measured from date City issues final building_vermits for apylicable Phase of Development) 36 months 36 months 36 months 36 months 36 months 36 months 36 months 36 months 18 months 18 months 36 months 36 months 36 months 180 days after Developer's completion of Suites Hotel 18 months 882/015610-0061 _ 17- 380889.09 a12/17/03 EXHIBIT "C" PURCHASE PRICE Sanctuary Villas Parcel 8 $ 841,193.42 Sanctuary Villas Parcel 9 247,409.82 Casitas Parcel 2 510,563.92 Casitas Parcel 3 773,718.02 Casitas Parcel 4 654,511.46 Landscape Parcel C 0 Landscape Parcel E 0 Landscape Parcel H 0 Landscape Parcel I 0 Medical Office/Surgical Facility A 1,455,219.64 Medical Office/Surgical Facility 10 164,190.15 Medical Office/Surgical Facility 11 276,649.17 Medical Office/Surgical Facility 12 164,190.15 Residential Parcel 5 135,694.34 Residential Parcel 7 557,028.39 Restaurant Parcel 1 206,924.58 Restaurant Parcel 13 251,908.18 Seeley Drive Parcel 0 Suites Hotel Parcel 753,475.39 Well Site Parcel 116,957.37 Property $7,109,634.00 882/015610-0061 _ 18_ 380889.09 a12/17/03 ATTACHMENT NO.15 DECLARATION [SEE FOLLOWING PAGES] 882/015610-0061 380889.09 a12/17/03 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:) La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attention: Executive Director (Space Above for Recorder's Use) (Exempt from Recordation Fee per Gov. Code § 27383) DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS FOR PROPERTY THIS DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS FOR PROPERTY (the "Declaration") is made by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company (the "Covenantor") and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency" or "Covenantee") as of the day of , 2003. RECITALS A. Covenantor is the fee owner of record of that certain real property (the "Property") located in the City of La Quinta, County of Riverside, State of California, legally described in the attached Exhibit "A", which Property Covenantor acquired from Agency pursuant to a Grant Deed recorded concurrently herewith. B. This Declaration and the Grant Deed described in Recital A are part of a redevelopment project described in that certain Disposition and Development Agreement ("DDA"), entered into by and between Covenantor and Covenantee on or about , . As described in the DDA, the Property includes not less than fifty-four (54) single family lots on each of which Covenantor shall construct a single family home, forty (40) of which single family homes shall be held for sale to "Eligible Buyers" (the "Affordable Housing Component") (as that term is defined in Section Lf hereof) (the "Project"). To assist Covenantor with the construction of the Affordable Housing Component, Covenantee provided financial assistance to Covenantor, in the form of a loan (the "Covenantee Loan"). Repayment of the Covenantee Loan is secured by a promissory note (the "Note") and a deed of trust (the "Deed of Trust"), which Deed of Trust was recorded concurrently herewith. The DDA provides that at the close of escrow for Covenantor's sale of one of the "Affordable Homes" (as that term is defined in Section Lb hereof) to an Eligible Buyer, Covenantor may transfer a portion of the Covenantee Loan to such Eligible Buyer, in the form of downpayment assistance provided from the Covenantor to the Eligible Buyer, and the outstanding balance due from Covenantor to Covenantee under the Note and the Deed of Trust will automatically be reduced by a like amount, all as further described in the DDA. 882/015610-0061 380889.09 a12/17/03 C. The Property is within the La Quinta Redevelopment Project No. 2 (the "Project Area") in the City of La Quinta and is subject to the provisions of the Redevelopment Plan for the Project Area (the "Redevelopment Plan"). D. The Community Redevelopment Law (California Health and Safety Code 33000 et seq.) provides that a redevelopment agency shall establish covenants running with the land in furtherance of redevelopment plans. NOW, THEREFORE, THE COVENANTEE AND THE COVENANTOR AGREE AS FOLLOWS: Definitions. a. "Affordability Period" for each Affordable Home shall be forty-five (45) years from the date said Affordable Home is transferred to an Eligible Buyer, as evidenced by the recordation of a Buyer Affordable Housing Agreement by said Eligible Buyer. b. "Affordable Homes" shall mean the forty (40) single family homes in the Project that are restricted for sale to Eligible Buyers. Any individual such home shall be referred to as an "Affordable Home." Each of the Affordable Homes shall be subject to the restrictions of this Declaration. C. "Affordable Housing Cost" shall be that purchase price which would result in monthly housing payments, including the cost for a thirty (30) year mortgage for that portion of the purchase price which is to be paid in the form of loan proceeds under currently prevailing mortgage loan rates or the interest rate of any below -market mortgage program for which such purchaser has obtained a first trust deed loan, of (i) for households which earn not more than one hundred ten percent (110%) of Riverside County median income, not less than twenty-eight percent (28%) of the gross income of the household, nor more than thirty-five percent (35%) of one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate for the Affordable Home, or (ii) if the gross income of the household exceeds one hundred ten percent (110%) of Riverside County median income, not more than thirty-five percent (35%) of the actual gross income of the household. A sample calculation of an Affordable Housing Cost for the Affordable Homes is set forth on Exhibit `B", which is attached hereto and incorporated herein by this reference ("Calculation of Affordable Housing Costs"). d. "Buyer Affordable Housing Documents" shall collectively refer to the following documents, all of which shall be required to be executed by each buyer of an Affordable Home to assure the affordability of the Affordable Home to Eligible Buyers: (i) an affordable housing agreement that prohibits the resale of the Affordable Home except to an Eligible Buyer and grants the Covenantee an option to purchase the Affordable Home ("Option to Purchase") in the event the buyer is unable to locate an Eligible Buyer ("Buyer Affordable Housing Agreement"); (ii) a Memorandum reciting Covenantee's Option to Purchase ("Buyer Memorandum re Option to Purchase"); (iii) a promissory note ("Buyer Promissory Note") whose terms shall include a second deed of trust securing the Buyer Promissory Note ("Buyer Second Trust Deed"); and (iv) a disclosure statement acknowledging and consenting to all of the 882/015610-0061 380889.09 a12/17/03 -2- affordability restrictions contained in the aforementioned documents ("Buyer Disclosure Statement"). e. "Covenantor" shall mean Covenantor and any successor in interest of Covenantor to the Site or any portion thereof. f. "Eligible Buyer" shall mean a buyer of one of the Affordable Homes in the Project who qualifies as a "person or family of moderate income" within the meaning of California Health and Safety Code Section 50093 (i.e., households whose household income, adjusted for family size, do not exceed one hundred twenty percent (120%) of the Riverside County Median Income). g. "Owner" shall mean an Eligible Buyer to whom Covenantor has conveyed fee title to one of the Affordable Homes or any successor in interest to said Eligible Buyer to all or any portion of the Affordable Home. h. "Proposed Buyer" shall mean a person or family determined to be an Eligible Buyer, to whom the Covenantor or any successor Owner desires and proposes to Transfer an Affordable Home. i. "Purchase Housing Cost" for an Eligible Buyer purchasing an Affordable Home shall be a cost that includes all of the following associated with that Affordable Home, estimated or known as of the date of the proposed sale of the Affordable Home: (1) Principal and interest on a fixed rate mortgage loan including any rehabilitation loans, and any loan insurance fees associated therewith. improvements. (2) Property taxes and assessments. (3) Fire and casualty insurance covering replacement value of property (4) Any homeowner association fees. (5) Estimate of utilities cost. (6) Estimate of property maintenance costs. The sum of (1) through (6), inclusive, shall not exceed the Affordable Housing Cost. j. "Sales Price" shall mean all sums paid by an Eligible Buyer to Covenantor for, or in conjunction with, the acquisition of an Affordable Home, including the purchase price designated in any purchase agreement, consideration for personal property and all other costs and fees paid by the Eligible Buyer to or for the benefit of the Covenantor. k. "Transfer" shall mean (i) any sale, assignment, or transfer of an interest in an Affordable Home, including, without limitation, a fee simple interest, tenancy in common, 882/015610-0061 380889.09 a12/17/03 -3' joint tenancy, community property, tenancy by the entireties, life estate, or other limited estate, leasehold interest or any rental of the Affordable Home, or (ii) any interest evidenced by a land contract. 1. "Unrestricted Homes" shall mean the fourteen (14) single-family homes in the Project that are not restricted for sale to Eligible Buyers. Each individual such home shall be referred to as an "Unrestricted Home." Notwithstanding the foregoing, this Declaration shall be subordinate to the lien of a first deed of trust against the Property, and shall not impair the rights of any institution or lender which is the maker of a loan secured by such first deed of trust, or such lender's assignee or successor in interest, to exercise its remedies under the deed of trust in the event of default under the first deed of trust by the Covenantor. Such remedies under the first deed of trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, the affordability covenants and the transfer restrictions set forth in Sections 1, 2, 3 and 7 of this Declaration as to each lot covered by this Declaration that is the subject to the foreclosure, shall be forever terminated and shall have no further effect as to the Property or any transferee thereafter; provided, however, if the holder of such deed of trust acquired title to the Property pursuant to a deed or assignment in lieu of foreclosure, said Sections 1, 2, 3 and 7 of this Declaration shall automatically terminate upon such acquisition of title, provided that (i) the Covenantee has been given written notice of a default under such first deed of trust; and (ii) the Covenantee shall not have cured the default under such first deed of trust within the thirty (30) day period provided in such notice sent to the Covenantee. Notwithstanding any other provision hereof, the nondiscrimination covenants and the maintenance requirements set forth in this Declaration shall remain in full force and effect as to the Property and any transferee. 2. Sale of Affordable Homes. Covenantor agrees that Covenantor shall sell each Affordable Home to an Eligible Buyer at an Affordable Housing Cost and that during the Affordability Period for such Affordable Home each subsequent resale thereof by the then -Owner shall be to an Eligible Buyer at an Affordable Housing Cost. Covenantor agrees that this Declaration shall be recorded against the Property concurrently with the close of escrow pursuant to which Covenantor acquired fee title to the Property. Covenantor agrees to commence to market each Affordable Home not later than the completion of construction of said Affordable Home and agrees to sell the Affordable Homes on a proportionate basis with the Unrestricted Homes. For example, Covenantor agrees to sell two (2) Affordable Homes prior to selling each Unrestricted Home. Escrow for the Transfer of an Unrestricted Home by Covenantor to a purchaser shall not close until after escrow closes for the Transfer of two (2) of the Affordable Homes. In the event Covenantor sells all of the homes in the Project, but does not sell all forty (40) of the Affordable Homes to Eligible Buyers, then within thirty (30) days after the close of escrow for the last home sold (whether such home is an Affordable Home or an Unrestricted Home), Covenantor shall be required to (i) repay to Covenantee the then -outstanding balance owed under the Note, in accordance with the terms thereunder, and, to the extent permitted by law, (ii) pay to Covenantee the sum of One Hundred Fifty Thousand Dollars ($150,000) for each 882/015610-0061 380889.09 a12/17/03 -4- Affordable Home that was sold to a buyer who does not qualify as an Eligible Buyer (the "Damage Amount"); provided, however, that nothing herein shall be deemed to limit Covenatee's remedy for a violation under this Section 2 to seeking monetary damages, and Covenantee shall be entitled to pursue any other equitable remedy permitted by law, including specific performance or injunctive relief, to prevent such a violation. For example, if Covenantor sells 20 of the homes in the Project as Unrestricted Homes, and 34 of the homes in the Project as Affordable Homes, then Covenantor shall pay to Covenantee, in addition to all amounts then -outstanding under the Note, the sum of $900,000 [(40 — 34) x $150,000]. THE PARTIES HERETO AGREE THAT THE DAMAGE AMOUNT CONSTITUTES A REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT COVENANTEE WOULD SUFFER DUE TO THE DEFAULTS BY COVENANTOR SET FORTH IN THIS SECTION 2, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EXECUTION DATE HEREOF, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNT TO THE RANGE OF HARM TO COVENANTEE AND ACCOMPLISHMENT OF COVENANTEE'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE BUYERS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE DAMAGE AMOUNT SET FORTH IN THIS SECTION 2 SHALL BE THE SOLE DAMAGES REMEDIES FOR THE DEFAULTS SET FORTH IN THIS SECTION 2, BUT NOTHING IN THIS SECTION 2 SHALL BE INTERPRETED TO LIMIT COVENANTEE'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY COUNSEL TO EXPLAIN THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. COVENANTOR'S INITIALS: COVENANTEE'S INITIALS: Notwithstanding any of the above, nothing herein is intended to preclude the Covenantee's recovery of its attorney's fees and costs incurred to enforce this Section, as provided in Section 14. For purposes of satisfying the requirement that all of the Affordable Homes shall be occupied by Eligible Buyers: (a) an individual or family who qualifies as an Eligible Buyer at the time he or she first takes title to an Affordable Home will be deemed an Eligible Buyer as long as he or she continues to hold title to such Affordable Home even though the Eligible Buyer subsequently ceases to meet the income requirements of an Eligible Buyer, and (b) when an Owner releases title to an Affordable Home, such home will be considered as occupied by an Eligible Buyer if it is held vacant and available for such occupancy until title is transferred to another Eligible Buyer. 882/015610-0061 380889.09 a12/17/03 -5- 3. Restrictions on Transfer by Sale of the Property or AU Affordable Home. a. For the duration of the Affordability Period, Covenantor, for itself and any subsequent Owner of an Affordable Home, hereby subjects the Property to certain restrictions and limits the price at which Covenantor or any Owner of an Affordable Home may sell and/or resell said Affordable Home and the persons to whom Covenantor or any Owner of an Affordable Home may sell said Affordable Home. b. COVENANTOR UNDERSTANDS THAT THE DETERMINATION OF THE SALES PRICE FOR THE AFFORDABLE HOMES CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, PROPERTY TAXES AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED AND THAT THE SALES PRICE PERMITTED HEREUNDER FOR THE AFFORDABLE HOMES MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR FURTHER ACKNOWLEDGES THAT IN SETTING THE SALES PRICE FOR THE AFFORDABLE HOMES, THE PRIMARY OBJECTIVE OF THE COVENANTEE AND THIS DECLARATION IS TO PROVIDE HOUSING TO ELIGIBLE BUYERS AT AN AFFORDABLE HOUSING COST. THE SALES PRICE MAY BE LESS THAN OTHER SIMILAR PROPERTIES WHICH HAVE NO RESTRICTIONS. Covenantor's Initials Transfer of an Affordable Home. Covenantor may Transfer an Affordable Home only in strict accordance with the provisions of this Declaration. Specifically, during the Affordability Period, Covenantor may transfer an Affordable Home (i) only to an Eligible Buyer whose assets immediately prior to the close of escrow for the Affordable Home do not exceed the limits set forth in the Asset Limitation Requirements set forth in the La Quinta Housing Program Implementation Manual, (ii) only if the Purchase Housing Cost does not exceed the Affordable Housing Cost for the Eligible Buyer; and (iii) only if the Transfer has previously been approved in writing by the Covenantee. In order to comply with this Subsection 3(c), Covenantor must calculate the Affordable Housing Cost for the Proposed Buyer of the Affordable Home in accordance with the definition set forth in Section l (c) of this Declaration. The Covenantor should contact the Covenantee housing staff to obtain assistance in determining this calculation. After calculating the Affordable Housing Cost for the Proposed Buyer, the Covenantor must ensure that the sum of the Sales Price and all costs listed in the definition of Purchase Housing Cost set forth in Section l (i) of this Declaration does not exceed an Affordable Housing Cost. The calculation of the Sales Price under this Section 3(c) is illustrated by example in the Calculation of Affordable Housing Cost. d. Notwithstanding anything to the contrary in this Section 3, at close of the escrow pursuant to which the Covenantor shall transfer an Affordable Home to an Eligible 882/015610-0061 380889.09 a12/17/03 -6- Buyer, the Eligible Buyer shall execute a complete set of Buyer Affordable Housing Documents as described in Section 1(d) hereof. e. The foregoing provisions will apply to every successive Transfer during the Affordability Period except that the then -Owner shall be responsible for complying with the requirements of the Covenantor as set forth in this Section 3. 4. Process to Complete Transfer by Sale of Affordable Homes. Prior to the Transfer by sale of an Affordable Home, Covenantor shall do all of the following: a. Notice to Covenantee: Covenantor shall send to the Covenantee in care of the La Quinta Housing Department (or its successor), at P.O. Box 1504, La Quinta, California 92253, the form attached hereto and incorporated herein as Exhibit "C" ("Request for Approval of Proposed Buyer") fully completed and executed by the Covenantor and the Proposed Buyer. b. Qualification of Proposed Buyer. No Transfer shall occur unless and until determination is made based on the Request for Approval of Proposed Buyer that the Proposed Buyer (i) intends to occupy the Affordable Home as the Proposed Buyer's principal residence and (ii) is an Eligible Buyer whose assets at the close of escrow for the Affordable Home do not exceed the limits set forth in the Asset Limitation Requirements, which are attached to the La Quinta Housing Program Implementation Manual as Attachment 1. Each Request for Approval of Proposed Buyer shall include a statement by the Proposed Buyer certifying its intent with regard to the occupancy of the Affordable Home and as to the truth and accuracy of all information supplied as to the Gross Income (calculated as set forth in 25 Cal. Code of Regs., Section 6914) of the Proposed Buyer. Covenantor shall certify pursuant to the Request for Approval of Proposed Buyer the information provided on said request form. Covenantor shall be entitled to rely on the information on the Request for Approval of Proposed Buyer and attachments thereto in making the determination required by this subsection 4(b) unless the Covenantor has knowledge of, or a reasonable basis for belief as to the inaccuracy or falsehood of the Request for Approval of Proposed Buyer. C. Affordable Home Sales Price. The Sales Price for the Affordable Home shall not exceed the maximum price at which the Purchase Housing Cost to be paid by the Proposed Buyer would not exceed the Affordable Housing Cost. The calculation of the Sales Price under this subsection is illustrated by the Calculation of Affordable Housing Cost. However, in determining the Affordable Housing Cost, the family size of the Proposed Buyer shall be deemed to be 1 person in the case of a studio Affordable Home, 2 persons in the case of a 1 bedroom Affordable Home, 3 persons for a 2 bedroom Affordable Home, 4 persons for a 3 bedroom Affordable Home, or 5 persons for a 4 bedroom Affordable Home. If the actual family size of the Proposed Buyer is larger, then the actual family size shall be used. d. Certificates from Covenantor and Proposed Buyer. With respect to each initial sale of an Affordable Home, Covenantor shall submit to the Covenantee, not later than four (4) weeks prior to close of escrow on the sale of the Affordable Home, a certificate that (i) the Covenantor has made the affirmative determinations required by Section 4(b) above and (ii) 882/015610-0061 380889.09 a12/17/03 -7- the Sales Price conforms with Section 4(c) above. The Covenantor shall concurrently submit to the Covenantee the Request for Approval of Proposed Buyer and all attachments thereto and all other documents or material with regard to information required by Section 4(a) and/or (b) above, whether or not relied on by the Covenantor. Further, the Covenantor and Proposed Buyer each shall certify in writing, in a form acceptable to the Covenantee, that the Transfer shall be closed in accordance with, and only with, the terms of the sales contract and other documents submitted to and approved by the Covenantee and that all consideration delivered by the Proposed Buyer to Covenantor has been fully disclosed to the Covenantee. The written certificate shall also include a provision that, in the event a Transfer is made in violation of the terms of this Declaration or false or misleading statements are made in any documents or certificate submitted to the Covenantee for its approval of the Transfer, the Covenantee shall have the right to file an action at law or in equity to seek termination and/or rescission of the sales contract and/or declare the sale void, notwithstanding the fact that the Transfer may have closed and become final as between Covenantor and its Proposed Buyer. In the event Covenantor fails to comply with Sections 4(a) or 4(b) above, any costs, liabilities or obligations incurred by the Covenantor and its Proposed Buyer for the return of any monies paid or received or for any costs and legal expenses, shall be borne jointly and severally by the Covenantor and its Proposed Buyer and such parties shall hold the City of La Quinta ("City") and Covenantee harmless and reimburse their expenses, legal fees and costs for any action and City and/or Covenantee take in enforcing the terms of this Section 4(d). e. Execution of Buyer Affordable Housing Documents. Notwithstanding anything to the contrary in this Agreement, at close of escrow of the sale of the Affordable Home from the Covenantor to an Eligible Buyer, the Eligible Buyer shall execute a complete set of Buyer Affordable Housing Documents. The Buyer Affordable Housing Documents require, among other things, that during the Affordability Period for said Affordable Home, (i) the Affordable Home must be owner -occupied at all times and cannot be rented or leased; (ii) the Affordable Home may only be Transferred at an Affordable Housing Cost to an Eligible Buyer; and (iii) the maximum permitted sales price for the Affordable Home may be less than fair market value. f. Delivery of Documents. Upon the close of the proposed Transfer, the Covenantor shall provide the Covenantee with a certified copy of the recorded documents, a copy of the final sales contract, settlement statement, escrow instructions, all certificates required by this Section 4 and any other documents which the Covenantee may request. COVENANTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED BUYER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE AFFORDABLE HOME AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR FURTHER ACKNOWLEDGES THAT IN SETTING THE TRANSFER PRICE THE 882/015610-0061 380889.09 a12/17/03 -8- PRIMARY OBJECTIVE OF THE COVENANTEE AND THIS DECLARATION IS TO PROVIDE HOUSING TO ELIGIBLE BUYERS AT AN AFFORDABLE HOUSING COST. The covenant contained in this Section 4 shall run with the land and, as to each Affordable Home, shall automatically terminate and be of no further force or effect upon the Expiration Date set forth in Section 12 hereof. 5. Nondiscrimination Covenants Covenantor by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall Covenantor itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. Covenantor, and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Covenantee) or sale of the Property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases, or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: a. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." C. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the 8821015610-0061 380889.09 a12/17/03 -9- premises, nor shall the transferee himself of herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees or vendees of the premises." Nothing in this Section 5 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph 5 shall run with the land in perpetuity. 6. Maintenance of Pronerty Covenantor shall properly maintain the buildings, landscaping and yard areas on the Property as follows: a. No improperly maintained landscaping shall be visible from public rights - of -way, including: (1) no lawns with grasses in excess of six (6) inches in height; (2) no untrimmed hedges; (3) no trees, shrubbery, lawns, and other plant life dying from lack of water or other necessary maintenance; and (4) no trees and shrubbery grown uncontrolled without proper pruning; (5) no vegetation so overgrown as to be likely to harbor rats or vermin; (6) no dead, decayed, or diseased trees, weeds, and other vegetation. b. No yard areas shall be left unmaintained, including: (1) no broken or discarded furniture, appliances, and other household equipment stored in yard areas for periods exceeding one (1) week; (2) no packing boxes, lumber, trash, dirt, and other debris stored in yards for periods exceeding one (1) week in areas visible from public property or neighboring properties; (3) no unscreened trash cans, bins, or containers stored for unreasonable periods in areas visible from public property or neighboring properties; and areas. (4) no vehicles parked or stored in areas other than approved parking C. No buildings may be left in an unmaintained condition, including: (1) no violations of state law, Uniform Codes, or City ordinances; 882/015610-0061 -1 Q- 380889.09 a12/1'7/03 (2) no condition that constitutes an unsightly appearance that detracts from the aesthetics or property value of the subject property or constitutes a private or public nuisance; (3) no broken windows or chipped, cracked, or peeling paint; and (4) no conditions constituting hazards and/or inviting trespassers or malicious mischief, and (5) no graffiti. 7. Covenantee's Right of Reverter Covenantee shall have the additional right, at its option, to reenter and take possession of the Property, or portion thereof, with all improvements thereon and revest in the Covenantee the estate theretofore conveyed to the Covenantor, if after conveyance of title to the Property and prior to issuance of the Certificate of Completion for the lot or lots in question, the Covenantor shall: a. Fail to proceed with the construction of the Project as required by the DDA (subject to any force majeure delays) for a period of ninety (90) days after written notice of such abandonment or suspension from the Covenantee subject to any force majeure delays under Section 702 of the DDA; or b. Abandon or substantially suspend construction of the improvements for a period of ninety (90) days (subject to any force majeure delays) after written notice of such abandonment or suspension from the Covenantee; or C. Transfer or suffer any involuntary transfer of the Property or any part thereof in violation of the DDA. Such right to reenter, repossess and revest to the extent provided in this Declaration shall be subordinate and subject to and be limited by and shall not defeat, render invalid or limit: (1) Any mortgage, deed of trust or other security instrument permitted by the DDA; or (2) Any rights or interest provided in the DDA for the protection of the holder of such mortgages, deeds of trust or other security instruments. Upon the revesting in the Covenantee of title to the Property or any part thereof as provided in this Section 7, the Covenantee shall, pursuant to its responsibilities under state law, use its best efforts to resell the Property or part thereof as soon and in such manner as the Covenantee shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan to a qualified and responsible party or parties (as determined by the Covenantee) who will assume the obligation of making or completing the improvements, or such other improvements in their stead, as shall be satisfactory to the Covenantee and in accordance 882/015610-0061 380889.09 a12/17/03 -11- with the uses specified for the Property or part thereof in the Redevelopment Plan. Upon such resale of the Property, the proceeds thereof shall be applied: (i) First, to reimburse the Covenantee on its own behalf or on behalf of the City for all costs and expenses incurred by the Covenantee (excluding salaries to personnel and other items of overhead of the Covenantee or the City) in connection with the recapture, management and resale of the Property or part thereof (but less any income derived by the Covenantee from the Property or part thereof in connection with such management); all taxes, assessments and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charges during the period of ownership, then such taxes, assessments or charges as determined by the County of Riverside assessing official as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Covenantor; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing the Covenantee by the Covenantor; and (ii) Second, to reimburse the Covenantor up to the amount equal to the sum of. (a) the Purchase Price paid to the Covenantee by the Covenantor for the Property (or allocable to the part thereof); plus (b) the costs and expenses incurred by the Covenantor for the development of the Property and for construction of the improvements existing on the Property at the time of the reentry and repossession; less (c) any gains or income withdrawn or made by the Covenantor from the Property or the improvements thereon. Any balance remaining after such reimbursements shall be retained by the Covenantee as its property. To the extent that the rights established in this Section 7 involve a forfeiture, it must be strictly interpreted against the Covenantee, the party for whose benefit it is created. The rights established in this Section 7 are to be interpreted in light of the fact that the Covenantee will convey the Property to the Covenantor for development and not for speculation. 8. Covenants Do Not Impair Liens. No violation or breach of covenants, conditions, restrictions, provisions, or limitations contained in this Declaration shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security instrument. 9. Conflict with Other Laws, Severability. In the event that any provision of this Declaration is found to be contrary to applicable law, then the contrary provisions of this Declaration shall be deemed to mean those provisions which are enforceable and consistent with such laws and policies. The remaining portions of this Declaration shall be deemed modified in a manner which is consistent with the goals and intent of this Declaration to provide housing at an Affordable Housing Cost to Eligible Buyers. 882/015610-0061 380889.09 a12/17/03 -12- Every provision of this Declaration is intended to be severable. In the event any term or provision of this Declaration is declared by a court of competent jurisdiction to be unlawful, invalid or unenforceable for any reason, such determination shall not affect the balance of the terms and provisions of this Declaration, which terms and provisions shall remain binding and enforceable. 10. Covenants for Benefit of Cily and Covenantee. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and the City and such covenants shall run in favor of the Covenantee and the City for the entire period during which such covenants shall be in force and effect, without regard to whether the Covenantee or the City is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee and the City, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 11. Notices, Demands and Communications. Written notices, demands and communications between the Covenantor and the Covenantee shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same - day or overnight courier service that provides a receipt showing date and time delivery, or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, as follows: Covenantor: CP Development La Quinta, LLC 77-900 Avenue of the States Palm Desert, CA 92611 Attn: Richard Oliphant copy to: Selzer, Ealy, Hemphill & Blasdel, LLP 777 Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill and Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Covenantee: La Quinta Redevelopment Agency Attention: Executive Director 78-495 Calle Tampico La Quinta, CA 92253 882/015610-0061 380889.09 a12/17/03 -13- copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. Such addresses for notice may be changed from time to time upon notice to the other party. Any written notice, demand or communication shall be deemed received immediately if delivered by hand or by reputable delivery service that provides a receipt with date and time of delivery and shall be deemed received on the third (3rd) calendar day from the date it is postmarked if delivered by registered or certified mail, postage prepaid, return receipt requested. 12. Expiration Date. This Declaration shall automatically terminate and be of no further force or effect as to each Affordable Home as of the termination of the Affordability Period for said Affordable Home, as described in Section 1 a hereof. 13. Effect on Unrestricted Homes. Notwithstanding anything herein to the contrary, with the exception of the nondiscrimination provisions set forth in Section 5 hereof, the provisions in this Declaration shall be effective only against the Affordable Homes, and shall not be effective or enforceable against the Unrestricted Homes. 14. Attorney's Fees. In the event any party hereto brings suit to enforce the terms of this Declaration or on account of breach hereof, the party not prevailing in such suit shall pay all reasonable costs and expenses incurred by the other party in such suit, including, without limitation, court costs, attorneys' fees, and expert witness fees 15. Counterparts. This Declaration may be executed in counterparts each of which, when both Covenantor and Covenantee have signed this Declaration, shall be deemed an original and shall constitute one and same instrument. [end — signature page follows] 882/015610-0061 380889.09 a12/17/03 -14- IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf of their respective officers hereunto duly authorized as of the date set forth above. Attest: Secretary (Covenantee's and Covenantor's Signature must be acknowledged by a Notary Public) "COVENANTEE" THE LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: Executive Director "COVENANTOR" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President APPROVED AS TO FORM RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency 882/015610-0061 380889.09 a12/17/03 -15- STATE OF CALIFORNIA ) ) ss COUNTY OF ) On personally appeared before me, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] STATE OF CALIFORNIA ) ) ss COUNTY OF ) On personally appeared Notary Public before me, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 380889.09 a12/17/03 - 16- STATE OF CALIFORNIA ) ) ss COUNTY OF On personally appeared before me, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 _ l %- 380889.09 a]2/17/03 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY [The legal description of the Property will be inserted prior to recordation of this Declaration. The term "Property" refers to that certain parcel of real property identified in the DDA as "Residential Parcel 7."] 882/015610-0061 380889.09 a12/17/03 EXHIBIT B CALCULATION OF AFFORDABLE HOUSING COST "Affordable Housing Cost" for the purposes of the Affordable Housing Agreement is that purchase price (inclusive of the proceeds of the Homebuyer Assistance) which would result in a monthly housing cost which is not less than twenty-eight percent (28%) of the gross income of the purchaser and does not exceed the greater of (a) the product of thirty-five percent (35%) times one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate for the unit for Eligible Buyers earning not more than one hundred ten percent (110%) of Riverside County median income, or (b) the product of thirty-five percent (35%) of the actual gross income of the household for Eligible Buyers earning more than one hundred ten percent (110%) of Riverside County median income. The following is a worksheet of how to calculate Affordable Housing Cost using the two methods set forth above: A. All Moderate Income Buyers Monthly housing costs may not exceed 1/12 of 35% x 110% of Riverside County Median Income adjusted for family size appropriate for the unit. For a two- bedroom housing Unit, monthly housing costs may not exceed 1/12 of 35% x 110% of Riverside County Median Income for a family of 3 (example of Median Income is $45,900 in Riverside County pursuant to regulations issued by the California Department of Housing and Community Development in March 2003, or $1,473). Monthly Housing Costs include: a. Mortgage Principal and Interest b. Private Mortgage Insurance C. Property Taxes d. Fire/Casualty Insurance e. Property Maintenance f. Utilities Allowance g. Homeowner's Association ("HOA") Fees For example, in the following situation, for a 2 bedroom housing Unit, assuming an 8% interest rate on a conventional loan, and assuming a down payment of at least 3% of the purchase price and an average second trust deed loan from the Agency of $60,000, the maximum loan amount would be $137,880 and the maximum purchase price would be $204,000 (down payment of $6,120 + Agency Loan of $60,000 + first trust deed loan of $137,880). The foregoing is based upon the following monthly housing costs: '82/015610-0061 380889.09 a12/17/03 a. Mortgage Principal and Interest $1,005.00 b. Private Mortgage Insurance (Included in $0.00 Mortgage Interest Rate) C. Property Taxes $203.00 d. Fire/Casualty Insurance (Included in HOA) $45.00 e. Property Maintenance $20.00 f. Utilities Allowance $65.00 g. Homeowner's Association $120.00 TOTAL: $1,458.00 B. Buyer's Income is between 110% and 120% of Riverside County Median Income Under method (b), monthly housing costs may not exceed 1/12 of 35% of the purchaser's income, instead of the formula set forth in paragraph (a) above. For example, if the purchaser is a three -person household earning $54,000 monthly housing costs may not exceed $1,575. The maximum sales price would be calculated in the same manner as in paragraph (a) above. For example, if all the other assumptions stated in that paragraph also apply herein, the purchaser's maximum loan amount would be $149,520, and the maximum purchase price, absent the Agency Second Trust Deed Loan would be $156,000. The foregoing is based upon the following monthly housing costs: a. Mortgage Principal and Interest $1,090.00 b. Private Mortgage Insurance (Included in $0.00 Mortgage Interest Rate) C. Property Taxes $225.00 d. Fire/Casualty Insurance (Included in HOA) $50.00 e. Property Maintenance $20.00 f. Utilities Allowance $65.00 g. Homeowner's Association $120.00 TOTAL: $1,570.00 882/015610-0061 390889.09 a12/17/03 -2- The foregoing are intended to be examples of how to calculate affordable housing cost, and the actual numbers will vary depending upon such factors as changes in median income, interest rates, amount of down payment, etc. Please see attached chart of Riverside County median income for moderate income purchasers. 882/015610-0061 380889.09 a12/17/03 -3- RIVERSIDE COUNTY 2003 Affordable Housing Costs for Home Purchase Programs for Persons of Moderate Income (3) (Income figures based on Department of Housing and Community Development Income Limits dated March, 2003) 1 Person Household 2 Person Household 3 Person Household Median Income $35,700 Median Income $40,800 Median Income $45,900 Annual Income(') Monthly Affordable Housing Cost(z) Annual Income Monthly Affordable Housina Cost Annual Income Monthly Affordable Housing Cost $42,850 $1,145 $48,950 $1,309 $55,100 $1,473 4 Person Household 5 Person Household 6 Person Household Median Median Median Income $51,000 Income $55,100 Income $59,150 Monthly Monthly Monthly Annual Affordable Annual Affordable Annual Affordable Income Housing Cost Income Housina Cost I Income Housing Cost $61,200 1 $1,636 $66,100 $1,768 1 $71,000 $1,898 7 Person Household 8 Person Household Median Median Income $63,250 Income $67,300 Monthly Monthly Annual Affordable Annual Affordable Income Housing Cost I Income Housing Cost $75,900 1 $2,029 1 $80,800 $2,159 DEFINITIONS: 1. Annual Income: Gross income from all sources for all members of the household. 2. Monthly Housing Costs: Amount of mortgage payment principal and interest, mortgage insurance, property taxes, and property insurance. 3. Moderate Income Affordable Housing Costs: Assumes affordable housing costs computed at 35% of 110% of median income; may not be less than 28% of household's gross income. 882/015610-0061 380889.09 a12/17/03 EXHIBIT C REQUEST FOR APPROVAL OF PROPOSED BUYER [SEE ATTACHED PAGES] 882/015610-0061 380889.09 a12/17/03 REQUEST FOR APPROVAL OF PROPOSED BUYER THIS FORM MUST BE DELIVERED TO THE AGENCY BEFORE PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Project Officer Re: Request for Approval of Proposed Buyer To Whom It May Concern: The undersigned is the owner of real property in La Quinta, located at (the "Property"), which was developed with assistance from the Agency ("Owner"). The Owner now desires to transfer the Property and by this letter is requesting the Agency to approve the proposed buyer. 1. The Proposed Buyer is: Name: Current Address: Telephone Number: 2. The terms of the proposed transfer are (a) Sales price of $ This sales price is based on the lesser of (i) Fair market value; or (ii) The maximum price at which the Purchase Housing Cost of the Proposed Buyer would not exceed Affordable Housing Cost. The calculation of the Sales Price under this subsection (ii) is illustrated in Exhibit "B" to the Declaration of Covenants, Conditions, and Restrictions for Property. 882/015610-0061 380889.09 a12/17/03 IN ORDER TO ANSWER QUESTION 2(b) YOU MUST CALCULATE THE PROPOSED SALES PRICE BASED ON AFFORDABLE HOUSING COST, TAKING INTO CONSIDERATION ALL ITEMS LISTED IN THE DEFINITION OF PURCHASE HOUSING COST. (b) Price of any personal property being sold by the Owner to the proposed buyer: $ . (If none, so state.) (c) The price of $ to be paid by the proposed buyer for any services of Owner. (If none, so state). (d) All other amounts of money or other consideration, if any, concerning the Property or any other matter to be paid by the proposed buyer to the Owner: $ (If none, so state.) (e) Sources of payment of sales price: Sales price $ Cash down payment $ 1 st loan $ 2nd loan $ Other (describe) $ Total $ (f) The financing obtained by the proposed buyer to purchase the Property is as follows: 1 st Loan: Loan amount $ Monthly payments: $ Interest rate If variable interest, describe adjustment mechanism: Due date: Balloon payment amount: Points and fees: 882/015610-0061 380889.09 a12/17/03 -2- Lender: Lender's address: 2nd Loan: Loan amount: $ Monthly payments: $ Interest rate If variable interest, describe adjustment mechanism: Due date: Balloon payment amount: Points and fees: Lender: Lender's address: Other Loans: (describe, if none, so state) (g) The monthly Purchase Housing Cost to be paid by the proposed buyer: 1 st loan monthly payment: $ 2nd loan monthly payment: $ Other loans monthly payment: $ Taxes and assessments (1/12 of $ yearly taxes and assessments): Insurance (1/12 of yearly $ premium): Homeowner's dues: $ Total: $ 882/015610-0061 380889.09 a12/17/03 _3_ 3. The proposed buyer represents, warrants and covenants the following: (a) The Property will be the principal residence of the proposed buyer. (b) The combined maximum annual income for all household members of the proposed buyer is $ . (This figure must include all sources of income.) (c) The proposed buyer will deliver to the Agency a signed financial statement on a form acceptable to the Agency. 4. The proposed buyer's household consists of the following persons who will reside in the Property: Adults (18 or over) - [name of each]: Minors (under 18) [name of each]: 5. The proposed buyer must submit to the Owner, on a form available from the Owner, an income certification so the Owner may determine if the proposed buyer is an Eligible Buyer. 6. A true and correct copy of the proposed buyer's most recent tax return to the U.S. Internal Revenue Service is attached hereto. 7. A true and correct copy of the purchase and sale or other agreement between the Owner and the proposed buyer is attached hereto. 882/015610-0061 380889.09 a12/17/03 -4- I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. OWNER: Date signature print name street address city PROPOSED BUYER: Date signature print name signature print name telephone state zip code signature print name street address telephone city state zip code 882/015610-0061 380889.09 a12/17/03 -5- Owner's Certification Based on the Proposed Buyer's Certificate above, and all documents attached hereto, Owner hereby certifies that: (1) Proposed Buyer is an Eligible Buyer; and (2) The monthly Purchase Housing Cost to be paid by the Proposed Buyer shall not exceed the monthly Affordable Housing Cost. [Capitalized terms used above are defined in the Agreement to which this certificate is attached unless otherwise provided herein.] OWNER: [Name] Date: 882/015610-0061 380889.09 a12/17/03 -6- ATTACHMENT NO. 16 RELEASE OF CONSTRUCTION COVENANTS [See Following Pages] 882/015610-0061 380889.09 a]2/17/03 RECORDING REQUESTED BY, AND WHEN RECORDED MAIL TO: CP DEVELOPMENT LA QUINTA, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant This document is exempt from the payment of a recording fee pursuant to Government Code Section 27383 RELEASE OF CONSTRUCTION COVENANTS THIS RELEASE OF CONSTRUCTION COVENANTS (the "Release") is made by the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), in favor of CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company (the "Developer"), as of , RECITALS A. The Agency and the Developer have entered into that certain Disposition and Development Agreement (the "DDA") dated , 2003 concerning the redevelopment of certain real property situated in the City of La Quinta, California, a portion of which is more fully described in Exhibit "A" attached hereto and made a part hereof (the "Property"). B. As referenced in Section 509 of the DDA, the Agency is required to furnish the Developer or its successors with a Release of Construction Covenants upon Developer's completion of construction of the [Insert applicable Phase of Development, as that term is described in Section 310 of the DDA] (as defined in Section 100 of the DDA), which Release is required to be in such form as to permit it to be recorded in the Recorder's office of Riverside County. This Release is conclusive determination of satisfactory completion of the construction and development required by the DDA. C. The Agency has conclusively determined that such construction and development has been satisfactorily completed. NOW, THEREFORE, the Agency hereby certifies as follows: 1. The [Insert applicable Phase of Development, as that term is described in Section 310 of the DDA]to be constructed by the Developer has been fully and satisfactorily completed in conformance with the DDA. Any operating requirements and all use, maintenance or nondiscrimination covenants contained in the DDA and other documents executed and recorded pursuant to the DDA shall remain in effect and enforceable according to their terms. 882/015610-0061 380889.09 a12/17/03 2. This Release of Construction Covenants does not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage or any insurer of a mortgage security money loaned to finance the work of construction if improvements and development of the Property, or any part hereof. 3. This Release of Construction Covenants does not denote completion of any work required to be completed, other than on the Property. 4. This Release of Construction Covenants is not a notice of completion as referred to in Section 3093 of the California Civil Code. 5. Nothing contained in this instrument shall modify in any other way any other provisions of the DDA. 8821015610-0061 380889.09 a]2/17/03 -2- IN WITNESS WHEREOF, the Agency has executed this Release as of the date set forth above. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: ATTEST: Agency Secretary APPROVED BY DEVELOPER: CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President 882/015610-0061 380889.09 a12/17/03 -3- EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY [TO BE ATTACHED] 882/015610-0061 380889.09 a12/17/03 _4_ STATE OF CALIFORNIA ) ) ss COUNTY OF ) On , before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] STATE OF CALIFORNIA ) ) ss COUNTY OF ) On personally appeared Notary Public before me, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 390889.09 a12/17/03 -5- ATTACHMENT NO.17 PRELIMINARY DEVELOPMENT BUDGET [See attached individual preliminary development budgets for each of the (i) Sanctuary Villas Development, (ii) Suites Hotel, (iii) Casitas Development, (iv) Parcel 5 Residential Development and Parcel 7 Residential Development, (iv) Medical Office/Surgical Facility, (v) Parcel 1 Restaurant and Parcel 2 Restaurant, and (vi) Seeley Drive] 882/015610-0061 380889.09 a12/17/03 PRELIMINARY DEVELOPMENT BUDGET FOR Sanctuary Villas Development LAND COST Purchase Price at FMV Property Transfer Tax HARD COSTS Building Costs Parking On/Off site Improvements Contingency SOFT COSTS Architects & Consultants General/Administrative Costs Other Fees HPO & Warranty Marketing Property Tax Condo Documentation Financing & Inspections Insurance Feasibility/Appraisal Fees, Permits, Connections Post Construction / Strata Fee Contingency Total INTEREST COSTS Interest Costs Contingency at 10% TOTAL PROJECT COSTS Amount $ 1,003,622 $ 1,003,622 $ 1,003,622 $ 4,900,500 $ 162,500 1,087,347 310,000 $ 6,460,347 $ 6,460,347 $ 294,030 625,450 100,000 39,000 540,800 10,036 36,400 50,000 208,000 25,000 154,514 20,000 110,000 $ 2,213,230 $ 2,213,230 $ 402,000 40,200 $ 442,200 $ 442,200 $ 109119,400 $ 10,119,400 882/015610-0061 380889.09 a12/17/03 -2- PRELIMINARY DEVELOPMENT BUDGET FOR Suites Hotel 1. CONSTRUCTION $7,117,947 2. ARCHITECTURE, ENGINEERING, DESIGN $162,120 3. CITY FEES AND DEVELOPMENT COST CHARGES $681,067 4. FURNITURE, FIXTURES AND EQUIPMENT $1,408,000 5. PROPERTY EXPENSES $142,359 6. GENERAL AND ADMINISTRATIVE COST $1,226,000 7. PRE -OPENING AND OPENING EXPENSES $134,000 8. FINANCING $890,125 9. SUBTOTAL INCLUDING CONTINGENCY $11,761,618 10. CASH FLOW SHORT FALL RESERVE FUND (WORKING CAPITAL AND GENERAL CONTINGENCY) $1,993,233 11. TOTAL PROJECT DEVELOPMENT COSTS $13,754,851 12. LAND COST $0 13. TOTAL PROJECT COSTS $13,754,851 882/015610-0061 380889.09 a12/17/03 -3_ PRELIMINARY DEVELOPMENT BUDGET FOR Casitas Development LAND COST Per DDA Property Transfer Tax HARD COSTS Building Costs On/Off site Improvements Surface Parking Contingency SOFT COSTS Architects & Consultants General and Administrative Costs Permits and Fees Otherfees HPO & Warranty Marketing Property Tax Condo Documentation, Legal & Survey Financing & Inspections Insurance Appraisal Administration Fees, Permits, Connections Post Construction / Condo Fee Contingency Total FURNITURE FIXTURE AND EQUITYPMENT INTEREST COSTS Interest Costs Contingency at 10% Total TOTAL PROJECT COSTS $ 2,620,134 $ 50,403 $ 11,631,880 2,169,373 613,600 1,200,000 $ 1,447,446 1,624,000 693,636 100,000 198,000 1,645,616 57,667 1,400 100,000 1,056,000 25,000 10,000 50,000 20,000 320,000 $ 1,508,625 150,863 $ 2,670,537 $ 15,614,853 $ 7,348,765 $ 2,840,000 $ 1,659,488 $ 30,133,642 882/015610-0061 380889.09 a12/17/03 -4- PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 5 Residential Development and Parcel 7 Residential Development (Cont.) Costs Number of Units Land Site Improvements Architectural, Structural, T24 Civil/ Soil Engineering House Construction Landscape Front & Common Pools & BBQ Area Developer/ Builder, Overhead Site Supervision Permits & Fees Fin. Costs (Pts, Int., misc.) Legal, Insurance, HOA, Taxes Contingency & Marketing Total Hard Costs Soft Costs -Comm. & Closing Sales Total Estimated Gross Sales Estimated Project Profit Project Summary In 000's Price Per Unit 67 2,550 38.1 1,562 23.3 150 2.2 195 2.9 6,644 99.2 380 5.7 155 2.3 600 9.0 150 2.2 1,022 15.3 751 11.2 285 4.3 446 6.7 14,890 222.4 525 7.8 Total Costs 15,415 230.2 17,485 261.0 2,070 11.84% 882/015610-0061 380889.09 a12/17/03 -5- PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 5 Residential Development and Parcel 7 Residential Development (Cont.) Preliminary Proforma Costs Number of Units Land Site Improvements Architectural, Structural, T24 Civil/ Soil Engineering House Construction Landscape Front & Common Pools & BBQ Area Developer/ Builder, Overhead Site Supervision Permits & Fees Fin. Costs (Pts, Int., misc.) Legal, Insurance, HOA Contingency & Marketing Total Hard Costs Maximum City Assist In 000's 1,562 195 380 155 600 151 MY1] 446 4,239 Price Per Unit 67 0.0 23.3 0.0 2.9 5.7 2.3 9.0 2.3 0.0 11.2 0.0 6.7 63.4 882/015610-0061 380889.09 a12/17/03 -6- PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 5 Residential Development and Parcel 7 Residential Development Perimeter Lots Square Footage 1430 1672 1778 Total Costs In 000's Price Per In 000's Price Per In 000's Price Per In 000's Price Per Unit Unit Unit Unit Number of Units 9 10 6 25 Land 324 36.0 360 36.0 216 36.0 900 36.0 Site Improvements 210 23.3 233 23.3 140 23.3 583 23.3 Architectural, Structural,T24 18 2.0 20 2.0 12 2.0 50 2.0 Civil/ Soil Engineering 26 2.9 29 2.9 18 3.0 73 2.9 House Construction 708 78.7 886 88.6 555 92.5 2,149 86.0 Landscape Front & 51 5.7 57 5.7 34 5.7 142 5.7 Common Pools & BBQ Area 21 2.3 23 2.3 14 2.3 58 2.3 Developer/ Builder, 81 9.0 90 9.0 54 9.0 224 9.0 Overhead Site Supervision 20 2.2 22 2.2 13 2.2 56 2.2 Permits & Fees 125 13.9 152 15.2 95 15.8 371 14.9 Fin. Costs (Pts, Int., misc.) 101 11.2 112 11.2 67 11.2 280 11.2 Legal, Insurance, HOA, 38 4.2 42 4.2 25 4.2 106 4.2 Taxes Contingency & Marketing 60 6.7 66 6.6 40 6.7 166 6.6 Total Hard Costs 1,783 198.1 2,092 209.2 1,283 213.9 5,158 206.3 Soft Costs -Comm. & Closing 63 7.0 74 7.4 45 7.5 182 7.3 Total Costs 1,846 205.1 2,166 216.6 1,328 221.4 5,340 213.6 Sales Total Estimated Gross Sales 2�,097 233.0 2,460 246.0 1,506 251.0 6�,063 242.5 Estimated Project Profit 251 11.98%294 11.95% 178 11.84% 723 11.92% 882/015610-0061 380889.09 a12/17/03 -7- PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 5 Residential Development and Parcel 7 Residential Development (Cont.) Home Purchase - Price per 163.00 147.00 141.00 Sq ft Purchase Price 233 246 251 Down Payment & Closing - 12 12 13 5% 1 st Trust Deed 181 194 198 Silent 2nd Trust Deed 40 40 40 Monthly Mortgage Payment 30 year fixed 5.50% - P & 1,028.00 1,102.00 1,125.00 1 Property Taxes -1.125 of 218.00 231.00 235.00 Value Estimated HOA 150.00 150.00 150.00 Estimated Utilities 250.00 250.00 250.00 $1,646.0 $1,733.0 $1,760.0 0 0 0 Percentage of 61.200 32.27% 33.98% 34.51 % annual income Purchase Price 233 246 251 Down Payment & Closing - 12 12 13 5% 1 st Trust Deed 171 184 188 Silent 2nd Trust Deed 50 50 50 Monthly Mortgage Payment 30 year fixed 5.50% - P & 971.00 1,045.00 1,068.00 1 Property Taxes - 1.125 of 218.00 231.00 235.00 Value Estimated HOA 150.00 150.00 150.00 Estimated Utilities 250.00 250.00 250.00 $1,589.0 $1,676.0 $1,703.0 0 0 0 Percentage of 61,200 31.16% 32.86% 33.39% annual income 882/015610-0061 380889.09 al2/17/03 -g- PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 5 Residential Development and Parcel 7 Residential Development (Cont.) Purchase Price 233 246 251 Down Payment & Closing - 12 12 13 5% 1 st Trust Deed 158 171 175 Silent 2nd Trust Deed 63 63 63 Monthly Mortgage Payment 30 year fixed 5.50% - P & 1 897.00 971.00 994.00 Property Taxes - 1.125 of 218.00 231.00 235.00 Value Estimated HOA 150.00 150.00 150.00 Estimated Utilities 250.00 250.00 250.00 $1,515.0 $1,602.0 $1,629.0 0 0 0 Percentage of 61,200 29.71 % 31.41 % 31.94% annual income 882/015610-0061 380889.09 a12/17/03 '9' PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 5 Residential Development and Parcel 7 Residential Development (Cont.) Purchase Price 233 246 251 Down Payment & Closing - 12 12 13 5% 1 st Trust Deed 141 154 158 Silent 2nd Trust Deed 80 80 80 Monthly Mortgage Payment 30 year fixed 5.50% - P & 1 801.00 875.00 897.00 Property Taxes - 1.125 of 218.00 231.00 235.00 Value Estimated HOA 150.00 150.00 150.00 Estimated Utilities 250.00 250.00 250.00 $1,419.0 $1,506.0 $1,532.0 0 0 0 Percentage of 61,200 27.82% 29.53% 30.04% annual income Purchase Price 233 246 251 Down Payment & Closing - 12 12 13 5% 1 st Trust Deed 121 134 138 Silent 2nd Trust Deed 100 100 100 Monthly Mortgage Payment 30 year fixed 5.50% - P & 1 687.00 761.00 784.00 Property Taxes -1.125 of 218.00 231.00 235.00 Value Estimated HOA 150.00 150.00 150.00 Estimated Utilities 250.00 250.00 250.00 $1,305.0 $1,392.0 $1,419.0 0 0 0 Percentage of 61,200 25.59% 27.29% 27.82% annual income 882/015610-0061 380889.09 a12/17/03 —1 �— PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 5 Residential Development and Parcel 7 Residential Development (Cont.) Courtyard Cluster Square Footage 1270 1295 1400 1520 Total Costs In 000's Price In 000's Price In 000's Price In 000's Price In Price Per Per Per Per 000's Per Unit Unit Unit Unit Unit Number of Units 7 5 11 6 29 Land 241 34.4 172 34.4 379 34.5 207 34.5 1,000 34.5 Site Improvements 163 23.3 117 23.4 256 23.3 140 23.3 676 23.3 Architectural, 12 1.7 9 1.8 19 1.7 10 1.7 50 1.7 Structural,T24 Civil/ Soil Engineering 20 2.9 14 2.8 32 2.9 17 2.8 84 2.9 House Construction 471 67.3 343 68.6 785 71.4 456 76.0 2,055 70.9 Landscape Front & 40 5.7 28 5.6 62 5.6 34 5.7 164 5.7 Common Pools & BBQ Area 16 2.3 12 2.4 25 2.3 14 2.3 67 2.3 Developer/ Builder, 63 9.0 45 9.0 99 9.0 54 9.0 260 9.0 Overhead Site Supervision 16 2.3 11 2.2 25 2.3 13 2.2 65 2.2 Permits & Fees 91 13.0 66 13.1 151 13.7 86 14.4 393 13.6 Fin. Costs (Pts, Int., misc.) 78 11.1 56 11.2 123 11.2 67 11.2 325 11.2 Legal, Insurance, HOA, 30 4.3 21 4.2 47 4.3 25 4.2 123 4.2 Taxes Contingency & Marketing 47 6.7 33 6.6 73 6.6 40 6.7 193 6.7 Total Hard Costs 1,288 184.0 927 185.3 2,076 188.8 1,163 194.0 5,455 188.1 Soft Costs -Comm. & 45 6.4 33 6.6 73 6.6 41 6.8 192 6.6 Closing Total Costs 1,333 190.4 960 191.9 2,149 195.4 1,204 200.8 5,647 194.7 882/015610-0061 -11- 380889.09 a12/17/03 PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 5 Residential Development and Parcel 7 Residential Development (Cont.) Sales Total Estimated Gross 1,512 216.0 1,090 218.0 2,431 221.0 1,368 228.0 6,401 220.7 Sales Estimated Project Profit 179 11.85% 130 11.96% 282 11.61 % 164 11.98% 754 11.77% Home Purchase - Price 170.00 168.00 158.00 150.00 per Sq ft Purchase Price 216 218 221 228 Down Payment & Closing 11 11 11 11 - 5% 1 st Trust Deed 165 167 170 177 Silent 2nd Trust Deed 40 40 40 40 Monthly Mortgage Payment 30 year fixed 5.50% - P 937.00 949.00 966.00 1,005.00 &I Property Taxes - 1.125 203.00 204.00 208.00 214.00 of Value Estimated HOA 150.00 150.00 150.00 150.00 Estimated Utilities 250.00 250.00 250.00 250.00 $1,540.0 $1,553.0 $1,574.0 $1,619.0 0 0 0 0 Percentage of 61,200 30.20% 30.45% 30.86% 31.75% annual income Purchase Price 216 218 221 228 Down Payment & Closing 11 11 11 11 - 5% 1 st Trust Deed 155 157 160 167 Silent 2nd Trust Deed 50 50 50 50 Monthly Mortgage Payment 30 year fixed 5.50% - P 880.00 892.00 909.00 949.00 &I Property Taxes -1.125 203.00 204.00 208.00 214.00 of Value Estimated HOA 150.00 150.00 150.00 150.00 Estimated Utilities 250.00 250.00 250.00 250.00 $1,483.0 $1,496.0 $1,517.0 $1,563.0 0 0 0 0 Percentage of 61,200 29.08% 29.33% 29.75% 30.65% annual income 882/015610-0061 380889.09 a12/17/03 -12- PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 5 Residential Development and Parcel 7 Residential Development (Cont.) Purchase Price 216 218 221 228 Down Payment & Closing 11 11 11 11 - 5% 1 st Trust Deed 142 144 147 154 Silent 2nd Trust Deed 63 63 63 63 Monthly Mortgage Payment 30 year fixed 5.50% - P 807.00 818.00 835.00 875.00 &I Property Taxes - 1.125 203.00 204.00 208.00 214.00 of Value Estimated HOA 150.00 150.00 150.00 150.00 Estimated Utilities 250.00 250.00 250.00 250.00 $1,410.0 $1,422.0 $1,443.0 $1,489.0 0 0 0 0 Percentage of 61,200 27.65% 27.88% 28.29% 29.20% annual income 882/015610-0061 380889.09 a12/17/03 -13- PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 5 Residential Development and Parcel 7 Residential Development (Cont.) Purchase Price 216 218 221 228 Down Payment & Closing 11 11 11 11 - 5% 1 st Trust Deed 125 127 130 137 Silent 2nd Trust Deed 80 80 80 80 Monthly Mortgage Payment 30 year fixed 5.50% - P 710.00 721.00 738.00 778.00 &I Property Taxes -1.125 203.00 204.00 208.00 214.00 of Value Estimated HOA 150.00 150.00 150.00 150.00 Estimated Utilities 250.00 250.00 250.00 250.00 $1,313.0 $1,325.0 $1,346.0 $1,392.0 0 0 0 0 Percentage of 61,200 25.75% 25.98% 26.39% 27.29% annual income Purchase Price 216 218 221 228 Down Payment & Closing 11 11 11 11 - 5% 1 st Trust Deed 105 107 110 117 Silent 2nd Trust Deed 100 1DO 100 100 Monthly Mortgage Payment 30 year fixed 5.50% - P 596.00 608.00 625.00 665.00 &I Property Taxes -1.125 203.00 204.00 208.00 214.00 of Value Estimated HOA 150.00 150.00 150.00 150.00 Estimated Utilities 250.00 250.00 250.00 250.00 $1,199.0 $1,212.0 $1,233.0 $1,279.0 0 0 0 0 Percentage of 61,200 23.51 % 23.76% 24.18% 25.08% annual income 882/015610-0061 380889.09 a12/17/03 -14- PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 5 Residential Development and Parcel 7 Residential Development (Cont.) Square Footage Costs Number of Units Land Site Improvements Architectural, Structural,T24 Civil/ Soil Engineering House Construction Landscape Front & Common Pools & BBQ Area Developer/ Builder, Overhead Site Supervision Permits & Fees Fin. Costs (Pts, Int., misc.) Legal, Insurance, HOA, Taxes Contingency & Marketing Total Hard Costs Soft Costs -Comm. & Closing Courtyard Cluster Villas 2180 2560 In 000's Price Per In 000's Price Per Unit Unit 5 3 250 50.0 150 50.0 117 23.4 70 23.3 19 3.8 12 4.0 15 3.0 9 3.0 828 165.6 576 192.0 28 5.6 17 5.7 12 2.4 7 2.3 45 9.0 27 9.0 11 2.2 7 2.3 90 18.0 60 20.1 56 11.2 34 11.3 21 4.2 13 4.3 33 6.6 20 6.7 1,525 305.0 1,002 334.0 54 10.8 35 11.7 2800 Total In 000's Price Per In 000's Price Per Unit Unit 5 13 250 50.0 650 50.0 117 23.4 303 23.3 19 3.8 50 3.8 15 3.0 38 2.9 1,036 207.2 2,440 187.7 28 5.6 74 5.7 12 2.4 30 2.3 45 9.0 116 8.9 11 2.2 29 2.2 107 21.4 257 19.8 56 11.2 146 11.2 21 4.2 55 4.2 33 6.6 87 6.7 1,750 350.0 4,275 328.9 62 12.4 151 11.6 Total Costs 1,579 315.8 1,037 345.7 1,812 362.4 4,426 340.5 Sales Total Estimated Gross Sales 1,790 358.0 1,176 392.0 2,055 411.0 5,021 386.2 Estimated Project Profit 211 11.79% 139 11.80% 243 11.82% 595 11.85% Home Purchase - Price per Sq ft 164.00 153.00 147.00 Purchase Price Down Payment & Closing - 5% 1 st Trust Deed Silent 2nd Trust Deed Monthly Mortgage Payment 30 year fixed 5.50% - P & I Property Taxes -1.125 of Value Estimated HOA Estimated Utilities 358 392 411 18 20 21 340 372 390 0 0 0 1,931.00 2,113.00 2,215.00 336.00 368.00 385.00 150.00 150.00 150.00 250.00 250.00 250.00 $2,667.00 $2,8�81.00 $3,000.00 882/015610-0061 -15- 380889.09 al2/17/03 PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 5 Residential Development and Parcel 7 Residential Development (Cont.) PROGRAM HOMES Perimeter Lots Courtyard Cluster Total Square Footage 1430 1672 1778 1270 1295 1400 1520 Program Units 7 7 4 5 4 7 6 40 Bedrooms per Unit 3 3 3 3 3 3 4 Costs Number of Units Land 252 252 144 172 138 242 207 1407 Site Improvements 163 163 93 117 94 163 140 933 Architectural, Structural,T24 14 14 8 9 7 12 10 74 Civil/ Soil Engineering 20 20 12 15 11 20 17 115 House Construction 551 620 370 337 274 500 456 3108 Landscape Front & Common 40 40 23 29 22 39 34 227 Pools & BBQ Area 16 16 9 12 10 16 14 93 Developer/ Builder, Overhead 63 63 36 45 36 63 54 360 Site Supervision 15 15 9 12 9 16 13 89 Permits & Fees 97 106 63 65 52 96 86 565 Fin. Costs (Pts, Int., misc.) 78 78 45 56 45 78 67 447 Legal, Insurance, HOA, Taxes 29 29 17 22 17 30 25 169 Contingency & Marketing 47 46 27 34 26 46 40 266 Total Hard Costs 1385 1462 856 925 741 1321 1163 7�853 88M15610-0061 380889.09 a12/17/03 —16— PRELIMINARY DEVELOPMENT BUDGET FOR Medical Office/Surgical Facility Medical Building #1 40,000 $ 86.13 $ 3,445,200 Medical Building #2 40,000 $ 86.13 $ 3,445,200 Medical Building #3 40,000 $ 86.13 $ 3,445,200 Shell Costs $ 10,335,600 Basic Interior Allowance 120,000 $ 20.89 $ 2,507,200 Sub -Total Direct Costs 120,000 $ 107.02 $ 12,842,800 Site Improvements Grading, Paving, Curbs $ 934,960 Landscaping $ 360,000 Off -Site Development Costs $ 3,004,677 Other Site Improvements $ 320,000 Sub -Total Site Improvements $ 4,619,637 TOTAL DIRECT AND SITE IMPROVEMENTS $ 17,462,437 INDIRECT COSTS Pre -Development 1% $ 224,500 Arch, Engineering & Consultants 8% $ 1,217,466 General Requirements 12% $ 2,095,492 Permit and Fees (Shell Building Only) 9% $ 1,658,292 Development Fees/Leasing Fees 9% $ 1,500,000 Furnishings NIC Contingency 8% $ 1,396,995 $ 6,650,780 TOTAL DIRECT AND INDIRECT COSTS $ 200.94 $ 24,113,216 LAND VALUE 9.22ACRES $ 5.00 $ 2,008,116 ESTIMATED COST VALUE $ 26,121,332 (SAY) 882/015610-0061 .17- 380889.09 al2/17/03 PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 1 Restaurant Fine Dinning Restaurant - Shell Costs 6,000 $ 100.00 Basic Interior Allowance 6,000 $ 110.00 Sub -Total Direct Costs 6,000 $ 210.00 Site Improvements Grading, Paving, Curbs $ 200,000 Landscaping $ 75,000 Other Site Improvements $ 90.000 Sub -Total Site Improvements TOTAL DIRECT AND SITE IMPROVEMENTS INDIRECT COSTS Pre -Development Arch, Engineering & Consultants General Requirements Permit and Fees (Shell Building Only) Development Fees/Leasing Fees Furnishings Financing Costs Lender Fees- Const. & Take out Brokerage Fees Construction Interest Rate Years Terms 60%7.00% 1 Contingency 8.00% $ 8.00% $ 12.00% $ 5.00% $ 5.00% $ NIC 1.50% $ 2.50% $ 130,000 130,000 195,000 81,250 81,250 30,000 50,000 $ 84,000 5.00% $ 81.250 TOTAL DIRECT AND INDIRECT COSTS $ 414.63 LAND VALUE 0.92ACRES $ 5.00 ESTIMATED COST VALUE (SAY) $ 600,000 $ 660,000 $ 1,260,000 $ 365,000 $ 1,625,000 $ 862,750 $ 2,487,750 $ 200,376 $ 2,688,126 �' 3 ,ill T1��11. 882/015610-0061 —1 g- 380889.09 a12/17/03 PRELIMINARY DEVELOPMENT BUDGET FOR Parcel 13 Restaurant FAMILY STYLE RESTAURANT Shell Costs Basic Interior Allowance Sub -Total Direct Costs Site Improvements Grading, Paving, Curbs Landscaping Other Site Improvements Sub -Total Site Improvements TOTAL DIRECT AND SITE IMPROVEMENTS INDIRECT COSTS 7,000 $ 100.00 $ 700,000 7,000 $ 90.00 $ 630,000 7,000 $ 190.00 $ 1,330,000 $ 250,000 $ 75,000 $ 90,000 $ 415,000 $ 1,745,000 Pre -Development 8.00% $ 139,600 Arch, Engineering & Consultants 8.00% $ 139,600 General Requirements 12.00% $ 209,400 Permit and Fees (Shell Building Only) 5.00% $ 87,250 Development Fees/Leasing Fees 5.00% $ 87,250 Furnishings NIC Financing Costs Lender Fees- Const. & Take out 1.50% $ 30,000 Brokerage Fees 2.50% $ 50,000 Construction Interest Rate Years Terms 60% 7.00% 1 $ 84,000 Contingency 5.00% $ 87,250 $ 914,350 TOTAL DIRECT AND INDIRECT COSTS $ 379.91 $ 2,659,350 LAND VALUE 1.12ACRES $ 5.00 $ 243,936 ESTIMATED COST VALUE $ 2,903,286 (SAY) 882/015610-0061 -19- 380889.09 a12/17/03 ATTACHMENT NO. 18 FORM OF BUYER AFFORDABLE HOUSING DOCUMENTS [See Following Pages] l . Buyer Affordable Housing Agreement (Document No. 398366) 2. Buyer Memorandum Re Option to Purchase (Document No. 398363) 3. Buyer Promissory Note Secured by Deed of Trust (Document No. 398344) 4. Buyer Deed of Trust with Assignment of Rents and Rider to Deed of Trust attached hereto (Document No. 398353) 5. Buyer Borrower Disclosure Statement (Document No. 398359) 882/015610-0061 380889.09 a12/17/03 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attn: Executive Director Exempt From Recording Fee Pursuant to Government Code § 6103 AFFORDABLE HOUSING AGREEMENT THIS AFFORDABLE HOUSING AGREEMENT (the "Agreement") is made this day of by and between ("Participant") and the LA QUINTA REDEVELOPMENT AGENCY ("Agency"). RECITALS A. Participant has entered into an agreement (the "Purchase Agreement") to purchase a single family home located at , in the City of La Quinta ("City"), California (the "Property"). The Property is more particularly described in Exhibit "A" attached hereto and incorporated herein by this reference. B. Participant requires financial assistance from the Agency to purchase the Property and would not be able to purchase the Property without such assistance. Participant is a "person or family of moderate income" who currently earns less than 120% of the current annual "area median income" for the Riverside County area, adjusted for family size appropriate for the unit, as those terms are defined by California Health and Safety Code Section 50093. C. Participant has represented to Agency that Participant shall reside in the Property as Participant's principal residence at all times throughout the term of this Agreement. D. Agency desires to assist "persons and families of moderate income" ("Eligible Buyers"), to purchase residential property and to increase, improve and preserve moderate - income housing available at "affordable housing cost" (as defined in Health and Safety Code Section 50052.5) within the territorial jurisdiction of Agency in accordance with the Community Redevelopment Law, Health and Safety Code Section 33000, et seq. E. Participant acknowledges that Agency and CP Development La Quinta, LLC, a California limited liability company ("Developer"), the developer, of the Property, previously entered into a Disposition and Development Agreement, dated (the "DDA"), and that the Property is subject to affordability restrictions stemming from (i) the DDA, which require purchasers of the Property to execute this Agreement in favor of Agency, and (ii) that certain Declaration of Covenants, Conditions, and Restrictions for Property, entered into by and between the Agency and Developer and recorded on , as Instrument No. in the Official Records of Riverside County (the "Declaration"). 882/015610-0061 398366.03 a12/15/03 F. Agency desires to lend to Participant, and Participant desires to borrow from Agency, funds in the form of a second trust deed mortgage assistance loan secured by a second lien deed of trust to assist Participant to purchase the Property subject to the terms and conditions set forth herein. AGREEMENT NOW, THEREFORE, for good and valuable consideration the parties agree as follows: 1. Duration of Covenants. The covenants set forth in this Agreement shall remain in effect from the date this Agreement is recorded and continue thereafter for forty-five (45) years following the date of recordation ("Covenant Period"). 2. Agency Loan. Agency shall loan to Participant (the "Agency Loan") the amount of Dollars ($____) subject to the conditions and restrictions set forth herein. Participant shall execute, as maker, and deliver to Agency a promissory note in favor of Agency, as holder, in the principal amount of the Agency Loan (the "Note Amount"), substantially in the form delivered to Participant prior to receiving the Agency Loan (the "Note" or "Promissory Note"). Interest on the Note Amount shall accumulate at the rate of seven percent (7%) per annum, compounded annually. At the expiration of the Covenant Period, the Note shall be cancelled and the Note Amount, together with interest thereon, shall be forgiven, unless prior to that time an "Event of Acceleration" (as that term is defined in Section 4 hereof) has occurred. Participant shall also execute and deliver to Agency a second deed of trust which shall secure the Note, in the form delivered to Participant prior to receiving the Agency Loan (the "Agency Deed of Trust"). As a further condition of the Agency making the Agency Loan to Participant, Participant shall execute and deliver to Agency (i) a memorandum re option to purchase ("Memorandum Re Option to Purchase"), and (ii) a Borrower Disclosure Statement and Notice of Rescission (collectively "Disclosure Statement"), both of which shall be in the form delivered to Participant prior to receiving the Agency Loan. 3. Property Transfer Restrictions. a. Participant shall not "Transfer" (as defined below) or permit the Transfer of the Property unless the Transfer is a "Permitted Transfer" (as defined below). A "Transfer" is (i) any sale, assignment, or transfer of an interest in the Property, including, without limitation, a fee simple interest, tenancy in common, joint tenancy, community property, tenancy by the entireties, life estate, or other limited estate, leasehold interest or any rental of the Property, (ii) any interest evidenced by a land contract, (iii) the refinancing of the lien of the Agency Deed of Trust, or (iv) the refinancing of any lien to which the lien of the Agency Deed of Trust is subordinated (the "First Lien") other than a "Permitted First Lien Refinance" (as defined in Section 7 hereof). b. Transfers shall be designated as voluntary or involuntary. Involuntary Transfers are Transfers that occur by operation of law, in the absence of an express conveyance by Participant, and include, but are not limited to, Transfers by devise, inheritance, incompetency, marriage, and divorce (collectively, "Involuntary Transfers"). Voluntary Transfers occur by affirmative act of Participant, and include Transfers by gift, 882/015610-0061 398366.03 a12/15/03 -2- sale and lease, any refinance that constitutes a Transfer, and any other Transfer that does not constitute an Involuntary Transfer. C. The following Transfers shall constitute "Permitted Transfers": (i) Voluntary Transfers to a spouse or to an Eligible Buyer; and (ii) Involuntary Transfers. A Transfer that does not constitute a Permitted Transfer (a "Prohibited Transfer") is expressly prohibited by this Agreement and shall be null and void and shall constitute a default of Participant under this Agreement, entitling Agency to exercise its right to purchase the Property from the new owner, as described in Section 6 herein, as well as all remedies available at law or equity, including without limitation the enforcement of the liquidated damages provision in Section 18 of this Agreement. 4. Events of Acceleration. The Agency Loan shall become due and immediately payable irrespective of any provisions herein to the contrary upon the occurrence of any one of the following events of acceleration ("Event of Acceleration"): (i) Transfer of the Property (as defined in Section 3 above), except a Transfer which under applicable law, would not, by itself, permit Agency to exercise a due on sale or due on encumbrance clause, or (ii) such time if or when Participant (or upon Participant's Transfer of the Property pursuant to a Permitted Transfer, Participant's transferee) is no longer in compliance with the occupancy requirements set forth in Section 9 of this Agreement or is in default of any other obligation under this Agreement, the Note, or the Agency Deed of Trust. Notwithstanding the above, however, the following Transfers of the Property shall not be an Event of Acceleration: a. A Transfer to Participant's Spouse; b. An Involuntary Transfer that satisfies both of the following: (1) The transferee(s) gives notice to Agency of such event within thirty (30) days of its occurrence and the transferee(s) assumes the Participant's obligations under this Agreement, by execution of an assignment and assumption agreement to be provided by Agency; and (2) Where the transferee is not an Eligible Buyer, such transferee Transfers the Property to an Eligible Buyer within one hundred eighty (180) days after the transferee obtains title to the Property. Agency's Executive Director may, in his or her sole and absolute discretion, waive some or all of the requirements of this Section 4. 5. Notice to Agency. Participant (or Participant's heirs following the death of Participant) agrees to notify Agency in writing not less than thirty (30) days prior to any Transfer of any interest in the Property. 6. Sale of Property; Agency's Option to Purchase. a. If Participant desires to sell, quitclaim, exchange, or in any manner dispose of the Property or any part thereof ("Proposed Sale"), Participant shall first notify Agency of its intent to transfer the Property, by sending to Agency the notification form 882/015610-0061 398366.03 a12/15/03 '3' attached hereto and incorporated herein as Exhibit "C", no later than ten (10) days prior to the date each time the Property is placed on the market for a Proposed Sale. b. Participant shall not sell or transfer the Property until such time as Agency has determined (i) the proposed buyer is an Eligible Buyer; (ii) the proposed buyer intends to occupy the Property as its principal residence; and (iii) the Proposed Sale is at an "Affordable Housing Cost" (as defined below). If Participant identifies a buyer whom the Participant believes to be an Eligible Buyer, Participant shall cooperate with and reasonably assist Agency with the determination of whether the proposed buyer is an Eligible Buyer. Within ten (10) days after Participant locates the proposed buyer, Participant shall submit to Agency (1) information evidencing the proposed buyer's identity and income in order that Agency may make a preliminary determination regarding the buyer's household income status ("Preliminary Determination"); and (2) the price at which Participant proposes to sell the Property (less the value of any personal property or equipment included in said price). In the event Agency makes a Preliminary Determination that the buyer qualifies as an Eligible Buyer, Participant may proceed with opening an escrow for a Proposed Sale; provided, however, that not less than twenty (20) days prior to the date escrow is scheduled to close for the Proposed Sale, Participant shall submit to Agency adequate information to enable the Agency to make a final determination regarding whether the buyer qualifies as an Eligible Buyer and whether the Property is available to such buyer at an Affordable Housing Cost ("Final Determination"). Such information shall include (a) a completed request for approval of buyer form in the form attached hereto and incorporated herein as Exhibit "D"; (b) the purchase and sale agreement pursuant to which Participant proposes to sell the Property to the proposed buyer; and (c) information evidencing the income of the proposed buyer including, but not limited to, original or true copies of pay stubs, income tax records or other financial documents. Agency may request additional information reasonably required to make a Final Determination regarding the proposed buyer's status. If Agency is unable to make a Final Determination regarding the proposed buyer's income as provided herein prior to the date set for the Proposed Sale, then the proposed buyer's income shall be deemed to exceed the maximum allowable income limit for Eligible Buyer status and Participant may not conclude the Proposed Sale. As used herein, the term "Affordable Housing Cost" shall be that purchase price which would result in an annual "Purchase Housing Cost" (as defined below) which does not exceed one of the following calculations, as applicable: (1) For moderate income purchasers earning not more than one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate to the unit, Affordable Housing Cost shall be not less than twenty-eight percent (28%) of the gross income of the household nor exceed the product of thirty-five percent (35%) times one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate to the unit; or (2) For moderate income purchasers earning more than one hundred ten percent (110%) but less than one hundred twenty percent (120%) of the 882/015610-0061 398366.03 a12/15/03 -4- Riverside County median income, Affordable Housing Cost shall be the product of thirty-five percent (35%) of the actual gross income of the household. "Purchase Housing Cost" shall be a cost that includes all of the following associated with the Property, estimated or known as of the date of the Proposed Sale of the Property: (1) Principal and interest payments on a mortgage loan including any rehabilitation loans and any loan insurance fees associated therewith. (2) Property taxes and assessments. (3) Fire and casualty insurance covering replacement value of property improvements. (4) Any homeowner association fees. (5) A reasonable utility allowance. (6) A reasonable property maintenance allowance. For purposes of this Agreement, the term "adjusted for family size appropriate to the unit" shall mean a household of one person in the case of a studio unit, two persons in the case of a one -bedroom unit, three persons in the case of a two -bedroom unit, four persons in the case of a three -bedroom unit, and five persons in the case of a four - bedroom unit. Participant shall contact the Agency to determine the applicable Affordable Housing Cost for a particular proposed Eligible Buyer. A sample calculation of an Affordable Housing Cost is attached hereto and incorporated herein as Exhibit `B". C. Upon (i) Participant's sale of the Property to a person who is an Eligible Buyer (provided that person's status as an Eligible Buyer has been verified by Agency pursuant to this Section 6) at an Affordable Housing Cost, and (ii) the Eligible Buyer's execution of an assignment and assumption agreement in a form satisfactory to Agency's legal counsel, the Agency Loan shall be assigned to the Eligible Buyer upon the close of escrow for such sale. d. At any time prior to the time Participant enters into a binding agreement with an Eligible Buyer for a Proposed Sale, Agency shall have an option to (i) purchase the Property from Participant at the Affordable Housing Cost set forth in paragraph b(1) above, or (ii) to cause the purchase of all the Property by an Eligible Buyer at an Affordable Housing Cost. Agency's exercise of such option to purchase shall be made by delivery of written notice to Participant. In the event Agency either purchases the Property or arranges the purchase by an Eligible Buyer, an escrow shall be established to close within forty-five (45) days after delivery of Agency's notice of exercise, subject to any extensions, at Agency's option, for causes outside the control of Agency. In the event Agency exercises its option to purchase the Property pursuant to (i) above, the 892/015610-0061 398366.03 a12/15/03 -5- balance of the Agency Loan and any accrued interest thereon shall be due and payable to Agency prior to or at the close of escrow. In the event Agency arranges the purchase by an Eligible Buyer pursuant to (ii) above, the Eligible Buyer shall be required to execute an assignment and assumption agreement in a form satisfactory to Agency's legal counsel. e. IN THE EVENT PARTICIPANT SELLS THE PROPERTY TO A BUYER WHO DOES NOT QUALIFY AS AN ELIGIBLE BUYER, AGENCY SHALL HAVE AN OPTION TO PURCHASE THE PROPERTY FROM THE BUYER AT THE AFFORDABLE HOUSING COST SET FORTH IN PARAGRAPH b(1) ABOVE. THE FOREGOING CONSTITUTES NOTICE TO ANY BUYER OF THE PROPERTY WHO HAS PURCHASED THE PROPERTY WITHOUT OBTAINING THE PRIOR APPROVAL OF AGENCY. f. Agency's option to purchase set forth in paragraphs d and e of this Section 6 shall terminate and be of no further force or effect on the date the Covenant Period terminates. Agency's option to purchase set forth in this Section shall be memorialized by the Memorandum Re Option to Purchase substantially in the form as distributed to Participant prior to receiving the Agency Loan to be recorded against the Property concurrently herewith. PARTICIPANT UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED SALE, AND THAT THE AFFORDABLE HOUSING COST PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THE AFFORDABILITY COVENANTS IN THIS AGREEMENT. PARTICIPANT FURTHER ACKNOWLEDGES THAT IN SETTING THE AFFORDABLE HOUSING COST, THE PRIMARY OBJECTIVE OF AGENCY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO ELIGIBLE BUYERS AT AN AFFORDABLE HOUSING COST. PARTICIPANT'S INITIALS 7. Refinance of First Lien. a. Participant shall be permitted to refinance the First Lien for either of the following amounts (each, a "Permitted Refinance"): (i) not more than the then -current principal balance of the First Lien, or (ii) for more than the then -current principal loan balance of the First Lien (i.e., obtain a "cash out" refinance) in accordance with paragraph b below. b. In a "cash out" refinance, the new first mortgage loan principal shall not exceed the lesser of: 882/015610-0061 _ 398366.03 a]2/15/03 -6 (1) An amount which when combined with the principal of the Agency Loan (i.e., the total of the principal of the new first mortgage loan plus the principal of the Agency Loan) does not exceed seventy percent (70%) of the appraised value of the Property as evidenced by an appraisal (paid for by Participant) from a qualified appraiser, or based on other evidence acceptable to Agency's Executive Director or authorized designee in his/her sole and absolute discretion; (2) The maximum amount the Participant may borrow as the new first mortgage loan without the Participant exceeding "Affordable Housing Cost" (as described in Section 6 hereof); or (3) An amount equal to the sum of (x) the outstanding principal balance, at the time of the refinance, of the then -current First Lien that is being refinanced, plus (y) usual and customary closing costs paid by Participant but excluding loan origination points or loan origination fees, plus (z) Twenty -Five Thousand Dollars ($25,000.00). Notwithstanding the foregoing, the Agency Executive Director shall have the authority, in his/her sole and absolute discretion, on behalf of the Agency to approve the following: (i) with respect to subparagraph (1) above, an increase from 70% to up to 80% in the maximum loan -to -value ratio, and (ii) with respect to subparagraph (3) above, an increase from Twenty -Five Thousand Dollars ($25,000) to up to Fifty Thousand Dollars ($50,000); provided, however, in both cases, Participant shall have provided evidence satisfactory to Agency's Executive Director, in his/her sole and absolute discretion, that the additional amount is needed to remedy a specific and significant current or identifiable future adverse financial condition of Participant and Agency's Executive Director determines, in his/her sole and absolute discretion, that such additional amount shall not jeopardize the continuation of the property as an affordable housing unit. In the event Agency's Executive Director modifies the amount in either subparagraphs (1) or (3) above, the new first mortgage loan principal shall not exceed the lesser of (a) the amount in subparagraph (1) above if and as modified, or (b) the amount in subparagraph (2) above, or (c) the amount in subparagraph (3) above if and as modified. C. Participant may seek subordination of the Agency Deed Of Trust to the deed of trust of the new first mortgage loan not more than once every three (3) years; provided, however, this restriction may be waived if Participant provides evidence satisfactory to Agency's Executive Director, in his/her sole and absolute discretion, that waiver of this restriction is needed to remedy a specific and significant current or identifiable future adverse financial condition of Participant and Agency's Executive Director determines, in his/her sole and absolute discretion, that waiver of this requirement shall not jeopardize the continuation of the property as an affordable housing unit. d. Participant shall notify Agency not less than thirty (30) days prior to the date proposed for the closing of the refinance loan and shall execute such documents, and 882J015610-0061 398366.03 a12/15/03 -7- shall cause the new first mortgage lender to execute such documents, as Agency requires to effect the Agency's subordination of the Agency Deed of Trust (and related recorded regulatory agreements if necessary ) to the deed of trust of the new first mortgage lender. Agency shall only approve a subordination of the Agency Deed of Trust (and related documents if necessary) to the deed of trust of the new first mortgage lender upon confirmation of the new first loan amount and review of Participant's loan application and related material and documents. 8. Maintenance of Property. Participant shall maintain the improvements and landscaping on the Property in a manner consistent with community standards which will uphold the value of the Property, in accordance with the La Quinta Municipal Code. Participant also agrees to comply with the Declaration, and to comply with all applicable federal, state and local laws. 9. Occupancy Standards. a. The Property shall be used as the principal residence of Participant and for no other purpose. b. Participant shall not enter into an agreement for the rental or lease of the Property. C. The maximum occupancy of the Property shall not exceed the maximum occupancy allowed pursuant to the general requirements of the United States Department of Housing and Urban Development which as of the date of this Agreement is two persons per bedroom, plus one person. d. Participant shall, upon demand by Agency, submit to Agency an affidavit of occupancy verifying Participant's compliance with this Section 9. Said affidavit may be required by Agency on an annual basis. e. Agency may grant a temporary waiver of the above requirements for good cause, in Agency's sole and absolute discretion. 10. Income and Asset Information. Participant has submitted an application and additional information verifying income and asset eligibility to Agency prior to execution of this Agreement. Participant represents, warrants and declares under penalty of perjury to Agency that all information Participant has provided and will provide in the future to Agency is and will be true, correct and complete. Participant acknowledges that Agency is relying upon Participant's representations that Participant is an Eligible Buyer, and Agency would not have entered into this Agreement if Participant did not so qualify. Asset eligibility shall be determined pursuant to the Asset Limitation Requirements set forth in the La Quinta Housing Program Implementation Manual, as it may be amended from time to time. 11. Loan Servicing. Agency may contract with a private lender or other person or entity (the "Administrator") to originate and service the Agency Loan, and to carry out Agency's obligations under this Agreement. Any reference to the duties of Agency herein shall also apply to the Administrator. 882/015610-0061 398366.03 a12/15/03 -8- 12. Participant Financing. As a condition to Agency's obligation to make the Agency Loan, Participant shall obtain first trust deed financing for the purchase of the Property from a reputable institutional lender (the "Lender"). In addition, Participant must make a down payment of not less than three percent (3 %) of the "Purchase Price" (as defined below). Nothing in this Agreement shall be construed as a promise or guaranty by Agency that the Participant will qualify for or receive such first trust deed financing. For purposes of this Section 12, "Purchase Price" is the original purchase price paid by the Participant to the seller of the Property for the seller's interest in the Property, together with all escrow fees, recording fees, transfer taxes, title insurance costs, broker's Agency, loan fees and any other closing or transaction costs paid by Participant. 13. Title Insurance. As a condition to disbursement of the Agency Loan, Participant, at no cost to Agency, shall obtain and cause to be delivered to Agency a standard form ALTA Lender's policy of Title Insurance, issued by a title company as may be mutually approved by Agency and Participant, in an amount not less than the Agency Loan, insuring the priority of the Agency Deed of Trust against all monetary liens and encumbrances against the Property, including but not limited to, mechanic's liens claims and excepting only (i) the lien of any non -delinquent property taxes; (ii) the Declaration recorded against the Property; (iii) the First Lien and Subordination Agreement referred to in Section 14; and (iv) other encumbrances and exceptions to title as may be approved by Agency in Agency's sole and absolute discretion. 14. Covenants Do Not Impair Lien. Agency agrees to subordinate the provisions of this Agreement, the Declaration, the Memorandum Re Option to Purchase, and the Agency Deed of Trust to any First Lien on the Property held by the Lender by recording a subordination agreement, in a form approved by Agency and Agency's legal counsel, which affords the Agency adequate cure rights, as required by Health and Safety Code Section 33334.14 ("Subordination Agreement"). Participant agrees it shall instruct the Escrow Agent for the acquisition of the Property by the Participant that the order of recording in the escrow for the purchase of the Property by the Participant shall occur as follows: 1) this Agreement; 2) the Memorandum Re Option to Purchase; 3) the Agency Deed of Trust; (4) the First Lien; and (5) the Subordination Agreement. Participant shall cause a Request for Notice to be recorded on the Property subsequent to the recordation of the First Lien deed of trust or mortgage requesting a statutory notice of default as set forth in the California Civil Code Section 29246. Such notice shall be sent to: La Quinta Redevelopment Agency, 78-495 Calle Tampico, La Quinta, California 92253, Attention: Executive Director. 15. Indemnification. Participant shall defend, indemnify and hold harmless Agency and the City of La Quinta and their respective officers, officials, agents, members, employees, representatives, and volunteers from and against any loss, liability, claim, or judgment relating in any manner to the Property or this Agreement. The Participant shall remain fully obligated for the payment of taxes, liens and assessments related to the Property. There shall be no reduction in taxes for Participant, nor any transfer of responsibility to Agency to make such payments, by virtue of the Agency Loan. 882/015610-0061 398366.03 a12/15/03 -9- 16. Insurance. Participant shall maintain, during the term of the Agency Loan, an all-risk property insurance policy insuring the Property in an amount equal to the full replacement value of the structures on the property. The policy shall name Agency as loss payee and shall contain a statement of obligation on behalf of the carrier to notify Agency of any material change, cancellation or termination of coverage at least thirty (30) days in advance of the effective date of such material change, cancellation or termination. Participant shall transmit a copy of the certificate of insurance and loss payee endorsement to Agency within thirty (30) days of the effective date of this Agreement, and Participant shall annually transmit to Agency a copy of the certificate of insurance and a loss payee endorsement, signed by an authorized agent of the insurance carrier setting forth the general provisions of coverage. The copy of the certificate of insurance and loss payee endorsement shall be transmitted to Agency as follows: La Quinta Redevelopment Agency 78495 Calle Tampico La Quinta, CA 92253 Attention: Executive Director Any certificate of insurance must be in a form, content and with companies approved by Agency. 17. Defaults. Failure or delay by either party to perform any term or provision of this Agreement which is not cured within thirty (30) days after receipt of notice from the other party constitutes a default under this Agreement; provided, however, if such default is of the nature requiring more than thirty (30) days to cure, the defaulting party shall avoid default hereunder by commencing to cure within such thirty (30) day period, and thereafter diligently pursuing such cure to completion. The party who so fails or delays must immediately commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy with diligence. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings against the party in default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. 18. Liquidated Damages for Prohibited Transfer. In the event Agency seeks monetary damages for a Prohibited Transfer, Participant shall be required, to the extent permitted by law, to pay to Agency the entire amount of the "Sale Price" (as defined below) received in excess of the Affordable Housing Cost permitted pursuant to this Agreement; provided, however, that nothing herein shall be deemed to limit Agency's remedy for a Prohibited Transfer to seeking monetary damages, and Agency shall be entitled to pursue any other equitable remedy permitted by law, including specific performance or injunctive relief, to prevent a Prohibited Transfer. For purposes of this Section 18, the "Sale Price" is the price to be paid by the buyer of the Property to Participant for Participant's interest in the Property, after deduction of escrow fees, recording fees, transfer taxes, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs paid by Participant. 882/015610-0061 .1 O_ 398366.03 a12/15/03 THE PARTIES HERETO AGREE THAT THE AMOUNT SET FORTH IN THIS SECTION 18 (THE "DAMAGE AMOUNT") CONSTITUTES A REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY PARTICIPANT SET FORTH IN THIS SECTION 18, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF HARM TO AGENCY AND ACCOMPLISHMENT OF AGENCY'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE BUYERS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE DAMAGE AMOUNT SET FORTH IN THIS SECTION 18 SHALL BE THE SOLE DAMAGES REMEDIES FOR THE DEFAULTS SET FORTH IN THIS SECTION 18, BUT NOTHING IN THIS SECTION 18 SHALL BE INTERPRETED TO LIMIT AGENCY'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY COUNSEL TO EXPLAIN THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. PARTICIPANT'S INITIALS: AGENCY'S INITIALS: Notwithstanding any of the above, nothing herein is intended to preclude the Agency's recovery of its attorney's fees and costs incurred to enforce this Section, as provided in Section 33. 19. Distribution of Insurance and Condemnation Proceeds. In the event the improvements on the Property are destroyed and insurance proceeds are distributed to Participant instead of being used to rebuild, or in the event of condemnation, if proceeds thereof are distributed to Participant, any surplus of proceeds so distributed remaining after payment of encumbrances of said Property, with the first claim accruing to the Lender, shall be distributed as follows: that portion of the surplus that is in excess of the Affordable Housing Cost permitted pursuant to this Agreement shall be distributed to Agency, and the balance of such surplus, if any, shall be distributed to Participant. 20. Covenant to Keep Property Drug Free. Participant represents to Agency that Participant shall maintain a drug free environment on the Property. Participant covenants to Agency that Participant and all persons residing on the Property shall not unlawfully manufacture, distribute, dispense, possess or use controlled substances, as said term is defined in 21 United States Code Section 812 and California Health and Safety Code Section 11007, including marijuana, heroin, cocaine, and amphetamines on the Property. If Participant or any person residing on the Property is convicted, pleads guilty or nolo contendere to a charge of unlawfully manufacturing, distributing, dispensing, possessing or using controlled substances on the Property, then such event shall be a default of this Agreement, which shall entitle Agency to exercise its option to purchase the Property at an Affordable Housing Cost as set forth in Section 6 of this Agreement within sixty (60) days after Agency's notice of said default. 882/015610-0061 -11- 398366.03 a12/15/03 21. Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other parry. 22. Covenants to Run with the Land. All conditions, covenants, and restrictions contained in this Agreement shall be covenants running with the land, and shall, in any event, and without regard to technical classification or designation, legal or otherwise, be, to the fullest extent permitted by law and equity, binding for the benefit and in favor of, and enforceable by, Agency and its successors and assigns, against Participant, its successors and assigns, to or of the Property or any portion thereof or any interest therein, and any party in possession or occupancy of said Property or portion thereof. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that Agency shall be deemed a beneficiary of the agreements and covenants provided hereinabove both for and in its own right and also for the purposes of protecting the interests of the community. All covenants without regard to technical classification or designation shall be binding for the benefit of Agency and such covenants shall run in favor of Agency for the entire period during which such covenants shall be in force and effect, without regard to whether Agency is or remains an owner of any land or interest therein to which such covenants relate. Agency shall have the right, in the event of any breach of any such agreement or covenant, to exercise all the rights and remedies, and to maintain any action at law or suit in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant. 23. Non -Waiver. Failure to exercise any right Agency may have or be entitled to, in the event of default hereunder, shall not constitute a waiver of such right or any other right in the event of a subsequent default. 24. Documents. Participant is aware that Agency has prepared certain documents to implement, and secure repayment of, the Agency Loan. Participant has reviewed and agrees to execute the following documents in substantially the form as distributed to Participant prior to receiving the Agency Loan, and any other documents reasonably required by Agency or a participating entity to complete the transaction contemplated herein: b. Promissory Note; C. Agency Deed of Trust; d. Disclosure Statement and Notice of Rescission; e. Memorandum Re Option to Purchase; and f. Subordination Agreement. Participant agrees and acknowledges that this Agreement, the Agency Deed of Trust, the Memorandum Re Option to Purchase, and the Subordination Agreement shall be recorded 882/015610-0061 398366.03 a12/15/03 -12- against the Property with the County Recorder of the County of Riverside and shall appear of record with respect to and as encumbrances to the Property. 25. Compliance with La Quinta Housing Program Implementation Manual. In addition to the terms and conditions set forth herein and in the documents listed in Section 24 above, Participant acknowledges that its occupancy and any attempted Transfer of the Property shall be in accordance with the La Quinta Housing Program Implementation Manual. 26. Further Assurances. The Participant shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form, as Agency shall from time to time find necessary or appropriate to effectuate its purposes in entering into this Agreement and making the Agency Loan. 27. Governing Law. The Participant hereby agrees to comply with all ordinances, rules and regulations of Agency and the City of La Quinta (the "City"). Nothing in this Agreement is intended to be, nor shall it be deemed to be, a waiver of any City ordinance, rule or regulation. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of the County of Riverside, State of California, in an appropriate municipal court in that county or in the Federal District Court in the District of California in which Riverside County is located. 28. Amendment to Agreement. No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement executed by the Participant and Agency. 29. Agency May Assign. Agency may, at its option, assign its right to receive repayment of the Agency Loan proceeds without obtaining the consent of the Participant. 30. Participant Assignment Prohibited. In no event shall Participant assign or transfer any portion of this Agreement or any of the other agreements referred to herein without the prior express written consent of Agency, which consent shall be given by Agency only in the event that Agency determines that the assignee or transferee is an Eligible Buyer, that the assignee's or transferee's monthly housing payments are at an Affordable Housing Cost, and that the assignee or transferee has expressly assumed this Agreement by execution of a written assignment document to be provided by Agency. 31. Relationship of Participant and Agency. The relationship of Participant and Agency pursuant to this Agreement is that of debtor and creditor and shall not be or be construed to be a joint venture, equity venture, partnership, or other relationship. 32. Notices. Any notices, requests or approvals given under this Agreement from one parry to another may be personally delivered or deposited with the United States Postal Service for mailing, postage prepaid, registered or certified mail, return receipt requested to the following address: To Participant: 882/015610-0061 398366.03 a12/15/03 -13- To Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attention: Executive Director Either party may change its address for notice by giving written notice thereof to the other party. 33. Attorneys' Fees and Costs. In the event that any action is instituted to enforce payment or performance under this Agreement, the parties agree the non -prevailing party shall be responsible for and shall pay all costs, including expert witness fees, and all attorneys' fees incurred by such prevailing party in enforcing this Agreement. 34. Nondiscrimination. Participant covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Participant itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Property. Participant, its successors and assigns, shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: a. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming 882/015610-0061 398366.03 a12/15/03 -14- under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." C. In contracts: "There shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Notwithstanding the foregoing, the Participant acknowledges and agrees that during the Covenant Period, the Promissory Note and Agency Deed of Trust executed pursuant thereto, Participant shall occupy the Property as Participant's principal residence and shall not rent or lease the Property. 35. Entire Agreement. This Agreement, together with all attachments hereto, constitutes the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous agreements between Agency and the Participant concerning all or any part of the subject matter of this Agreement. 36. Authority. Each signatory hereto warrants to the other party that it has authority to sign on behalf of the party for whom it purports to sign. 37. Non -Liability of Officers and Employees. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Participant, or any successor or assign of same, in the event of any default or breach by Agency, or for any amount which may become due to Participant, or any successor or assign of same, or for breach of any obligation of the terms of this Agreement. 38. Time of Essence. Time is of the essence of every portion of this Agreement in which time is a material part. 39. Interpretation; Severability. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party hereto by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Agreement. Each provision of this Agreement shall be severable from the whole. If any provision of this Agreement shall be found contrary to law, the remainder of this Agreement shall continue in full force. 40. Integration; Amendment. It is understood that there are no oral agreements between the parties hereto affecting this Agreement, and this Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements, and understandings, if any, between the parties with respect to the subject matter hereof, and none shall be used to interpret 882/015610-0061 398366.03 a12115/03 -15- this Agreement. This Agreement may be amended at any time by the mutual consent of the parties by an instrument in writing. 41. Counterparts. This Agreement may be executed in counterparts, each of which, when this Agreement has been signed by each of the parties hereto, shall be deemed to be an original. 882/015610-0061 398366.03 a12/15/03 -16- IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written below. "Participant" Date: I Printed Name: LN Date: , Printed Name: "Agency" LA QUINTA REDEVELOPMENT AGENCY Date: By: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Agency Legal Counsel 882/015610-0061 398366.03 a12/15/03 -17- STATE OF CALIFORNIA ) ss. COUNTY OF ) On , , before me, , Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ss. COUNTY OF ) On 9 , before me, Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 398366.03 a12/15/03 -18- STATE OF CALIFORNIA ) ss. COUNTY OF ) On , before me, , Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 -19- 398366.03 a12/15/03 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY [To be inserted] 882/015610-0061 398366.03 a12/15/03 EXHIBIT "B" CALCULATION OF AFFORDABLE HOUSING COST "Affordable Housing Cost" for the purposes of the Affordable Housing Agreement is that purchase price (inclusive of the proceeds of the Homebuyer Assistance) which would result in a monthly housing cost which is not less than twenty-eight percent (28%) of the gross income of the purchaser and does not exceed the greater of (a) the product of thirty-five percent (35%) times one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate for the unit for Eligible Buyers earning not more than one hundred ten percent (110%) of Riverside County median income, or (b) the product of thirty-five percent (35%) of the actual gross income of the household for Eligible Buyers earning more than one hundred ten percent (110%) of Riverside County median income. The following is a worksheet of how to calculate Affordable Housing Cost using the two methods set forth above: A. All Moderate Income Buyers Monthly housing costs may not exceed l/12 of 3 5 % x 110% of Riverside County Median Income adjusted for family size appropriate for the unit. For a two- bedroom housing Unit, monthly housing costs may not exceed 1/12 of 35% x 110% of Riverside County Median Income for a family of 3 (example of Median Income is $45,900 in Riverside County pursuant to regulations issued by the California Department of Housing and Community Development in March 2003, or $1,473). Monthly Housing Costs include: a. Mortgage Principal and Interest b. Private Mortgage Insurance C. Property Taxes d. Fire/Casualty Insurance e. Property Maintenance f. Utilities Allowance g. Homeowner's Association ("HOA") Fees For example, in the following situation, for a 2 bedroom housing Unit, assuming an 8% interest rate on a conventional loan, and assuming a down payment of at least 3% of the purchase price and an average second trust deed loan from the Agency of $60,000, the maximum loan amount would be $137,880 and the maximum purchase price would be $204,000 (down payment of $6,120 + Agency Loan of $60,000 + first trust deed loan of $137,880). The foregoing is based upon the following monthly housing costs: 882/015610-0061 398366.03 a12/15/03 -1- a. Mortgage Principal and Interest $1005.00 b. Private Mortgage Insurance (Included in $0.00 Mortgage Interest Rate) C. Property Taxes $203.00 d. Fire/Casualty Insurance (Included in HOA) $45.00 e. Property Maintenance $20.00 f. Utilities Allowance $65.00 g. Homeowner's Association $120.00 TOTAL: $1,458.001 B. Buyer's Income is between 110% and 120% of Riverside County Median Income Under method (b), monthly housing costs may not exceed 1/12 of 35% of the purchaser's income, instead of the formula set forth in paragraph (a) above. For example, if the purchaser is a three -person household earning $54,000 monthly housing costs may not exceed $1,575. The maximum sales price would be calculated in the same manner as in paragraph (a) above. For example, if all the other assumptions stated in that paragraph also apply herein, the purchaser's maximum loan amount would be $149,520, and the maximum purchase price, absent the Agency Second Trust Deed Loan would be $156,000. The foregoing is based upon the following monthly housing costs: a. Mortgage Principal and Interest $1090.00 b. Private Mortgage Insurance (Included in $0.00 Mortgage Interest Rate) C. Property Taxes $225.00 d. Fire/Casualty Insurance (Included in HOA) $50.00 e. Property Maintenance $20.00 f. Utilities Allowance $65.00 g. Homeowner's Association $120.00 TOTAL: $1,570.001 882/015610-0061 399366.03 a12/15/03 -2- The foregoing are intended to be examples of how to calculate affordable housing cost, and the actual numbers will vary depending upon such factors as changes in median income, interest rates, amount of down payment, etc. Please see attached chart of Riverside County median income for moderate income purchasers. 882/015610-0061 398366.03 a12/15/03 -3- RIVERSIDE COUNTY 2003 Affordable Housing Costs for Home Purchase Programs for Persons of Moderate Income (3) (Income figures based on Department of Housing and Community Development Income Limits dated March, 2003) 1 Person Household 2 Person Household 3 Person Household Median Median Median Income $35,700 Income $40,800 Income $45,900 Monthly Affordable Monthly Monthly Annual Housing Annual Affordable Annual Affordable Income(') Cost(Z) Income Housing Cost Income Housing Cost $42,850 �-$1,145 $48,950 $1,309 $55,100 $1,473 4 Person Household 5 Person Household 6 Person Household Median Median Median Income $51,000 Income $56,100 Income $59,150 Monthly Monthly Monthly Annual Affordable Annual Affordable Annual Affordable Income Housing Cost Income Housing Cost I Income Housing Cost $61,200 $1,636 $66,100 $1,768 1 $71,000 $1.898 7 Person Household 8 Person Household Median Median Income $63,250 Income $67,300 Monthly Monthly Annual Affordable Annual Affordable Income Housing Cost Income HousingCost $75,900 $2,029 $80,800 $2,159 DEFINITIONS: 1. Annual Income: Gross income from all sources for all members of the household. 2. Monthly Housing Costs: Amount of mortgage payment principal and interest, mortgage insurance, property taxes, and property insurance. 3. Moderate Income Affordable Housing Costs: Assumes affordable housing costs computed at 35% of 110% of median income; may not be less than 28% of household's gross income. 882/015610-0061 398366.03 a12/15/03 -4- EXHIBIT "C" NOTICE OF INTENT TO TRANSFER [See attached] 882/015610-0061 398366.03 a]2115/03 NOTICE OF INTENT TO TRANSFER NOTICE OF INTENT TO TRANSFER MUST BE DELIVERED TO THE LA QUINTA REDEVELOPMENT AGENCY PRIOR TO PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. From: To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Project Officer Re: (street address) La Quinta, CA (the "Property") ("Owner") Owner desires to [sell, convey, transfer by inheritance or devise, lease, gift, otherwise transfer] (circle appropriate words) the Property. If the Agency has a program to help locate an Eligible Buyer, does the Owner want the Agency to help look for an Eligible Buyer to buy the Property? Yes Date: Signature of Owner (U Day time telephone of Owner Date: Signature of Owner Day time telephone of Owner 882/015610-0061 398366.03 a12/15/03 -1- EXHIBIT "D" REQUEST FOR APPROVAL OF PROPOSED BUYER [See attached] 882/015610-0061 398366.03 a12/15/03 REQUEST FOR APPROVAL OF PROPOSED BUYER THIS FORM MUST BE DELIVERED TO THE AGENCY BEFORE PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Project Officer Re: Request for Approval of Proposed Buyer To Whom It May Concern: The undersigned is the owner of real property in La Quinta, located at (the "Property"), which was developed with assistance from the Agency ("Owner"). The Owner now desires to transfer the Property and by this letter is requesting the Agency to approve the proposed buyer. 1. The Proposed Buyer is: Name: Current Address: Telephone Number: 2. The terms of the proposed transfer are (a) Sales price of $ . This sales price is based on the lesser of .(i) Fair market value; or (ii) The maximum price at which the Purchase Housing Cost of the Proposed Buyer would not exceed Affordable Housing Cost. The calculation of the Sales Price under this subsection (ii) is illustrated in Exhibit `B" to the Affordable Housing Agreement. IN ORDER TO ANSWER QUESTION 2(b) YOU MUST CALCULATE THE PROPOSED SALES PRICE BASED ON AFFORDABLE HOUSING COST, TAKING INTO 882/015610-0061 398366.03 a12/15/03 -1- CONSIDERATION ALL ITEMS LISTED IN THE DEFINITION OF PURCHASE HOUSING COST. (b) Price of any personal property being sold by the Owner to the proposed buyer: $ . (If none, so state.) (c) The price of $ to be paid by the proposed buyer for any services of Owner. (If none, so state). (d) All other amounts of money or other consideration, if any, concerning the Property or any other matter to be paid by the proposed buyer to the Owner: $ (If none, so state.) (e) Sources of payment of sales price: Sales price $ Cash down payment $ 1 st loan $ 2nd loan $ Other (describe) $ Total $ (f) The financing obtained by the proposed buyer to purchase the Property is as follows: 1 st Loan: Loan amount Monthly payments: Interest rate If variable interest, describe adjustment mechanism: Due date: Balloon payment amount: Points and fees: Lender: 882/015610-0061 398366.03 a12/15/03 -2- Lender's address: 2nd Loan: Loan amount: $ Monthly payments: $ Interest rate If variable interest, describe adjustment mechanism: Due date: Balloon payment amount: Points and fees: Lender: Lender's address: Other Loans: (describe, if none, so state) (g) The monthly Purchase Housing Cost to be paid by the proposed transferee: 1 st loan monthly payment: $ 2nd loan monthly payment: $ Other loans monthly payment: $ Taxes and assessments (1/12 of yearly taxes and $ assessments): Insurance (1 / 12 of yearly premium): $ Homeowner's dues: $ Total: $ 3. The proposed buyer represents, warrants and covenants the following: (a) The Property will be the principal residence of the proposed transferee. 882/015610-0061 398366.03 a12/15/03 -3- (b) The combined maximum annual income for all household members of the proposed buyer is $ . (This figure must include all sources of income.) (c) The proposed buyer will deliver to the Agency a signed financial statement on a form acceptable to the Agency. 4. The proposed buyer's household consists of the following persons who will reside in the Property: Adults (18 or over) - [name of each]: Minors (under 18) [name of each]: 5. The proposed transferee must submit to the Owner, on a form available from the Owner, an income certification so the Owner may determine if the proposed buyer is an "Eligible Buyer" (as that term is defined in the Agreement). 6. A true and correct copy of the proposed buyer's most recent tax return to the U.S. Internal Revenue Service is attached hereto. 7. A true and correct copy of the purchase and sale or other agreement between the Owner and the proposed buyer is attached hereto. 882/015610-0061 398366.03 a12/15/03 -4- I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. OWNER: Date signature signature print name print name street address telephone city state zip code PROPOSED BUYER: Date signature signature print name print name street address telephone city state zip code 882/015610-0061 398366.03 a12/15/03 -5- Owner's Certification Based on the Proposed Buyer's Certificate above, and all documents attached hereto, Owner hereby certifies that: (1) Proposed Buyer is an Eligible Buyer; and (2) The monthly Purchase Housing Cost to be paid by the Proposed Buyer shall not exceed the monthly Affordable Housing Cost. [Capitalized terms used above are defined in the Agreement to which this certificate is attached.] [Name] Date: 882/015610-0061 398366.03 a12/15/03 _6_ EXHIBIT "E" ASSIGNMENT AND ASSUMPTION AGREEMENT [See attached] 882/015610-0061 398366.03 al2/15/03 Recording Requested By And When Recorded Mail To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attn: Executive Director (Space above for Recorder's use) (Exempt from Recording Fee Per Gov. Code § 6103) ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement ("Agreement"), is made as of by and among the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), ("Seller" or "Assignor"), and ("Buyer" or "Assignee"). WITNESSETH: A. Seller is the owner in fee of that certain real property located in the City of La Quinta, County of Riverside, State of California described in Exhibit "A" attached hereto and made a part hereof (the "Property"). B. The Agency is the holder of that certain Promissory Note Secured by Deed of Trust (the "Promissory Note") dated , with a Note Amount of Dollars ($ ), made by Seller and payable to the order of Agency. The Promissory Note is secured by that certain Deed of Trust dated , from Seller as trustor to , as trustee, in favor of Agency as beneficiary, and recorded on as Instrument Number in the Official Records of Riverside County, California. (The Promissory Note and the Deed of Trust are sometimes hereinafter referred to collectively as the "Loan Documents".) The Deed of Trust encumbers the Property. C. Buyer is acquiring the Property from Seller and has met all of Agency's requirements to qualify therefor. Seller and Buyer desire that in connection with the sale of the Property from Seller to Buyer that Agency, as beneficiary under the Loan Documents, consent to the transfer of the obligation of the Loan Documents from Seller to Buyer. C. Agency will consent to such acquisition provided that (i) Buyer assumes the obligations of Seller under the Loan Documents, as set forth in this Agreement, and that (ii) Seller shall not be released from any liability or obligations under the Loan Documents as further provided herein. NOW THEREFORE, Agency, Seller and Buyer agree as follows: 1. Effective Date. As used in this Agreement, the "Effective Date" shall be 882/015610-0061 398366.03 al2/15/03 -1- 2. Consent by A eg ncy_. As of the Effective Date, Agency consents to the transfer of the Property by Assignor/Seller to Assignee/Buyer. Such consent by Agency shall not constitute a consent to any further or subsequent sale, conveyance or transfer by Assignee/Buyer of the Property, or any part thereof, or any interest therein. 3. Assumption by Assi ng eeBWer. As of the Effective Date, Assignee/Buyer assumes and agrees to be bound by the Loan Documents. Assignee/Buyer shall fully and faithfully pay, perform and discharge, as and when payment, performance and discharge are due, all of the obligations of Assignor/Seller under the Loan Documents, and each of them. 4. No Release of Assignor/Seller. There shall be no release of Assignor/Seller from any liability or obligations arising under the Loan Documents. In the event of any default under the Loan Documents, whether prior to or after the Effective Date, Agency shall have the option, in its sole discretion, to pursue its remedies against Assignor/Seller, Assignee/Buyer or both. 5. Legal Effect. Except as modified by this Agreement, the Loan Documents are unchanged and, as so modified, the Loan Documents shall remain in full force and effect. The Deed of Trust (as modified by this Agreement) shall secure the Promissory Note, all extensions, renewals and modifications thereof, all substitutions therefor, and all other indebtedness and obligations recited in the Deed of Trust. 6. Entire Agreement. This Agreement contains the entire agreement among Agency, Assignor/Seller and Assignee/Buyer with respect to the subject matter hereof and supersedes all prior agreements, understandings, offers and negotiations, oral or written, with respect thereto. This Agreement shall bind and inure to the benefit of Agency, Assignor/Seller and Assignee/Buyer and their respective personal representatives, heirs, successors and assigns. This Agreement shall be governed and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, Agency, Assignee/Seller and Assignee/Buyer have executed this Agreement as of the date first hereinabove written. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic BY: Executive Director ASSIGNOR/SELLER ASSIGNEEBUYER 882/015610-0061 398366.03 a]2/15/03 -2- EXHIBIT "A" LEGAL DESCRIPTION [TO BE INSERTED AT TIME FORM COMPLETED] 882/015610-0061 398366.03 a12/15/03 _3_ RECORDED AT THE REQUEST OF AND WHEN RECORDED RETURN TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Ouinta, CA 92253 (Space Above Line for Recorder's Use) Exempt From Recording Fee Pursuant to Government Code § 6103 MEMORANDUM RE OPTION TO PURCHASE This MEMORANDUM RE OPTION TO PURCHASE is entered into this _ day of , by and between ("Owner") and the LA QUINTA REDEVELOPMENT AGENCY ("Agency") with reference to the following: A. Participant is the fee owner of record of that certain real property (the "Property") located in the City of La Quinta, County of Riverside, State of California, legally described in the attached Exhibit "A." B. On or about , Owner and Agency entered into that certain Affordable Housing Agreement ("Affordable Housing Agreement") recorded concurrently herewith in the Official Records of the Riverside County Recorder's Office. C. In consideration for Agency's provision of financial assistance to Owner which enabled Owner to purchase the Property and in order to assist Agency in achieving its goal of increasing, improving and preserving the supply of moderate income housing available within the territorial jurisdiction of Agency, in accordance with the Community Redevelopment Law (California Health and Safety Code Sections 33000 et M.), Owner has provided to Agency an option to purchase the Property at the price and time, and subject to the terms and conditions, set forth in Section 6 of the Affordable Housing Agreement. Reference to the Affordable Housing Agreement is hereby made for a complete statement of Agency's option to purchase the Property. D. Agency's option to purchase, as set forth in Section 6 of the Affordable Housing Agreement, shall terminate and be of no further force or effect on the date that is forty-five (45) years after the date of recordation of the Affordable Housing Agreement. E. Owner's obligations with respect to the option to purchase shall be covenants running with the land and shall, without regard to technical classification or designation, legal or otherwise, be, to the fullest extent permitted by law and equity, binding for the benefit and in favor of and enforceable by Agency, its successors and assigns, against Owner, its successors and assigns, to or of the Property or any interest therein, and any party in possession or occupancy of the Property or portion thereof. Agency shall have the right, in the event of any breach by Owner of any covenant relating to Agency's option to purchase, to exercise all the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce Agency's rights with respect thereto. 882/015610-0061 398363.01 a05/16/03 IN WITNESS WHEREOF, the parties have executed this Memorandum as of the date and year written below. Date: Date: Date: , ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Agency Legal Counsel "OWNER" By: Printed Name: By: Printed Name: "AGENCY" LA QUINTA REDEVELOPMENT AGENCY Executive Director 882/015610-0061 398363.01 a05/16/03 STATE OF CALIFORNIA ss. COUNTY OF On before me, Public, personally , Notary appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] STATE OF CALIFORNIA COUNTY OF On Public, ss. Notary Public before me, personally , Notary appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 398363.01 a05/16/03 STATE OF CALIFORNIA ) ss. COUNTY OF ) .M Public, before me, personally Notary appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 398363.01 a05/16/03 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF RIVERSIDE, CITY OF LA QUINTA, DESCRIBED BELOW: [to be inserted] 882/015610-0061 398363.01 a05/16/03 PROMISSORY NOTE SECURED BY DEED OF TRUST NOTICE TO MAKER: A PENALTY CONSISTING OF THE DIFFERENCE BETWEEN MAKER'S SALE PRICE AND AN AFFORDABLE HOUSING COST SHALL BE DUE AND PAYABLE IF CERTAIN EVENTS OCCUR. E1 Property Address: La Quinta, CA La Quinta, California FOR VALUE RECEIVED, the undersigned ("Maker") promises to pay to the La Quinta Redevelopment Agency ("Holder"), at 78-495 Calle Tampico, La Quinta, California 92253, or at such other address as Holder may direct from time to time in writing, NO/100 Dollars ($_ (the "Note Amount"), together with interest thereon as hereafter set forth. All sums hereunder shall be payable in lawful money of the United States of America. This Promissory Note Secured by Deed of Trust ("Promissory Note" or "Note") is secured by a Deed of Trust with Assignment of Rents and Rider to Deed of Trust Attached Hereto ("Deed of Trust"). 1. Loan Agreement. This Promissory Note is made and delivered pursuant to and in implementation of the Affordable Housing Agreement entered into by and between the Holder and the Maker concurrently herewith and recorded on even date herewith in the Official Records of the County of Riverside (the "Agreement"), a copy of which is on file as a public record with the Holder and is incorporated herein by reference. The Maker acknowledges that but for the execution of this Promissory Note, the Holder would not enter into the Agreement or make the loan contemplated therein. Unless definitions of terms have been expressly set out at length herein, each term shall have the same definition as set forth in the Agreement. 2. Interest Rate. The Note Amount shall accrue interest at the rate of seven percent (7%) per annum, compounded annually. 3. Time of Payment. The term of this Note shall be forty-five (45) years from the date of recordation of the Agreement ("Covenant Period"). At the end of the Covenant Period, this Note shall be cancelled and the Note Amount, together with interest thereon, shall be forgiven and the Deed of Trust reconveyed unless prior to that time an "Event of Acceleration" (as that term is defined in Section 4 below) has occurred. 4. Events of Acceleration. The Note Amount shall become due and immediately payable irrespective of any provisions herein to the contrary upon the occurrence of any one of the following events of acceleration ("Event of Acceleration"): (i) "Transfer" of the Property (as defined in Section 3 of the Agreement), except a Transfer which under applicable law, would not, by itself, permit Holder to exercise a due on sale or due on encumbrance clause, or (ii) such time if or when Maker (or upon a Transfer of the Property by Maker that constitutes a "Permitted Transfer," [as defined in Section 3 of the Agreement] Maker's transferee) is no longer in compliance with the occupancy requirements set forth in Section 9 of the Agreement or is in 882/015610-0061 398344.02 a06/24/03 default of any other obligation under the Agreement, this Note, or the Deed of Trust. Notwithstanding the above, however, the following Transfers of the Property shall not be an Event of Acceleration: a. A Transfer to Maker's Spouse; b. An "Involuntary Transfer" (as defined in Section 3 of the Agreement) that satisfies both of the following: (i) The transferee(s) gives notice to Holder of such event within thirty (30) days after its occurrence and the transferee(s) assumes the Maker's obligations under the Agreement, by execution of an assignment and assumption agreement to be provided by Holder; and (ii) Where the transferee is not an "Eligible Buyer" (as defined below), and such transferee Transfers the Property to an Eligible Buyer within one hundred eighty (180) days after the transferee obtains title to the Property. Holder's Executive Director may, in his or her sole and absolute discretion, waive some or all of the requirements of this Section 4. For purposes of this Note, an "Eligible Buyer" is a "person or family of moderate income" who currently earns less than 120% of the current annual "area median income" for the Riverside County area, adjusted for family size appropriate for the unit (as those terms are defined in California Health and Safety Code Section 50093). 5. Sale of Property; Holder's Option to Purchase. a. If Maker desires to sell, exchange, quitclaim or in any manner dispose of the Property or any part thereof ("Proposed Sale"), Maker shall first notify Holder in writing no later than ten (10) days prior to the date each time the Property is placed on the market for a Proposed Sale. b. Maker shall not sell or transfer the Property until such time as Holder has determined (i) the proposed buyer is an Eligible Buyer; (ii) the proposed buyer intends to occupy the Property as its principal residence; and (iii) the Proposed Sale is at an "Affordable Housing Cost" (as defined below). If Maker identifies a buyer whom the Maker believes to be an Eligible Buyer, Maker shall cooperate with and reasonably assist Holder with the determination of whether the proposed buyer is an Eligible Buyer. Within ten (10) days after Maker locates the proposed buyer, Maker shall submit to Holder (1) information evidencing the proposed buyer's identity and income in order that Holder may make a preliminary determination regarding the buyer's household income status ("Preliminary Determination"); and (2) the price at which Maker proposes to sell the Property (less the value of any personal property or equipment included in said price). In the event Holder makes a Preliminary Determination that the buyer qualifies as an Eligible Buyer, Maker may proceed with opening an escrow for a Proposed Sale; provided, however, that not less than twenty (20) days prior to the date escrow is scheduled to close for the Proposed Sale, Maker shall submit to Holder adequate information to enable the Holder to make a final determination regarding whether the buyer qualifies as an Eligible Buyer 882/015610-0061 398344.02 a06/24/03 -2- and whether the Property is available to such buyer at an Affordable Housing Cost ("Final Determination"). Such information shall include the identity of the proposed buyer, the purchase and sale agreement pursuant to which Maker proposes to sell the Property to the proposed buyer, and information evidencing the income of the proposed buyer including, but not limited to, original or true copies of pay stubs, income tax records or other financial documents. Holder may request additional information reasonably required to make a Final Determination regarding the proposed buyer's status. If Holder is unable to make a Final Determination regarding the proposed buyer's income as provided herein prior to the date set for the Proposed Sale, then the proposed buyer's income shall be deemed to exceed the maximum allowable income limit for Eligible Buyer status and Maker may not conclude the Proposed Sale. As used herein, the term "Affordable Housing Cost" shall be that purchase price which would result in an annual "Purchase Housing Cost" (as defined below) which does not exceed one of the following calculations, as applicable: (i) For moderate income purchasers earning not more than one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate to the unit, Affordable Housing Cost shall be not less than twenty-eight percent (28%) of the gross income of the household nor exceed the product of thirty-five percent (35%) times one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate for the unit; or (ii) For moderate income purchasers earning more than one hundred ten percent (110%) but less than one hundred twenty percent (120%) of the Riverside County median income, Affordable Housing Cost shall be the product of thirty-five percent (35%) of the actual gross income of the household. "Purchase Housing Cost" shall be a cost that includes all of the following associated with the Property, estimated or known as of the date of the Proposed Sale of the Property: (1) Principal and interest payments on a mortgage loan including any rehabilitation loans and any loan insurance fees associated therewith. (2) Property taxes and assessments. (3) Fire and casualty insurance covering replacement value of property improvements. (4) Any homeowner association fees. (5) A reasonable utility allowance. For purposes of this Note, the term "adjusted for family size appropriate to the unit" shall mean a household of one person in the case of a studio unit, two persons in the case of a one - bedroom unit, three persons in the case of a two -bedroom unit, four persons in the case of a three -bedroom unit, and five persons in the case of a four bedroom unit. 882/015610-0061 398344.02 a06/24/03 -3- Maker shall contact the Holder to determine the applicable Affordable Housing Cost for a particular proposed Eligible Purchaser. C. Upon (i) Maker's sale of the Property to a person who is an Eligible Buyer (provided that person's status as an Eligible Buyer has been verified by Holder pursuant to this Section 5) at an Affordable Housing Cost, and (ii) the Eligible Buyer's execution of an assignment and assumption agreement in a form satisfactory to Holder's legal counsel, this Note shall be assigned to the Eligible Buyer. d. At any time prior to the time Maker enters into a binding agreement with an Eligible Buyer for a Proposed Sale, Holder shall have an option to (i) purchase all of the Property from Maker at the Affordable Housing Cost set forth in paragraph b(i) above, or (ii) to cause the purchase of all of the Property by an Eligible Buyer at an Affordable Housing Cost. Holder's exercise of such option to purchase shall be made by delivery of written notice to Maker. In the event Holder either purchases the Property or arranges the purchase by an Eligible Buyer, an escrow shall be established to close within forty-five (45) days after delivery of Holder's notice of exercise, subject to any extensions, at Holder's option, for causes outside the control of Holder. In the event Holder exercises its option to purchase the Property pursuant to clause (i) above, the balance of the Note Amount and any accrued interest thereon shall be due and payable to Holder prior to or at the close of escrow. In the event Holder arranged the purchase by an Eligible Buyer pursuant to clause (ii) above, the Eligible Buyer shall be required to execute an assignment and assumption agreement in a form satisfactory to Holder's legal counsel. e. In the event Maker sells the Property to a purchaser who does not qualify as an Eligible Buyer, Holder shall have an option to purchase the Property from the purchaser at the Affordable Housing Cost set forth in paragraph b(i) above. f. Holder's option to purchase set forth in paragraphs d and a of this Section 5 shall terminate and be of no further force or effect on the date the Covenant Period terminates. Holder's option to purchase set forth in this Section shall be memorialized by the Memorandum Re Option to Purchase substantially in the form as distributed to Maker prior to receiving the Note Amount to be recorded against the Property concurrently herewith. MAKER UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED SALE, AND THAT THE AFFORDABLE HOUSING COST PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THE AFFORDABILITY COVENANTS IN THIS NOTE. MAKER FURTHER ACKNOWLEDGES THAT IN SETTING THE AFFORDABLE HOUSING COST THE PRIMARY OBJECTIVE OF HOLDER AND THIS AGREEMENT IS TO PROVIDE HOUSING TO ELIGIBLE BUYERS AT AN AFFORDABLE HOUSING COST. MAKER'S INITIALS 882/015610-0061 398344.02 a06/24/03 -4- 6. Liquidated Damages for Prohibited Transfer. In the event Holder seeks monetary damages for a Prohibited Transfer, Maker shall be required, to the extent permitted by law, to pay to Holder the entire amount of the "Sale Price" (as defined below) received in excess of the Affordable Housing Cost permitted pursuant to this Agreement; provided, however, that nothing herein shall be deemed to limit Holder's remedy for a Prohibited Transfer to seeking monetary damages, and Holder shall be entitled to pursue any other equitable remedy permitted by law, including specific performance or injunctive relief, to prevent a Prohibited Transfer. For purposes of this Section 6, the "Sale Price" is the price to be paid by the buyer of the Property to Maker for Maker's interest in the Property, after deduction of escrow fees, recording fees, transfer taxes, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs paid by Maker. THE PARTIES HERETO AGREE THAT THE AMOUNT SET FORTH IN THIS SECTION 6 (THE "DAMAGE AMOUNT") CONSTITUTES A REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT HOLDER WOULD SUFFER DUE TO THE DEFAULTS BY MAKER SET FORTH IN THIS SECTION 6, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS NOTE, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF HARM TO HOLDER AND ACCOMPLISHMENT OF HOLDER'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE BUYERS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE DAMAGE AMOUNT SET FORTH IN THIS SECTION 6 SHALL BE THE SOLE DAMAGES REMEDIES FOR THE DEFAULTS SET FORTH IN THIS SECTION 6, BUT NOTHING IN THIS SECTION 6 SHALL BE INTERPRETED TO LIMIT HOLDER'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY COUNSEL TO EXPLAIN THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. MAKER'S INITIALS: HOLDER'S INITIALS: Notwithstanding any of the above, nothing herein is intended to preclude the Holder's recovery of its attorneys' fees and costs incurred to enforce this Section, as provided in Section 12. 7. Security for Note. This Promissory Note is secured by a second deed of trust of even date herewith, executed by Maker as Trustor in favor of Holder as Trustee. 8. Prepayment of Note. Maker may prepay this Note to Holder, provided that any prepayment must be in full and not in part. Prepayment will be treated in the same manner as refinancing of the Property. 882/015610-0061 398344.02 a06/24/03 -5- 9. Holder May Assign. Holder may, at its option, assign its right to receive payment under this Promissory Note without necessity of obtaining the consent of the Maker. 10. Maker Assignment. In no event shall Maker assign or transfer any portion of this Promissory Note without the prior express written consent of the Holder, which consent shall be given by the Holder only in the event that the Holder determines that the assignee or transferee is an Eligible Buyer, that the assignee's or transferee's monthly housing payments are at an Affordable Housing Cost, and that the assignee or transferee has expressly assumed this Promissory Note and the Agreement by execution of a written assignment document to be provided by the Holder. 11. Joint and Several. The undersigned, if more than one, shall be jointly and severally liable hereunder. 12. Attorneys' Fees and Costs. In the event that any action is instituted to enforce payment under this Promissory Note, the parties agree the non -prevailing party shall be responsible for and shall pay to the prevailing party all court costs, including expert witness fees, and all attorneys' fees incurred in enforcing this Note. 13. Amendments. This Note may not be modified or amended except by an instrument in writing expressing such intention executed by the parties sought to be bound thereby, which writing must be so firmly attached to this Note so as to become a permanent part thereof. 14. Maker's Waivers. Maker waives any rights to require the Holder to: (a) demand payment of amounts due (known as "presentment"), (b) give notice that amounts due have not been paid (known as "notice of dishonor"), and (c) obtain an official certification of nonpayment (known as "protest"). 15. Notice. Any notice that must be given under this Note shall be given by personal delivery or by deposit with the United State Postal Service for mailing, postage prepaid, registered or certified mail, return receipt requested, to Maker, at the Property Address above or such other address as Maker shall direct from time to time in writing, and to Holder, at Holder's address stated in the preamble to this Note. Failure or delay in giving any notice required hereunder shall not constitute a waiver of any default or late payment, nor shall it change the time for any default or payment. 16. Successors Bound. This Promissory Note shall be binding upon the parties hereto and their respective heirs, successors and assigns. [END — SIGNATURE PAGE FOLLOWS] 882/015610-0061 398344.02 a06/24/03 -6- IN WITNESS WHEREOF, Maker has executed this Promissory Note. "Maker" By: Printed Name: By: Printed Name: Dated: Dated: The foregoing Promissory Note is approved, and consented to, by the Holder. "Holder" LA QUINTA REDEVELOPMENT AGENCY M. Executive Director Dated: 882/015610-0061 398344.02 a06/24/03 -7- Order No. Escrow No. Loan No. WHEN RECORDED MAIL TO: LA QUINTA REDEVELOPMENT AGENCY 78495 Calle Tampico La Quinta, CA 92253 Attn: City Clerk (Space Above This Line For Kecoraer's use) (Exempt From Recording Fees Pursuant To Government Code Section 6103) DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER TO DEED OF TRUST ATTACHED HERETO This DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER TO DEED OF TRUST ATTACHED HERETO ("Deed of Trust"), made this day of between herein called PARTICIPANT, whose address is , FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, herein called TRUSTEE, and THE LA QUINTA REDEVELOPMENT AGENCY, herein called BENEFICIARY, WITNESSETH: That Participant grants to Trustee in trust, with power of sale, that property in the City of La Quinta, County of Riverside, State of California, described in the legal description attached hereto as Exhibit "A", together with rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of $ , with interest thereon according to the terms of a promissory note or notes of even date herewith made by Participant, payable to order of Beneficiary, and extensions or renewals thereof; (2) the performance of each agreement of Participant incorporated by reference or contained herein; and (3) payment of additional sums and interest thereon which may hereafter be loaned to Participant,. or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. A. To protect the security of this Deed of Trust, Participant agrees: 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Participant. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Participant fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Participant and without releasing Participant from any obligation hereof, may: make or do the same in such, manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to 398353 v1 affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) To pay immediately upon demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: 1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 5) That as additional security, Participant hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of this Trust, to collect the rents, issues and profits of said property, reserving unto Participant the right, prior to any default by Participant in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Participant in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Participant, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Participant, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. (7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Participant, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8} That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Participant, Beneficiary or Trustee shall be a party unless brought by Trustee. The undersigned Participant requests that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. Signature of Participant STATE OF CALIFORNIA COUNTY OF On } }ss } before me, Signature of Participant personally appeared personally known to me ( or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) istare subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (This area for official notarial seal) DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO FIRST AMERICAN TITLE INSURANCE COMPANY, TRUSTEE: The undersigned is the legal owner and holder of the note or notes and of all indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, an all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated Please mail Deed of Trust, Note and Reconveyance to Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. Iiiii- W Q U) v �� v ?, W � p Z W O � ~ W� W 0 882/015610-0061 398353.03 a12/15/03 EXHIBIT "A" LEGAL DESCRIPTION [to be inserted] 882/015610-0061 Exhibit "A" 398353.03 a12/15/03 RIDER TO DEED OF TRUST This Deed of Trust is subject to the terms and conditions of that certain Affordable Housing Agreement dated concurrently herewith and recorded on even date herewith in the Official Records of the County of Riverside (the "Affordable Housing Agreement") and incorporated herein by reference, pursuant to which Beneficiary has agreed to loan Participant the sum of Dollars (the "Agency Loan"). All terms in this Rider to Deed of Trust, if not separately defined herein, shall have the meanings as defined in the Affordable Housing Agreement. 1. Property Transfer Restrictions. a. Participant shall not "Transfer" (as defined below) or permit the Transfer of the Property unless the Transfer is a "Permitted Transfer" (as defined below). A "Transfer" is (i) any sale, assignment, or transfer of an interest in the Property, including, without limitation, a fee simple interest, tenancy in common, joint tenancy, community property, tenancy by the entireties, life estate, or other limited estate, leasehold interest or any rental of the Property; (ii) any interest evidenced by a land contract; (iii) the refinancing of the lien of this Deed of Trust, or (iv) the refinancing of any lien to which the lien of this Deed of Trust is subordinated (the "First Lien") other than a "Permitted First Lien Refinance" (as defined in Section 7 of the Affordable Housing Agreement). b. Transfers shall be designated as voluntary or involuntary. Involuntary Transfers are Transfers that occur by operation of law, in the absence of an express conveyance by Participant, and include, but are not limited to, Transfers by devise, inheritance, incompetency, marriage, and divorce (collectively, "Involuntary Transfers"). Voluntary Transfers occur by affirmative act of Participant, and include Transfers by gift, sale and lease, any refinance that constitutes a Transfer, and any other Transfer that does not constitute an Involuntary Transfer. C. The following Transfers shall constitute "Permitted Transfers": (i) Voluntary Transfers to a spouse or to an "Eligible Buyer" (as defined in Section 2 below); and (ii) Involuntary Transfers. A Transfer that does not constitute a Permitted Transfer (a "Prohibited Transfer") is expressly prohibited by this Rider to Deed of Trust and shall be null and void and shall constitute a default of Participant under this Rider to Deed of Trust, entitling Beneficiary to exercise its right to purchase the Property from the new owner, as described in Section 3 herein, as well as all remedies available at law or equity, including without limitation the enforcement of the liquidated damages provision in Section 4 of this Rider to Deed of Trust. 2. Events of Acceleration. The Agency Loan shall become due and immediately payable irrespective of any provisions herein to the contrary upon the occurrence of any one of the following events of acceleration ("Event of Acceleration"): (i) Transfer of the Property (as defined in Section 1 above), except a Transfer which under applicable law, would not, by itself, permit Beneficiary to exercise a due on sale or due on encumbrance clause, or (ii) such time if or when Participant (or upon Participant's Transfer of the Property pursuant to a Permitted Transfer, Participant's transferee) is no longer in compliance with the occupancy requirements set forth in Section 9 of the Affordable Housing Agreement or is in default of any other obligation under the Affordable Housing Agreement, the Note, or this Deed of Trust. 882/015610-0061 398353.03 a12/15/03 Notwithstanding the above, however, the following Transfers of the Property shall not be an Event of Acceleration: a. A Transfer to Participant's Spouse; b. An Involuntary Transfer that satisfies both of the following: (i) The transferee(s) gives notice to Beneficiary of such event within thirty (30) days of its occurrence and the transferee(s) assumes the Participant's obligations under the Affordable Housing Agreement, by execution of an assignment and assumption agreement to be provided by Beneficiary; and (ii) Where the transferee is not an Eligible Buyer, and such transferee Transfers the Property to an Eligible Buyer within one hundred eighty (180) days after the transferee obtains title to the Property. Beneficiary's Executive Director may, in his or her sole and absolute discretion, waive some or all of the requirements of this Section 2. For purposes of this Rider to Deed of Trust, an "Eligible Buyer" is a person who is a "person or family of moderate income" who currently earns less than 120% of the current annual "area median income" for the Riverside County area adjusted for family size appropriate for the unit (as those terms are defined in California Health & Safety Code Section 50093). 3. Sale of Property; Beneficiary's Option to Purchase. a. If Participant desires to sell, exchange, quitclaim or in any manner dispose of the Property or any part thereof ("Proposed Sale"), Participant shall first notify Beneficiary in writing no later than ten (10) days prior to the date each time the Property is placed on the market for a Proposed Sale. b. Participant shall not sell or transfer the Property until such time as Beneficiary has determined (i) the proposed buyer is an Eligible Buyer; (ii) the proposed buyer intends to occupy the Property as its principal residence; and (iii) the Proposed Sale is at an "Affordable Housing Cost" (as defined below). If Participant identifies a buyer whom the Participant believes to be an Eligible Buyer, Participant shall cooperate with and reasonably assist Beneficiary with the determination of whether the proposed buyer is an Eligible Buyer. Within ten (10) days after Participant locates the proposed buyer, Participant shall submit to Beneficiary (1) information evidencing the proposed buyer's identity and income in order that Beneficiary may make a preliminary determination regarding the buyer's household income status ("Preliminary Determination"); and (2) the price at which Participant proposes to sell the Property (less the value of any personal property or equipment included in said price). In the event Beneficiary makes a Preliminary Determination that the buyer qualifies as an Eligible Buyer, Participant may proceed with opening an escrow for a proposed sale; provided, however, that not less than twenty (20) days prior to the date escrow is scheduled to close for the Proposed Sale, Participant shall submit to Beneficiary adequate information to enable the Beneficiary to make a final determination regarding whether the buyer qualifies as an Eligible Buyer and whether the Property is available to such buyer at an Affordable Housing Cost ("Final Determination"). Such information shall include the identity of the proposed buyer, the purchase 882/015610-0061 398353.03 a12/15/03 -2- and sale agreement pursuant to which Participant proposes to sell the Property to the proposed buyer, and information evidencing the income of the proposed buyer including, but not limited to, original or true copies of pay stubs, income tax records or other financial documents. Beneficiary may request additional information reasonably required to make a Final Determination regarding the proposed buyer's status. If Beneficiary is unable to make a Final Determination regarding the proposed buyer's income as provided herein prior to the date set for the Proposed Sale, then the proposed buyer's income shall be deemed to exceed the maximum allowable income limit for Eligible Buyer status and Participant may not conclude the Proposed Sale. As used herein, the term "Affordable Housing Cost" shall be that purchase price which would result in an annual "Purchase Housing Cost" (as defined below) which does not exceed one of the following calculations, as applicable: (i) For moderate income purchasers earning not more than one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate to the unit, Affordable Housing Cost shall be not less than twenty-eight percent (28%) of the gross income of the household nor exceed the product of thirty-five percent (35%) times one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate for the unit; or (ii) For moderate income purchasers earning more than one hundred ten percent (110%) but less than one hundred twenty percent (120%) of the Riverside County median income, Affordable Housing Cost shall be the product of thirty-five percent (35%) of the actual gross income of the household. "Purchase Housing Cost" shall be a cost that includes all of the following associated with the Property, estimated or known as of the date of the Proposed Sale of the Property: (1) Principal and interest payments on a mortgage loan including any rehabilitation loans and any loan insurance fees associated therewith. (2) Property taxes and assessments. (3) Fire and casualty insurance covering replacement value of property improvements. (4) Any homeowner association fees. (5) A reasonable utility allowance. For purposes of this Rider to Deed of Trust, the term "adjusted for family size appropriate for the unit" shall mean a household of one person in the case of a studio unit, two persons in the case of a one -bedroom unit, three persons in the case of a two -bedroom unit, four persons in the case of a three -bedroom unit, and five persons in the case of a four -bedroom unit. Participant shall contact the Beneficiary to determine the applicable Affordable Housing Cost for a particular proposed Eligible Buyer. 882/015610-0061 398353.03 a12/15/03 -3- C. Upon (i) Participant's sale of the Property to a person who is an Eligible Buyer (provided that person's status as an Eligible Buyer has been verified by Beneficiary pursuant to this Section 3) at an Affordable Housing Cost, and (ii) the Eligible Buyer's execution of an assignment and assumption agreement in a form satisfactory to Beneficiary's legal counsel, the Agency Loan shall be assigned to the Eligible Buyer. d. At any time prior to the time Participant enters into a binding agreement with an Eligible Buyer for a Proposed Sale, Beneficiary shall have an option to (i) purchase all of the Property from Participant at the Affordable Housing Cost set forth in paragraph b(i) above, or (ii) cause the purchase of all of the Property by an Eligible Buyer at an Affordable Housing Cost. Beneficiary's exercise of such option to purchase shall be made by delivery of written notice to Participant. In the event Beneficiary either purchases the Property or arranges the purchase by an Eligible Buyer, an escrow shall be established to close within forty-five (45) days after delivery of Beneficiary's notice of exercise, subject to any extensions, at Beneficiary's option, for causes outside the control of Beneficiary. In the event Beneficiary exercises its option to purchase the Property pursuant to clause (i) above, the balance of the Agency Loan and any accrued interest thereon shall be due and payable to Beneficiary prior to or at the close of escrow. In the event Beneficiary arranges the purchase by an Eligible Buyer pursuant to clause (ii) above, the Eligible Buyer shall be required to execute an assignment and assumption agreement in a form satisfactory to Beneficiary's legal counsel. e. IN THE EVENT PARTICIPANT SELLS THE PROPERTY TO A PURCHASER THAT DOES NOT QUALIFY AS AN ELIGIBLE BUYER, BENEFICIARY SHALL HAVE AN OPTION TO PURCHASE THE PROPERTY FROM THE PURCHASER AT THE AFFORDABLE HOUSING COST SET FORTH IN PARAGRAPH b(ii) ABOVE. THE FOREGOING CONSTITUTES NOTICE TO ANY PURCHASER OF THE PROPERTY WHO HAS PURCHASED THE PROPERTY WITHOUT OBTAINING THE PRIOR APPROVAL OF BENEFICIARY. f. Beneficiary's option to purchase set forth in paragraphs d and a of this Section 3 shall terminate and be of no further force or effect on the date that is forty-five (45) years after the recordation of the Affordable Housing Agreement. Beneficiary's option to purchase set forth in this Section 3 shall be memorialized by the Memorandum Re Option to Purchase substantially in the form as distributed to Participant prior to receiving the Agency Loan to be recorded against the Property concurrently herewith. PARTICIPANT UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED SALE, AND THAT THE AFFORDABLE HOUSING COST PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THE AFFORDABILITY COVENANTS IN THIS DEED OF TRUST. PARTICIPANT FURTHER ACKNOWLEDGES THAT IN SETTING THE AFFORDABLE HOUSING COST THE PRIMARY OBJECTIVE OF BENEFICIARY AND THE BENEFICIARY'S 882/015610-0061 398353.03 al2/15/03 -4- PROVISION OF THE AGENCY LOAN THIS AGREEMENT IS TO PROVIDE HOUSING TO ELIGIBLE BUYERS AT AN AFFORDABLE HOUSING COST. PARTICIPANT'S INITIALS 4. Liquidated Damages for Prohibited Transfer. In the event Beneficiary seeks monetary damages for a Prohibited Transfer, Participant shall be required, to the extent permitted by law, to pay to Beneficiary the entire amount of the "Sale Price" (as defined below) received in excess of the Affordable Housing Cost permitted pursuant to this Agreement; provided, however, that nothing herein shall be deemed to limit Beneficiary's remedy for a Prohibited Transfer to seeking monetary damages, and Beneficiary shall be entitled to pursue any other equitable remedy permitted by law, including specific performance or injunctive relief, to prevent a Prohibited Transfer. For purposes of this Section 4, the "Sale Price" is the price to be paid by the buyer of the Property to Participant for Participant's interest in the Property, after deduction of escrow fees, recording fees, transfer taxes, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs paid by Participant. THE PARTIES HERETO AGREE THAT THE AMOUNT SET FORTH IN THIS SECTION 4 (THE "DAMAGE AMOUNT") CONSTITUTES A REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT BENEFICIARY WOULD SUFFER DUE TO THE DEFAULTS BY PARTICIPANT SET FORTH IN THIS SECTION 4, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF THIS DEED OF TRUST, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNTS TO THE RANGE OF HARM TO BENEFICIARY AND ACCOMPLISHMENT OF BENEFICIARY'S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE BUYERS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE DAMAGE AMOUNT SET FORTH IN THIS SECTION 4 SHALL BE THE SOLE DAMAGES REMEDIES FOR THE DEFAULTS SET FORTH IN THIS SECTION 4, BUT NOTHING IN THIS SECTION 4 SHALL BE INTERPRETED TO LIMIT BENEFICIARY'S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY COUNSEL TO EXPLAIN THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. PARTICIPANT'S INITIALS: BENEFICIARY'S INITIALS: Notwithstanding any of the above, nothing herein is intended to preclude the Beneficiary's recovery of its attorneys' fees and costs incurred to enforce this Section. 5. Covenants Do Not Impair Lien. The Beneficiary agrees to subordinate the provisions of the Affordable Housing Agreement, that certain Declaration of Covenants 882/015610-0061 398353.03 a12/15/03 -5- Conditions, and Restrictions for Property, entered into by and between Beneficiary and CP Development La Quinta, LLC, a California limited liability company and recorded on , as Instrument No. , in the official records of Riverside County ("Declaration"), the Memorandum Re Option to Purchase, entered into by and between Participant and Beneficiary and recorded concurrently herewith in the Official Records of Riverside County, and the deed of trust to any first trust deed for the purchase of the Property held by a reputable institutional lender ("First Lien") on the Property by recording a subordination agreement, in a form approved by Beneficiary's legal counsel ("Subordination Agreement"). Participant agrees it shall instruct the Escrow Agent for the acquisition of the Property by the Participant that the order of recording in the escrow for the purchase of the Property by the Participant shall occur as follows: 1) the Affordable Housing Agreement; 2) the Memorandum Re Option to Purchase; 3) this Deed of Trust; 4) the First Lien; and 5) the Subordination Agreement. Participant shall cause a Request for Notice to be recorded on the Property subsequent to the recordation of the First Lien deed of trust or mortgage requesting a statutory notice of default as set forth in the California Civil Code Section 29246. Such notice shall be sent to: La Quinta Redevelopment Agency, 78-495 Calla Tampico, La Quinta, California 92253, Attention: Executive Director. 6. Protection of Beneficiary's Rights in the Property. If Participant fails to perform the covenants and agreements contained in this Deed of Trust, or there is a legal proceeding that may significantly affect Beneficiary's rights in the Property (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture or to enforce laws or regulations), then Beneficiary may do and pay for whatever is necessary to protect the value of the Property and Beneficiary's rights in the Property. Beneficiary's actions may include paying any sums secured by a lien which has priority over this Deed of Trust, appearing in court, paying reasonable attorneys' fees and entering on the Property to make repairs. Although Beneficiary may take action under this Section 6, Beneficiary does not have to do so. Any amount disbursed by Beneficiary under this Section 6 shall become additional debt of Participant secured by this Deed of Trust. Unless Participant and Beneficiary agree to other terms of payment, these amounts shall bear interest from the date of disbursement at nine percent (9%) per annum or the maximum legal rate, whichever is less, and shall be payable, with interest, upon notice from Beneficiary to Participant requesting payment. [End - Signature Page Follows] 882/015610-0061 398353.03 a12/15/03 -6- IN WITNESS WHEREOF, Participant has executed this Rider to Deed of Trust as of the date set forth below. By: Printed Name: By: Printed Name: Dated: Dated: The foregoing Deed of Trust and Rider to Deed of Trust is approved, and consented to, by Beneficiary. By: LA QUINTA REDEVELOPMENT AGENCY Dated: Executive Director 882/015610-0061 398353.03 a]2/15/03 -7- STATE OF CALIFORNIA ) ss. COUNTY OF ) On , before me, , Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. [SEAL] STATE OF CALIFORNIA COUNTY OF On Notary Public ss. , before me, Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 _ 398353.03 a12/15/03 _g STATE OF CALIFORNIA ) ss. COUNTY OF ) On , before me, , Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 398353.03 a12/15/03 -9- Name of Participant(s): Property Address: Agency Loan Amount: BORROWER DISCLOSURE STATEMENT Dollars ($_� I/we ("Participant") are obtaining financial assistance (the "Agency Loan") from the La Quinta Redevelopment Agency (the "Agency") to assist me/us to purchase the above described property (the "Property"). I/we understand that the Agency Loan is conditional on a number of factors, including, but not limited to: I/we have signed or will sign an Affordable Housing Agreement, Memorandum Re Option to Purchase, Promissory Note Secured by Deed of Trust ("Promissory Note"), and Deed of Trust with Assignment of Rents and Rider to Deed of Trust Attached Hereto ("Deed of Trust") in connection with the Agency Loan. I/we have read or had explained to us the terms and conditions of all of those documents. I/we understand that all of those documents impose binding legal obligations on me/us. I/we understand that interest will accrue on the Agency Loan in the amount of seven percent (7%) per annum, compounded annually, but that the Agency Loan will be forgiven and the Promissory Note will be canceled forty-five years after I/we sign the Affordable Housing Agreement unless before that time I/we sell or otherwise transfer the Property, refinance the Promissory Note, refinance the primary loan for the Property in a manner not permitted by the Affordable Housing Agreement, no longer live in the Property as my/our primary residence, or otherwise violate the Promissory Note or Affordable Housing Agreement or the other documents we have signed in connection with the Agency Loan. I/we understand that if I/we attempt to sell the Property to a person who does not qualify as an affordable buyer or if I/we attempt to sell the Property at a price that exceeds the Affordable Housing Cost such sale will be null and void, and that I/we may be required to pay to the Agency a penalty that equals the difference between the sale price for the Property and an "Affordable Housing Cost" (as that term is defined in the Affordable Housing Agreement). • I/we understand that the Promissory Note, Deed of Trust, Memorandum Re Option to Purchase, and Affordable Housing Agreement contain an option to purchase that may be exercised by the Agency to purchase the Property at an Affordable Housing Cost in the following situations: 882/015610-0061 398359.01 a05/16/03 -1- ■ during the period after I/we place the place the Property for sale and before I/we enter into an agreement to sell the Property to an affordable buyer; or ■ upon my/our sale of the Property to a person who does not qualify as an affordable buyer. I/we understand that the Agency's option to purchase will remain in effect for forty-five (45) years after I/we sign the Affordable Housing Agreement. I/we further understand that I/we may be liable to pay damages to any noneligible buyer to whom I/we sell the Property if the Agency exercises its option to purchase the Property from the noneligible buyer. • I/we must qualify for a home loan from a reputable institutional lender acceptable to Agency. • I/we must make a down payment of at least three percent (3%) of the home purchase price, plus closing costs. • I/we understand that Agency loans are available on a first come, first served basis. • I/we must qualify as a "Moderate -Income Household" under the guidelines of the Program. • I/we understand that after I/we close escrow for the Property, my/our assets must not exceed the sum of. (i) an amount equal to six (6) months of reserves for mortgage payments, taxes, homeowner's association dues, if any, and insurance; and (ii) $5,000. • My/our monthly payments for housing expenses may not be less than $28% of my/our gross income nor exceed 35% times 110% of the Riverside County median; or, if my/our income is greater than 110% but less than 120% of the Riverside County median, my/our monthly payments for housing expenses may not exceed 35% of the gross income of my/our household, as more specifically defined by Health and Safety Code Section 50052.5 and the Affordable Housing Cost Worksheet available from Agency. • During the term of the Affordable Housing Agreement, I/we must continuously occupy the Property and I/we shall not rent or lease the Property. • Agency shall not be held responsible for any costs associated with the home I/we purchase with such assistance including, but not limited to, any loan fees or charges, any charges for appraisals or any escrow costs or other costs relating to the transfer of the Property. • Agency shall not be responsible for the competitiveness of the terms of the Agency Loan. I/we assume all responsibility for determining whether I/we will 882/015610-0061 398359.01 a05/16/03 -2- inform myself/ourselves as to the availability and terms of other public or private loans. The Agency financial assistance I/we receive under the Affordable Housing Agreement may be considered to be income for purposes of federal or state income taxes and Agency shall not be held responsible for the payment of any taxes which I/we may incur by virtue of the receipt of such financial assistance. • I/We have a right to cancel or rescind the Agency Loan at any time prior to midnight on the third business day after the Promissory Note is signed by sending a notice in the form which is attached to this Borrower Disclosure Statement of my/our decision to rescind or cancel the Agency Loan to: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 • I/We are responsible for payment of the cost of a title insurance policy insuring the Deed of Trust to be recorded against the Property to secure Agency's right to repayment of the Agency Loan. • I/We are responsible for payment and deposit into escrow of $550.00 as a loan servicing fee to be paid to Agency at the close of escrow. • Agency cannot ensure that information provided by or on my/our behalf will be kept confidential. • Agency shall not be responsible for the selection of a home (except that homes eligible for an Agency Loan shall be those approved by Agency), the selection of a lender providing funds assisting in the purchase of the home (provided that such lender shall be a reputable institutional lender approved by Agency), or providing information concerning other public or private sources of loans. • Agency shall not be charged with the knowledge of the contents of the documents of the lender. • All loans and funding requests must be approved by the Executive Director of Agency. Therefore, a minimum 30 day escrow may be necessary. By: Printed Name: By: Printed Name: Dated: Dated: 882/015610-0061 _ 398359.01 a05/16/03 -3 NOTICE OF RIGHT OF RESCISSION (Identification of Transaction) Notice To Customer Required By Federal Law: You have entered into a transaction on , which may result in a lien, mortgage or other security interest on your home. You have a legal right under federal. law to cancel this transaction, if you desire to do so, without any penalty or obligation within three (3) business days from the above date or any later date on which all material disclosures required under the Truth in Lending Act have been given to you. If you so cancel the transaction, any lien, mortgage or other security interest on your home arising from this transaction is automatically void. You are also entitled to receive a refund of any down payment or other consideration if you cancel. If you decide to cancel this transaction, you may do so by notifying La Quinta Redevelopment Agency (Name of Creditor) at 78-495 Calle Tampico, La Quinta, CA 92253 (Address of Creditor's Place of Business) by mail or telegram sent not later than midnight on , (Date) You may also use any other form of written notice identifying the transaction if it is delivered to the above address not later than that time. This notice may be used for that purpose by dating and signing below. I hereby cancel this transaction. (Date) (Owner's Signature) SEE NEXT PAGE FOR IMPORTANT INFORMATION ABOUT YOUR RIGHT OF RESCISSION 882/015610-0061 _ 398359.01 a05/16/03 -4 ACKNOWLEDGMENT OF RECEIPT OF TWO COPIES OF NOTICE Each of the undersigned hereby acknowledges receipt of two completed copies of the Notice of Right of Rescission. (Owner's Signature) (Date) (Owner's Signature) (Date) EFFECT OF RESCISSION. When a customer exercises his right to rescind he is not liable for any finance or other charge and any security interest becomes void upon such a rescission. Within ten (10) days after receipt of a notice of rescission, the creditor shall return to the customer any money or property given as earnest money, down payment or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the customer, the customer may retain possession of it. Upon the performance of the creditor's obligations under this section, the customer shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the customer shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the customer, at the option of the customer. If the creditor does not take possession of the property within ten (10) days after tender by the customer, ownership of the property vests in the customer without obligation on his part to pay for it. 882/015610-0061 398359,01 a05/16/03 -5- ATTACHMENT NO. 19 AFFORDABLE HOUSING COST "Affordable Housing Cost" for the purposes of the Affordable Housing Agreement is that purchase price (inclusive of the proceeds of the Homebuyer Assistance) which would result in a monthly housing cost which is not less than twenty-eight percent (28%) of the gross income of the purchaser and does not exceed the greater of (a) the product of thirty-five percent (35%) times one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate for the unit for Eligible Buyers earning not more than one hundred ten percent (110%) of Riverside County median income, or (b) the product of thirty-five percent (35%) of the actual gross income of the household for Eligible Buyers earning more than one hundred ten percent (110%) of Riverside County median income. The following is a worksheet of how to calculate Affordable Housing Cost using the two methods set forth above: A. All Moderate Income Buyers Monthly housing costs may not exceed 1/12 of 35% x 110% of Riverside County Median Income adjusted for family size appropriate for the unit. For a two- bedroom housing Unit, monthly housing costs may not exceed 1/12 of 35% x 110% of Riverside County Median Income for a family of 3 (example of Median Income is $45,900 in Riverside County pursuant to regulations issued by the California Department of Housing and Community Development in March 2003, or $1,473). Monthly Housing Costs include: a. Mortgage Principal and Interest b. Private Mortgage Insurance C. Property Taxes d. Fire/Casualty Insurance e. Property Maintenance f. Utilities Allowance g. Homeowner's Association ("HOA") Fees For example, in the following situation, for a 2 bedroom housing Unit, assuming an 8% interest rate on a conventional loan, and assuming a down payment of at least 3% of the purchase price and an average second trust deed loan from the Agency of $60,000, the maximum loan amount would be $137,880 and the maximum purchase price would be $204,000 (down payment of $6,120 + Agency Loan of $60,000 + first trust deed loan of $137,880). The foregoing is based upon the following monthly housing costs: 882/015610-0061 380889.09 a12/17/03 a. Mortgage Principal and Interest b. Private Mortgage Insurance (Included in Mortgage Interest Rate) C. Property Taxes d. Fire/Casualty Insurance (Included in HOA) e. Property Maintenance f. Utilities Allowance 9. B. Median Income Homeowner's Association $1,005.00 $0.00 $203.00 $45.00 $20.00 $65.00 $120.00 TOTAL: $1,458.00 Buyer's Income is between 110% and 120% of Riverside County Under method (b), monthly housing costs may not exceed 1/12 of 35% of the purchaser's income, instead of the formula set forth in paragraph (a) above. For example, if the purchaser is a three -person household earning $54,000 monthly housing costs may not exceed $1,575. The maximum sales price would be calculated in the same manner as in paragraph (a) above. For example, if all the other assumptions stated in that paragraph also apply herein, the purchaser's maximum loan amount would be $149,520, and the maximum purchase price, absent the Agency Second Trust Deed Loan would be $156,000. The foregoing is based upon the following monthly housing costs: a. Mortgage Principal and Interest $1,090.00 b. Private Mortgage Insurance (Included in $0.00 Mortgage Interest Rate) C. Property Taxes $225.00 d. Fire/Casualty Insurance (Included in HOA) $50.00 e. Property Maintenance $20.00 f. Utilities Allowance $65.00 g. Homeowner's Association $120.00 TOTAL: $1,570.00 882/015610-0061 380889.09 a12/17/03 -2- The foregoing are intended to be examples of how to calculate affordable housing cost, and the actual numbers will vary depending upon such factors as changes in median income, interest rates, amount of down payment, etc. Please see attached chart of Riverside County median income for moderate income purchasers. 882/015610-0061 _ 380889.09 a12/17/03 _3 RIVERSIDE COUNTY 2003 Affordable Housing Costs for Home Purchase Programs for Persons of Moderate Income (3) (Income figures based on Department of Housing and Community Development Income Limits dated March, 2003) 1 Person Household 2 Person Household 3 Person Household Median Median Median Income $35,700 Income $40,800 Income $46,900 Monthly Affordable Monthly Monthly Annual Housing Annual Affordable Annual Affordable Income(') Cost(2) Income Housing Cost Income Housing Cost $42,850 $1,145 $48,950 $1,309 $55,100 $1,473 4 Person Household 5 Person Household 6 Person Household Median Median Median Income $61,000 Income $65,100 Income $69,150 Monthly Monthly Monthly Annual Affordable Annual Affordable Annual Affordable Income Housing Cost Income Housing Cost Income Housing Cost $61,200 $1,636 $66,100 $1,768 $71,000 $1,898 7 Person Household 8 Person Household Median Median Income $63,250 Income $67,300 Monthly Monthly Annual Affordable Annual Affordable Income Housing Cost Income HousingCost $75,900 $2,029 t $80,800 $2,159 DEFINITIONS: Annual Income: Gross income from all sources for all members of the household. 2. Monthly Housing Costs: Amount of mortgage payment principal and interest, mortgage insurance, property taxes, and property insurance. 3. Moderate Income Affordable Housing Costs: Assumes affordable housing costs computed at 35% of 110% of median income; may not be less than 28% of household's gross income. 882/015610-0061 380889.09 a12/17/03 -4- ATTACHMENT NO.20 SCHEDULE OF PERFORMANCE' [See attached individual schedules for each of the (i) Sanctuary Villas Development, (ii) Suites Hotel and Casitas Development, (iii) Parcel 5 Residential Development and Parcel 7 Residential Development, (iv) Medical Office/Surgical Facility, and (v) Parcel 1 Restaurant and Parcel 2 Restaurant] 1 All days are calendar days in this Schedule of Performance. 882/015610-0061 380889.09 a12/17/03 SCHEDULE OF PERFORMANCE FOR SANCTUARY VILLAS DEVELOPMENT (ALL PHASES OF DEVELOPMENT) Item of Performance Time for Completion 1. Developer execution of DDA. Within 7 days after Developer and Agency approve final draft. 2. Developer's submission of complete Site Within 270 days after Effective Date of DDA. Development Permit Application "SDPA", which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan* • Tract Map* 3. Review of SDPA by all applicable City** Agency will use reasonable efforts to cause such departments. review within 21 days after Developer's submission of SDPA. 4. Agency response to Developer as to City Within 7 days after receipt of final comments, but no comments on SDPA. later than 30 days after Developer's submission of SDPA. 5. Developer and City responses. Developer will respond to any request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 days. 6. Agency publishes Notice of Public Hearing Within 10 days after City responds to Developer's before the Planning Commission. comments in the preceding section. 7. Planning Commission Public Hearing and Approximately 10 days after first publication. consideration of SDPA and Tract Map. 8 City Council consideration of Tract Map.* Within 21 days after Planning Commission approval if required). 9. City's issuance of SDPA, Tract Map (if Within 7 days after approval by both City Council and applicable) and conditions. Planning Commission as applicable). 10A Developer's preparation of final grading Within 180 days after City's issuance of SDPA and plans and Design Development Drawings Tract Map (if applicable). for Sanctuary Villas Parcel 8. 1013 Developer's preparation of final grading Within 180 days after Developer's completion of plans and Design Development Drawings construction of Sanctuary Villas Parcel 8. for Sanctuary Villas Parcel 9. 11A. Developer's submission of evidence of Within 20 days after Developer's completion of financing necessary to complete the Parcel Design Development Drawings for Parcel 8 Sanctuary 8 Sanctuary Villas Component Villas Component. 11A. Developer's submission of evidence of Within 20 days after Developer's completion of financing necessary to complete the Parcel Design Development Drawings for Parcel 9 Sanctuary 9 Sanctuary Villas Component Villas Component. 882/015610-0061 _ 380889.09 a12/17/03 _2 Item of Performance Time for Completion 12. Agency review and approval, approval with Within 30 days after Agency's receipt of applicable conditions, or denial of Developer's evidence of financing. evidence of financing for Parcel 8 Sanctuary Villas Component and Parcel 9 Sanctuary Villas Component. 13A. Developer's submission of grading permit Within 300 days after City's issuance of the SDPA. and building permit applications for Sanctuary Villas Parcel 8. 13B. Developer's submission of grading permit Within 120 days after Developer's completion of and building permit applications for Parcel 8 Sanctuary Villas Component. Sanctuary Villas Parcel 9. 12A. City's issuance of grading permit for Within 56 days after City's receipt of grading permit Sanctuary Villas Parcel 8. application for Sanctuary Villas Parcel 8. 12B. City's issuance of grading permit for Within 56 days after City's receipt of grading permit Sanctuary Villas Parcel 9. application for Sanctuary Villas Parcel 9. 13A. City's issuance of building permit for By the earlier of: (i) within 98 days after City's receipt Sanctuary Villas Parcel 8. of building permit application for Parcel 8 Sanctuary Villas Component, which is 42 days after City's issuance of grading permit for Sanctuary Villas Parcel 8, or ii within 660 days after Effective Date. 13B. City's issuance of building permit for Within 98 days after City's receipt of building permit Sanctuary Villas Parcel 9. application for Parcel 9 Sanctuary Villas Component, which is 42 days after City's issuance of grading permit for Sanctuary Villas Parcel 9. 14A. Developer commences construction of Within thirty (30) days after City's issuance of Parcel 8 Sanctuary Villas Component. building permits for the Parcel 8 Sanctuary Villas Component. 14B. Developer commences construction of Within thirty (30) days after City's issuance of Parcel 9 Sanctuary Villas Component. building permits for the Parcel 9 Sanctuary Villas Corn onent. 15A. Developer's completion of Parcel 8 Within 30-36 months after City's issuance of final Sanctuary Villas Component. building permits for the Parcel 8 Sanctuary Villas Component. 15B. Developer's completion of Parcel 9 Within 30-36 months after City's issuance of final Sanctuary Villas Component. building permits for the Parcel 9 Sanctuary Villas Com one. * In the event that a master grading plan and total parcel map for the entire Property are submitted with the SDPA for the Suites Hotel, then no further master grading plan or tract map is required for the SDPA for the Parcels included in this Schedule and City Council consideration shall not be required. ** Nothing herein shall be construed to limit the City's legislative authority, which City may exercise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. 882/015610-0061 _ 380889.09 a12/17/03 -3 OUTSIDE DATES FOR CLOSING OPTION A Outside Date For Closing for Sanctuary Villas Parcel 8 and Sanctuary Villas Parcel 9 365 days after the Effective Date. OPTION B Parcel Closing Milestones Sanctuary Villas Parcel 8 Within 180 days after the Developer's completion of the foundation for the Suites Hotel. Sanctuary Villas Parcel 9 Within 180 days after the City's issuance of building permits for the Parcel 8 Sanctuary Villas Component. 882/015610-0061 380889.09 a12/17/03 _4_ SCHEDULE OF PERFORMANCE FOR SUITES HOTEL AND CASITAS DEVELOPMENT (ALL PHASES OF DEVELOPMENT) Item of Performance Time for Completion 1. Developer execution of DDA. Within 7 days after Developer and Agency a rove final draft. 2. Developer and Agency execute Early Entry Within 7 days after the Effective Date. Agreement. 3. Developer makes purchase election, and Within 7 days after the Effective Date. Agency and Developer open the Initial Escrow or the Property Escrow as applicable). 4. Agency provides Developer with (i) copies of Within 30 days after the Effective Date. environmental studies and reports regarding the Property and (ii) the Preliminary Title Report. 5. Developer submission of complete Site Within 180 days after Effective Date. Development Permit Application "SDPA", which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan • Tract Ma 6. Review of SDPA by all applicable City` Agency will use reasonable efforts to cause such departments. review within 21 days after Developer's submittal receipt of SDPA. 7. Agency response to Developer as to City Within 7 days after Agency's receipt of City's comments on SDPA. final comments, but no later than 30 days after Developer's submission of SDPA. 8. Developer and City Responses. Developer will respond to any request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 days. 9. Agency publishes Notice of Public Hearing Within 10 days after City responds to Developer's before the Planning Commission. comments in the preceding section. 10. Planning Commission Public Hearing and Approximately 10 days after first publication. consideration of SDPA and Tract Map. 11. City Council consideration of Tract Map. Within 21 days after Planning Commission approval. Nothing herein shall be construed to limit the City's legislative authority, which City may excise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. 882/015610-0061 380889.09 a12/17/03 _5_ Item of Performance Time for Completion 12. City's issuance of SDPA, Tract Map and Within 7 days after City Council approval. conditions. 13. Developer's preparation of final grading plans Within 180 days after City's issuance of SDPA and Design Development Drawings for the and Tract Map. Suites Hotel, all Phases of Development of the Casitas Development, and Seeley Drive. 14. Developer's submission of (i) evidence of Within 20 days after Developer's completion of financing necessary to complete the Suites Design Development Drawings for the Suites Hotel and the first Phase of Development of Hotel, the first Phases of Development of the the Casitas Development, and (iii) grading Casitas Development, and Seeley Drive. permit and building permit applications for the Suites Hotel, the first Phase of Development of the Casitas Development, and Seeley Drive. 15. Agency review and approval, approval with Within 30 days after Agency's receipt of evidence conditions, or denial of Developer's evidence of financing of financing submitted in Item No. 14. 16. City's issuance of grading permit for the Suites Within 56 days after City's receipt of grading Hotel Parcel, the Parcel on which Developer permit application for the Suites Hotel Parcel, the shall construct the first Phase of Development Parcel on which Developer shall construct the first of the Casitas Development and Seeley Drive. Phase of Development of the Casitas Development, and Seeley Drive. 17. Developer's completion of first pavement lift Within (30) days after Developer's installation of and curbs and gutters of Seeley Drive. the foundation for the Suites Hotel. 18. Developer's submission of evidence of Within 20 days after Developer's completion of financing necessary to construct the second Design Development Drawings for the second Phase of Development of the Casitas Phase of Development of the Casitas Development. Development. 19. Agency review and approval, approval with Within 30 days after Agency's receipt of evidence conditions, or denial of Developer's evidence of financing. of financing in Item No. 18. 20. Developer's submission of grading and Within 120 days after Developer's completion of building permit applications for the second the first Phase of Development of the Casitas Phase of Development of the Casitas Development. Development. 21. City's issuance of grading permit for the Within 56 days after City's receipt of grading second Phase of Development of the Casitas permit application for the second Phase of Development. Development of the Casitas Development. 22. Developer's submission of evidence of Within 20 days after Developer's completion of financing necessary to construct the third Design Development Drawings for the second Phase of Development. Phase of Development of the Casitas Development. 23. Agency review and approval, approval with Within 30 days after Agency's receipt of evidence conditions, or denial of Developer's evidence of financing. of financing in Item No. 22. 88M15610-0061 380889.09 a12/17103 -6- Item of Performance Time for Completion 24. Developer's submission of grading and Within 120 days after Developer's completion of building permit applications for the third Phase the second Phase of Development of the Casitas of Development of the Casitas Development. Development. 25. City's issuance of grading permit for the third Within 56 days after City's receipt of grading Phase of Development of the Casitas permit application for the third Phase of Development. Development of the Casitas Development. 26. City's issuance of building permits for the Within 98 days after City's receipt of building Suites Hotel, the first Phase of Development of permit application for the Suites Hotel, the first the Casitas Development, and Seeley Drive. Phase of Development of the Casitas Development, and Seeley Drive, which is 42 days after City's issuance of grading permit for the Suites Hotel, the first Phase of Development of the Casitas Development, and Seeley Drive. 27. Developer commences construction of Suites Within 30 days after Developer's receipt of Hotel and first Phase of Development of the building permits for the Suites Hotel and first Casitas Development. Phase of Development of the Casitas Development. 28. City's issuance of building permits for the Within 98 days after City's receipt of building second Phase of Development of the Casitas permit application for the second Phase of Development Development of the Casitas Development, which is 42 days after City's issuance of grading permit for the second Phase of Development of the Casitas Development 29. Developer commences construction of second Within 30 days after Developer's receipt of Phase of Development of the Casitas building permits for the second Phase of Development. Development of the Casitas Development. 30. City's issuance of building permits for the Within 98 days after City's receipt of building third Phase of Development of the Casitas permit application for the third Phase of Development Development of the Casitas Development, which is 42 days after City's issuance of grading permit for the third Phase of Development of the Casitas Development 31. Developer commences construction of third Within 30 days after Developer's receipt of Phase of Development of the Casitas building permits for the third Phase of Development. Develo ment of the Casitas Development. 32. Completion of Suites Hotel. Within 18 months after City's issuance of building ermits for Suites Hotel. 33. Developer completes final pavement lift of Within one hundred eighty (180) days after Seeley Drive. Developer's completion of the Suites Hotel. 34. Completion of first Phase of Casitas Within 30-36 months after City's issuance of Development. building permits for first Phase of Development of the Casitas Development. 35. Completion of second Phase of Casitas Within 30-36 months after City's issuance of Development. building permits for second Phase of Develo ment of the Casitas Development. 882/015610-0061 380889.09 a12/17/03 -7- Item of Performance Time for Completion 36. Completion of third Phase of Casitas Within 30-36 months after City's issuance of Development. building permits for third Phase of Development of the Casitas Development. Outside Date for Closing for Suites Hotel Parcel, Casitas Parcel 2, Casitas Parcel 3, Casitas Parcel 4, Landscape Parcel C, Landscape Parcel E, and the Seeley Drive Parcel (under Option A or Option B): 365 days after the Effective Date. 882/015610-0061 380889.09 a12/17/03 -8- SCHEDULE OF PERFORMANCE FOR PARCEL 5 RESIDENTIAL DEVELOPMENT AND PARCEL 7 RESIDENTIAL DEVELOPMENT Item of Performance Time of Completion 1. Developer's execution of the DDA. Within 7 days after Developer and Agency approve final draft. 2. Developer's submission of (i) evidence of Within 180 days after Effective Date. financing necessary to complete the Parcel 5 Residential Development and the Parcel 7 Residential Development, and (ii) complete Site Development Permit Application "SDPA", including: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan • Tentative Tract Ma 3. Review of SDPA by all applicable City* Agency will use reasonable efforts to cause such departments. review within 21 days after Developer's submission of SDPA. 4. Agency response to Developer as to City Within 7 days after receipt of final comments, but no comments on SDPA. later than 30 days after Developer's submission of SDPA. 5. Developer and City Responses. Developer will respond to any request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 days. 6. Agency publishes Notice of Public Hearing Within 10 days after City responds to Developer's before the Planning Commission. comments in the preceding Section. 7. Planning Commission public hearing and Approximately 10 days after first publication. consideration of SDPA and Tentative Tract Map. 8. City Council consideration of Tentative Within 21 days after Planning Commission approval. Tract Map. 9. City's issuance of SDPA, Tentative Tract Within 7 days after City Council approval. Map and conditions of approval. 10. Preparation of Grading Plans and Design By the earlier of: (i) within 180 days after City's Development Drawings for the Parcel 5 issuance of SDPA and Tentative Tract Map, or (ii) Residential Development and the Parcel 7 within 452 days after Effective Date. Residential Development. 11. Developer's submission of grading permit Within 20 days after Developer's completion of and building permit application for Design Development Drawings. backbone infrastructure for the Parcel 5 Residential Development and the Parcel 7 Residential Development. 882/015610-0061 380889.09 a12/17103 -9- Item of Performance Time of Completion 12. City's issuance of Grading Permit for the Within 56 days after City's receipt of grading permit Parcel 5 Residential Development and the application. Parcel 7 Residential Development. 13 City's issuance of building permit for Within 98 days after City's receipt of Building Permit backbone infrastructure for the Parcel 5 application, which is 42 days after City's issuance of Residential Development and the Parcel 7 Grading Permit. Residential Development. 14. Developer's commencement of construction Within 30 days following City's issuance of Building of backbone infrastructure of the Parcel 5 Permits. Residential Development and the Parcel 7 Residential Development. 15 Within 90 days after the earlier of: (1) Developer's Developer's commencement of Construction commencement of construction of backbone of the Parcel 5 Residential Development and infrastructure and (2) Developer's completion of the Parcel 7 Residential Development. exterior walls and roof for the Suites Hotel. 16 Developer's completion of construction of Within 18 months following City's issuance of the Parcel 5 Residential Development and Building Permits for the Parcel 5 Residential the Parcel 7 Residential Development. Development and the Parcel 7 Residential Development. *Nothing herein shall be construed to limit City's legislative authority, which City may exercise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. OUTSIDE DATES FOR CLOSING OPTION A Outside Date For Closing for Residential Parcel 5 and Residential Parcel 7: 365 days after the Effective Date. OPTION B Outside Date For Closing for Residential Parcel 5 and Residential Parcel 7: 30 days after the Developer's completion of the exterior walls and roof of the Suites Hotel. 882/015610-0061 380889.09 a12/17/03 - 10- SCHEDULE OF PERFORMANCE FOR MEDICAL OFFICE/SURGICAL FACILITY (ALL PHASES OF DEVELOPMENT) Item of Performance Time for Completion 1. Developer execution of DDA. Within 7 days after Developer and Agency approve final draft. 2AB. Developer's submission of complete Site Within 270 days after Effective Date. Development Permit Application for the Parcel A Medical Office/Surgical Facility Component and for the first and second Phases of Development of the Medical Office/Surgical Facility, "First/Second MOB SDPA", which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan* • Tract Map* 2C. Developer's submission of complete Site Within 90 days after City's issuance of building Development Permit Application for the permits for the first and second Phases of third Phase of Development of the Development of the Medical Office/Surgical Medical Office/Surgical Facility, "Third Facility. MOB SDPA," which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan* • Tract Map* 3A. Review of First/Second MOB SDPA by Agency will use reasonable efforts to cause such all applicable City** departments. review within 21 days after Developer's submittal of First/Second MOB SDPA. 3B. Review of Third MOB SDPA by all Agency will use reasonable efforts to cause such applicable City departments. review within 21 days after Developer's submittal of Third MOB SDPA. 4A. Agency response to Developer as to City Within 7 days after Agency's receipt of City's final comments on First/Second MOB SDPA. comments, but no later than 30 days after Developer's submission of First/Second MOB SDPA. 4B. Agency response to Developer as to City Within 7 days after Agency's receipt of City's final comments on Third MOB SDPA. comments, but no later than 30 days after Developer's submission of Third MOB SDPA. 882/015610-0061 -1 1- 380889.09 a12/17/03 Item of Performance Time for Completion 5. Developer and City Responses. Developer will respond to any request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 days. 6A. Agency publishes Notice of Public Within 10 days after City responds to Developer's Hearing for the First/Second MOB SDPA comments regarding the First/Second MOB SDPA. before the Planning Commission. 6B. Agency publishes Notice of Public Within 10 days after City responds to Developer's Hearing for the Third MOB SDPA before comments regarding the Third MOB SDPA. the Planning Commission. 7A. Planning Commission Public Hearing and Approximately 10 days after first publication of consideration of First/Second MOB notice of the same. SDPA and Tract Map. 7B. Planning Commission Public Hearing and Approximately 10 days after first publication of consideration of Third MOB SDPA and notice of the same. Tract Map. 8A. City Council consideration of Tract Within 21 days after Planning Commission approval Map.* of First/Second MOB SDPA. 8B. City Council consideration of Tract Within 21 days after Planning Commission approval Map.* of Third MOB SDPA. 9A. City's Issuance of First/Second MOB Within 7 days after approval of First/Second MOB SDPA Tract Map, if applicable. SDPA by both Planning Commission and City Council. 9B. City's Issuance of Third MOB SDPA Within 7 days after approval of Third MOB SDPA Tract Map, if applicable. by both PI ning Commission and City Council. 10A. Developer's preparation of final grading Within 180 days after City's issuance of plans and Design Development Drawings First/Second MOB SDPA and Tract Map (if for the Parcel A Medical Office/Surgical applicable). Facility Component and the first and second Phases of Development of the Medical Office/Surgical Facility. 10B. Developer's preparation of final grading Within 180 days after City's issuance of Third MOB plans and Design Development Drawings SDPA and Tract Map (if applicable). for the third Phase of Development of the Medical Office/Surgical Facility. 1 IA. Developer's submission of evidence of Within 20 days after Developer's completion of financing necessary to complete the Design Development Drawings for the Parcel A Parcel A Medical Office/Surgical Facility Medical Office/Surgical Facility Component and the Component and the first and second first and second Phases of Development of the Phases of Development of the Medical Medical Office/Surgical Facility. Office/Surgical Facility and of grading permit and building permit applications for the Parcel A Medical Office/Surgical Facility Component and the first and second Phases of Development of the Medical Office/Surgical Facility. 882/015610-0061 -12- 380889.09 a]2/17/03 Item of Performance Time for Completion 11B. Developer's submission of evidence of Within 20 days after Developer's completion of financing necessary to complete the third Design Development Drawings for the third Phase of Phase of Development of the Medical Development of the Medical Office/Surgical Office/Surgical Facility and of grading Facility. permit and building permit applications for the third Phase of Development of the Medical Office/Surgical Facility. 12A. Agency's review and approval, approval Within 30 days after Agency's receipt of the same. with conditions or denial of Developer's evidence of financing submittal in Item 11 A. 12B. Agency's review and approval, approval Within 30 days after Agency's receipt of the same. with conditions or denial of Developer's evidence of financing submittal in Item 1113. 13A. City's issuance of grading permit for the The later of (i) within 56 days after City's receipt of Parcel A Medical Office/Surgical Facility building permit application for first Phase of Component and first Phase of Development of the Medical Office/Surgical Facility Development of the Medical or (ii) upon Developer's completion of foundation Office/Surgical Facility. for Suites Hotel. 13B. City's issuance of grading permit for The later of (i) within 56 days after City's receipt of second Phase of Development of the building permit application for the second Phase of Medical Office/Surgical Facility. Development of the Medical Office/Surgical Facility or (ii) upon Developer's completion of framing of exterior walls of the Suites Hotel. 13C. City's issuance of grading permit for the The later of (i) within 56 days after City's receipt of third Phase of Development of the building permit application for the third Phase of Medical Office/Surgical Facility. Development of the Medical Office/Surgical Facility or (ii) upon Developer's completion of exterior walls and roof for the Suites Hotel. 14A. City's issuance of building permit for By the earlier of: (i) within 98 days after City's Parcel A Medical Office/Surgical Facility receipt of building permit application for the first and first Phase of Development of the Phase of Development of the Medical Medical Office/Surgical Facility. Office/Surgical Facility, which is 42 days after issuance of grading permit for the first Phase of Development of the Medical Office/Surgical Facility, or (ii) within 660 days after Effective Date. 14B. City's issuance of building permit for Within 98 days after City's receipt of building second Phase of Development of the permit application for the second Phase of Medical Office/Surgical Facility. Development of the Medical Office/Surgical Facility, which is 42 days after issuance of grading permit for the second Phase of Development of the Medical Office/Surgical Facility. 882/015610-0061 380889.09 a12/17/03 -13 - Item of Performance Time for Completion 14C. City's issuance of building permit for Within 98 days after City's receipt of building third Phase of Development of the permit application for the third Phase of Medical Office/Surgical Facility. Development of the Medical Office/Surgical Facility, which is 42 days after issuance of grading permit for the third Phase of Development of the Medical Office/Surgical Facility. 15A. Developer commences construction of With thirty (30) days after City's issuance of Parcel A Medical Office/Surgical Facility building permits for the first Phase of Development and first Phase of Development of the of the Medical Office/Surgical Facility. Medical Office/Surgical Facility. 15B. Developer commences construction of With thirty (30) days after City's issuance of second Phase of Development of the building permits for the second Phase of Medical Office/Surgical Facility. Development of the Medical Office/Surgical Facility. 15C. Developer commences construction of With thirty (30) days after City's issuance of third Phase of Development of the building permits for the third Phase of Development Medical Office/Surgical Facility. of the Medical Office/Surgical Facility. 16A. Developer's completion of Parcel A Within 30-36 months after City's issuance of Medical Office/Surgical Facility and the building permits for Parcel A Medical first Phase of Development of the Medical Office/Surgical Facility Component and the first Office/Surgical Facility. Phase of Development of the Medical Office/Sur ical Facility. 16B. Developer's completion of second Phase Within 30-36 months after City's issuance of of Development of the Medical building permit for second Phase of Development of Office/Surgical Facility. the Medical Office/Surgical Facility Component. 16C. Developer's completion of third Phase of Within 30-36 months after City's issuance of Development of the Medical building permit for third Phase of Development of Office/Surgical Facility. the Medical Office/Surgical Facility Component. * In the event that a master grading plan and total parcel map for the entire Property are submitted with the SDPA for the Suites Hotel, then no further master grading plan or tract map is required for the SDPA for any of the Parcels included in this Schedule and City Council consideration shall not required. ** Nothing herein shall be construed to limit City's legislative authority, which City may exercise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. '82/015610-0061 380889.09 al2/17/03 -14- OUTSIDE DATES FOR CLOSING OPTION A Outside Date for Closing for Medical Office/Surgical Facility Parcel A, Medical Office/Surgical Facility Parcel 10, Medical Office/Surgical Facility Parcel 11, and Medical Office/Surgical Facility Parcel 12: 365 days after the Effective Date. OPTION B Parcel Outside Date for Closing Medical Office/Surgical Facility Parcel A Within 90 days after the Developer's completion of and one of (i) Medical Office/Surgical Facility the foundation for the Suites Hotel. Parcel 10, (ii) Medical Office/Surgical Facility Parcel 11, or (iii) Medical Office/Surgical Facility Parcel 12 One of (i) Medical Office/Surgical Facility Within 90 days after the Developer's completion of Parcel 10, (ii) Medical Office/Surgical Facility framing of all exterior walls of the Suites Hotel. Parcel 11, or (iii) Medical Office/Surgical Facility Parcel 12 The final unpurchased Parcel of the (i) Medical Within 90 days after the Developer's completion of Office/Surgical Facility Parcel 10, (ii) Medical the exterior walls and roof of the Suites Hotel. Office/Surgical Facility Parcel 11, and (iii) Medical Office/Surgical Facility Parcel 12 982/015610-0061 380889.09 a12/17/03 -15- SCHEDULE OF PERFORMANCE FOR PARCEL 1 RESTAURANT AND PARCEL 13 RESTAURANT Item of Performance Time for Completion 1. Developer execution of DDA. Within 7 days after Developer and Agency approve final draft. 2A. Developer's submission of complete Site Within 180 days after Effective Date. Development Permit Application for Restaurant Parcel 1 "Parcel 1 SDPA", which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan* • Tract Map* 2B. Developer's submission of complete Site Within 180 days after City's issuance of building Development Permit Application for permits for Restaurant Parcel 1. Restaurant Parcel 13 "Parcel 13 SDPA", which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan* • Tract Map* 3A. Review of Parcel 1 SDPA by all Agency will use reasonable efforts to cause such applicable City** departments. review within 21 days after Developer's submittal of Parcel 1 SDPA. 3B. Review of Parcel 13 SDPA by all Agency will use reasonable efforts to cause such applicable City departments. review within 21 days after Developer's submittal of Parcel 13 SDPA. 4A. Agency response to Developer as to City Within 7 days after Agency's receipt of City's comments on Parcel 1 SDPA. final comments on application, but no later than 30 days after Developer's submission of Parcel 1 SDPA. 4B. Agency response to Developer as to City Within 7 days after Agency's receipt of City's comments on Parcel 13 SDPA. final comments on application, but no later than 30 days after Developer's submission of Parcel 13 SDPA. 5. Developer and City Responses. Developer will respond to any request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 days. 882/015610-0061 380889.09 a12/17/03 -16- Item of Performance Time for Completion 6A. Agency publishes Notice of Public Within 10 days after City responds to Developer's Hearing for the Parcel 1 SDPA before the comments regarding the Parcel 1 SDPA. Planning Commission. 6B. Agency publishes Notice of Public Within 10 days after City responds to Developer's Hearing for the Parcel 13 SDPA before comments regarding the Parcel 13 SDPA. the Planning Commission. 7A. Planning Commission's Public Hearing Approximately 10 days after first publication of and consideration of Parcel I SDPA and notice of the same. Tract Map. 7B Planning Commission's Public Hearing Approximately 10 days after first publication of and consideration of Parcel 13 SDPA and notice of the same. Tract Map. 8A. City Council's consideration of Tract Map Within 21 days after Planning Commission for Parcel 1.* a roval of the Parcel 1 SDPA. 8B. City Council's consideration of Tract Map Within 21 days after Planning Commission for Parcel 13.* approval of the Parcel 13 SDPA. 9A. City's issuance of Parcel I SDPA and Within 7 days after approval of Parcel 1 SDPA Tract Map and conditions. and Tract Map by both Planning Commission and Ci Council. 9B. City's issuance of Parcel 13 SDPA and Within 7 days after approval of Parcel 13 SDPA Tract Map and conditions. and Tract Map by both Planning Commission and City Council. 10A. Developer's preparation of final grading Within 180 days after City issues Parcel 1 SDPA, plan and Design Development Drawings Tract Map, and conditions. for Restaurant Parcel 1. IOB. Developer's preparation of final grading Within 180 days after City issues Parcel 13 plan and Design Development Drawings SDPA, Tract Map, and conditions. for Restaurant Parcel 13. 1 IA. Developer's submission of (i) evidence of Within 20 days after Developer's completion of financing necessary to complete Parcel 1 Design Development Drawings for the Parcel I Restaurant, and (ii) grading and building Restaurant. permit applications for Restaurant Parcel 1. I IB. Developer's submission of (i) evidence of Within 20 days after Developer's completion of financing necessary to complete Parcel 1 Design Development Drawings for the Parcel 13 Restaurant, and (ii) grading and building Restaurant. permit applications for Restaurant Parcel 13. 11C. Developer's submission of grading and Within 20 days after Developer's completion of building permit applications for the Parcel I Restaurant. Restaurant Parcel 13. 12A. City's issuance of grading permit for Within 56 days after City's receipt of building Restaurant Parcel 1. ermit a lication for Restaurant Parcel 1. 12B. City's issuance of grading permit for Within 56 days after City's receipt of building Restaurant Parcel 13. 1 permit application for Restaurant Parcel 13. 882/015610-0061 380889.09 a12/17/03 -17- Item of Performance Time for Completion 13A. City's issuance of building permit for Within 98 days after receipt of building permit Parcel 1 Restaurant. application for Parcel 1 Restaurant, which is 42 days after City's issuance of grading permit for Restaurant Parcel 1. 13B. City's issuance of building permit for By the earlier of (i) within 98 days after receipt of Parcel 13 Restaurant. building permit application for Parcel 13 Restaurant, which is 42 days after City's issuance of grading permit for Restaurant Parcel 13, or (ii) within 570 days after Effective Date. 14A. Developer commences construction of Within thirty (30) days after City's issuance of Parcel 1 Restaurant. building permits for Parcel 1 Restaurant. 14B. Developer commences construction of Within thirty (30) days after City's issuance of Parcel 13 Restaurant. building permits for Parcel 13 Restaurant. 15A. Completion of Parcel 1 Restaurant. Within 30-36 months after City's issuance of building ermits for Parcel 1 Restaurant. 15B. Completion of Parcel 13 Restaurant. Within 30-36 months after City's issuance of building permits for the Parcel 13 Restaurant. * In the event that a master grading plan and total parcel map for the entire Property are submitted with the SDPA for the Suites Hotel, then no further master grading plan or tract map is required for the SDPA for any of the Parcels included in this Schedule, and City Council consideration shall not be required. ** Nothing herein shall be construed to limit the City's legislative authority, which City may exercise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. 882/015610-0061 380889.09 a12/17/03 -18- OUTSIDE DATES FOR CLOSING OPTIONA Outside Closing Date for Closing for Restaurant Parcel 1 and Restaurant Parcel 13: 365 days after the Effective Date. OPTION B Parcel Closing Milestones Restaurant Parcel 1 Within 90 days after the Developer's completion of the foundation for the Suites Hotel. Restaurant Parcel 13 Within 90 days after the City's issuance of building hermits for Parcel 13 Restaurant. 882/015610-0061 380889.09 a12/17/03 -19- PLEASE COMPLETE THIS INFORMATION RECORDING REQUESTED BY: JUNE S. GREEK, City Clerk AND WHEN RECORDED MAIL TO: CITY OF LA QUINTA Attn: June Greek P. 0. Box 1504 78-495 Calle Tampico La Quinta, CA 92253 SPA( DOC a 2004-0005256 01/05/2004 08:00A Fee:NC Page 1 of 57 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk 8 Recorder IIN 1l11111111I 11111 11 N1 11111111 DEVELOPMENT AGREEMENT by and between CITY OF LA QUINTA & CP DEVELOPMENT LA QUINTA, LLC Title of Document THIS AREA FOR RECORDER'S USE ONLY THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION ($3.00 Additional Recording Fee Applies) C:\MYDATA\WPDOCS\FORMS\Recorder.wpd S RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attn: City Clerk Space Above This Line for Recorder's Use (Exempt from Recording Fee per Gov't Code § 6103) DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF LA QUINTA CP DEVELOPMENT LA QUINTA, LLC 394/015610-0061 390243.13 a] 2/17/03 - l - TABLE OF CONTENTS Page 1.0 GENERAL........................................................................................................................ 3 1.1 Term...................................................................................................................... 3 1.2 Effective Date.......................................................................................................3 1.3 Amendment or Cancellation......................................:..........................................3 1.4 Termination...........................................................................................................3 2.0 DEVELOPER'S RIGHTS AND LIMITATIONS REGARDING CONSTRUCTION OF THE PROJECT...........................................................................3 2.1 Right to Develop...................................................................................................3 2.2 Additional Applicable Codes and Regulations.....................................................4 2.3 Permitted Density, Height and Use Limitations................................................... 5 3.0 DEVELOPER'S OBLIGATIONS....................................................................................5 3.1 Development of the Project; Planned Development ............................................. 5 3.2 Conditions of Approval.........................................................................................6 3.3 Covenants, Conditions and Restrictions...............................................................6 3.3.1 Recordation of Covenants, Conditions and Restrictions and Establishment of Casitas Development Homeowner Association................................................................................................ 6 3.3.2 Recordation of Covenants, Conditions and Restrictions and Establishment of Sanctuary Villas Development Homeowner Association................................................................................................ 7 3.4 Payments to City by Developer............................................................................7 3.4.1 General......................................................................................................7 3.4.2 Developer's Payments of One -Time Mitigation Fees ..............................7 3.4.3 Casitas Development Annual Mitigation Fee; Termination .....................8 3.4.4 Sanctuary Villas Development Annual Mitigation Fee; Termination............................................................................................... 8 3.4.5 Payment of Casitas Development Public Facilities Fee ........................... 9 3.4.6 Payment of Sanctuary Villas Development Public Facilities Fee ............ 9 3.4.7 Consumer Price Index Adjustments..........................................................9 3.4.8 Termination of Sanctuary Villas Development Fees..............................10 3.4.9 1 Landscape Improvements Payment; Maintenance..................................10 3.4.10 Other F ees and Charges; Assessment Appeals.......................................11 3.5 Park Improvements.............................................................................................11 3.6 Dedications and Improvements...........................................................................11 3.7 Indemnification...................................................................................................12 3.8 Insurance.............................................................................................................12 4.0 CITY'S OBLIGATIONS................................................................................................13 4.1 Scope of Subsequent Review/Confirmation of Compliance Process.................13 4.2 Project Approvals Independent...........................................................................14 4.3 Review for Compliance......................................................................................14 394/015610-0061 390243.13 a12/17/03 -1— Page 5.0 DEFAULT; REMEDIES; DISPUTE RESOLUTION....................................................14 5.1 Notice of Default ..............:.... .... ...... ..... :............................................................. 14 5.2 Cure of Default...................................................................................................15 5.3 City Remedies.....................................................................................................15 5.4 Developer's Exclusive Remedy..........................................................................15 6.0 MORTGAGEE PROTECTION; CERTAIN RIGHTS OF CURE.................................16 6.1 Encumbrances on the Project Site......................................................................16 6.2 Mortgage Protection............................................................................................16 6.3 Mortgagee Not Obligated...................................................................................16 6.4 Notice of Default to Mortgagee; Right of Mortgagee to Cure ............................16 7.0 TRANSFERS OF INTEREST IN SITE OR AGREEMENT.........................................17 7.1 Prohibition...........................................................................................................17 7.2 Transfers Prior to Completion of Project............................................................17 7.3 Assignment and Assumption of Obligations......................................................18 7.4 Successors and Assigns.......................................................................................18 7.5 Assignment by City.............................................................................................18 8.0 MISCELLANEOUS.......................................................................................................18 8.1 Notices................................................................................................................18 8.2 Force Majeure.....................................................................................................19 8.3 Binding Effect.....................................................................................................20 8.4 Independent Entity..............................................................................................20 8.5 Agreement Not to Benefit Third Parties.............................................................20 8.6 Covenants............................................................................................................20 8.7 Nonliability of City Officers and Employees.....................................................20 8.8 Covenant Against Discrimination.......................................................................21 8.9 Amendment of Agreement..................................................................................21 8.10 No Waiver...........................................................................................................21 8.11 Severability.........................................................................................................21 8.12 Cooperation in Carrying Out Agreement............................................................21 8.13 Estoppel Certificate.............................................................................................21 8.14 Construction........................................................................................................22 8.15 Recordation.........................................................................................................22 8.16 Captions and References.....................................................................................22 8.17 Time....................................................................................................................22 8.18 Recitals & Exhibits Incorporated; Entire Agreement.........................................22 8.19 Exhibits...............................................................................................................22 8.20 Counterpart Signature Pages...............................................................................23 8.21 Authority to Execute...........................................................................................23 8.22 City Approvals and Actions................................................................................23 8.23 Governing Law; Litigation Matters....................................................................23 8.24 No Brokers..........................................................................................................23 394/015610-0061 390243.13 a12/17/03 -11- DEVELOPMENT AGREEMENT This Development Agreement (the "Agreement") is entered into as of the _La_ day of f]QCg0ng=r,?— , 2003 ("Reference Date"), by and between the CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of the California (the "City"), and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company (the "Developer"), with reference to the following: RECITALS: A. Government Code Sections 65864-65869.5 ("Development Agreement Act") authorize the City to enter into a binding development agreement for the development of real property within its jurisdiction with persons having legal or equitable interest in such real property. B. Pursuant to Section 65865 of the Government Code, the City has adopted its Development Agreement Ordinance (La Quinta Municipal Code Section 9.250.030) establishing procedures and requirements for such development agreements ("Development Agreement Ordinance"). C. Prior to or concurrently with the execution of this Agreement, Developer has entered into a Disposition and Development Agreement (the "DDA") with the La Quinta Redevelopment Agency ("Agency"), pursuant to which (1) the Agency, subject to the terms and conditions set forth in the DDA, has agreed to sell to the Developer, in one or more phases, certain real property located within the City southeast of the Miles Avenue and Washington Street intersection which is legally described in Exhibit A-1 attached hereto and shown on the Site Map attached hereto as Exhibit A-2 (the "Site"); and (2) the Developer has agreed to construct on the Site the "Project," which will consist of a mixed use residential and commercial development, and other permitted uses. The Project is more fully described in, and subject to (i) this Agreement, (ii) the Center Point Specific Plan, also known as Specific Plan No. SP2001-055 as amended by City Council R solution No. 2003-035 on June 3, 2003 ("Specific Plan"); (iii) the DDA, (iv) the Mitigated Negative Declaration prepared for the Project, dated December 5, 2001, as amended by the Addendum to Mitigated Negative Declaration, approved by the City Council on June 3, 2003, by City Co cil Resolution No. 2003-035 (collectively, the "Revised Mitigated Negative Declaration"); (v) my future Site Development Permits issued for the Project, including all conditions of approval attached thereto (collectively, the "Project Site Development Permits"); (vi) any future Tract Maps approved for the Project, including all conditions of approval thereto (collectively, the "Project Tract Maps"); and (vii) the conditions of approval associated with each and all. of the foregoing approvals (collectively, the "Conditions of Approval"). The documents described in the foregoing clauses (i)-(vi) are collectively referred to herein as the "Developmen Plan," and are, or when approved or issued shall be, on file with the City Clerk. D. By virtue of the DDA, as of the execution of this Agreement, the Developer has an equitable interest in the Site. By its execution of the consent form attached to this Agreement, the Agency consents to recordation of this Agreement against the Site. 394/015610-0061 390243.13 a] 2/17/03 -1- E. Consistent with Section 9.250.030 of the La Quinta Municipal Code, City and Developer desire to enter into a binding agreement for purposes of (i) identifying the terms, conditions, and regulations for the construction of the Project, certain components of which constitute a Planned Development (as defined in Civil Code Section 1351(k)); (ii) setting forth a payment schedule for the Developer's payment to the City of certain amounts designed to compensate the City in the event that certain components of the Project fail to generate specified levels of transient occupancy tax (as that term is used in La Quinta Municipal Code Chapter 3.24) (hereinafter, "transient occupancy tax" or "TOT"); (iii) setting forth a payment schedule for the Developer's payment to the City of Three Hundred Forty -Six Thousand Eleven Dollars ($346,011), to cover the Developer's contribution towards the cost of certain landscaping improvements the City desires to install within certain portions of the real property adjacent to the Site; (iv) requiring the Developer, at its sole cost, to construct a neighborhood park on certain real property owned in fee by the City; and (v) setting forth the extent to which Developer may construct, develop, use and operate the Project. F. Among other purposes, this Agreement is intended to be, and shall be construed as, a development agreement within the meaning of the Development Agreement Act. This Agreement will eliminate uncertainty in planning for and secure the orderly development of the Project, ensure a desirable and functional community environment, provide effective and efficient development of public facilities, infrastructure, and services appropriate for the development of the Project, and assure attainment of the maximum effective utilization of resources within the City, by achieving the goals and purposes of the Development Agreement Act. In exchange for these benefits to City, Developer desires to receive the assurance that they may proceed with development of the Project in accordance with the terms and conditions of this Agreement and the Development Plan, all as more particularly set forth herein. G. The City Council has determined that the Project and this Agreement are consistent with the City's General Plan and the Specific Plan, including the goals and objectives thereof. H. All actions taken by City have been duly taken in accordance with all applicable legal requirements, including the California Environmental Quality Act (Public Resources Code Section 21000, et seq.) ("CEQA"), and all other requirements for notice, public hearings, findings, votes and other procedural matters. Agreement. On June 17, 2003, the City Council adopted its Ordinance No. 385 approving this AGREEMENT. - NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged, the parties do hereby agree as follows: 394/015610-0061 390243.13 a12/17/03 -2- 1.0 GENERAL 1.1 Term. The term of this Agreement shall commence on the Effective Date hereof and, shall continue for fifty (50) years thereafter, unless said term is otherwise terminated, modified, or extended by circumstances set forth in this Agreement or by mutual consent of the parties hereto after the satisfaction of all applicable public hearing and related procedural requirements. 1.2 Effective Date. This Agreement shall be effective, and the obligations of the parties hereunder shall be effective, as of July 17, 2003, which is the date that Ordinance No. 385 takes effect ("Effective Date"). 1.3 Amendment or Cancellation. Except as expressly stated to the contrary herein, this Agreement may be amended or canceled in whole or in part only by mutual consent of the parties and in the manner provided for in Government Code Section 65867-65868 and the City's Development Agreement Ordinance. 1.4 Termination. Unless terminated earlier, pursuant to the terms hereof, this Agreement shall automatically terminate and be of no further effect upon the expiration of the Term of this Agreement as set forth in Section 1.1. Termination of this Agreement, for any reason, shall not, by itself, affect any right or duty arising from entitlements or approvals set forth under the Development Plan, as defined in Section 2.1, below. Notwithstanding anything herein to the contrary, in the event the "Initial Escrow" or the "Property Escrow" (as those terms are defined in the DDA), as applicable, fail to close within the time set forth in the DDA, as such time may be extended pursuant to the terms of the DDA, this Agreement shall automatically terminate and the Developer and City agree to execute and record such document as the Title Company (defined in the DDA) reasonably requires to remove this Agreement of record. 2.0 DEVELOPER'S RIGHTS AND LIMITATIONS REGARDING CONSTRUCTION OF THE PROJECT 2.1 Right to Develop. Subject to the terms, conditions, and covenants of this Agreement, Developer's right to develop the Project in accordance with the Development Plan (and subject to the Conditions of Approval which, among other Conditions of Approval associated with future approvals and permits issued by the City, includes but is not limited to the Conditions of Approval set forth in Exhibit `B" attached hereto) shall be deemed vested upon approval of the Development Plan, which vesting shall expire upon the earlier of the following occurrences: (a) termination of this Agreement; (b) termination of the DDA; (c) an uncured material default by Developer of this Agreement or the DDA; (d) as to a particular phase, parcel, or lot comprising a portion of the 394/015610-0061 390243.13 al2/17/03 -3- Site, the earlier of the final approved City inspection of the completed development on such phase, parcel, or lot or the issuance by City of a certificate of occupancy for such phase, parcel, or lot; or (e) as to a particular phase, parcel, lot comprising a portion of the Site, the date set forth in the DDA when Developer was required to have completed the development of all improvements on such phase, parcel, or lot. Except for the expiration set forth in clause (a) of the preceding sentence, the expiration of the vesting right set forth in the preceding sentence shall not terminate the obligations of Developer under this Agreement. Notwithstanding anything in this Agreement to the contrary, the Project shall remain subject to: (i) all ordinances, regulations, rules, laws, plans, policies, and guidelines of the City and its City Council, Planning Commission, and all other City boards, commissions, and committees existing on the Effective Date of this Agreement (collectively, the "Existing Development Regulations"); (ii) all amendments or modifications to Existing Development Regulations after the Effective Date of this Agreement and all ordinances, regulations, rules, laws, plans, policies, and guidelines of the City and its City Council, Planning Commission, and all other City boards, commissions, and committees enacted or adopted after the Effective Date of this Agreement (collectively, "New Laws"), except such New Laws which would prevent or materially impair Developer's ability to develop the Project in accordance with the Development Plan unless such New Laws are (A) adopted by the City on a City-wide basis and applied to the Site in a non-discriminatory manner, (B) required by a non -City entity to be adopted by or applied by the City (or if optional the failure to adopt or apply such non -City law or regulation would cause City to sustain a loss of funds or loss of access to funding or other resources), or (C) New Laws the City reserves the right to apply under this Agreement, including but not limited to Sections 2.2 and 3.4.10; (iii) all subsequent development approvals and the conditions of approval associated therewith, including but not limited to Site Development Permits, Project Tract Maps, and building permits, (iv) the payment of all fees or exactions in the categories and in the amounts as required at the time such fees are due and payable which may be at the time of issuance of building permits, or otherwise as specified by applicable law, as existing at the time such fees are due and payable, and (v) the reservation or dedication of land for public purposes or payment of fees in lieu thereof as required at the time such reservations or dedications or payments in lieu are required under applicable law to be made or paid. 2.2 Additional Applicable Codes and Regulations Notwithstanding any other provision of this Agreement, City also reserves the right to apply the following to the development of the Project: 2.2.1 Building, electrical, mechanical, fire and similar building codes based upon uniform codes adopted in, or incorporated by reference into, the La Quinta Municipal Code, as existing on the Effective Date of this Agreement or as may be enacted or amended thereafter, applied to the Project in a nondiscriminatory manner. 394/015610-0061 390243.13 a]2/17/03 -4- 2.2.2 In the event of fire or other casualty requiring construction of more than fifty (50%) percent of any building previously constructed hereunder, nothing herein shall prevent the City from applying to such reconstruction all requirements of the City's Building, Electrical, Mechanical, and similar building codes based upon uniform codes adopted in, or incorporated by reference into, the La Quinta Municipal Code, solely to the extent applicable to all development projects in the City. 2.2.3 This Agreement shall not prevent the City from establishing any new City fees, including new development impact fees, or increasing any existing City fees, including existing development impact fees, including but not limited to the Community Facility Fees, as discussed in 3.4 below, and to apply such new or increased fees to the Project or applicable portion thereof where such new or increased fees may be charged. 2.3 Permitted Density, Height and Use Limitations. The permitted uses, density and intensity of use, location of uses, maximum height and size of proposed buildings, minimum setbacks, and other standards applicable to the Project shall be those set forth in the Development Plan and this Agreement, whichever is the strictest. 3.0 DEVELOPER'S OBLIGATIONS 3.1 Development of the Project-, Planned Development. Developer shall construct the Project on the Site in accordance with the Development Plan. The Project shall consist of a mixed -use residential and commercial development with the following components: (A) a mid -price suites hotel containing approximately one hundred thirty-four (134) guest rooms ("Suites Hotel") to be constructed on a portion of the Site, as depicted on the Site Map (the "Suites Hotel Parcel"); (B) a resort -style condominium/casitas project containing approximately one hundred thirty-six (136) condominium/casitas units ("Casitas Development") to be constructed on a portion of the Site, as depicted on the Site Map (the "Casitas Development Parcel(s)"); (C) a residential development containing approximately thirteen (13) "courtyard cluster villas" homes ("Villas Residential Development") to be constructed on a portion of the Site, as depicted on the Site Map (the "Villas Residential Development Parcel"); (D) a residential development containing approximately fifty-four (54) homes consisting of approximately twenty-nine (29) "Courtyard Cluster Homes" and approximately twenty-five (25) "Perimeter Homes" (collectively, the "Cluster/Perimeter Residential Development"), to be constructed on a portion of the Site, as depicted on the Site Map ("Cluster/Perimeter Residential Development Parcel"), with (i) fourteen (14) of the homes ("Unrestricted Cluster/Perimeter Component") within the Cluster/Perimeter Residential Development to be sold on a market rate basis; and 394/015610-0061 390243.13 a12/17/03 -5- (ii) forty (40) of the homes ("Affordable Housing Component") within the Cluster/Perimeter Residential Development to be marketed and sold to moderate income buyers at an affordable housing cost (as those terms are defined in Health & Safety Code Section 50093); (E) two (2) restaurants (the "Restaurants"); (F) a medical office/surgical facility ("Medical Office/Surgical Facility") to be constructed on a portion of the Site (the "Medical/Office/Surgical Facility Parcel(s)"); and (G) a development containing approximately twenty-six (26) sanctuary villas ("Sanctuary Villas Development") to be constructed on a portion of the Site, as depicted on the Site Map (the "Sanctuary Villas Parcel(s)"); The Site Map is not a tract map and the parcels depicted there are not legal parcels. Upon Developer's preparation of a tract map that creates legal parcels substantially consistent with the Site Map, Developer shall prepare legal descriptions for each of the Suites Hotel Parcel, the Casitas Development Parcel(s), the Villas Residential Development Parcel, the Cluster/Perimeter Residential Development Parcel, the Medical Office/Surgical Facility Parcel(s), and the Sanctuary Villas Parcel(s), and Agency and Developer shall cooperate to attach such legal descriptions to any document where such legal descriptions are required. The Villas Residential Development, the Cluster/Perimeter Residential Development, the Sanctuary Villas Development, and the Casitas Development shall each constitute a Planned Development, and shall be developed and operated in compliance with Section 1350, et M. of the Civil Code. 3.2 Conditions of Approval. The Conditions of Approval attached hereto as Exhibit `B" include and incorporate the mitigation measures of the Revised Mitigated Negative Declaration so that significant environmental effects will be mitigated or avoided. The Developer shall also comply with the mitigation monitoring program set forth in Exhibit "C" attached hereto (the "Mitigation Monitoring Program"). Developer acknowledges that additional Conditions of Approval beyond those set forth in Exhibit `B" may be applicable to the Project if and as associated with future Project approvals including but not limited to Site Development Permits and Project Tract Maps. 3.3 Covenants, Conditions and Restrictions. 3.3.1 Recordation of Covenants, Conditions and Restrictions and Establish- ment of Casitas Development Homeowner Association. Prior to, and as a condition of, the City's issuance of any building permits for the Casitas Development, the Developer shall submit to the City, obtain approval thereof, and record, covenants, conditions and restrictions against the Casitas Development Parcel which, in addition to the obligations set forth in the Conditions of Approval, shall (i) establish a homeowner's association for the Casitas Development (the "Casitas Development HOA"); (ii) provide for the Casitas Development HOA's payment of the fees described in Sections 3.4.3 and 3.4.5; and (iii) provide for the rental of each of the units in the Casitas Development through a national 3941015610-0061 390243.13 a12/17/03 -6- reservation system (unless Developer provides to the reasonable satisfaction of the City a written, final, and binding determination by a governmental authority with jurisdiction, or the written opinion, subject only to reasonable qualifications, of a qualified legal counsel, that requiring the rental of units in the Casitas Development through a national reservation system would mandate registration of the Casitas Development or the sale of such units as a "security" within the meaning of applicable federal or state law or regulation). 3.3.2 Recordation of Covenants Conditions and Restrictions and Establishment of Sanctuary Villas Development Homeowner Association. Prior to, and as a condition of, the City's issuance of any building permits for the Sanctuary Villas Development, the Developer shall submit to the City, obtain approval thereof, and record, covenants, conditions and restrictions against the Sanctuary Villas Parcels which, in addition to the obligations set forth in the Conditions of Approval, shall (i) establish a homeowner's association for the Sanctuary Villas Development (the "Sanctuary Villas Development HOA"); (ii) provide for the Sanctuary Villas Development HOA's payment of the fees described in Sections 3.4.4 and 3.4.6; and (iii) provide for the rental of each of the units in the Sanctuary Villas Development through a national reservation system (unless Developer provides to the reasonable satisfaction of the City a written, final, and binding determination by a governmental authority with jurisdiction, or the written opinion of a qualified legal counsel, subject only to reasonable qualifications, that requiring the rental of units in the Sanctuary Villas Development through a national reservation system would mandate registration of the Sanctuary Villas Development or the sale of such units as a "security" within the meaning of applicable federal or state law or regulation). 3.4 Payments to City by Developer. 3.4.1 General. During the Term of this Agreement, Developer or the applicable HOA, as applicable, shall make the payments to City described in this Section 3.4. The payments under this Section 3.4 are not the exclusive development impact fees for the Project and nothing in this Section 3.4 shall be construed as a limitation on the right of the City to impose, levy, or assess the Site other development fees as permitted by applicable law. 3.4.2 Developer's Payments of One -Time Mitigation Fees. a. Developer shall pay to the City, for each unit in the Casitas Development, with such payment due upon the first close of escrow for each such unit, the sum of One Thousand Five Hundred Dollars ($1,500). b. Developer shall pay to the City, for each unit in the Sanctuary Villas Development, with such payment due upon the first close of escrow for each such unit, the sum of Two Thousand One Hundred Fifty Dollars ($2,150). 394/015610-0061 390243.13 a12/17/03 -7- 3.4.3 Casitas Development Annual Mitigation Fee, Termination. During the term of this Agreement, on each July 1 st following the Effective Date ("Annual Mitigation Payment Date"), the Casitas Development HOA shall pay to the City an annual mitigation fee ("Casitas Development Annual Mitigation Fee") covering the annual period of the prior July 1 through the June 30 occurring immediately preceding the Annual Mitigation Payment Date (the "Operative Year") [provided, however, the first Operative Year shall commence on the Effective Date of this Agreement and end on the next occurring June 30). The Casitas Development Annual Mitigation Fee shall be the collective sum of One Hundred Fifty Dollars ($150) [as the same may increase by the CPI in accordance with Section 3.4.7] for each unit ("Casitas Development Unit Fee") in the Casitas Development that has been sold to a purchaser, as evidenced by the close of escrow for such unit, prior to the applicable Annual Mitigation Payment Date regardless of when or in which Operative Year the unit was sold. Notwithstanding anything herein to the contrary, the Casitas Development Annual Mitigation Fee shall not be required to be paid for any Operative Year in which the City has received transient occupancy taxes derived from, collectively, the Suites Hotel Parcel, the Casitas Development Parcel, and the Sanctuary Villas Parcel, which equals or exceeds Five Hundred Forty -Six Thousand One Hundred Thirty -One Dollars ($546,131.00) [as the same may increase by the CPI in accordance with Section 3.4.7] (the "Minimum Annual TOT Amount") for the applicable Operative Year. Notwithstanding the paragraph above, if the City has received the Minimum Annual TOT Amount in each of three (3) consecutive Operative Years, the Casitas Development HOA's obligation to pay the Casitas Development Annual Mitigation Fee shall be terminated and shall be of no further force or effect. 3.4.4 Sanctuary Villas Development Annual Mitigation Fee,• Termination. During the term of this Agreement, on each Annual Mitigation Payment Date, the Sanctuary Villas Development HOA shall pay to the City an annual mitigation fee ("Sanctuary Villas Development Annual Mitigation Fee") covering the annual period of the prior July 1 through the June 30 occurring immediately preceding the Annual Mitigation Payment Date (the "Operative Year") [provided, however, the first Operative Year shall commence on the Effective Date of this Agreement and end on the next occurring June 30). The Sanctuary Villas Development Annual Mitigation Fee shall be the collective sum of One Hundred Fifty Dollars ($150) ) [as the same may increase by the CPI in accordance with Section 3.4.7] for each unit ("Sanctuary Villas Development Unit Fee") in the Sanctuary Villas Development that has been sold to a purchaser, as evidenced by the close of escrow for such unit, regardless of when or in which Operative Year the unit was sold. Notwithstanding anything herein to the contrary, the Sanctuary Villas Development Annual Mitigation Fee shall not be required to be paid for any Operative Year in which the City has received transient occupancy taxes derived from, collectively, the Suites Hotel Parcel, the Casitas Development Parcel, and the Sanctuary Villas Parcel, which equals or exceeds the Minimum Annual TOT Amount for the applicable Operative Year. Notwithstanding the paragraph above, if the City has received the Minimum Annual TOT Amount in each of three (3) consecutive Operative Years, the Sanctuary Villas Development 394/015610-0061 390243.13 a12/17/03 -8- HOA's obligation to pay the Sanctuary Villas Development Annual Mitigation Fee shall be terminated and shall be of no further force or effect. 3.4.5 Payment of Casitas Development Public Facilities Fee. In addition to the other . payments required to be paid pursuant to this Section 3.4, the Casitas Development HOA shall be required to pay to the City the sum of five percent (5%) of any rental amount charged for occupancy of a unit in the Casitas Development which is rented for a period of more than thirty (30) days (the "Casitas Development Public Facilities Fee"). The Casitas Development Public Facilities Fee shall be due and payable to the City within thirty (30) days after any such occupancy terminates, regardless of whether the rent, or any amount thereof, was collected. If the unit is provided free of charge or at a discount, as consideration for a service provided to the owner of the unit or to the Casitas Development HOA and/or for promotional or marketing purposes, the rent shall be deemed to be the higher of (i) the value of the services received; or (ii) the average rent of all of the units in the Casitas Development during the period the unit was provided. Notwithstanding the foregoing, the requirement to pay the Casitas Development Public Facilities Fee shall not apply in the case where an owner of a Casitas Development unit provides his or her Casitas Development unit to a person who is a relative of the owner, for no consideration, for a period of more than thirty (30) days. 3.4.6 Payment of Sanct3M Villas Development Public Facilities Fee. In addition to the other payments required to be paid pursuant to this Section 3.4, the Sanctuary Villas Development HOA shall be required to pay to the City the sum of five percent (5%) of any rental amount charged for occupancy of a unit in the Sanctuary Villas Development which is rented for a period of more than thirty (30) days (the "Sanctuary Villas Development Public Facilities Fee"). The Sanctuary Villas Development Facilities Fee shall be due and payable to the City within thirty (30) days after any such occupancy terminates, regardless of whether the rent, or any amount thereof, was collected. If the unit is provided free of charge or at a discount, as consideration for a service provided to the owner of the unit or to the Sanctuary Villas Development HOA and/or for promotional or marketing purposes, the rent shall be deemed to be the higher of (i) the value of the services received; or (ii) the average rent of all of the units in the Sanctuary Villas Development during the period the unit was provided. Notwithstanding the foregoing, the requirement to pay the Sanctuary Villas Development Public Facilities Fee shall not apply in the case where an owner of a Sanctuary Villas Development unit provides his or her Sanctuary Villas Development unit to a relative of the owner, for no consideration, for a period of more than thirty (30) days. 3.4.7 Consumer Price Index Adjustments. Each of the Casitas Development Annual Mitigation Fee, the Casitas Development Unit Fee, the Sanctuary Villas Development Annual Mitigation Fee, the Sanctuary Villas Development Unit Fee, and the Minimum Annual TOT Amount shall be adjusted annually, on each May 1" during the term of this Agreement, by the Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles -Riverside -Orange County average, All Items, 1982- 84 = 100, published by the United States Department of Labor, Bureau of Labor Statistics (the "CPI"), by comparing the CPI existing on the immediately prior March 1st to the CPI existing on the March I" of the previous year. No adjustment shall be made in any year in which there has 394/015610-0061 390243.13 a12/17/03 -9- been a decrease in the CPI. If the CPI is no longer published at any point during the Term of this Agreement, a comparable index shall be selected by the parties. 3.4.8 Termination of Sanctuary Villas Development Fees. In the event that, after the Developer constructs the Casitas Development, the escrow pursuant to which the Developer is to acquire the Sanctuary Villas Parcel(s) from the La Quinta Redevelopment Agency is terminated, or the City has otherwise determined that the Developer will not construct the Sanctuary Villas Development, the City and Developer agree to execute and record any document reasonably required by the Riverside County Recorder's Office to terminate the provisions contained in this Development Agreement as they pertain to the Sanctuary Villas Development. From and after such termination the Developer shall have no rights or obligations under this Agreement with respect to the Sanctuary Villas Parcel(s). 3.4.9 Landscape Improvements Payment. Maintenance. The City has applied for various grants (collectively, the "Landscape Grants") to partially fund the cost of certain landscaping improvements (the "Landscaping Improvements") the City desires to make to certain portions of the real property adjacent to the Site (the "Agency and City Landscape Property"). The Landscape Improvements are estimated to cost approximately Nine Hundred Eleven Thousand Two Hundred Forty -Six Dollars ($911,246). The Developer's contribution towards the Landscape Improvements is Three Hundred Forty -Six Thousand Eleven Dollars ($346,011) (the "Developer's Contribution"). In the event the City obtains the Landscape Grants, Developer shall pay to the City the Developer's Contribution, pursuant to the following: (i) Developer shall pay to City One Hundred Fifteen Thousand Three Hundred Thirty -Seven Dollars ($115,337) prior to, and as a condition of, the close of escrow pursuant to which the Developer will purchase the real property on which the Developer will construct the Suites Hotel; (ii) Developer shall pay to City One Hundred Fifteen Thousand Three Hundred Thirty -Seven Dollars ($115,337) prior to, and as a condition of, the close of escrow pursuant to which the Developer will purchase the Sanctuary Villas Parcel(s); and (iii) Developer shall pay to City One Hundred Fifteen Thousand Three Hundred Thirty -Seven Dollars ($115,337) prior to, and as a condition of, the close of escrow pursuant to which the Developer will purchase the first of the Cluster/Perimeter Residential Development Parcel or Villas Residential Parcel. Notwithstanding the payment schedule outlined above, the full amount of the Developer's Contribution shall be due and payable to the City on or before May 20, 2004. Notwithstanding anything in this Agreement to the contrary, if the City does not obtain the Landscape Grants, (i) City shall not be obligated to construct the Landscape Improvements, (ii) Developer shall not be obligated to pay to City the Developer's Contribution, and (iii) Developer shall be obligated to construct on the Agency and City Landscape Property landscape improvements in accordance with the standards set forth in the Landscaping Plan that was 394/015610-0061 -1 O- 390243.13 a12/17/03 approved as part of the various Site Development Permits for the Project, in accordance with Section 312 of the DDA (the "Developer Landscape Improvements"). Developer agrees to maintain, in perpetuity, the Landscape Improvements or the Developer Landscape Improvements, as applicable. City and Developer agree to execute an Easement Agreement, in the form attached to the DDA as Attachment No. 12, for purposes of providing Developer access to the Agency and City Landscape Property in order to perform Developer's obligations pursuant to this Section. 3.4.10 Other Fees and Charges; Assessment Appeals. Nothing set forth in this Agreement is intended or shall be construed to limit or restrict the City's authority to impose its existing, or any new or increased, fees, charges, levies, or assessments for the development of the Site, or to impose or increase, subject to the required procedure, any taxes applicable to the Site including but not limited to transient occupancy taxes, provided nothing set forth herein, subject to the next sentence, is intended or shall be construed to limit or restrict whatever right Developer might otherwise have to challenge any fee, charge, levy, assessment, or tax imposed. Developer agrees that it shall not to take any action, including any assessment appeal, to decrease the assessed value of any of the Site or any portion thereof below the final assessed value at the time the development of the Site or separate parcel thereof is completed; provided, however, the foregoing restriction on challenging or appealing assessments shall not apply to individual homeowners who have purchased units on the Villas Residential Development Parcel or the Cluster/Perimeter Residential Development Parcel. Developer shall timely pay all applicable fees, charges, levies, assessments, and special and general taxes validly imposed in accordance with the Constitution and laws of the State of California, including without limitation school impact fees in accordance with Government Code §§ 65995, et seq. 3.5 Park Improvements. Developer agrees to develop a neighborhood park on that certain City -owned property, which is identified as "Lot 6" in the Site Map (the "City Park Property"), in accordance with the list of park improvements set forth in Exhibit "D" hereto (the "Park Improvements") and all applicable City and State laws and regulations. Prior to Developer's entry onto the City Park Property, Developer shall enter into an Early Entry Agreement with the City substantially in the form of which is attached hereto as Exhibit " E". The Park Improvements shall be completed and accepted by the City prior to, and as a condition of, the City's final inspection of the first unit in the earlier of the Villas Residential Development Parcel or the Cluster/Perimeter Residential Development Parcel. 3.6 Dedications and Improvements. Developer shall offer dedications to the City or other applicable public agency, or complete those public improvements in connection with the Project, as specified in the Conditions of Approval. 394/015610-0061 390243.13 a] 2/17/03 -11- 3.7 Indemnification. a. The Developer agrees to and shall indemnify, hold harmless, and defend, the City and the Agency and their respective officers, officials, members, agents, employees, and representatives, from liability or claims for death or personal injury and claims for property damage which may arise from the acts, errors, and/or omissions of the Developer or its contractors, subcontractors, agents, employees or other persons acting on its behalf in relation to the Project and/or this Agreement. The foregoing indemnity applies to all deaths, injuries, and damages, and claims therefor, suffered or alleged to have been suffered by reason of the acts, errors, and/or omissions referred to in this paragraph, regardless of whether or not the City prepared, supplied, or approved plans or specifications, or both, and regardless of whether or not the insurance policies referred to in this Agreement are applicable. In the event of litigation, the City agrees, at no cost to the City, to cooperate with the Developer. b. In the event of any court action or proceeding challenging the validity of this Agreement or the Revised Mitigated Negative Declaration, the Developer shall indemnify, hold harmless, pay all costs and provide defense for the City in said action or proceeding with counsel chosen by Developer and reasonably approved by the City. The City shall, at no cost to the City, cooperate with the Developer in any such defense as Developer may reasonably request. In the event the Developer fails or refuses to provide such defense of any challenge to this Agreement or the Revised Mitigated Negative Declaration, City shall have the right not to defend such challenge, and to resolve such challenge in any manner it chooses in its sole discretion, including terminating this Agreement. 3.8 Insurance. Before beginning construction on the Site, the Developer shall cause the insurance required under this paragraph to be issued and thereafter to be maintained until one (1) year following the later of (i) the date City issues the last certificate of occupancy needed for the initial occupancy of the last portion of the Project, or (ii) the date the City signs off on the last final inspection of the last of the Project improvements. Developer shall procure and maintain: a, A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (A) for death and bodily injury, either (i) a combined single limit of Three Million Dollars ($3,000,000) or (ii) Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and Three Million Dollars ($3,000,000) in the aggregate, and (B) for property damage, Three Million Dollars ($3,000,000) per occurrence. b. A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both the Developer and City against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Developer in the course of carrying out the work or services contemplated in this Agreement. C. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of Three 394/015610-0061 390243.13 a12/17/03 -12- Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and property damage liability limits of Three Million Dollars ($3,000,000) per occurrence and Three Million Dollars ($3,000,000) in the aggregate or (ii) combined single limit liability of Three Million Dollars ($3,000,000). Said policy shall include coverage for owned, non -owned, leased, and hired cars. The following additional requirements shall apply to all of the above policies of insurance: (i) All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation insurance, shall name City, the Agency, and their respective officers, officials, members, employees, agents, and representatives as additional insureds. (ii) The insurer shall waive all rights of subrogation and contribution it may have against City, Agency, and their respective officers, officials, members, employees, agents, and representatives, and their respective insurers. (iii) All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to City and Agency. (iv) The policies of insurance required by this Agreement shall not require Developer to meet a deductible of more than Twenty -Five Thousand Dollars ($25,000) unless approved in writing by the City Manager in his or her sole and absolute discretion. In the event any of said policies of insurance are cancelled, the Developer shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the City Manager. Not later than the Reference Date of this Agreement, Developer shall provide the City Manager with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the City Manager. Developer agrees that the provisions of this Section shall not be construed as limiting in any way Developer's indemnity obligations set forth in Section 3.7 or the extent to which Developer may be held responsible for the payment of damages to any persons or property resulting from the Developer's activities or the activities of any person or persons for which the Developer is otherwise responsible. 4.0 CITY' S OBLIGATIONS 4.1 Scone of Subseauent Review/Confirmation_ of Compliance Process. Nothing set forth herein shall impair or interfere with the right of the City to require the processing of building permits as required by law pursuant to the applicable provisions of the La Quinta Municipal Code and the provisions of City's Fire Codes and ordinances, Health and Safety Codes and ordinances, and Building, Electrical, Mechanical, and similar building codes. 394/015610-0061 390243.13 a12/17/03 -13- Prior to each request for a building permit, Developer shall provide City with a Compliance Certificate ("Certificate") in a form created by Developer and approved by the City, which shall describe how all applicable Conditions of Approval have been fully complied with. The Certificate shall be distributed to relevant City departments for checking the representations made by Developer on the Certificate. 4.2 Project Approvals Independent. All approvals required for the Project which may be or have been granted, and all land use entitlements or approvals generally which have been issued or will be issued by the City with respect to the Project, constitute independent actions and approvals by the City. If any provision of this Agreement or the application of any provision of this Agreement to a particular situation is held by a court of competent jurisdiction to be invalid or unenforceable, or if this Agreement. terminates for any reason, then such invalidity, unenforceability or termination of this Agreement or any part hereof shall not affect the validity or effectiveness of any such Project approvals or other land use approvals and entitlements. In such cases, such approvals and entitlements will remain in effect pursuant to their own terms, provisions, and the Conditions of Approval. It is understood by the parties to this Agreement that pursuant to existing law, if this Agreement terminates or is held invalid or unenforceable as described above, such approvals and entitlements shall not remain valid for the term of this Agreement, but shall remain valid for the term of such approvals and entitlements. 4.3 Review for Compliance. The City shall review this Agreement at least once during every twelve (12) month period following the Effective Date of this Agreement, in accordance with the City's procedures and standards for such review set forth in the City's Development Agreement Ordinance. During such periodic review by the City, the Developer, upon written request from City, shall be required to demonstrate, and hereby agrees to furnish, evidence of good faith compliance with the terms hereof. The failure of the City to conduct or complete the annual review as provided herein or in accordance with the Development Agreement Act shall not impact the validity of this Agreement. If, at the conclusion of the annual review provided for herein, Developer shall have been found in compliance with this Agreement, City, through the City's Community Development Director, shall, at Developer's written request, issue a Certificate of Compliance to Developer stating that (1) this Agreement remains in full force and effect and (2) Developer is in compliance with this Agreement. The Certificate of Compliance shall be in recordable form, and shall contain information necessary to communicate constructive record notice of the finding of compliance. Developer, at its option and sole cost, may record the Certificate of Compliance. 5.0 DEFAULT, REMEDIES: DISPUTE RESOLUTION. 5.1 Notice of Default. In the event of failure by either party hereto substantially to perform any material term or provision of this Agreement, the non -defaulting party shall have those rights and remedies provided herein, provided that such non -defaulting party has first provided to the defaulting party a written notice of default in the manner required by Section 8.1 hereof identifying with 394/015610-0061 390243.13 a12/17/03 -14- specificity the nature of the alleged default and the manner in which said default may satisfactorily be cured. 5.2 Cure of Default. Upon the receipt of the notice of default, the alleged defaulting party shall promptly commence to cure, correct, or remedy the identified default at the earliest reasonable time after receipt of the notice of default and shall complete the cure, correction or remedy of such default not later than five (5) days [or thirty (30) days for non -monetary defaults] after receipt of the notice of default, or, for such defaults that cannot reasonably be cured, corrected or remedied within five (5) days [or thirty (30) days for non -monetary defaults], such party shall commence to cure, correct, or remedy such default within such five (5) day period [or thirty (30) day period for non -monetary defaults], shall and continuously and diligently prosecute such cure, correction or remedy to completion. 5.3 City Remedies. In the event of an uncured default by Developer of the terms of this Agreement, the City, at its option, may institute legal action in law or in equity to cure, correct, or remedy such default, enjoin any threatened or attempted violation, or enforce the terms of this Agreement; provided, however, that (i) City and Developer agree that City's right to pursue damages is limited to the then -outstanding loan balance under that certain Note, executed by Developer, as "Maker," in favor of Agency, as "Holder," pursuant to the DDA, and (ii) in no event shall City be entitled to consequential damages for any Developer default. For purposes of this Agreement the term "consequential damages" shall include, but not be limited to, potential loss of anticipated tax revenues from the Project or any portion thereof. Furthermore, the City, in addition to or as an alternative to exercising the remedies set forth in this Section 5.3, in the event of a material default by Developer, may give notice of its intent to terminate or modify this Agreement pursuant to the City's Development Agreement Ordinance and/or the Development Agreement Act, in which event the matter shall be scheduled for consideration and review by the City Council in the manner set forth in the City's Development Agreement Ordinance or the Development Agreement Act. 5.4 Developer's Exclusive Remedy. The parties acknowledge that the City would not have entered into this Agreement if it were to be liable in damages under or with respect to this Agreement or any of the matters referred to herein including but not limited to the Development Plan, Conditions of Approvals, the Existing Development Regulations or any future amendments or enactments thereto, or the Project, except as provided in this Section. Accordingly, Developer covenants on behalf of itself and its successors and assigns, not to sue the City for damages or monetary relief for any breach of this Agreement by City or arising out of or connected with any dispute, controversy, or issue between Developer and City regarding this Agreement or any of the matters referred to herein including but not limited to the application, interpretation, or effect of this Agreement, the Development Plan, the Conditions of Approval, the Existing Development Regulations or nay future amendment or enactments thereto, or any land use permit or approval sought in connection with the development of the Project or any component thereof, or use of a parcel or 394/015610-0061 390243.13 a12/17/03 -15- any portion thereof, the parties agreeing that declaratory and injunctive relief, mandate, and specific performance shall be Developer's sole and exclusive judicial remedies. 6.0 MORTGAGEE PROTECTION; CERTAIN RIGHTS OF CURE 6.1 Encumbrances on the Project Site. This Agreement shall not prevent or limit the Developer from encumbering the Site or any portion thereof or any improvements thereon with any mortgage, deed of trust, sale and leaseback arrangement, or any other form of conveyance in which the Site, or a portion thereof or interest therein, is pledged as security, and contracted for in good faith and fair value (a "Mortgage") securing financing with respect to the construction, development, use or operation of the Project. 6.2 Mortgage Protection. This Agreement shall be superior and senior to the lien of any Mortgage. Notwithstanding the foregoing, no breach of this Agreement shall defeat, render invalid, diminish, or impair the lien of any Mortgage made in good faith and for value, and any acquisition or acceptance of title or any right or interest in or with respect to the Site or any portion thereof by a holder of a beneficial interest under a Mortgage, or any successor or assignee to said holder (a "Mortgagee") [whether pursuant to foreclosure, trustee's sale, deed in lieu of foreclosure, lease termination or otherwise] shall be subject to all of the terms and conditions of this Agreement. 6.3 Mortgagee Not Obligated. No Mortgagee will have any obligation or duty under this Agreement to perform the obligations of the Developer or other affirmative covenants of Developer hereunder, or to guarantee such performance, except that (i) the Mortgagee shall have no right to develop or operate the Site, and (ii) to the extent that any covenant to be performed by the Developer is a condition to the performance of a covenant by the City, the performance thereof shall continue to be a condition precedent to the City's performance hereunder. 6.4 Notice of Default to Mortgagee, Right of Mortgagee to Cure. City shall, upon written request to the City, deliver to each Mortgagee a copy of any notice of default given to Developer under the terms of this Agreement, at the same time of sending such notice of default to Developer. The Mortgagee shall have the right, but not the obligation, within five (5) days [or thirty (30) days for non -monetary defaults] after the receipt of such notice from City, to cure, correct, or remedy the default, or, for such defaults that cannot reasonably be cured, corrected, or remedied within five (5) days [thirty (30) days for non - monetary defaults], to commence to cure, correct, or remedy the default within such five (5) day period [or thirty (30) day period for non -monetary defaults], and to continuously and diligently prosecute such cure to completion. If the default is of a nature which can only be remedied or cured by such Mortgagee upon obtaining possession of the Site, such Mortgagee shall have the right to seek to obtain possession with diligence and continuity through foreclosure, a receiver or otherwise, and shall be permitted thereafter to remedy or cure the default within such time as is reasonably necessary to cure or remedy said default but in no event more than thirty (30) days 394/015610-0061 390243.13 a12/17/03 -16- after obtaining possession. If any such default cannot, with diligence, be remedied or cured within such thirty (30) day period, then such period shall be extended to permit the Mortgagee to effect a cure or remedy so long as Mortgagee commences said cure or remedy during such thirty (30) day period, and thereafter diligently pursues and completes such cure. 7.0 TRANSFERS OF INTEREST IN SITE OR AGREEMENT 7.1 Prohibition. The qualifications and identity of the Developer as the developer of high quality commercial developments are of particular concern to the City. Furthermore, the parties acknowledge that the City has negotiated the terms of this Agreement in contemplation of the development and operation of the Project on the Site and the tax revenues to be generated by the operation of the Project on the Site and other benefits accruing to the City from the Project. Accordingly, until the date the Agency, pursuant to the DDA, issues a Release of Construction Covenants for the final Phase of Development (as defined in the DDA) to be constructed on the Site (the "Completion of Construction Date"), (a) no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement, (b) nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Site or the Project thereon (collectively referred to herein as a "Transfer"), except as provided in this Section 7. 7.2 Transfers Prior to Completion of Project. Prior to the Completion of Construction Date, the City may approve or disapprove a proposed Transfer in its sole and absolute discretion; provided that the City agrees to reasonably consider a proposed Transfer to an entity in which the Developer or Richard Oliphant retains a minimum of fifty-one percent (51 %) of the ownership or beneficial interest and retains management and control of the transferee entity. The City may condition its approval of such a proposed Transfer prior to the Completion of Construction Date (other than transfers approved pursuant to the immediately preceding sentence) upon the payment of one-half of the net proceeds of the Transfer. Notwithstanding the foregoing, City approval of a Transfer prior to the Completion of Construction Date shall not be required in connection with any of the following: a. The conveyance or dedication of any portion of the Site to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Project (as defined herein). b. Any assignment for financing purposes (subject to such financing being permitted pursuant to, and subject to, the DDA), including the grant of a deed of trust to secure the funds necessary for land acquisition, construction and permanent financing of the Project or of a Phase of Development. C. A transfer of any of the Suites Hotel, the Suites Hotel Parcel, the Casitas Development, or the Casitas Development Parcel(s), to Center Point Hotel Development, LLC, a California limited liability company. 394/015610-0061 390243.13 a12/17/03 -17- d. A transfer of the Villas Residential Development Parcel or Cluster/Perimeter Residential Parcel to (i) Ehline Development Co., a California corporation ("Ehline"), or (ii) a limited liability company or limited partnership to be formed by Ehline, and in which Ehline is the managing member of the liability company or the general partner of the limited partnership. e. A transfer of the Sanctuary Villas Development or Sanctuary Villas Parcel(s) to Center Point Sanctuary, LLC, a California limited liability company. f. A transfer of the Medical Office/Clinic or parcel(s) on which that use is developed to Medical Service Center of La Quinta, LLC, a California limited liability company intended to be formed by Developer. In the event of a Transfer by Developer under subparagraphs (a) through (f) above not requiring the City's prior approval, Developer nevertheless agrees that at least thirty (30) days prior to such Transfer it shall give written notice to City of such assignment and satisfactory evidence that the assignee has assumed in writing through an assignment and assumption agreement of all obligations (or specifically listed and defined obligations with respect to Transfers for a portion of the Site) of Developer of this Agreement. In the event such transfer is under subparagraphs (d), or (f) above (other than a transfer to Ehline), Developer shall, along with the notice required to be given pursuant to the immediately preceding sentence, provide City with evidence that such proposed transferee entity has been duly formed in accordance with the laws of the State of California. 7.3 Assignment and Assumption of Obligations. Developer shall provide to City an assignment and assumption agreement in a form reasonably satisfactory to the City's legal counsel for all proposed Transfers requiring the City's approval. 7.4 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon the Developer and its permitted successors and assigns. Whenever the term "Developer" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. 7.5 Assignment b-City. City may assign or transfer any of its rights or obligations under this Agreement with the approval of the Developer, which approval shall not be unreasonably withheld. 8.0 MISCELLANEOUS 8.1 Notices. All notices permitted or required hereunder must be in writing and shall be effected by (i) personal delivery, (ii) first class mail, registered or certified, postage fully prepaid, or (iii) reputable same -day or overnight delivery service that provides a receipt showing date and time 394/015610-0061 390243.13 a12/17/03 -18- of delivery, addressed to the following parties, or to such other address as any party may from time to time designate in writing in the manner as provided herein: To City: City of La Quinta 78-495 Calle Tampico La Quinta, California 92253 Attn: Community Development Director With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, California 92626 Attn: M. Katherine Jenson To Developer: CP Development La Quinta, LLC Attn: Richard Oliphant 77-900 Avenue of the States Palm Desert, CA 92211 Telephone: (760) 776-9900 Facsimile: (760) 776-9971 With a copies to: Genesis Hotel Development, LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Telephone: (760) 360-7886 Facsimile: (760) 345-7175 and Selzer, Ealy, Hemphill & Blasdel, LLP 777 E. Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill, Esq. Telephone: (760) 320-5977 Facsimile: (760) 320-9507 Any written notice, demand or communication shall be deemed received immediately if personally delivered or delivered by delivery service, and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 8.2 Force Majeure. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default where delays or failures to perform are due to war, insurrection, strikes, walk -outs, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, terrorism, epidemics, quarantine restrictions, freight embargoes, governmental restrictions imposed or mandated by other governmental entities, governmental restrictions or priority, unusually severe weather, inability to secure labor, materials, or tools necessary for the Project, delays of any contractor, subcontractor or supplier; acts of another party, acts or the failure to act of any public or governmental agency or entity (except that acts or the failure to act of the City or the Agency shall not excuse performance by the City) or any 394/015610-0061 390243.13 a12/17/03 -19- other causes beyond the control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall only be for the period of the enforced delay, which period shall commence to run from the time of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the City and the Developer. Notwithstanding the paragraph above, Developer is not entitled pursuant to this Section 8.2 to an extension of time to perform because of past, present, or future difficulty in obtaining suitable construction or permanent financing for the development of the Site, or because of economic or market conditions. 8.3 Binding Effect. This Agreement, and all of the terms and conditions hereof, shall be binding upon and inure to the benefit of the parties, any subsequent owner of all or any portion of the Project or the Site, and their respective assigns, heirs or successors in interest, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Project or the Site. 8.4 Independent Entity. The parties acknowledge that, in entering into and performing this Agreement, each of the Developer and the City is acting as an independent entity and not as an agent of the other in any respect. 8.5 Agreement Not to Benefit Third Parties. This Agreement is made for the sole benefit of the parties, and no other person shall be deemed to have any privity of contract under this Agreement nor any right to rely on this Agreement to any extent for any purpose whatsoever, nor have any right of action of any kind on this Agreement nor be deemed to be a third party beneficiary under this Agreement. Notwithstanding the immediately preceding sentence, the Agency shall be an intended third party beneficiary to this Agreement. 8.6 Covenants. The provisions of this Agreement shall constitute mutual covenants which shall run with the land comprising the Site for the benefit thereof, and the burdens and benefits hereof shall bind and inure to the benefit of each of the parties hereto and all successors in interest to the parties hereto for the term of this Agreement. 8.7 Nonliability of City Officers and Employees. No official, officer, employee, agent or representative of City, acting in his/her official capacity, shall be personally liable to Developer, or any successor or assign, for any loss, costs, damage, claim, liability, or judgment, arising out of or connection to this Agreement, or for any act or omission on the part of City. 394/015610-0061 _20_ 390243.13 a12/17/03 8.8 Covenant Against Discrimination. Developer and City covenant and agree, for themselves and their respective successors and assigns, that there shall be no discrimination against, or segregation of, any person or group or persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry, or any other impermissible classification, in the performance of this Agreement. Developer shall comply with the Americans with Disabilities Act of 1990, as amended (42 U.S.C. §§ 12101, et seq.). 8.9 Amendment of Agreement. This Agreement may be amended from time to time by mutual consent of the original parties or such party to which the Developer assigns all or any portion of its interest in this Agreement, in accordance with the provisions of the City's Development Agreement Ordinance and Government Code Sections 65867 and 65868. 8.10 No Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought and referring expressly to this Section. No delay or omission by either party in exercising any right or power accruing upon non-compliance or failure to perform by the other party under any of the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof, except as expressly provided herein. No waiver by either party of any of the covenants or conditions to be performed by the other party shall be construed or deemed a waiver of any succeeding breach or nonperformance of the same or other covenants and conditions hereof. 8.11 Severability. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Agreement shall continue in full force and effect, to the extent that the invalidity or unenforceability does not impair the application of this Agreement as intended by the parties. 8.12 Cooperation in CgMing Out Agreement. Each party shall take such actions and execute and deliver to the other all such further instruments and documents as may be reasonably necessary to carry out this Agreement in order to provide and secure to the other party the full and complete enjoyment of its rights and privileges hereunder. 8.13 Estoppel Certificate. Any party hereunder may, at any time, deliver written notice to any other party requesting such party to certify in writing that, to the best knowledge of the certifying party, (i) this Agreement is in full force and effect and a binding obligation of the parties, (ii) this Agreement has not been amended or modified either orally or in writing, or if so amended, identifying the amendments, (iii) the requesting party is not in default in the performance of its obligations 394/015610-0061 390243.13 a12/17/03 -21- under this Agreement, or if in default, describing the nature and amount of any such defaults, and (iv) any other reasonable information requested. A party receiving a request hereunder shall execute and return such certificate within ten (10) days following approval of the proposed estoppel certificate by the City Attorney, which approval shall not be unreasonably withheld or delayed. The City Manager, Assistant City Manager, and Community Development Director are each authorized to sign and deliver an estoppel certificate on behalf of the City. City acknowledges that a certificate hereunder may be relied upon by transferees and Mortgagees. 8.14 Construction. This terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. As used in this Agreement, and as the context may require, the singular includes the plural and vice versa, and the masculine gender includes the feminine and vice versa. 8.15 Recordation. This Agreement shall be recorded with the County Recorder of Riverside County at Developer's cost, if any, within the period required by Government Code Section 65868.5. Amendments approved by the parties, and any cancellation or termination of this Agreement, shall be similarly recorded. 8.16 Captions and References. The captions of the paragraphs and subparagraphs of this Agreement are solely for convenience of reference, and shall be disregarded in the construction and interpretation of this Agreement. Reference herein to a paragraph or exhibit are the paragraphs, subparagraphs and exhibits of this Agreement. 8.17 Time. Time is of the essence in the performance of this Agreement and of each and every term and condition hereof as to which time is an element. 8.18 Recitals & Exhibits Incorporated; Entire Agreement. The Recitals to this Agreement and all of the exhibits and attachments to this Agreement are, by this reference, incorporated into this Agreement and made a part hereof. This Agreement, including all Exhibits attached hereto, constitutes the entire agreement between the parties with respect to the subject matter of this Agreement, and this Agreement supersedes all previous negotiations, discussions and agreements between the parties, and no parole evidence of any prior or other agreement shall be permitted to contradict or vary the terms hereof. 8.19 Exhibits. Exhibits "A" — " E" to which reference is made in this Agreement are deemed appropriated herein in their entirety. Said exhibits are identified as follows: 394/015610-0061 390243.13 a12/17/03 -22- A-1 Legal Description of Site A-2 Site Map B Conditions of Approval C Mitigation Monitoring Program D Park Improvements E Early Entry Agreement 8.20 Counterpart Signature Pages. For convenience the parties may execute and acknowledge this agreement in counterparts and when the separate signature pages are attached hereto, shall constitute one and the same complete Agreement. 8.21 Authority to Execute. Developer warrants and represents that (i) it is duly organized and existing, (ii) it is duly authorized to execute and deliver this Agreement, (iii) by so executing this Agreement, Developer is formally bound to the provisions of this Agreement, (iv) Developer's entering into and performance of its obligations set forth in this Agreement do not violate any provision of any other agreement to which Developer is bound, and (v) there is no existing or threatened litigation or legal proceeding of which Developer is aware which could prevent Developer from entering into or performing its obligations set forth in this Agreement. 8.22 City Approvals and Actions. Whenever a reference is made in this Agreement to an action or approval to be undertaken by the City Manager, his or her authorized designee is authorized to act on behalf of the City unless specifically provided otherwise or the law otherwise requires. 8.23 Governing Law; Litigation Matters. The internal laws of the State of California shall govern the interpretation and enforcement of this Agreement without regard to conflicts of law principles. Any action at law or in equity brought by any party hereto for the purpose of enforcing, construing, or interpreting the validity of this Agreement or any provision hereof shall be brought in the Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in said county, and the parties hereto waive all provisions of law providing for the filing, removal, or change of venue to any other court. Service of process on City shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside of California. In the event of any action between the parties hereto seeking enforcement of any of the terms of this Agreement or otherwise arising out of this Agreement, the prevailing party in such litigation shall be awarded, in addition to such relief to which such party is entitled, its reasonable attorney's fees, expert witness fees, and litigation costs and expenses. 8.24 No Brokers. Each of the City and the Developer represents to the other party that it has not engaged the services of any finder or broker and that it is not liable for any real estate commissions, 394/015610-0061 390243.13 a12/17/03 -23- broker's fees, or finder's fees which may accrue by means of this Agreement, and agrees to hold harmless the other party from such commissions or fees as are alleged to be due from the party making such representations. [end — signature page follows] 394/015610-0061 390243.13 a12/17/03 -24- IN WITNESS WHEREOF, the Developer and the City have executed this Agreement as of the Reference Date. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By. Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: _ ��" Q — ( r Richard R. Oliphant Its: President "CITY" CITY OF LA QUINTA, a California municipal corporation City Manager .- -EST: OGr k City Clerk APPROVED AS TO FORM RUTAN & TUCKER, LLP M. Katherine Jenson City Attorney 394/015610-0061 -25- 390243.13 a12/17/03 Dec-17-03 11:38am From-RUTAN a TUCKER LLP 714-546-9035 T-293 P.13/17 F-582 IN WITNESS WHEREOF, the Developer and the City have executed this Agreement as of the Reference Date. "DEVELOPER' CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust fts: Member By_ Richard R. Oliphant its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: :�aQ Q— C Richard R. Oliphant Its: President ..CITY„ CITY OF LA QUINTA, a California municipal - co B Y• City Manager ATTEST: Iunee Greek City Clerk APPROVED AS TO FORM A.Kath & TUCKER, LLP (ne4Jens CityAttorney 3MO15010-wdl -25- 3qu243.13 m2/0/03 STATE OF CALIFORNIA ) \ ss COUNTY OF ,�,i ex -b On J" Cem�nloeet \`06as 3 , before me, .JLA- w e ISI C -' e jelc . , personally appearedca\-_cLyvL personally known to me (or proved to me on the*basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. .ublic GMM 118p*ConmS0wJLA2%M �.� r STATE OF CALIFORNIA ) ) ss COUNTY OF -4 e.X' s On..]/e.cur.��r ��, a�3 , before me, .�+.we_. 5• ���� personally appeared —1_tim v%a_S DE "ems v e—se-- personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. ublic DUNE S. GREEK Conrnt$ton # 12rA 0 [SEAL] Haksy PW tc - Ccoamb MrCaT.n.e�t.wii�0�t 394/015610-0061 -26- 390243.13 a12/17/03 EXHIBIT "A-1" LEGAL DESCRIPTION OF SITE IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO. 23971-1, ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 00027'38" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026'40" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 89033'22" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 0002640" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41 °42'33", AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044'32" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45027'41 ", AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 108979, O.R. THENCE SOUTH 00012'13" EAST ALONG SAID EASTERLY LINE, A DISTANCE OF 790.73 FEET TO AN ANGLE POINT THEREIN; 394/015610-0061 390243.13 a12/17/03 -1- x, THENCE SOUTH 43056'42 WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42059'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 02057'46", AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C" AND ITS NORTHWESTERLY PROLONGATION NORTH 64021'03" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO.255528, O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 86011'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 005'41 ", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 75033'02" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17033'23" EAST; THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00032'28", AN ARC DISTANCE OF 23.61 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT B, SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; 394/015610-0061 390243.13 a12/17/03 -2- THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06", AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006-56" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013' 18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02012'44", AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 67006'56" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001'12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19058'08", AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028'37" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36057'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18051'35", AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (1,850,000 SQUARE FEET), MORE OR LESS. 394/015610-0061 390243.13 a12/17/03 -3- P.O.C. CTR. 1 /4 COR. SEC. 19 S 00 `E MILES AVENUE 75.00' - 5.00 N 89.31' 3" E 487.01' N 89'3' N 00'28'37 W 153.41' 'n T.P.O.B. !y9 sy S 0V26'40" E 112.88' S 44'44.32" E %�j 90,06, C 0 r 2 N 89'4T47" E SITE 239.56' to N s6'(R'1 " AREA-42.47 AC. " L4 PORTION OF THE S. 1 /2 OF 1 " n SEC. 19, T.5S., R.7E., S.B.M. (R) n L5 N 75'53'46" E r R vPR\ES L3 PT. B 1 "=300' kw�R/W 1 �T33'3" C�0 N 866E , C, R F c4 R LINE DATA '03, NUMBER 'DIRECTION DISTANCE L1 S 00'18 01 E 397.49 L2 N 48.09'56" W 22.00' L3 N 75.33'02" E 4.22' L4 N 67'06'56" E 20.00' L5 S 6706 56" W 20:o0' L6 N 00'2W_4 ,W 20.00' L7 I N 89'33.22" E . 8.0.00' II EXCEPTION ro PARCEL PT. A N 36'57.27" E N (R) CURVE DATA 1 NUMBER DELTA RADIUS JARC LENGTH TANGENT C1 41'42'33" 440.00 320.30 167.62 02 45.27'41 " 80.00 63.48 33.52 C3 0757'46" 4565.17 236.07 118.06 C4 19'24'03" . 2500.00 846.52 427.35 C5 11'05'.41" 2072.00 401.22 201.24 C6 19*58'08" 2092.00 729.11 368.29 C7 0712'44" .2072.00, 80.00 140.01 G8 07.41'06" 2092.00 280.60 140.51 C9 00'32'28" 2500.00 23.61 111.81 C l o 18'5`I'35" 2600.00 822.91 1415.21 ' w L2 CIOeti Fqr� Z J.N. 1612 394/015610-0061 390243.13 a12/17/03 _4_ EXHIBIT "A-2" SITE MAP The Site Map is not a tract map and the parcels depicted there are not legal parcels. Upon Developer's preparation of a tract map that creates legal parcels substantially consistent with the Site Map, Developer shall prepare legal descriptions for each of the Suites Hotel Parcel, the Casitas Development Parcel(s), the Villas Residential Development Parcel, the Cluster/Perimeter Residential Development Parcel, the Medical Office/Surgical Facility Parcel(s), and the Sanctuary Villas Parcel(s), and Agency and Developer shall cooperate to attach such legal descriptions to any document where such legal descriptions are required. LOTS LANDUSE *LOT LOT t -RESTAURANT - °•34 LOT 2 - RESORT CASITAS *LOT •D• 149M s.l. 0.34 x LOT 3 - RESORT CASITAS LOT 1 ISO V. LOT 4 - RESORT CASITAS 0.99 °C' LOT 5. - RESIDENTIAL *LOT 8 - PARK LOT 7 RESIDENTIAL *LOT'C• 14n7 Ff. LOT 8 THE SANCTUARY 0.W «• 4 LOT 9 - THE SANCTUARY LOT10 ' MEDICAL OFFICE BUILDINGS LOT 11 MEDICAL OFFICE BUILDINGS LOT 12 " MEDICAL OFFICE. BUILDINGS LOT 13-- RESTAURANT LOT 14 " -HOTEL * LOT 'E 54ee V 0.13 «. COMMON LL,QTS LAND USE LOT 'A - - - - - MEDICAL OFFICE PARKING / LANDSCAPE LOT 'B - - - - - - - SEELEY. DRIVE *LOT .'C- - - - - - - 20' PARKWAY.(WASHNOTON STREET) * LOT '1 - - - " - CITY LANDSCAPE ENTRY *LOT •E- - - - 20' PARKWAY (WASHINGTON STREET) LOT •F -. - - - WELLSITE * LOT •G -- " " WELLSITE (N.A.P.) * LOT •H - - - 20' PARKWAY (MILES AVENUE) *LOT 'r - - - - - - 20' PARKWAY (MILES AVENUE) * sm af. MILES AVENUE 0.12 «. LOT 3 1 O 72 ..f. LOT 4 11991 Of. LOT 14 LOT 2 145994 ..f. OOL34 J 3.35 «. 1.27 «. LOT 13 40013 J. 1.12 «. LOT 'A• zeroes .J. LOT 12 0.47 «. 3157O35 f. CL LOT 10 315e5 .f, LOT 11 0.73 «. sxuof. LOT 'A• OT 'F' ZQ 66441 f. LOT 9 «f. * Thm pwc& are not being conveyed by the 1A Quint& Redeveloputent Agency' They we depicted on this Site Map for convenience of reference only. r V LOT •G• z00.51. LOT p a. 2 O *LOT 8 2.68 au 5: ld U tl C 7 s 0 LOT 7 3Oaf. e.99.w «. U \ U IM � LOTS 1W122 a/. Q# 1111� 3.74 x 4'ORe N.T.S. NOVEMBER 21, 2003 394/015610-0061 390243.13 a12/17/03 - 1 - EXHIBIT "B" CONDITIONS OF APPROVAL CITY COUNCIL RESOLUTION NO.2003-035 CONDITIONS OF APPROVAL - FINAL SPECIFIC PLAN 2001-055, AMENDMENT #1 ADOPTED: JUNE 3, 2003 The Specific Plan document shall be modified to include the following: The developer shall submit five final documents to the Community Development Department prior to issuance of any permits. 1. The Developer agrees to defend, indemnify and hold harmless the City of La Quinta (City), its agents, officers and employees from any claim, action or proceeding to attack, set aside, void, or annul the approval of this Specific Plan, or any other application pertaining thereto. The City shall have sole discretion in selecting its defense counsel. 2. Add to the Development Standards for Tourist Commercial, page 6, and Office Commercial, Page 8, that the first 150 feet along Washington Street is limited to structure heights of 22 feet. 3. Change, on Page 5 of the Specific Plan, Land Use Area I- 19.51 acre to 19.12- acre. 4. Change, on page 6 of the Specific Plan, Land Use Area II- 11.32 acre to 11.10- acre. 5. Add to Page 6 of the Specific Plan, Tourist Commercial Development Standards - "Minimum perimeter building/landscape setback (in feet) from Cluster Villas at the corner of Miles Avenue and Seeley Drive-18/10." 6. Add the following footnote to Page 6 of the Specific Plan, Tourist Commercial Development Standards- Resort Casitas Maximum building height (ft.) 33*; *within the first 60' along Miles Avenue, measured from the south side of the 20' landscape setback parcel, the Maximum height of the Resort Casitas units is 22'; within the next 60' to 150' along Miles Avenue, the Maximum height of the Resort Casitas units is 26'; the height may be 33' outside the 150' setback. 7. Change, on Page 7 of the Specific Plan, Medium Density Residential (RM) Development standards- Attached Dwelling Units to Two-story Courtyard Single Family Homes. 8. Eliminate on Page 7, Two-story Courtyard single family homes standard for the minimum perimeter building/landscape setback from Tourist Commercial (casita units) 5 feet. 394/015610-0061 390243.13 a12/17/03 -1- 9. Add on, Page 7, Two-story Courtyard single-family homes standard, Interior street building/landscape setback 20 feet. 10. Add on, Page 7, Two-story Courtyard single-family homes standard, minimum front yard setback 20 feet. 11. Change, on Page 7A of the Specific Plan, Medium Density Residential (RM) Development standards- Single Family Cluster Courtyard to One- and Two -Story Single Cluster Courtyard Villas. 12. Page 7A. Single Family Cluster Courtyard Dwelling Units Standards. Add an Interior street building/landscape setback of 20 feet. 13. Page 7A. Single Family Cluster Courtyard Units. Change the setback from Tourist Commercial (casita units) from 5 feet to 10 feet. 14. Page 7A. Single Family Cluster Courtyard Dwelling Units Standards. Change the minimum perimeter building/landscape setback from Tourist Commercial District from 5 feet to 10 feet. 15. Add the following footnote to Page 7A of the Specific Plan, Medium Density Residential (RM) Development standards- One- and Two -Story Single Cluster Courtyard Villas Building Height 28 ft*; *within the first 60' along Miles Avenue, measured from the south side of the 20' landscape setback parcel, the Maximum height of the One- and Two -Story Single Cluster Courtyard Villas units is 22'; within the next 60' to 150' along Miles Avenue, the Maximum height of the One- and Two -Story Single Cluster Courtyard Villas units is 26'; the height may be 28' outside the 150' setback.. 16. Page 16. On -Site Improvements. Move the last bullet point, The Public Works Department shall consider the option to install a left turn pocket for Seeley Drive southbound, north of Miles Avenue to the off -site improvement section. 17. Exhibit B and F is for illustrative purposes and is subject to modification based upon the development standards in this Specific Plan and applicable Zoning Development Standards. 18. Page 8. Land Use Area IV. Add C. Prohibited Uses: 1. Helicopter Landing Areas; and, 2. Emergency Center. 19. Change, on Page 8 of the Specific Plan, Land Use Area III- 3.02-acre to 2.68- acre. 20. Change, on page 8 of the Specific Plan, Land Use Area IV- 9.73-acre to 9.22- acre. 21. Comply with the Coachella Valley Water District Letter dated January 30, 2002, Attachment A, unless modified by the District. 394/015610-0061 390243.13 a12/17/03 -2- 22. Streets shall be 28 feet wide with 12 foot setbacks with no parking on one side of the street for the One and Two Story Courtyard Villas located north of Seeley Drive and west of the Park. 23. The grading plan shall be approved with the site development permit by the Planning Commission. 24. The HOA shall maintain all common area landscaping in perpetuity. 25. The landscaping shall comply with the Water Efficiency Ordinance. 26. The boundary between the residential development and the park may be designed with compatible uses. 27. Eliminate the last paragraph on Page 22 under Circulation Element. 28. Add Exhibits B-1 (Concept Plan- Development Parceling), B-2 (Concept Plan - Medical & Surgical Center), and B-3 (Concept Plan- Boutique Hotel) to the Specific Plan 394/015610-0061 390243.13 a12/17/03 -3- Addendum for Environmental Assessment 2001-436 Planning Commission Resolution 2002-017 City Council Resolution 2002-07 I.a)&c) The proposed project occurs at a high topographic point in the city, and is bordered on the east and north by single family residential development. In order to assess the potential impacts to the viewshed of these single family residential units, a visual impact simulation was conducted.' The simulations were conducted for views from the east and south to the west, and from the north and east to the south and west. The analysis clearly demonstrates that the scale of the proposed project will not eliminate the views of existing or future residential units to the surrounding mountains. The impacts of structures on the project site will be less than significant. III. a) & d) Air quality in the Coachella Valley and the City is primarily affected by vehicular emissions. The development of this project could generate up to 6,170 average daily trips. Based on this trip generation, the project at buildout will generate the following ~%l L itante Running Exhaust Emissions ounds/da PM10 PM10 PM10 CO ROC NOx Exhaust Brakes Tires 50 mph 223.1 8.58 45.76 -- 0..95 0.95 Daily Threshold* 550 75 100 150 Based on 6,170 trips/day and average trip length of 7 miles, using EMFAC7G Model provided by California Air Resources Board. Assumes catalytic light autos at 75°F. * Operational thresholds provided by SCAQMD for assistance in determining the significance of a project and the need for an EIR. As demonstrated above, the operational impacts associated with air quality on the project site are expected to be less than significant. III.c) The Coachella Valley is a non -attainment area for PM10 (particulate matter of 10 microns or smaller). The construction of the proposed project has the potential to generate dust, which could contribute to the PM 10 problem in the area. In order to control PM10, the City has imposed standards and requirements on development to control dust. The applicant will be required to submit such a plan prior to initiation of any 1 Visual Impact Simulations, The Keith Companies, December 2001. 2 "La Quinta Gateway Traffic Impact Analysis," prepared by Urban Crossroads, December 2001. 394/015610-0061 390243.13 a] 2/17/03 -1- earth moving activity at the site. In addition, the potential impacts associated with PM10 can be mitigated by the mitigation measures below. Construction equipment shall be properly maintained and serviced to minimize exhaust emissions. 2. Existing power sources should be utilized where feasible via temporary power poles to avoid on -site power generation. 3. Construction personnel shall be informed of ride sharing and transit opportunities. 4. Cut and fill quantities will be balanced on site. 5. Any portion of the site to be graded shall be pre -watered to a depth of three feet prior to the onset of grading activities. 6. Watering of the site or other soil stabilization method shall be employed on an on- going basis after the initiation of any grading activity on the site. Portions of the site that are actively being graded shall be watered regularly to ensure that a crust is formed on the ground surface, and shall be watered at the end of each work day. 7. All disturbed areas shall be treated to prevent erosion until the site is constructed upon. Pad sites which are to remain undeveloped shall be seeded with either a desert wildflower mix or grass seed, or chemical stabilizer. 8. Landscaped areas shall be installed as soon as possible to reduce the potential for wind erosion. Perimeter landscaping on Avenue 52 and Jefferson Street, and the retention basin landscaping shall be completed with the first phase of development. 9. SCAQMD Rule 403 shall be adhered to, insuring the clean up of construction - related dirt on approach routes to the site. 10. All grading activities shall be suspended during first and second stage ozone episodes or when winds exceed 25 miles per hour. 11 All buildings on the project site shall conform to energy use guidelines in Title 24 of the California Administrative Code. With the implementation of these mitigation measures, the impacts to air quality from buildout will not be significant. IV. a) The proposed project is within the mitigation fee area for the Coachella Valley Fringe - toed Lizard Habitat Conservation Plan, and will be required to pay fees to mitigate the potential impact on this species. The payment of the fees serves to mitigate the impacts to a less than significant level. 394/015610-0061 390243.13 a12/17/03 -2- V.b)&d) Several cultural resource studies were completed for the subject property.3 The surveys included extensive testing and the excavation of a cremation site. The work done on the site to date has been comprehensive, but additional resources may be buried within the project area. As a result, to ensure that the potential impacts to cultural resources are mitigated, the following mitigation measure shall be implemented: 1. During any and all earth moving activities on any portion of the project site, a qualified archaeological monitor shall be present. The monitor shall be empowered to stop or redirect activities on the site should a resource be identified. A final report shall be filed with the Community Development Department prior to issuance of a certificate of occupancy for any building on the project site. VI. a) ii) A geotechnical investigation was completed for the project site a The site occurs in a seismic Zone IV. The site, as with the balance of the City, will be subject to strong ground shaking during a seismic event. The City has implemented standards in the Uniform Building Code to ensure the highest construction standards are applied to protect against seismic hazard. These standards are expected to ensure that impacts associated with seismic ground shaking are reduced to a less than significant level. IX. b) The proposed General Plan Amendment and Change of Zone will change the land uses on the project site from High Density Residential and Park to Tourist Commercial, Medium Density Residential, and Park. The surrounding land use designations include Park, Low Density Residential and Watercourse. The change in land use represents a natural extension of the land use plan, insofar as it places more intense land use (Tourist Commercial) at the intersection of Miles and Washington, and steps down the land use intensity as it proceeds easterly. The Medium Density Residential will be an effective buffer to the existing and future low density development to the east and south. The existing High Density Residential designation is a relatively intense land use, which would not have been buffered from the Low Density development to the east. The proposed General Plan and Change of Zone will therefore represent a less than significant impact on the land use pattern in the City. 3 "Archaeological Monitoring Report, Miles Avenue Borrow Site," prepared by CRM Tech, July 2001; "Final Report Archaeological Mitigation of Project Effects to a Native American Cremation Found on Parcel Map No. 26860," prepared by CRM Tech, February 2001; "Final Report Archaeological Testing and Site Evaluation on Parcel Map No. 26860," prepared by CRM Tech, June 2000; "Phase I Archaeological Assessment of 54.65 Acres at the Southeast Corner of Washington Street and Miles Avenue," prepared by Archaeological Advisory Group, June 1999. 4 "Geotechnical Engineering Report," prepared by Earth Systems Southwest, November 2001. 394/015610-0061 390243.13 a12/17/03 -3- XI. a) A noise study was completed for the proposed project.5 The project site is currently subject to high noise levels, and will continue to be impacted by noise as the project build out. The noise levels will not be reduced to City standards without mitigation. In order to achieve acceptable noise levels for the hotels and townhomes on the subject property, the noise study proposes several setback areas for the construction of sound walls, depending on the site design. These mitigation measures include sound walls and/or berms ranging from 0 to 10 feet in height, and are variable depending on the finish grade of the individual sites within the project. With the implementation of the mitigation measures included in the noise study, however, noise levels on the site at buildout can be reduced to an acceptable level. Since no Site Development Permit is proposed at this time for any portion of the site, and specific mitigation cannot therefore be evaluated, the following mitigation measures shall be implemented: 1. Any site development permit submitted for any portion of the site shall either: a) Demonstrate conformance with the mitigation measures provided in the "Revised Preliminary Acoustical Analysis" prepared by Gordon Bricken & Associates on December 6, 2001; or b) Submit a noise study specifically prepared for that site development permit which demonstrates that the noise levels can be reduced on the site to the noise standards in effect at the time of submittal of the application. XIII. a) The proposed development will have a less than significant impact on public services. All areas of the proposed Specific Plan will be served by the County Sheriff and Fire Department, acting under City contract. Site development will generate property tax, transient occupancy tax and sales taxes which will offset the costs of added police and fire services. The project will be required to pay the mandated school fees as development occurs. These fees mitigate the students generated, and offset the impacts to schools. The collection of property tax, and the generation of sales tax will generate revenues to the City to offset the added costs associated with the provision of municipal services. The project will be required to participate in the City's Impact Fee Program, which helps to offset roadway improvement costs. XV. a) A traffic study was conducted for the proposed project. 6 The study found that buildout of the proposed project would generate up to 6,170 average daily trips, of which 310 would 5 "Revised Preliminary Acoustical Analysis," prepared by Gordon Bricken & Associates, December 2001. 6 "La Quinta Gateway Traffic Impact Analysis," prepared by Urban Crossroads, December 2001. 394/015610-0061 390243.13 a12/17/03 -4- occur during the AM peak, and 465 during the PM peak hour. The volume generated by the proposed project, combined with the growth in traffic volumes on City streets from other project in the area resulted in recommended mitigation measures in the study in order to maintain City level of service standards. These mitigation measures are enumerated below: 1. Miles Avenue and Washington Street shall be constructed to their full half -width right-of-way with development of the first phase of the project. 2. A traffic signal shall be installed at the intersection of Seeley Drive and Miles Avenue in conjunction, as warranted. 3. Access to the project from Washington Street shall be limited to right -in, right -out only. 4. Left turn pocket on Seeley Drive, accessing westbound Miles Avenue, shall be a minimum of 100 feet in length. Left turn pocket on westbound Miles Avenue, accessing southbound Seeley Drive, shall be a minimum of 150 feet in length. With the implementation of these mitigation measures, impacts of the project on the City's circulation system shall be less than significant. XVI. a)-f) The buildout of the site will require service from utility providers. The overall impacts on these services is not expected to be significant, insofar as these suppliers will charge the businesses and residents for their services, and provide improvements to these services as needed. In addition, connection fees will be required at construction of any project. These fees and charges will mitigate the potential impacts to a less than significant level. 394/015610-0061 390243.13 a12/17/03 -5- EXHIBIT "C" MITIGATION MONITORING PROGRAM PROJECT MONITORING CHECKLIST (CEQA Mitigation Measures) CITY OF LA QUINTA MONITORING PROGRAM FOR CEQA COMPLIANCE DATE: December 5, 2001 ASSESSORS PARCEL NO.: CASE NO.: GPA 2001-083, ZC 2001-105, PROJECT LOCATION: SP 2001-055 EA/EIR NO: 2001-436 APPROVAL DATE: APPLICANT: City of La Quinta Southeast corner of Washington Street and Miles Avenue In Process THE FOLLOWING REPRESENTS THE CITY=S MITIGATION MONITORING PROGRAM IN CONNECTION WITH THE MITIGATED NEGATIVE DECLARATION FOR THE ABOVE CASE NUMBER SUMMARY RESPONSIBLE FOR TIMING CRITERIA COMPLIANCE DATE MITIGATION MONITORING CHECKED BY MEASURES ITT ATT? (NTAT.TTV Maintain construction Contractor. Project Construction. SCAQMD standards. equipment. Utilize temporary power. City Engineer. Prior to issuance of IID standards. grading permits. Balance cut and fill on site. City Engineer. Project Construction. Municipal Code. Pre -water and stabilize Building Department. Prior to issuance of PM10 Management soils. building ermits. Plan. Provide alternative Community Prior to the issuance of TDM ordinance. transportation. Development grading permits. Department. V_ CULTURAL RESOURCES MEASURE• Archaeological monitor to Community During earth moving. City standards for be on site during earth Development and cultural resource moving. Public Works analysis. Departments. 394/015610-0061 390243.13 a12/17/03 SUMMARY RESPONSIBLE FOR TIMING CRITERIA COMPLIANCE DATE MITIGATION MONITORING CHECKED BY MEASURES v1 ivnie'v Conform to December 6, Community Site Development Project review, 2001 Gordon Bricken & Development Permit review Plan inspection. Associates noise Department, Building check. mitigation measures. Department. Alternatively, submit Community Site Development Project review. revised noise analysis, Development Permit review. conforming to City Department. standards. VV TDA1111r AN71r1Dr11i.AT1nN Construct Miles & City Engineer. Project Construction. Inspection. Washington to ultimate right-of-ways. Install traffic signal at City Engineer. Construction or Plan check. Seeley and Miles. warrants. Limit access on City Engineer. Plan Check. City standards for Washington to right -in, access. right -out. Left turn pockets to be 100 City Engineer. Plan Check. City standards for foot minimum on Seeley to roadway Miles and 150 foot improvements. minimum on Miles to Seeley. 394/015610-0061 390243.13 a12/17/03 -2- EXHIBIT "D" PARK IMPROVEMENTS The Park Improvements shall include all of the following: Appropriate irrigation, turf, landscaping and walkways. All hardscape shall be handicap accessible. 2. A 20,000 square foot dog park which contains: (1) A six foot high wrought iron fence around the entire park perimeter, with the wrought iron fencing 2 inches on center 2 feet from the bottom, and 4 inches on center 4 feet from the lower section to the top, and which contains a top rail. The fence shall be centered on a 4-inch mow curb. (2) The park area is to be divided, by fencing that meets the specifications listed in (1) above, into two sections, with one section containing approximately 12,000 square feet, and the other section containing approximately 8,000 square feet. (3) A double -entry gate system leading to both sections that is handicap accessible. (4) A 6-foot wide maintenance gate into each section. (5) *Two drinking fountains, to be acquired from Most Dependable Fountains (1- 800-831-3606; Model #400SM), with one fountain to be installed in each section of the dog park. (6) *Two benches, to be acquired from Playworld Systems (1-800-669-2585; Model #ZZXX 1410), with one bench to be installed in each section of the dog park. (7) *Two shade structures to be installed over the benches described in (6) above, to be acquired from Shade Structures (1-800-50 SHADE) (must contain dimensions of10'X10'). (8) *Two trash containers, to be acquired from Playworld Systems (Model #ZZXX 1414, ZZXX 1415, ZZXX 1418, or ZZXX8060), with one trash container to be installed in each section of the dog park. 3. A 5,000 square foot playground, which contains: (1) A handicap accessible entry into the play area. (2) *One playground structure designed for ages 2-12 years, to be acquired from Playworld Systems (Model #500-0103). (3) *One arch swing with two bays, to be acquired from Playworld Systems (Model #SWING ARCH 500, #SWING ARCH 500-ADD). (4) One wood product, to be acquired from Sof Fall Engineered Wood Fiber with felt layer and swing/slide mats to be installed to meet industry standards for safety. (5) One spring animal, to be acquired from Playworld Systems (Model #ZZXX0585 Speedy Racer). (6) *One play panel, to be acquired from Playworld Systems (Model #ZZPD-SHOP). (7) *One drinking fountain, to be acquired from Most Dependable Fountains (Model #440SM (Hi Lo)), to be installed near the playground structure. 394/015610-0061 390243.13 a]2/17/03 (8) *Two benches, to be acquired from Playworld Systems (Model #ZZXX1410), to be installed facing the playground structure. (9) *Two shade structures to be installed over the benches, to be acquired from Shade Structures (must contain dimensions of 10' X 10'). (10) *One trash container, to be acquired from Playworld Systems (Model #ZZXX1414, ZZXX1415, ZZXX1418, or ZZXX8060), to be installed near the playground structure. *Colors to be determined by City staff at time of order. 394/015610-0061 2 390243.13 a12/17/03 EXHIBIT "E" FORM OF EARLY ENTRY AGREEMENT This Early Entry Agreement ("Agreement") is entered into as of , 2003, by and among the CITY OF LA QUINTA, a municipal corporation and a charter city organized and existing under the Constitution of the State of California ("City"), and CP DEVELOPMENT LA QUINTA, LLC., a California limited liability company ("Developer"), with reference to the following facts: RECITALS: A. City is the present owner of that certain property located in La Quinta, California, identified as "Lot 6" on the site map attached hereto and incorporated herein as Exhibit "A" (the "Property") B. City and Developer have executed and entered into that certain Development Agreement, with a Reference Date of 2003, ("Development Agreement") pursuant to which Developer agrees, among other obligations, to enter upon the Property and construct and install the "Park Improvements" as described in Exhibit E to the Development Agreement. C. Pursuant to its obligation under the Development Agreement to construct and install the Park Improvements on the Property, Developer has now requested the right to enter onto and about the Property to perform the Park Improvements (hereinafter, the "Permitted Work") and City is willing to allow such entry on the terms and conditions hereinafter specified. AGREEMENT: NOW, THEREFORE, in consideration of the covenants and agreements contained herein and other valuable consideration, the sufficiency and receipt of which are hereby acknowledged by the parties hereto, the parties covenant and agree as follows: 1. Grant of License. City hereby grants to Developer and its employees, agents, consultants, and contractors ("Related Parties") a license for the term set forth in Paragraph 3 ("License") to enter upon the Property between the hours of 8:00 a.m. and 5:00 p.m., Monday through Friday, for the purposes of the Permitted Work. Notwithstanding the above, at least forty-eight (48) hours prior to any of the Related Parties' first entry onto the Property to commence the Permitted Work, Developer shall notify City of its intention of the same, and shall thereafter provide such notice before again entering the Property if there is an interruption of such initial entry for a period of even (7) consecutive days (excluding interruptions for events of enforced delay as defined in Section 8.2 of the Development Agreement). Said notice shall be provided by facsimile, addressed to the person listed in Section 8.8 hereof at the number provided therein. City may reject any proposed entry by providing telephonic notification to Developer to the person listed in Section 8.8 hereof, at the number provided therein, at any time prior to the time of the proposed entry. City has full right, title and authority to grant Developer the License for the Permitted Work, and no third party permission or consent is needed in connection therewith. Such License 394/015610-0061 3 390243.13 a12/17/03 shall be non -revocable for the Term defined in Paragraph 3 below, except as otherwise set forth herein. City specifically agrees that Developer shall have access to and be entitled to perform the Permitted Work on all portions of the Property, provided, however, that neither Developer nor any of the Related Parties shall interfere with any other real or personal property, or enter upon any other real property, without first obtaining the written consent of the owner(s) of such other real or personal property. 2. City's Authority to Revoke. City may revoke this License upon two (2) days written notice to Developer delivered in accordance with Subparagraph 8.8 below in the event: (i) in the reasonable judgment of City, such revocation is necessary to protect the public health, safety, or welfare pursuant to the exercise of City's police powers; or (ii) Developer is in violation of the terms of this Agreement or any applicable law, statute, ordinance, rule, or regulation pertaining to the Permitted Work or Developer's or the Related Parties' entry upon the Property pursuant to this Agreement, and Developer has failed to cure such violation within two (2) days following Developer's receipt of notice of such violation from City. 3. Term. Unless earlier revoked or terminated pursuant to the provisions of this Agreement, the term of the License shall commence on full execution hereof and shall terminate on the earlier of (i) City's final inspection of and approval of the Permitted Work, or (ii) one hundred twenty (120) days from the date hereof. 4. Repair and Restoration of Property. Developer shall repair any damage it causes to the Property in the course of performing the Permitted Work pursuant hereto and shall, except for the actual Permitted Work allowed hereby, restore the Property to the condition existing prior to Developer's or Related Parties' entry onto the Property, unless this requirement is waived by the City Manager or the Community Development Director in his or her sole and absolute discretion. 5 Compliance with Laws. Developer shall obtain, at is sole cost and expense, all governmental permits and authorizations required by any governmental agencies for the Permitted Work. Developer shall comply with, and shall cause all of its Related Parties to comply with, all applicable governmental laws, rules, regulations and requirements governing the Permitted Work. Prior to Developer's or any of the Related Parties' entry onto the Property to perform any of the Permitted Work, Developer shall have prepared, obtained approval from the City thereof, and implemented, a dust control program. 6. Indemnity. Developer shall protect, defend, indemnify and hold harmless City and the La Quinta Redevelopment Agency ("Agency") and their respective officers, officials, members, employees, agents, and representatives (any of the foregoing shall be known individually as "Indemnitee" and collectively as "Indemnitees"), and each of them, jointly and severally, against and from any and all claims, demands, causes of action, damages, costs, expenses, losses and liabilities, at law or in equity, of every kind or nature whatsoever, including attorneys' fees and expert witness fees (hereinafter "Claims"), brought in connection with any death or personal injury to any person or persons or damage or destruction of any property arising out of or in any manner directly or indirectly connected with the entry upon the Property by Developer or any of its Related Parties or the activities on the Property (including but not limited to the Permitted Work) by Developer or any of its Related Parties, but excluding from the foregoing any Claims resulting from environmental contamination of the Property or other 394/015610-0061 4 390243.13 a12/17/03 defects on the Property existing prior to Developer's entry thereon and not otherwise caused by Developer or any of the Related Parties. The foregoing indemnification shall also cover: (a) any mechanics' or materialmen's liens, claims, demands, actions or suits arising (directly or indirectly) from (i) any work performed or materials supplied to or for Developer, or (ii) any activities of any of its Related Parties on or relating to the Property (including, without limitation, any claims by any of such Related Parties); and (b) any costs of removing Developer or its Related Parties from the Property after the expiration of the term hereof unless Developer is otherwise entitled to be on the Property at such time under this Agreement. 7. Insurance. (a) Before entering the Property for any purpose, Developer shall cause the insurance required under this paragraph to be issued and thereafter to be maintained until one (1) year following the end of the Term. Developer shall procure and maintain: (1) A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (i) for death and bodily injury, either (A) a combined single limit of Three Million Dollars ($3,000,000) or (B) Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and Three Million Dollars ($3,000,000) in the aggregate, and (ii) for property damage, Three Million Dollars ($3,000,000) per occurrence. (2) A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both the Developer and City against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Developer in the course of carrying out the work or services contemplated in this Agreement. (3) A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and property damage liability limits of Three Million Dollars ($3,000,000) per occurrence and Three Million Dollars ($3,000,000) in the aggregate or (ii) combined single limit liability of Three Million Dollars ($3,000,000). Said policy shall include coverage for owned, non -owned, leased, and hired cars. (b) The following additional requirements shall apply to all of the above policies of insurance: (1) All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation insurance, shall name City, the Agency, and their respective officers, officials, members, employees, agents, and representatives as additional insureds. 394/015610-0061 5 390243.13 a12/17/03 (2) The insurer shall waive all rights of subrogation and contribution it may have against City, Agency, and their respective officers, officials, members, employees, agents, and representatives, and their respective insurers. (3) All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to City and Agency. (4) The policies of insurance required by this Agreement shall not require Developer to meet a deductible of more than Twenty -Five Thousand Dollars ($25,000) unless approved in writing by the City Manager, or his or her designee, in his or her sole and absolute discretion. (c) In the event any of said policies of insurance are cancelled, the Developer shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the City Manager, or his or her designee. (d) Not later than the date of this Agreement, Developer shall provide the City Manager with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the City Manager, or his or her designee. (e) Developer agrees that the provisions of this Section shall not be construed as limiting in any way Developer's indemnity obligations set forth in Section 6 or the extent to which Developer may be held responsible for the payment of damages to any persons or property resulting from the Developer's activities or the activities of any person or persons for which the Developer is otherwise responsible. 8. Miscellaneous. 8.1 Authorily. Each signatory hereto warrants to the other party that it has authority to sign on behalf of the party for whom it purports to sign. 8.2 Attorney's Fees. In the event any party hereto brings suit to enforce the terms of this Agreement or on account of breach hereof, the party not prevailing in such suit shall pay all reasonable costs and expenses incurred by the other party in such suit, including, without limitation, court costs, attorneys' fees, and expert witness fees. 8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations, understandings or agreements relating thereto. 8.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. 8.5 Litigation Matters. The Municipal and Superior Courts of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation 394/015610-0061 6 390243.13 a12/17/03 between the parties arising out of this Agreement. This Agreement shall be governed by, and construed under, the laws of the State of California. Service of process on City shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. 8.6 Non -liability of City Officers and Employees. No officer, official, member, employee, agent, or representative of City shall be personally liable to Developer, or any successor or assign of same, in the event of any default or breach by City, or for any amount which may become due to Developer, or any successor or assign of same, or for breach of any obligation of the terms of this Agreement. 8.7 Covenant Against Discrimination. Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through it, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the performance of this Agreement. 8.8 Notices. Unless other sections of this Agreement allow certain specific notices to be given by other means, all notices required to be delivered under this Agreement or under applicable law shall be delivered by one of the following means: (a) personal delivery; (b) delivery by United States mail, prepaid, certified, return receipt requested; (c) delivery by reputable document delivery service that provides a receipt showing date and time of delivery; or (d) delivery by facsimile provided the sender receives confirmation the fax was received. Notices personally delivered or delivered by a document delivery service shall be effective upon receipt. Notices delivered by mail shall be effective at 5:00 p.m. on the second business day following dispatch. Notices delivered by facsimile shall be effective upon receipt provided that any faxed notices which are transmitted at any time other than 8:00 a.m. to 4:30 pm Monday through Friday (excluding legal holidays) shall be deemed transmitted as of the next business day. Notices shall be delivered to the following addresses: To City: City of La Quinta Attn: Community Development Director 78-495 Calle Tampico La Quinta, CA 92253 Telephone: (760) 777-7000 Facsimile: (760) 777-1233 With a copy to: Rutan & Tucker, LLP Attn: M. Katherine Jenson, Esq. 611 Anton Boulevard, 14th Floor Costa Mesa, CA 92626-1998 Telephone: (714) 641-5100 Facsimile: (714) 546-9035 394/015610-0061 390243.13 a12/17103 To Developer: CP Development La Quinta, LLC Attn: Richard Oliphant 44-139 Monterey Avenue, Suite 201 Palm Desert, CA 92260 Telephone: (760) 776-9900 Facsimile: (760) 776-9971 With a copies to: Genesis Hotel Development, LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Telephone: (760) 360-7886 Facsimile: (760) 345-7175 and Selzer, Ealy, Hemphill & Blasdel, LLP 777 E. Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill, Esq. Telephone: (760) 320-5977 Facsimile: (760) 320-9507 Changes in the address to be used for receipt of notices shall be effected in accordance with this Paragraph 8.7. Agreement. 8.8 Time of Essence. Time is of the essence in the performance of the [end — signature page follows) 394/015610-0061 8 390243.13 a12/17/03 IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the date first above -written. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager Lin Richard R. Oliphant Its: President "CITY" CITY OF LA QUINTA By: City Manager 394/015610-0061 9 390243.13 a12/17/03 EXHIBIT "A" TO EARLY ENTRY AGREEMENT SITE MAP The Site Map is not a tract map and the parcels depicted there are not legal parcels. Upon Developer's preparation of a tract map that creates legal parcels substantially consistent with the Site Map, Developer shall prepare legal descriptions for each of the Suites Hotel Parcel, the Casitas Development Parcel(s), the Villas Residential Development Parcel, the Cluster/Perimeter Residential Development Parcel, the Medical Office/Surgical Facility Parcel(s), and the Sanctuary Villas Parcel(s), and Agency and Developer shall cooperate to attach such legal descriptions to any document where such legal descriptions are required. M LAND USE LOT I RESTAURANT LOT 2 - RESORT CASITAS *LOT 0.34 LOT 3 - RESORT CASITAS LOT - RESORT CASITAS LOT b - RESIDENTIAL *LOT 8 - PARK LOT 7 RESIDENTIAL LOT 8_- THE SANCTUARY LOTS THE SANCTUARY LOT 10MEDICAL OFFICE BUILDINGS LOT 11 MEDICAL OFFICE BUILDINGS LOT 12 ' MEDICAL OFFICE BUILDINGS LOT 13 RESTAURANT LOT 14 ' HOTEL COMMON LOTS LOT 'A - - - - - - - - LAND USE MEDICAL OFFICE PARKING / LANDSCAPE LOT 'B' - - - - - - - SEELEY DRIVE * LOT 'C- - -- - - - 20' PARKWAY.(WASHINGTON STREET) * LOT '0' - - - - - - - CITY LANDSCAPE ENTRY *LOT 'E - - " - - - - 20' PARKWAY (WASHINGTON STREET) LOT 'F' - - - - - - - WELLSITE * LOT 'G- - - - - " - - WELLSITE (N.A.P) * LOT 'H' - - - " " - " 20' PARKWAY (MILES AVENUE) * LOT 'I' - - - - " - - 20' PARKWAY (MILES AVENUE) *LOT 'H 234e3 al 0.34 �. * These patceis are not being conveyed by the La Quints Redevelopment Agency. They = depicted on this Site Map for convenience of refeence Wy. N.T.S. NOVEMBER 21. 2003 AGENCY CONSENT TO RECORDATION THE LA QUINTA REDEVELOPMENT AGENCY HEREBY CONSENTS TO THE RECORDATION OF THE FOREGOING DEVELOPMENT AGREEMENT AGAINST THE REAL PROPERTY DESCRIBED IN EXHIBIT "A" TO SAID DEVELOPMENT AGREEMENT. LA QUINTA REDEVELOPMENT AGENCY Its: STATE OF CALIFORNIA ) ) ss COUNTY OF On , before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 394/015610-0061 390243.13 a12/17/03 EARLY ENTRY AGREEMENT This Early Entry Agreement ("Agreement") is entered into as of Qe , t $ , 2003, by and among the CITY OF LA QUINTA, a municipal corporation and a charter city organized and existing under the Constitution of the State of California ("City"), and CP DEVELOPMENT LA QUINTA, LLC., a California limited liability company ("Developer"), with reference to the following facts: RECITALS: A. City is the present owner of that certain property located in La Quinta, California, identified as "Lot 6" on the site map attached hereto and incorporated herein as Exhibit "A" (the "Property"). B. City and Developer have exesuted and entered into that certain Development 2003, Agreement, with a Reference Date of bc�1r- ("Development pment Agreement") pursuant to which Developer agrees, among other obligations, to enter upon the Property and construct and install the "Park Improvements" as described in Exhibit E to the Development Agreement. C. Pursuant to its obligation under the Development Agreement to construct and install the Park Improvements on the Property, Developer has now requested the right to enter onto and about the Property to perform the Park Improvements (hereinafter, the "Permitted Work") and City is willing to allow such entry on the terms and conditions hereinafter specified. AGREEMENT: NOW, THEREFORE, in consideration of the covenants and agreements contained herein and other valuable consideration, the sufficiency and receipt of which are hereby acknowledged by the parties hereto, the parties covenant and agree as follows: 1. Grant of License. City hereby grants to Developer and its employees, agents, consultants, and contractors ("Related Parties") a license for the term set forth in Paragraph 3 ("License") to enter upon the Property between the hours of 8:00 a.m. and 5:00 p.m., Monday through Friday, for the purposes of the Permitted Work. Notwithstanding the above, at least forty-eight (48) hours prior to any of the Related Parties' first entry onto the Property to commence the Permitted Work, Developer shall notify City of its intention of the same, and shall thereafter provide such notice before again entering the Property if there is an interruption of such initial entry for a period of even (7) consecutive days (excluding interruptions for events of enforced delay as defined in Section 8.2 of the Development Agreement). Said notice shall be provided by facsimile, addressed to the person listed in Section 8.8 hereof at the number provided therein. City may reject any proposed entry by providing telephonic notification to Developer to the person listed in Section 8.8 hereof, at the number provided therein, at any time prior to the time of the proposed entry. City has full right, title and authority to grant Developer the License for the Permitted Work, and no third party permission or consent is needed in connection therewith. Such License 882/015610-0061 460803.01 a12/17/03 1 shall be non -revocable for the Term defined in Paragraph 3 below, except as otherwise set forth herein. City specifically agrees that Developer shall have access to and be entitled to perform the Permitted Work on all portions of the Property, provided, however, that neither Developer nor any of the Related Parties shall interfere with any other real or personal property, or enter upon any other real property, without first obtaining the written consent of the owner(s) of such other real or personal property. 2. City's Authority to Revoke. City may revoke this License upon two (2) days written notice to Developer delivered in accordance with Subparagraph 8.8 below in the event: (i) in the reasonable judgment of City, such revocation is necessary to protect the public health, safety, or welfare pursuant to the exercise of City's police powers; or (ii) Developer is in violation of the terms of this Agreement or any applicable law, statute, ordinance, rule, or regulation pertaining to the Permitted Work or Developer's or the Related Parties' entry upon the Property pursuant to this Agreement, and Developer has failed to cure such violation within two (2) days following Developer's receipt of notice of such violation from City. 3. Term. Unless earlier revoked or terminated pursuant to the provisions of this Agreement, the term of the License shall commence on full execution hereof and shall terminate on the earlier of (i) City's final inspection of and approval of the Permitted Work, or (ii) one hundred twenty (120) days from the date hereof. 4. Repair and Restoration of Property. Developer shall repair any damage it causes to the Property in the course of performing the Permitted Work pursuant hereto and shall, except for the actual Permitted Work allowed hereby, restore the Property to the condition existing prior to Developer's or Related Parties' entry onto the Property, unless this requirement is waived by the City Manager or the Community Development Director in his or her sole and absolute discretion. 5 Compliance with Laws. Developer shall obtain, at is sole cost and expense, all governmental permits and authorizations required by any governmental agencies for the Permitted Work. Developer shall comply with, and shall cause all of its Related Parties to comply with, all applicable governmental laws, rules, regulations and requirements governing the Permitted Work. Prior to Developer's or any of the Related Parties' entry onto the Property to perform any of the Permitted Work, Developer shall have prepared, obtained approval from the City thereof, and implemented, a dust control program. 6. Indemnity. Developer shall protect, defend, indemnify and hold harmless City and the La Quinta Redevelopment Agency ("Agency") and their respective officers, officials, members, employees, agents, and representatives (any of the foregoing shall be known individually as "Indemnitee" and collectively as "Indemnitees"), and each of them, jointly and severally, against and from any and all claims, demands, causes of action, damages, costs, expenses, losses and liabilities, at law or in equity, of every kind or nature whatsoever, including attorneys' fees and expert witness fees (hereinafter "Claims"), brought in connection with any death or personal injury to any person or persons or damage or destruction of any property arising out of or in any manner directly or indirectly connected with the entry upon the Property by Developer or any of its Related Parties or the activities on the Property (including but not limited to the Permitted Work) by Developer or any of its Related Parties, but excluding from the foregoing any Claims resulting from environmental contamination of the Property or other 882/015610-0061 460803.01 a12/17/03 2 defects on the Property existing prior to Developer's entry thereon and not otherwise caused by Developer or any of the Related Parties. The foregoing indemnification shall also cover: (a) any mechanics' or materialmen's liens, claims, demands, actions or suits arising (directly or indirectly) from (i) any work performed or materials supplied to or for Developer, or (ii) any activities of any of its Related Parties on or relating to the Property (including, without limitation, any claims by any of such Related Parties); and (b) any costs of removing Developer or its Related Parties from the Property after the expiration of the term hereof unless Developer is otherwise entitled to be on the Property at such time under this Agreement. 7. Insurance. (a) Before entering the Property for any purpose, Developer shall cause the insurance required under this paragraph to be issued and thereafter to be maintained until one (1) year following the end of the Term. Developer shall procure and maintain: (1) A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (i) for death and bodily injury, either (A) a combined single limit of Three Million Dollars ($3,000,000) or (B) Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and Three Million Dollars ($3,000,000) in the aggregate, and (ii) for property damage, Three Million Dollars ($3,000,000) per occurrence. (2) A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both the Developer and City against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Developer in the course of carrying out the work or services contemplated in this Agreement. (3) A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and property damage liability limits of Three Million Dollars ($3,000,000) per occurrence and Three Million Dollars ($3,000,000) in the aggregate or (ii) combined single limit liability of Three Million Dollars ($3,000,000). Said policy shall include coverage for owned, non -owned, leased, and hired cars. (b) The following additional requirements shall apply to all of the above policies of insurance: (1) All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation insurance, shall name City, the Agency, and their respective officers, officials, members, employees, agents, and representatives as additional insureds. 882/015610-0061 460803.01 a12/17/03 3 (2) The insurer shall waive all rights of subrogation and contribution it may have against City, Agency, and their respective officers, officials, members, employees, agents, and representatives, and their respective insurers. (3) All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to City and Agency. (4) The policies of insurance required by this Agreement shall not require Developer to meet a deductible of more than Twenty -Five Thousand Dollars ($25,000) unless approved in writing by the City Manager, or his or her designee, in his or her sole and absolute discretion. (c) In the event any of said policies of insurance are cancelled, the Developer shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the City Manager, or his or her designee. (d) Not later than the date of this Agreement, Developer shall provide the City Manager with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the City Manager, or his or her designee. (e) Developer agrees that the provisions of this Section shall not be construed as limiting in any way Developer's indemnity obligations set forth in Section 6 or the extent to which Developer may be held responsible for the payment of damages to any persons or property resulting from the Developer's activities or the activities of any person or persons for which the Developer is otherwise responsible. 8. Miscellaneous. 8.1 Authority. Each signatory hereto warrants to the other party that it has authority to sign on behalf of the party for whom it purports to sign. 8.2 Attorneys Fees. In the event any party hereto brings suit to enforce the terms of this Agreement or on account of breach hereof, the party not prevailing in such suit shall pay all reasonable costs and expenses incurred by the other party in such suit, including, without limitation, court costs, attorneys' fees, and expert witness fees. 8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations, understandings or agreements relating thereto. 8.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. 8.5 Litigation Matters. The Municipal and Superior Courts of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation 882/015610-0061 460803.01 a12/17/03 4 between the parties arising out of this Agreement. This Agreement shall be governed by, and construed under, the laws of the State of California. Service of process on City shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. 8.6 Non -liability of City Officers and Employees. No officer, official, member, employee, agent, or representative of City shall be personally liable to Developer, or any successor or assign of same, in the event of any default or breach by City, or for any amount which may become due to Developer, or any successor or assign of same, or for breach of any obligation of the terms of this Agreement. 8.7 Covenant Against Discrimination. Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through it, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the performance of this Agreement. 8.8 Notices. Unless other sections of this Agreement allow certain specific notices to be given by other means, all notices required to be delivered under this Agreement or under applicable law shall be delivered by one of the following means: (a) personal delivery; (b) delivery by United States mail, prepaid, certified, return receipt requested; (c) delivery by reputable document delivery service that provides a receipt showing date and time of delivery; or (d) delivery by facsimile provided the sender receives confirmation the fax was received. Notices personally delivered or delivered by a document delivery service shall be effective upon receipt. Notices delivered by mail shall be effective at 5:00 p.m. on the second business day following dispatch. Notices delivered by facsimile shall be effective upon receipt provided that any faxed notices which are transmitted at any time other than 8:00 a.m. to 4:30 pm Monday through Friday (excluding legal holidays) shall be deemed transmitted as of the next business day. Notices shall be delivered to the following addresses: To City: City of La Quinta Attn: Community Development Director 78-495 Calle Tampico La Quinta, CA 92253 Telephone: (760) 777-7000 Facsimile: (760) 777-1233 With a copy to: Rutan & Tucker, LLP Attn: M. Katherine Jenson, Esq. 611 Anton Boulevard, 14th Floor Costa Mesa, CA 92626-1998 Telephone: (714) 641-5100 Facsimile: (714) 546-9035 882/015610-0061 _ 460803.01 a12/17/03 -5 To Developer: CP Development La Quinta, LLC Attn: Richard Oliphant 44-139 Monterey Avenue, Suite 201 Palm Desert, CA 92260 Telephone: (760) 776-9900 Facsimile: (760) 776-9971 With a copies to: Genesis Hotel Development, LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Telephone: (760) 360-7886 Facsimile: (760) 345-7175 and Selzer, Ealy, Hemphill & Blasdel, LLP 777 E. Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill, Esq. Telephone: (760) 320-5977 Facsimile: (760) 320-9507 Changes in the address to be used for receipt of notices shall be effected in accordance with this Paragraph 8.7. Agreement. 8.8 Time of Essence. Time is of the essence in the performance of the [end — signature page follows] 882/015610-0061 460803.01 a12/17/03 6 Dec-17-03 11:40am From-RUTAN & TUCKER LLP 714-546-9035 T-293 P.17/17 F-582 IN WITNESS WHFUO]F, this Agreement has been executed by the parties hereto as of the date first above -written. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a Califonda limited liability company By: Oliphant Family Trust Its: Member By: f)-tsj a. ( v Richard R. Oliphant its: Trustee By. Oliphant Enterprises, Inc. Its: Manager 0- By: - Richard R. Oliphant its: President "CITY" CI A QUINT City Mannga j G!� 682,101.ibLOA I -7- 4Do9U3 01 a1247/W EXHIBIT "A" SITE MAP The Site Map is not a tract map and the parcels depicted there are not legal parcels. Upon Developer's preparation of a tract map that creates legal parcels substantially consistent with the Site Map, Developer shall prepare legal descriptions for each of the Suites Hotel Parcel, the Casitas Development Parcel(s), the Villas Residential Development Parcel, the Cluster/Perimeter Residential Development Parcel, the Medical Office/Surgical Facility Parcel(s), and the Sanctuary Villas Parcel(s), and Agency and Developer shall cooperate to attach such legal descriptions to any document where such legal descriptions are required. LOTS LAND USE *LOT 'H' 23483 ..1. LOT 1 RESTAURANT 0'54 O0 LOT 2 - RESORT CASITAS *LOT •0• 14030 s./. 0.34 «. LOT 3 - RESORT CASITAS LOT 1 40188 0. LOT 4 - RESORT CASITAS 0.92 se. LOT b - RESIDENTIAL *LOT e - PARK LOT 7 RESIDENTIAL *LOT 'C• 14297 s.f. LOT 8 THE SANCTUARY 0.33 «. LOT 9 THE SANCTUARY�� LOT 10 ` MEDICAL OFFICE BUILDINGS CA� LOT 11 - MEDICAL OFFICE BUILDINGS N LOT 12 - MEDICAL OFFICE BUILDINGS LOT 13 - RESTAURANT LOT 14 HOTEL *LOT 'E 54M s.f 0.13 m. COMMON LOTS LAND USE. LOT 'A- - - - - - - - MEDICAL OFFICE PARKING / LANDSCAPE LOT 'B' - - - - - - SEELEY DRIVE * LOT •C' - - - - - - - 20' PARKWAY (WASHINGTON STREET) * LOT •D' - - - - CITY LANDSCAPE ENTRY *LOT 'E' ' - - - - - 20' PARKWAY (WASHINGTON STREET) LOT •F- - - - - - - - WELLSITE * LOT 'G' - - - - - - - WELLSITE (N.A.P.) * LOT 'H' - ' ' ' - ' - 20' PARKWAY (MILES AVENUE) * LOT 'I - - - - - - - 20' PARKWAY (MILES AVENUE) LOT 14 14504 s.f. 3.35 oc LOT 13 48613 s./. '1.12 cr- LOT •A• 7f1oc. LOT 12 6.431W5 9.f 0.73 «. 31556T5 .J' LOT 11 0.73 «. Su130 «a1. LOT 'A` OT 'F• 22641 ..f. 0.52 «. LOT 9 40M CC 1.10 W. * 'Best panels are not being conveyed by the Ls Qninta Rodevelopmmt Agency. They are depicted 0n this Site Map fbr convenience Of 1'eferw= Orly. * LOT •1' 5460 s f. MILES AVENUE 0.12 «. LOT 3 142672 &J. 3.44 «. LOT 2 25934 s.f. 2.27 «. LOT 4 126828 ../. 2.91 «. * LOT 'G' 225002 «. ..f. 0.5 LOT B 95591 a1. 2.19 x * LOT «.e 116798 s.l. Z.68 LOT 7 391%6 0. 6.99 «. J J C OU u aJ a 6 U tj 44 3l �� LOT 8 163122 3.74s a �11111 N.T.S. NOVEMBER 21. 2003 EARLY ENTRY AGREEMENT This Early Entry Agreement ("Agreement") is entered into as of lkc . 19 , 2003, by and among the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency") and CP DEVELOPMENT LA QUINTA, LLC., a California limited liability company ("Developer"), with reference to the following facts: RECITALS A. Agency is the present owner of that certain property located in La Quinta, California, described on Exhibit "A" hereto (herein "Property"). B. Agency has executed that certain Disposition and Development Agreement with Developer ("DDA"), pursuant to which Agency shall sell to Developer the Property for Developer's development thereon of a commercial project consisting of mid -price suites hotel, two restaurants, a sanctuary villas development, a condominium/casitas development, a medical facility, and two single-family residential developments (collectively, the "Project"). C. Developer has requested the right to enter onto and about the Property to perform certain work specified herein, and Agency is willing to allow such entry on the terms and conditions hereinafter specified. NOW, THEREFORE, in consideration of the covenants and agreements contained herein and other valuable consideration, the sufficiency and receipt of which are hereby acknowledged by the parties hereto, the parties covenant and agree as follows: 1. Grant of License. Agency hereby grants to Developer and its employees, agents, consultants, and contractors ("Related Parties") a license for the term set forth in Paragraph 3 ("License") to enter upon the Property between the hours of 8:00 a.m. and 5:00 p.m., Monday through Friday, for the purposes of (i) grading on all or any portion of the Property, (ii) installing wet and dry utilities on all or any portion of the Property, (iii) installing signs on the Property, provided such installation is in accordance with Section 9.160.070 of the City of La Quinta Municipal Code (Permitted Semipermanent Signs), and (iv) paving Seeley Drive, an interior street to be developed by Developer and subsequently conveyed to the City of La Quinta ("City") for City's use thereafter as a public street (collectively, the "Permitted Work") in connection with the proposed development of the Project. Notwithstanding the above, at least forty-eight (48) hours prior to any of the Related Parties' first entry onto the Property to commence the Permitted Work, Developer shall notify Agency of its intention of the same, and shall thereafter provide such notice before again entering the Property if there is an interruption of such initial entry for a period of even (7) consecutive days (excluding interruptions for events of force majeure). Said notice shall be provided by facsimile, addressed to the person listed in Section 8.8 hereof at the number provided therein. Agency may reject any proposed entry by providing telephonic notification to Developer to the person listed in Section 8.8 hereof, at the number provided therein, at any time prior to the time of the proposed entry. Agency has full right, title and authority to grant Developer the License for the Permitted Work, and no third party permission or consent is needed in connection therewith. Such License 882/015610-0061 460811.01 a12/17/03 shall be non -revocable for the Term defined in Paragraph 3 below, except as otherwise set forth herein. Agency specifically agrees that Developer shall have access to and be entitled to perform the Permitted Work on all portions of the Property, provided, however, that neither Developer nor any of the Related Parties shall interfere with any other real or personal property, or enter upon any other real property, without first obtaining the written consent of the owner(s) of such other real or personal property. 2. 'Agency's Authority to Revoke. Agency may revoke this License upon two (2) days written notice to Developer delivered in accordance with Subparagraph 8.8 below in the event: (i) in the reasonable judgment of Agency, such revocation is necessary to protect the public health, safety, or welfare pursuant to the exercise of Agency's police powers; or (ii) Developer is in violation of the terms of this Agreement or any applicable law, statute, ordinance, rule, or regulation pertaining to the Permitted Work or Developer's or the Related Parties' entry upon the Property pursuant to this Agreement, and Developer has failed to cure such violation within two (2) days following Developer's receipt of notice of such violation from Agency. 3. Term. Unless earlier revoked or terminated pursuant to the provisions of this Agreement, the term of the License shall commence on full execution hereof and shall terminate on the earlier of (i) as to each portion of the Property, the date Developer acquires such portion from Agency, or (ii) one hundred eighty-five (185) days from the date hereof. 4. Repair and Restoration of Property. Developer shall repair any damage it causes to the Property in the course of performing the Permitted Work pursuant hereto and shall, except for the actual Permitted Work allowed hereby, restore the Property to the condition existing prior to Developer's or Related Parties' entry onto the Property, unless this requirement is waived by the Agency Executive Director or the Community Development Director in his or her sole and absolute discretion. 5. Compliance with Laws. Developer shall obtain, at is sole cost and expense, all governmental permits and authorizations required by any governmental agencies for the Permitted Work. Developer shall comply with, and shall cause all of its Related Parties to comply with, all applicable governmental laws, rules, regulations and requirements governing the Permitted Work. Prior to Developer's or any of the Related Parties' entry onto the Property to perform any of the Permitted Work, Developer shall have prepared, obtained approval from the City thereof, and implemented, a dust control program. 6. Indemnity. Developer shall protect, defend, indemnify and hold harmless Agency and City and their respective officers, officials, members, employees, agents, and representatives (any of the foregoing shall be known individually as "Indemnitee" and collectively as "Indemnitees"), and each of them, jointly and severally, against and from any and all claims, demands, causes of action, damages, costs, expenses, losses and liabilities, at law or in equity, of every kind or nature whatsoever, including attorneys' fees and expert witness fees (hereinafter "Claims"), brought in connection with any death or personal injury to any person or persons or damage or destruction of any property arising out of or in any manner directly or indirectly connected with the entry upon the Property by Developer or any of its Related Parties or the activities on the Property (including but not limited to the Permitted Work) by Developer or any 882/015610-0061 460811.01 al2/17/03 2 of its Related Parties, but excluding from the foregoing any Claims resulting from environmental contamination of the Property or other defects on the Property existing prior to Developer's entry thereon and not otherwise caused by Developer or any of the Related Parties. The foregoing indemnification shall also cover: (a) any mechanics' or materialmen's liens, claims, demands, actions or suits arising (directly or indirectly) from (i) any work performed or materials supplied to or for Developer, or (ii) any activities of any of its Related Parties on or relating to the Property (including, without limitation, any claims by any of such Related Parties); and (b) any costs of removing Developer or its Related Parties from the Property after the expiration of the term hereof unless Developer is otherwise entitled to be on the Property at such time under this Agreement. 7. Insurance. (a) Before entering the Property for any purpose, Developer shall cause the insurance required under this paragraph to be issued and thereafter to be maintained until one (1) year following the end of the Term. Developer shall procure and maintain: (1) A policy of commercial general liability insurance written on a per occurrence basis in an amount not less than: (i) for death and bodily injury, either (A) a combined single limit of Three Million Dollars ($3,000,000) or (B) Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and Three Million Dollars ($3,000,000) in the aggregate, and (ii) for property damage, Three Million Dollars ($3,000,000) per occurrence. (2) A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both the Developer and City against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Developer in the course of carrying out the work or services contemplated in this Agreement. (3) A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of Three Million Dollars ($3,000,000) per person and Three Million Dollars ($3,000,000) per occurrence, and property damage liability limits of Three Million Dollars ($3,000,000) per occurrence and Three Million Dollars ($3,000,000) in the aggregate or (ii) combined single limit liability of Three Million Dollars ($3,000,000). Said policy shall include coverage for owned, non -owned, leased, and hired cars. (b) The following additional requirements shall apply to all of the above policies of insurance: (1) All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation insurance, shall name City, the Agency, and their 882/015610-0061 460811.01 a12/17/03 3 respective officers, officials, members, employees, agents, and representatives as additional insureds. (2) The insurer shall waive all rights of subrogation and contribution it may have against City, Agency, and their respective officers, officials, members, employees, agents, and representatives, and their respective insurers. (3) All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to City and Agency. (4) The policies of insurance required by this Agreement shall not require Developer to meet a deductible of more than Twenty -Five Thousand Dollars ($25,000) unless approved in writing by the City Manager in his or her sole and absolute discretion. (c) In the event any of said policies of insurance are cancelled, the Developer shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the City Manager. (d) Not later than the date of this Agreement, Developer shall provide the Agency Executive Director with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the Executive Director. (e) Developer agrees that the provisions of this Section shall not be construed as limiting in any way Developer's indemnity obligations set forth in Section 6 or the extent to which Developer may be held responsible for the payment of damages to any persons or property resulting from the Developer's activities or the activities of any person or persons for which the Developer is otherwise responsible. 8. Miscellaneous. 8.1 Authority. Each signatory hereto warrants to the other party that it has authority to sign on behalf of the party for whom it purports to sign. 8.2 Attorney's Fees. In the event any party hereto brings suit to enforce the terms of this Agreement or on account of breach hereof, the party not prevailing in such suit shall pay all reasonable costs and expenses incurred by the other party in such suit, including, without limitation, court costs, attorneys' fees, and expert witness fees. 8.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations, understandings or agreements relating thereto. 8.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. 882/015610-0061 460811.01 al2/17/03 4 8.5 Litigation Matters. The Municipal and Superior Courts of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Agreement. This Agreement shall be governed by, and construed under, the laws of the State of California. Service of process on Agency shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. 8.6 Non -liability of Agency Officers and Employees. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Developer, or any successor or assign of same, in the event of any default or breach by Agency, or for any amount which may become due to Developer, or any successor or assign of same, or for breach of any obligation of the terms of this Agreement. 8.7 Covenant Against Discrimination. Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through it, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the performance of this Agreement. 8.8 Notices. Unless other sections of this Agreement allow certain specific notices to be given by other means, all notices required to be delivered under this Agreement or under applicable law shall be delivered by one of the following means: (a) personal delivery; (b) delivery by United States mail, prepaid, certified, return receipt requested; (c) delivery by reputable document delivery service that provides a receipt showing date and time of delivery; or (d) delivery by facsimile provided the sender receives confirmation the facsimile was received. Notices personally delivered or delivered by a document delivery service shall be effective upon receipt. Notices delivered by mail shall be effective at 5:00 p.m. on the second business day following dispatch. Notices delivered by facsimile shall be effective upon receipt provided that any faxed notices which are transmitted at any time other than 8:00 a.m. to 4:30 p.m. Monday through Friday (excluding legal holidays) shall be deemed transmitted as of the next business day. Notices shall be delivered to the following addresses: To Agency: La Quinta Redevelopment Agency Attn: Executive Director 78-495 Calle Tampico La Quinta, CA 92253 Telephone: (760) 777-7000 Facsimile: (760) 777-7101 With a copy to: Rutan & Tucker, LLP Attn: M. Katherine Jenson, Esq. 611 Anton Boulevard,l4th Floor Costa Mesa, CA 92626-1998 Telephone: (714) 641-5100 Facsimile: (714) 546-9035 882/015610-0061 460811.01 a12/17/03 5 To Developer: CP Development La Quinta, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant Telephone: (760) 776-9900 Facsimile: (760) 776-9971 With copies to: Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Telephone: (760) 360-7886 Facsimile: (760) 345-7175 and Selzer, Ealy, Hemphill & Blasdel, LLP 777 E. Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill, Esq. Telephone: (760) 320-5977 Facsimile: (760) 320-9507 Changes in the address to be used for receipt of notices shall be effected in accordance with this Paragraph 8.8. 8.9 Time of Essence. Time is of the essence in the performance of the Agreement. 882/015610-0061 460811.01 a12/17/03 6 Dec-17-03 11:37am From-RUTAN & TUCKER LLP 714-546-9035 T-293 P.11/17 F-582 IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as•of the date first above -written. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company 13y: Oliphant Family Trust its: Member I3y: )-, Richard R. Oliphant Its: Trustee 13y: Oliphant Enterprises, Inc. Its: Manager (I � jiyoU Richard R_ Oliphant Its: President "'AGENCY„ LA QVINTA REDEVELOPMENT AGENCY, a public body, corporate and po By; Its: Exccutive Director i 9 � �8210156i0- 1 _7- ;60811.01 sJ221171W EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO.23971-1, ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 00027138" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026'40" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 89033'22" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 00026'40" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41 °42'33", AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044132" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45027'41 ", AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 108979, O.R. THENCE SOUTH 00012' 13" EAST ALONG SAID EASTERLY LINE, A DISTANCE OF 790.73 FEET TO AN ANGLE POINT THEREIN; 882/015610-0061 460811.01 a12/17/03 8 THENCE SOUTH 43056'42' WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL C , A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42059'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 020571461, AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C" AND ITS NORTHWESTERLY PROLONGATION NORTH 64021103" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO.255528, O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 86011'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 005'41 ", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 75033102" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17033123" EAST; THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00 32 28 , AN ARC DISTANCE OF 23.61 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT B, SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; 882/015610-0061 460811.01 a12/17/03 9 THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06", AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006156" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013'18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02012'44", AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 67006'56" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001'12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19058'08"9 AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028137" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36057'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18051135119 AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (1,850,000 SQUARE FEET), MORE OR LESS. 882/015610-0061 -10- 460811.01 a12/17/03 P.O.C. CTR. 1 /4 COR. SEC. 19 in ko S 00'5.00' E I MILES AVENUE _ 75,00' _ � _ _ 16 N 89`31' 3" 487.01' N 89'33'22" E 960.27' L7 N 00'28037" W S 00'26'40" E 153.41' in 112.85' TP.0.8. v 9S tiffn y \ S 44'44'32" E 90.06' 0 �' ? N " E , N 6VO1 1 w E SITE 239.56' (R) AREA-42.47 AC. o L4 PORTION OF THE S. 1 /2 OF °' SEC. 19, T.5S., R.7E., S.B.M. w �� l o-15 L3 -� 1 "=300' N 86' 11'26" E R Will= nets NUMBER DIRECTION DISTANCE L1 S 00'18'01" E L2 N 48'09'56" W 2100'' L3 N 75'33'02" E F 4.22' L4 N 67'06'56" E 20.00' L5 S .67'06 56 W 20.00' L6 N 00*26*40" W 20.00' L7 N 8T33'22" E 80.00' .•I Intl= n AT e i M r N N 75'53'46" E o (R) N PT. B C FAY 06 EXCEPTION PARCEL N S i4. PT. OS¢, (R) J N 42'59'27" E R N G4•��,o3Y �i 2SIT 4 L2 '4;i �F9 NUMBER DELTA !RADIUS ARC LENGTH TANGE C1 C2 41'42'33 45'27'41 " 440.00 80.00 320.30 63.48 167.E 33.52 C3 OZ57'46" 4565.17 236.07 118.06 C4 19'24'03" 2500.00 846.52 427.35 C5 11*0541" 2072.00 401.22 201.24 C6 19'58'08" 2092.00 729.11 368.29 C7 67Z12'44" 2072.00 80.00 40.01 C8 07*41'06" 2092.00 280.60 140.51 C9 QO'32'28" 2500.00 123.61 11.81 Ct0 18'S1'35" 2500.00 822.91 415.21 J.N. 1612 882/015610-0061 -11- 460811.01 a12/17/03 INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT is made and entered into as of Vg�L 1$ 2003, by and among CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Center Point"), the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and the CITY OF LA QUINTA, a California municipal corporation (the "City") with reference to the following Recitals. Recitals A. Center Point and the Agency have entered into that certain Disposition and Development Agreement dated concurrently herewith (the "DDA"), pursuant to which, among other terms, (i) Agency has agreed to sell to Center Point, and Center Point has agreed to purchase from Agency certain real property identified therein as the "Property", which is located in the City of La Quinta, County of Riverside, State of California, and (ii) Center Point has agreed to construct, complete, and operate on the Property a commercial project containing a medical office/surgical facility, a development containing "sanctuary villas," a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to moderate -income buyers at restricted sales prices, all as more particularly described in the DDA (collectively, the "Project). B. Center Point and the City have entered into that certain Development Agreement dated concurrently herewith (the "Development Agreement"), which, among other terms, (i) sets forth a payment schedule for Center Point's mitigation payments to the City; (ii) sets forth a schedule for Center Point's payment to the City of Three Hundred Forty -Six Thousand Eleven Dollars ($346,011) as Center Point's financial obligation toward certain landscaping improvements to be installed on a portion of the Property; (iii) requires Center Point, at its sole cost, to construct a neighborhood park on certain real property owned in fee by the City; and (iv) sets forth the extent to which Center Point may construct, develop, use and operate the Project, all as more particularly described in the Development Agreement. C. The Agency and City were initially contacted regarding the Project by Center Point Development, LLC, a California limited liability company (the "Original Developer"). At some point during the negotiations regarding the Project, the Original Developer requested that the developer entity listed as the contracting party in the DDA and DA be changed to Center Point. D. City and Agency agreed to change the developer entity listed as the contracting party to Center Point provided that Center Point agreed to indemnify the City and Agency against any claims regarding such change or resulting from the City's approval of the DA and/or the Agency's or City's approval of the DDA with Center Point, or arising from the Original Developer's entry onto the Property or the Original Developer's or Center Point's obligations to third parties who have prepared plans or conducted work in furtherance of the Project. 882/015610-0061 427773.03 a12/03/03 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Agreement 1. Indemnification by Center Point. Center Point hereby agrees that it shall indemnify, defend, and hold harmless City and Agency and their respective officers, officials, members, employees, agents, consultants, and representatives from and against any and all claims, liabilities, damages, losses, suits, costs and expenses of every kind, nature and type (including but not limited to expert witness fees and reasonable attorneys' fees) asserted by any person, entity, or party arising out of (i) the Agency's and City's agreement to change the developer entity listed as the contracting party in the DA and DDA from the Original Developer to Center Point, (ii) the City's approval of the DA and/or the Agency's or City's approval of the DDA with Center Point, (iii) the Original Developer's entry onto the Property, or (iv) the Original Developer's or Center Point's obligations to third parties, including, but not limited to, persons or entities who have designed or prepared plans or conducted any other work related to the Project on behalf of the Original Developer or Center Point (as applicable). 2. Successors and Assigns. This Indemnification Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties hereto. 3. Governing Law. This Indemnification Agreement shall be governed by and construed in accordance with the laws of the State of California. 4. Further Assurances. The parties covenant and agree that they will execute such other and further instruments and documents as are or may become necessary or convenient to effectuate and carry out this Indemnification Agreement. 5. Authority of Signatories to Bind Principals. The persons executing this Indemnification Agreement on behalf of their respective principals represent that (i) they have been authorized to do so and that they thereby bind the principals to the terms and conditions of this Indemnification Agreement and (ii) their respective principals are properly and duly organized and existing under the laws of, and permitted to do business in, the State of California. 6. Interpretation. The paragraph headings of this Indemnification Agreement are for reference and convenience only and are not part of this Indemnification Agreement. They have no effect upon the construction or interpretation of any part hereof. The provisions of this Indemnification Agreement shall be construed in a reasonable manner to effect the purposes of the parties and of this Indemnification Agreement. 7. Attorney's Fees. In the event that a party to this Indemnification Agreement brings an action against another party hereto by reason of the breach of any condition, covenant, 882/015610-0061 2 427773.03 a12/03/03 representation or warranty in this Indemnification Agreement, or otherwise arising out of this Indemnification Agreement, the prevailing party in such action shall be entitled to recover from the non -prevailing party expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 8. Counterparts. This Indemnification Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. IN WITNESS WHEREOF, this Indemnification Agreement has been executed by the parties as of the date set forth above. Dated: 1��ea►�•. �3 Dated: 882/015610-0061 3 427773.03 a12/03/03 "Center Point" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: -� Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager I_ B �t Y• Richard R. Oliphant Its: President (16city" City of La Quinta, a California municipal corporation By: Thomas Genovese Title: City Manager "Agency" Dec-17-03 11:34am From-RUTAN & TUCKER LLP 714-546-9035 T-293 P.04/17 F-582 representation or warranty in this Indemnification Agreement, or otherwise arising out of this Indemnification Agreement, the prevailing party in such action shall be entitled to recover from The non -prevailing party expert witness fees, and its reasonable attorneys fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorneys fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 8. Counie arts. This Indemnification Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. IN WITNESs WHEREOF, this Indemnification Agreement has been executed by the parties as of the date set forth above. ��eC a� yea di m Dated: Z $$31U13610-0061 427773.03 aI V03l03 `.Center Point" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company 3 By: Oliphant Family Trust Its: Member By= Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager BY: Richard R. Oliphant Its: President "City" City of La Quinta, a California municipal corporation By. Thomas Genovese Title: City Manager "'Agency" Dec-17-03 11:34am From—RUTAN & TUCKER LLP 714-546-9035 T-203 P.05/17 F-582 2_ S=o 1-3 Dated: La Quinta Redevelopment Agency, a public body, corporate and politic .13y.-us..4 1, _ Thomas Genovese Title. Executive Director 89W I S010-cwc, 4 427773 03 a, V03/03 CENTER POINT .DEVELOPMENT, LLC RESOLUTION AND RATIFICATION OF ACTION OF MEMBERS WITHOUT MEETING AND WAIVER OF MEETING We the undersigned Members ("Members") of CENTER POINT DEVELOPMENT, LLC ("Company") do hereby waive notice of time, place and purpose for a special meeting of the members of the Company and do hereby ratify, affirm, and adopt the following actions notwithstanding any provisions of the Company's operating agreement. THEREFORE upon motion duly made, seconded and unanimously passed by all of the Members, the Members hereby agree to an assignment of all rights, title, interests, obligations and liabilities in the City of La Quinta DDA agreement for the development of the projects known as the Center Point Project from Center Point Development, LLC to CP Development, LLC, a California Limited Liability company. FURTHERMORE upon motion duly made, seconded and unanimously passed by all of the Members, the Members hereby approve the payment of consideration the sufficiency of which is hereby acknowledged to Curtis E. Pickering upon Mr. Pickering's execution of this resolution. WITNESS our hands this 2nd day of December, 2003. By: ` RICHARD OLIPHANT OLIPHANT FAMILY TRUST BY: ' fi4f-NNIS FRENCH, Individually and n behalf of I, INC. By: CURTIS E-14CKERING TWELVE STONE TRUST 12/02/2003 16:32 1114072-4241 CHADWICK J BRADBURY PAGE 01 Phone: (76o) M-oo76 Date: Recipient: To Fax numbers: Sender: From Fax Number: Pages RE: ne Law Offices of Q/ CK J. B BURY 75140 St. Charles Place, Suite "B" Palm Desert, California 92211 Fax: (76o) 779-i8o6 FACSUVME TRANSMISSION December 2, 2003 Cathy Jensen (760) 777-7101 Chadwick J. Bradbury (760) 779-I806 SI e-mail: bradburylaw@aol.com Center Point Development Operating Agreement and nay letter dated Z 2.2.02 CONFIDENTL&LITY STATEMENT: THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU RECEIVED THIS COMMUNICATION IN ERROR PLEASE NOTIFY US M1IEDIATELY BY TELEPHONE, AND RETURN THE ORIGINAL MESSAGE TO US AT THE ABOVE ADDRESS VIA THE U.S. POSTAL SERVICE. YOUR COOPERATION IS ANTICIPATED AND INDEED APPRECIATED. COMMENTS: . 12/02/2003 .16:.32 111.4072-4241 1 CHADWICK J BRADBURY PAGE 02 CHADWICK J. BRADBURY ATnrOXNM' AT LAW 75-140 SSCtt-..- Charlas Place swte NBM Pam Desert, C_alifomia 92211 Phone: (760) 779-0076 Fax- (760) 779-1806 E-Maik bradburylawCaol.com December 2, 2003 VIA FAX (760) 777-7101 Cathy Jensen CITY OF LA QUINTA 78495 Calle Tampico La Quinta, CA 92253 Re: Centex Point Development, LLC Operating Agreement Dear Ms. Jensen: As I informed you over the telephone 1 am legal counsel to Richard Oliphant and Dennis French. I have been retained for the specific purpose of representing Mr. Oliphant's and Mir. French's interests in Center Point Development, LLC ("Center Point!). Attached hereto is a signed copy of the Center Point Development, LLC Operating Agreement that you requested. I ask that you pay particular attention to the following sections which state: "5.3 Powers of Mana emirs. A. Powers of Man_ Without limiting tlae generality of Section 5.1, but subject to Section 5.3B and to the express limitations set forth elsewhere in this Agreement, the Managers shall have all Necessary powers to manage and carry out the purposes, business, property, mad affairs of the Company, including, without limitation, the power to exercise on behalf and in the name of the Company all of the powers described in Corporations Code Section 17003, including, without limitation, the power to: 0) Acquire, purchase, renovate, irnprove, alter, rebuild, demolish, replace, and own zeal property and any other property or. assets that the Managers determine is necessary or appropriate or in the interest of the business of the Company, and to acquire options for the purchase of any such property; (H) Sell, exchange, lease, or otherwise dispose of the real property and other property and assets owned by the Company, or any part thereof, or any ia�tereSt therein; 12/02/2003 16:32 1114072-4241 CHADWICK J BRADBURY PAGE 03 5.3B. Limitations on Power of Managers. Notwithstanding airy other provisions of this Agreement, no debt or liability of more than $10,000.00 may be contracted on behalf of the Company except by the written consent of all Members. AAdditionahy, the Managers shall not have authority hereunder to cause the Company to engage in the following transactions without first obtaining the affirmative vote or written consent of a Majority Interest (or such greater Percentage Interests set forth below) of the Members: (i) The sale, exchange or other disposition of all, or substantially all, of the Company's assets occurring as part of a single transaction or playa, or in multiple transactions over a three (3) month period, except in the orderly liquidation, and winding up of the business of the Company upon its duly authorized dissolution, shall require the affirmative vote or written consent of Members holding at least fifty-one percent (51 %) in Percentage lj#earests; I have also attached hereto a signed Resolution by Managing Members Oliphant and French who hold a combined 66.66% Percentage Interest in Center Point. As stated by the clear language of the Operating Agreement the assignment of the DD,A, agreement from Center Point to CP Development, LLC has been approved and is appropriate. I am also in the process of finalizing an agreement with Mir. Pickering to resolve any differences that may exist between the Members. Even without Mr. Pickering's approval my clients are well within their legal rights to proceed with the assignment of the DDA Agreement from Center Point Development, LLC to CP Development, LLC. Please forward this information to the City Counsel for their review. I apologize for the delay in providing you this information, but we have been involved with ongoing negotiations for a final resolution. I will be present at the counsel meeting tonight at 6:30 to address any questions that may arise. Sincerely yours, Chadwick J. Bradbury Enclosure as stated. Cc: Dennis French Richard Oliphant 12/02/2003 16:32 1114072-4241 CHADWICK J BRADBURY PAGE 04 CENTER POINT DEVELOPMENT, LT-C RESOLUTION AND RATIFICATION OF ACTION OF MEMBERS WITHOUT MEETING AND WAIVER- OF MEETING We the undersigned Members ("Members") of CENTER POINT DEVELOPMENT, LLC ("Company") do hereby waive notice of time, place and purpose for a special meeting of the members of the Company and do hereby gratify, affirm, and adopt the following actions notwithstanding any provisions of the Company's operating agreement. T U; FFORE upon motion duly made, seconded and unanimously passed by all of the Members, the Members hereby agree to an assignment of all rights, title, interests, obligations and liabilities in the City of La Quinta DDA agreement for the development of the projects known as the Center Point Project from Center Point Development, LLC to CP Development, LLC, a California Limited Liability company. FU tTE ERMORE upon motion duly made, seconded and unanimously passed by all of the Members, the Members hereby approve the payment of consideration the sufficiency of which is hereby acknowledged to Curtis E. Pickering upon Mr. Pickering's execution of this resolution. WITNESS our bands this 2nd day of December, 2003. By: 200.( RICHARD OLIPHANT OLIPHANT FANMY TRUST BY: ' ENNIS FRENCH, Individually and n behalf of NM INC. By: CURTIS E. PICKERING TWELVE STONE TRUST 12/02/2003 16t-32 1114072-4241 CHADWICK J BRADBURY PAGE "05 OPERATING AGREEMENT FOR CENTER POINT DEVELOPMENT, LLC A CALIFORNIA LIMITED LIABILITY COMPANY THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS AGREEMENT IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS W 11CH ARE SET FORTH HEREIN. 12/02/2003 16:32 1114072-4241 CHADWICK J BRADBURY PAGE 06 OPERATING AGREEMENT • FOR CENTER POINT DEVELOPMENT, LLC A CALIFORNIA LIMITED LIABILITY COMPANY This Operating Agreement, is made as of the ist day of Mauch, 2003, by and among the parties listed on the signature pages hereof, with reference to the following facts: A. On January 27, 2003, Articles of Organization for CENTER POINT DEVELOPMENT, LLC, (the "Company"), a limited liability company organized under the laws of the State of California, were filed with the California Secretary of State. B. The parties desire to adopt and approve an operating agreement for the Company. NOW, TI MREFORE, the parties by this Agreement set forth the operating agreement for the Company under the laws of the State of California upon the terms and subject to the conditions of this Agreement, ARTICLE I DEFINITIONS When used in this Agreement, the following terms shall have the meanings set forth below (all terms used in this Agreement that are not defined in this Article I shall have the meanings set forth elsewhere in this Agreement): 1.1 "Art" shall mean the Beverly-Killea Limited Liability Company Act, codified in the California Corporations Code, Section 17000 at sec}., as the same may be amended from time to time. 1.2 "Affiliate" of a Member or Manager shall mean any Person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with a Member or Manager, as applicable. The term "control," as used in the immediately preceding sentence, shall mean with respect to a corporation or limited liability company the right to exercise, directly or indirectly, more than fifty percent (50%) of the voting rights attributable to the controlled corporation or limited liability eompariy, and, with respect to any individual, partnership, trust, other entity or association, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled entity. 1.3 " Amement" shall mean this Operating Agreement, as originally executed and as amended from time to time. 1 A "Articles" shall mean the Articles of Organization for the Company originally filed with the California Secretary of State and as amended from time to time. 1.S "Assignee" shall mean the owner of an Economic Interest who has not been admitted as a substitute Member in accordance with Article VII. .2- 12/02/2003 16:32 1114072-4241 .CHADWICK J BRADBURY PAGE 07 1.6 " " shall mean: (a) the filing of an application by a Member for, or his or her consent to, the appointment of a trustee, receiver, or custodian of his or her other assets; (b) the entry of an order for relief with respect to a Member in proceedings under the United States Bankruptcy Code, as amended or superseded from time to time; (c) the making by a Member of a general assignment for the benefit of creditors; (d) the entry of an order, judgment, or decree by any court of competent jurisdiction appointing a trustee, receiver, or custodian of the assets of a Member unless the proceedings and the person appointed are dismissed within ninety (90) days; or (e) the failure by a Member generally to pay his or her debts as the debts become due within the meaning of Section 303(h)(1) of the United States Bankruptcy Code, as determined by the Bankruptcy Court, or the admission in writing of his or her inability to pay his or her, debts as they become due. 1.7 "Cani al A _ .n +nt" shall mean with respect to any Member the capital account which the Company establishes and maintains for such Member pursuant to Section 33. J.& "C'aital irnntrihmian" shall mean the total amount of cash and fair market value of property contributed and/or services rendered or to be rendered to the Company by Members. 1.9 "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, the provisions of succeeding law, and to the extent applicable, the Regulations. 1.10 "Campan " shall mean CENTER POINT DEVELOPMENT, LLC, a California limited liability company. 1.11 "Company Mit)imti gain" shall have the meaning ascribed to the term "Partnership Minimum Gain" in the Regulations Section 1.704-2(d). 1.12 "C_ornnratinna Code" shall mean the California Corporations Code, as amended from time to time, and the provisions of succeeding law. 1.13 "Diccnhitinn EUpt)t" shall mean with respect to any Member one or more, of the following: the death, insanity, withdrawal, resignation, retirement, expulsion, Bankruptcy or dissolution of any Member. 1.14 "Distrihignbir. CaSh" shall mean the amount of cash which the Managers deem available for distribution to the Members, taking into account all debts, liabilities, and obligations of the Company then due, and working capital and other amounts which the Managers deem necessary for the Companys business or to place into reserves for customary and usual claims with respect to such business. 1.15 "Ennnom is intar st" shall mean the right to receive distributions of the Company's assets and allocations of income, gain, loss, deduction, credit and similar items from the Company pursuant to this Agreement and the Act, but shall not include any other rights of a Member, including, without limitation, the right to vote or participate in the management of the Company, or except as provided in Section 17106 of the Corporations Code, any right to information concerning the business and affairs of the Company. 1.16 "Fiscal Year" shall mean the Company's fiscal year, which shall be the calendar year. 1.17 "Form&.r Member" shall have the meaning ascribed to it in Section 8.1. -3. 12_f02/2003 16:32 1114072-4241 CHADWICK J: BRADBURY PAGE 08 1.18 "Fnrmer Artembods Interest", shall have the meaning ascribed to it in Section 8.1. 1.19 "MAinrity int=stt", shall mean those Members who hold a majority of the Percentage Interests which all Members hold. 1.20 "Manager"or "Managers" . shall mean OLIPH,ANT ENTERPRISES, INC., a California corporation, andior any other Member appointed as manager by a Majority Intereg or any other persons that succeed any of them as a manager of the Company. 1.21 "Member" shall mean each Person who (a) is an initial signatory to this Agreement, has been admitted to the Company as a Member its accordance with the Articles or this Agreement or is an Assignee who has become a Member in accordance with Article VII, and (b) has not become the subject of a Dissolution Event or ceased to be a Member its accordance with Article VIII or for any other reason. 1.22 "MeWgC__Nnnrerrotrce T g to shall have the meaning ascribed to the term "Partner Nonrecourse Debt" in Regulations Section 1.704-2(b)(4). 1.23 "Mnmher Nnn=nJ1rg0 Deductions" shall mean items of Company loss, deduction, or Code Section 705(a)(2)(B) expenditures which are attributable to Member Nonrecourse Debt. 1.24 " Mcwhars ' t" shall mean a Membees entire interest in the Company including the Members Economic Interest, the right to vote on or participate in the management, and the right to receive information concerning the business and affairs, of the Company. 1.25 'UAt p " and "Net T asset" shall mean the income, gain, loss and deductions of the Company in the aggregate or separately stated, as appropriate, determined in accordance with the method of accounting at the close of each Fiscal Year on the Company's information tax return filed for federal income tax purposes. 1.26 "Nonrernurse T inbilicy" shall have the meaning set forth in Regulations Section 1.752- 1(a)(2). 1.27 "Percentage Tatecest" shall meats the percentage of a Member set forth opposite the name of such Member under the column "Members Percentage Interest" in Exhibit "A" hereto, as such percentage may be adjusted from time to time pursuant to the terms of this Agreement. Percentage Interests shall be determined annually, unless otherwise provided herein, in accordance with the relative proportions of the aggregate Capital Contributions of the Members. 1.28 "Ecx=" shall mean an individual, partnership, limited 'partnership, limited liability company, corporation, trust, estate, association or any other entity. 1.29 " shall, unless the context clearly indicates otherwise, mean the regulations in force as final or temporary that have been issued by the U.S. Department of Treasury pursuant to its authority under the Code, and any successor regulations. 1.30 "Remaining Mt; hem_ " shall have the meaning ascribed to it in Section 8.1. 1.31 "Tar Matter_-, PArMPr" (as defined in Code Section 6231) shall be CALIFORNIA -4- 12/02/2003 16 32 1114072-4241 CHADWICK J BRADBURY PAGE' 09 INTELLIGENT COMMUNITIES, LLC, a California limited liability company, or its successor as designated pursuant to Section 9.8. 9 ARTICLE 11 ORGANIZATIONAL MATTERS 2.1 Formatinn. The Members shall form (or have formed) a California limited liability company under the laws of the State of California by filing the Articles with the California Secretary of State and entering into this Agreement, which Agreement shall be deemed effective as of the date the Articles were so filed. The rights and liabilities of the Members shall be determined pursuerit to the Act and this Agreement. To the extent that the rights or obligations of any Member are different by reason of any provision of this Agreement than they would be in the absence of such provision, this Agreement shall, to the extent permitted by the Act, control. 2.2 Wnmt-. The name of the Company shall be "CENTER POINT DEVELOPMENT, LLC." The business of the Company may be conducted under that name or, upon compliance with applicable laws, any other name that the Managers deem appropriate or advisable. The Managers shall file any fictitious name certificates and similar filings, and any amendments thereto, that the Managers consider appropriate or advisable. 2.3 Term. The term of this Agreement commenced on the fling of the Articles and shall continue until the completion of the primary purpose for which this Company was formed, unless extended or sooner terminated as hereinafter provided. 2.4 Offee And Ament. The Company shall continuously maintain an office and registered agent in the State of California. The principal office of the Company shall be 44-139 Monterey Avenue, Suite 201, Palm Desert, CA 92260. The Company may also have such offices, anywhere within and without the State of California, as the Managers may determine from time to time, or the business of the Company may require. The registered agent shall be as stated in the Articles or as otherwise determined by the Managers. 2.5 Adjrpssec of the hdr.MhprS And the Mignag=. The respective addresses of the Members and the Managers are set forth on Exhibit A. A Member may Change his or her address upon notice thereof to the Managers. 2.6 P.yttpo-;it�snd of thl•,Cnrnpany. The purpose of the Company is to engage in any lawful activity for which a limited liability company may be organized under the Act. Notwithstanding the foregoing, without the consent of all of the Members, the Company shall not engage in any business other than the following: A. The business of acquiring, financing, developing, marketing and selling, or operating real estate development projects on real property in La Quints, California, more particularly described on Exhibit "B" attached hereto, and by this reference trade a part hereof, to be acquired for that purpose; and B. Such other activities directly related to and in furtherance of the foregoing business as may be necessary, advisable, or appropriate, in the reasonable opinion of the Managers. -57 12/02/2003 16:32 1114072-4241 CHADWICK J BRADBURY PAGE 10 ARTICLE III CAPITAL CONTRIBUrlONS 3.1 InitiqJ C.411ital Cnntrihutinns. Each Member shall contribute such amount as is set forth on Exhibit "A" as his or her initial Capital Contribution, which Exhibit "A" shall be revised to reflect any additional contributions made in accordance with Section 3.2. 3.2 Additinnal ['Anita.) C; ntr;b1! inns. No Member shall be required to make any additional Capital Contributions. To the extent unanimously approved by the Managers and a Majority interest, from time to time, the Members may be permitted to make additional Capital Contributions if and to the extent they so desire, and if the Managers determine that such additional Capital Contributions are necessary or appropriate for the conduct of the Company's business. In that event, the Members shall have the opportunity, but not the obligation, to participate in such additional Capital Contributions on a pro rats basis in accordance with their Percentage Interests. Each Member shall receive a credit to his or her Capital Account in the amount of any additional capital which he or she contributes to the Company. Immediately following such Capital Contributions, the Percentage Interests shall be adjusted by the Managers to reflect the new relative proportions of the Capital Accounts of the Members. 3.3 Capital Arnmintc. The Company shall establish and maintain an individual Capital Account for each Member in accordance with Regulations Section 1.704-1(bx2xiv). If a Member transfers all or a part of his or her Membership Interest in accordance with this Agreement, such Member's Capital Account attributable to the transferred Membership Interest shall carry over to the new owner of such Membership Interest pursuant to Regulations Section 1.704-1(b)(2)(iv)(1). 3.4 Na interact, No Member shall be entitled to receive any interest on his or her Capital Contributions. 3.5 FailLire to Make Cnntri utinnc. If a Member does not timely contribute capital when required, that Member shall be in default under this Agreement. In such event, the Managers shall send the defaulting Member written notice of such default, giving him or her fourteen (14) days froth the date such notice is given to contribute the entire amount of his or her required capital contribution (if the defaulting Member did not make a required contribution of property or services, the Company may instead require the defaulting Member to contribute cash equal to that portion of the fair market value of the contribution that has not been made). If the defaulting Member does not contribute his or her required capital to the Company within said fourteen (14)-day period, those non -defaulting Members who hold a majority of the Percentage Interests held by all non -defaulting Members may elect any one or more of the following remedies: A. The non -defaulting Members may advance ;funds to the Company to cover those amounts which the defaulting Member fails to contribute. Amounts which a non -defaulting Member so advances on behalf of the defaulting Member shall become a loan due and owing from the defaulting Member to such non -defaulting Member and bear interest at the rate of ten percent (10%) per annum, payable monthly. All cash distributions otherwise distributable to the defaulting Member tinder this Agreement shall instead be paid to the non -defaulting Members making such advances until such advances and interest thereon are paid in full. In any event, any such advances shall be evidenced by a promissory note in a form reasonably acceptable to the Managers, and be due and payable by the defaulting Member one (1) year from the date that such advance was made. Any amounts repaid shall first be applied to interest -6- 12/02/2003 '16:40 1114072-4241 CHADWICK J BRADBURY PAGE 01 and thereafter to principal. Effective upon a Member becoming a defaulting Member, each Member grants to the non -defaulting Members who advance funds under this Section 3.5A, a security interest in his or her Economic Interest to secure his or her obligation to repay such advances and agrees to execute and deliver a promissory note as described herein together with a security agreement in a form reasonably acceptable to the Managers, and such UCC-1 financing statements and assignments of certificates of membership (or other documents of transfer) as such non -defaulting Members may reasonably request. B. The Percentage Interests shall be adjusted, in which event each Members Percentage Interest shall be a fraction, the numerator of which represents the aggregate amount of such Membees Capital Contributions and the denominator of which represents the sum of all Members' Capital Contributions. C. The non -defaulting Members who hold a majority of the Percentage Interests held by all non -defaulting Members may dissolve the Company, in which event the Company shall be wound -up, liquidated and terminated pursuant to Article X. D. The Company or the non -defaulting Members may purchase the defaulting Member's entire Membership Interest in accordance with the same terms and conditions as those set forth in Article VIII except that the purchase price shall be an amount equal to eighty percent (80%) of the purchase price determined in accordance with Section 8.3. E. The defaulting Members shall have no right to receive any distributions from the Company until the non -defaulting Members have first received distributions in an amount equal to the additional capital contributed by each non -defaulting Member to the Company plus a cumulative, non - compounded return thereon at the rate of ten percent (10%) per annum. P. The defaulting Member shall lose his or her voting and approval rights under the Act, the Articles and this Agreement until such time as the defaulting Member cures the default. G. The defaulting Member shall lose his or her ability (whether as a Member or a Manager) to participate in the management and operations of the Company. Each Member acknowledges and agrees that (i) a default by any Member in making a required capital contribution will result in the Company and the non -defaulting Members incurring certain costs and other damages in an amount that would be extremely difficult or impractical to ascertain and (ii) the remedies described in this Section 3.5 bear a reasonable relationship to the damages which the Members estimate may be suffered by the Company and the non -defaulting Members by reason of the failure of a defaulting Member to make any required Capital Contribution and the election of any or all of the above described remedies is not unreasonable under the circumstances existing as of the date hereof. The election of the Managers or nor -defaulting Members, as applicable, to pursue any remedy provided in this Section 3.5 shall not be a waiver or limitation of the right to pursue an additional or different remedy available hereunder or of law or equity with respect to any subsequent default. 3.6 $eyiij_rr►ment to C loran r,S'nrignicxi0 T nana� nn�ie ncattnn ------� n----,.� CompensatiAn. No Manager nor Member shall be required to provide anv personal guaranty of any type, kind or nature to further the business of the Company; p=ided hn1Ut&U, that any Manager or Member that does elect, if requested by Manager, to provide personal guaranty to any lender required to further the business of the Company, shall -7- 12/02/2003 16:40 1114072-4241 -CHADWICK J BRADBURY PAGE 02 be entitled to a bonus compensation equal to 5% of the amount of such sum guaranteed out of profits as a bonus compensation before division of net profits of Company. ARTICLE IV MEMBERS 4.1 i.4niteri l J hility. Except as expressly set forth in this Agreement or required by law, no Member shall be personally liable for any debt, obligation, or liability of the Company, whether that liability or obligation arises in contract, tort, or otherwise. 4.2 Admisginn if Additional Mem}%ers, The Managers, with the approval of all Members, may admit to the Company additional Members. Any additional Members shall obtain Membersbip Interests and will participate in the management, Net Profits, Net Losses, and distributions of the Company on such terms as are determined by and approved by all Members. Notwithstanding the foregoing, Assignees may only be admitted as substitute Members in accordance with Article VII. 4.3 WirhdrAl�yS� _nr.ResionAt. �c ic_, Any Member who is under an obligation to render services to the Company may withdraw or resign as a Member at any time upon one hundred twenty (120) days prior written notice to the Company, without prejudice to the rights, if any, of the Company or the other Members under any contract to which the withdrawing Member is a party. In the event of such withdrawal, such Member's Membership Interest shall terminate pursuant to Section 4.4. No other Member may withdraw or resign from the Company. 4.4 TerminAtinn of_Memher_ahin iatgMq. Upon (a) the transfer of a Members Membership. Interest in violation of Article VII, (b) the occurrence of a Dissolution Event as to such Member which does not result in the dissolution of the Company under Article X, or (c) the withdrawal or resignation of a Member in accordance with Section 4.3, the Membership Interest of a Member shall be terminated by the Managers and thereafter that Member shall be an Assignee only unless such Membership Interest shall be purchased by the Company and/or remaining Members as provided in Article VI11. Each Member acknowledges and agrees that such termination or purchase of a Membership Interest upon 'the occurrence of any of the foregoing events is not unreasonable under the circumstances existing as of the date hereof. 4.5 Competing Activities, The Members and their officers, directors, shareholders, partners, members, managers, agents, employees and Affiliates may engage or invest in, independently or with others, any business activity of any type or description, including without limitation those that might be the same as or similar to the Company's business and that might be in direct or indirect competition with the Company. Neither the Company nor any Member shall have any right in or to such other ventures or activities or to the income or proceeds derived therefrom. The Members shall not be obligated to present any investment opportunity or prospective economic advantage to the Company, even if the opportunity is of the character that, if presented to the Company, could be taken by the Company. The Members shall have the right to hold any investment opportunity or prospective economic advantage for their own account or to recommend such opportunity to Persons other than the Company. Each Member acknowledges that the other Members and their Affiliates own and/or manage other businesses, including businesses that may compete with the Company and for the Members' time. Each Member hereby waives any and all rights and claims which they may otherwise have against the other Members and their officers, directors, shareholders, partners, members, managers, agents, employees, and Affiliates as a result of any of such activities. -$- 12/02/2003 16:40 1114072'4241 CHADWICK'J BRADBURY PAGE' 03 4.6 Transactin6„s 5UUh The Cmmpan . Subject to any limitations set forth in this Agreement and with the prior approval of the Managers; a Member may lend money to and transact other business with the Company. Subject to other applicable law, such Member has the same rights and obligations with respect thereto as a Person who is not a Member. 4.7 Ramuneratinn To,,hdambe s, Except as otherwise specifically provided in this Agreement, no Member is entitled to remuneration for acting in the Company business. 4.8 Mcmha - Are Not A gents. Pursuant to Section 5.1 and the Articles, the management of the Company is vested in the Managers. The Members shall have no power to participate in the management of the Company except as expressly authorized by this Agreement or the Articles and except as expressly required by the Act. No Member, acting solely in the capacity of a Member, is an agent of the Company nor does any Member, unless expressly and duly authorized in writing to do so by a Manager or Managers, have any power or authority to bind or act on behalf of the Company in any way, to pledge its credit, to execute any instrument on its behalf or to under it liable for any purpose. 4.9 doting Rigs. Except as expressly provided in this Agreement or the Articles, Members shall have no voting, approval, or consent rights. Members shall have the right to approve or disapprove matters as specifically stated in this Agreement, including the following: A. I.Inmnimnus Ann:, rnvAl. The following matters shall require the unanimous vote, approval or consent of all Members who are not the subject of a Dissolution Event or an assignor of a Membership Interest: (i) A decision made pursuant to Section 8.1 to continue the business of the Company after the occurrence of a Dissolution Event; (ii) Except as provided in Section 7.4, the transfer of a Membership Interest and admission of the Assignee as a Member of the Company in accordance with Article VII; (iix) Any amendment of the Articles or, in accordance with Section 13.15, this Agreement; and (iv) A decision to compromise the obligation of a Member to make a Capital Contribution or return money or property paid or distributed in violation of the Act. B. ApDMVal by Memherq Holding a Mainrity int,grgg- Except as set forth in Section 5.3B, in all other matters in which a vote, approval or consent of the Members is required, a vote, consent or approval of a Majority Interest (or, in instances in which there are defaulting or remaining members, non - defaulting or remaining Members %vho hold a majority of the Percentage Interests held by all non -defaulting or remaining Members) shall be sufficient to authorize or approve such act. C. Oer Voting Rights. Besides the rights granted in Section 4.9A, Members may vote, consent or approve to the extent and on the terms provided in this Agreement in the following Sections: (i) Section 3.2 on additional Capital Contributions; -9. 12/02/2003 `16:40 1114072-4241 CHADWICK J BRADBURY PAGE.' 04 (ii) Section 3.5on remedies for a Membees failure to matte a contribution; (iii) Section 4.2 on admission of new Members; Managers; (iv) Section 5.2 on election and removal of a Manager; (v) Section 5,38 on a change in the purpose or business of the Company-, (vi) Section 5.313 on reorganization of the Company; (vii) Section 5.38 on other limitations on the Managers' authority; (viii) Section 5.7 on transactions with the Managers and Affiliates of the (ix) Section 5.9A on management fees payable to Managers; (x) Section 10.1 on dissolving the Company; and (xi) Section 11.7 on indemnification by the Company. n. Ap=yal StAndard, Except as otherwise specifically provided in this Agreement, all votes, approvals or consents of the Members may be given or withheld, conditioned or delayed as the Members may determine in their sole and absolute discretion. 4.10 Meetings of Mr;mhem, A. D,aW- Time and Placg�nf Meetings of 1deWhCrs- Secretary. Meetings of Members may be held at such date, time and place within or without the State of California as the Managers may fix from time to time, or if there are two or more Managers and they are unable to agree to such time and place, Members holding a Majority Interest shall determine the time and place. No annual or regular meetings of Members are required. At any Members' meeting, the Managers shall appoint a person to preside at the meeting and a person to act as secretary of the meeting. The secretary of the meeting shall prepare minutes of the meeting which shall be placed in the minute books of the Company. B. Power to Qa1I MP_P.lin . Meetings of the Members maybe called by any Manager, or upon written demand of Members holding more than ten percent (10%) of the Percentage Interests for the purpose of addressing any matters on which the Members may vote. C. Nntice of MFp+..1;nS. Written notice of a meeting of Members shall be sent or otherwise given to each Member in accordance with Section 4.1OD/Corporations Code Section 17104(e)(2) not less than ten (10) nor more than sixty (60) days before the date of the meeting. The notice shall specify the place, date and hour of the meeting and the general nature of the business to be transacted. No other business may be transacted at this meeting. Upon written request to a Manager by any person entitled to call a meeting of Members, the Managers shall immediately cause notice to- be given to the Members entitled to vote that a meeting will be held at a time requested by the person calling the meeting, not less than test (10) days nor more than sixty (60) days after the receipt of the request. 1f the notice is not given -10- 12/02/2003 ;1.6:40 '1114072-4241 ."CHADWICK J BRADBIJRY PAGE' 05 within twenty (20) days after the receipt of the request, the person entitled to call the 'meeti'ng may give the notice. • D. Manner nfaying Notice- Afficiayir a f Notice. Notice of any meeting of Members shall be given either personally or by first-class mail or telegraphic or other written communication, charges prepaid, addressed' to the Member at the address of that Member appearing on the books of the Company or given by the Member to the Company for the purpose of notice. If no such address appears on the Company's books or is given, notice shall be deemed to have been given if sent to that Member by first-class mail or telegraphic or other written communication to the Company's principal executive office, or if published at least once in a newspaper of general circulation in the county where that office is located. Notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by telegram or other means of written communication,. If any notice addressed to a Member at the address of that Member appearing on the books of the Company is returned to the Company by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice to the Member at that address, all future notices or reports shall be deemed to have been duly given without further mailing if these shall be available to the Member on written demand of the Member at the principal executive office of the Company for a period of one year from the date of the giving of the notice. An affidavit of the mailing or other means of giving any notice of any meeting shall be executed by the Manager or any secretary, assistant secretary, or any transfer agent of the Company giving the notice, and shall be filed and maintained in the minute book of the Company. E. Validity of Action. Any action approved at a meeting, other than by unanimous approval of those entitled to vote, shall be valid only if the general nature of the proposal so approved was stated in the notice of meeting or in any written waiver of notice' F. 011orum. The presence in person or by proxy of a Majority Interest shall constitute a quorum at a meeting of Members, The Members present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the loss of a quorum, if any action taken after loss of a quorum (other than adjournment) is approved by at least Members holding a Majority Interest Percentage Interests which taken together exceed fifty (50%) percent of all Percentage Interests, G. A linumed Meeting- Natirp.Any Members' meeting, whether or not a quorum is present, may be adjourned from time to time by the vote of the majority of the Membership Interests represented at that meeting, either in person or by proxy, but in the absence of a quorum, no other business may be transacted at that meeting, except as provided in Section 4.1OF. When any meeting of Members is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place are announced at a meeting at which the adjournment is taken, unless a new record date for the adjourned meeting is subsequently fixed, or unless the adjournment is for more than forty-five (45) days from the date set for the original meeting, in which case the Managers shall set a new record date. At any adjourned meeting the Company may transact any business which might have been transacted at the original meeting. 14. Waiver of NntiCi or Consent, The actions taken at any meeting of Members however called and noticed, and wherever held, have the same validity as if taken at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after -11- 12/02I2003 6 40 1114072-4241 CHADWICK J BRADBURY PAGE 06 the meeting, each of the Members entitled to �►'ote, who was not present in person or by proxy, signs a written waiver of notice or consents to the holding of the meeting or approves the minutes of the meeting. All such waivers, consents or approvals shaII be filed with the Company records or made a part of the minutes of the meeting, Attendance of a person at a meeting shall constitute a waiver of notice of that meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters not included in the notice of the meeting if that objection is expressly made at the meeting. Neither the business to be transacted nor the purpose of any meeting of Members need be specified in any written waiver of notice except as provided in Section 4.1 OE. 1. . Any action that may be taken at a meeting of Members may be takers without a meeting, if a consent in writing setting forth the action so taken, is signed and delivered to the Company within sixty (60) days of the record date for that action by Members having not less than the minimum number of votes that would be necessary to authorize or take that action at a meeting at which all Members entitled to vote on that action at a meeting were present and voted. All such consents shall be filed with the Managers or the secretary, if any, of the Company and shall be maintained in the Company records. Any Member giving a written consent, or the Membees proxy holders, may revoke the consent by a writing received by the Managers or secretary, if any, of the Company before written consents of the number of votes required to authorize the proposed action have been filed. Unless the consents of all Members entitled to vote have been solicited in writing, (i) notice of any Member approval of an amendment to the Articles or this Agreement, a dissolution of the Company, or a merger of the Company, without a meeting by less than unanimous written consent, shall be given at least ten (10) days before the consummation of the action authorized by such approval, and (ii) prompt notice shall be given of the taking of any other action approved by Members without a meeting by less than unanimous written consent, to those Members entitled to vote who have not consented in writing. J. Tglepbnnir PaWcinintinn by Member at Me t� ine . Members may participate in any Members' meeting through the use of any means of conference telephones or similar communications equipment as long as all Members participating can hear one another. A Member so participating is deemed to be present in person at the meeting. K. Recard Date. In order that the Company may determine the Members of record entitled to notices of any meeting or to vote, or entitled to receive any distribution or to exercise any rigbts in respect of any distribution or to exercise any rights in respect of any other lawful action, a Manager, or Members representing more than ten percent (10%) of the Percentage Interests may fix, in advance, a record date, that is not more than sixty (60) days nor less than ten (10) days prior to the date of the meeting and not more than sixty (60) days prior to any other action. If no record date is fixed, the record date shall be as set forth in Section I7104(k), L. Prnriec. Every Member entitled to vote for Managers or on any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the person and filed with the Managers or secretary, if any, of the Company. A proxy shall be deemed signed if the Member's name is placed on the proxy (whether by manual signature, typewriting., telegraphic transmission, electronic transmission or othenvise) by the Member or the Membees attorney in fact. A proxy may be transmitted by an oral telephonic transmission if it is Submitted with information from which -12- 12IO2/2003 ',1640 1114072-4241 ,,CHADWICK J;BRADBURY PAGE, 07 it may be determined that the proxy was authorized by the Member or the Member's attorney in fact. A validly executed proxy which does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, before the vote pursuant to that proxy, by a writing delivered to the Company stating that the proxy is revoked, or by a subsequent proxy executed by, or attendance at the meeting and voting in person by, the person executing the proxy; or (R) written notice of the death or incapacity of the maker of that proxy is received by the Company before the vote pursuant to that proxy is counted; provided, however, that no proxy shall be valid after the expiration of eleven (11) months from the date of the proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Corporations Code Sections 705(e) and 705(f). " ■I u - in, I w A. CertMicatR. A Membership Interest may be represented by a certificate of membership. The enact contents of a certificate of membership may be determined by action of the Managers but shall be issued substantially in conformity with the following requirements. The certificates of membership shall be respectively numbered serially, as they are issued, shall be impressed with the Company seal or a facsimile thereof, if any, and shall be signed by the Managers of the Company. Each certificate of membership shall state the name of the Company, the fact that the Company is organized under the laws of the State of California as a limited liability company, the name of the person to whom the certificate is issued, the date of issue, and the Percentage Interest represented thereby. A statement of the designations, preferences, qualifications, limitations, restrictions, and special or relative rights of the Membership Interest, if any, shall be set forth in full or summarized on the face or back of the certificates which the Company shall issue, or in lieu thereof, the certificate may set forth that such a statement or summary will be furnished to any holder of a Membership interest upon request without charge. Each certificate of membership shall be otherwise in such form as may be deternrtined by the Managers. 13. rancel1at6o0 of r~,erf;fir-ste, Except as herein provided with respect to lost, stolen, or destroyed certificates, no new certificates of membership shall be issued in lieu of previously issued certificates of membership until former certificates for a like number of Membership Interests shall have been surrendered and cancelled. All certificates of membership surrendered to the Company for transfer shall be cancelled. C. Replacement of 1 _net_ Sralgtt, nrnr neatrwerl Certifigam. Any Member claiming that his or her certificate of membership is lost, stolen, or destroyed may make an affidavit or affirmation of that fact and request a new certificate. Upon the giving of a satisfactory indemnity to the Company as reasonably required by the Managers, a new certificate may be issued of the same tenor and representing the same Percentage Interest of membership as was represented by the certificate alleged to be lost, stolen, or destroyed. ARTICLE V MANAGEMENT AND CONTROL OF THE COMPANY A. Exclusive Migna gmeml...b_y Managers. The business, property and affairs of the Company shall be managed exclusively by the Managers. Except for situations in which the approval of the Members is expressly required by the Articles or this Agreement, the Managers shall have full, complete -13- 12/02/2003'- :16: 4'0 1114072`-4241 CHAD4JICK J BRADBURY PAGE -'08 and exclusive authority, power, and discretion to manage and control the business, property and affairs of the Company, to make all decisions regarding those matters and to perform any and all other acts or activi- ties customary or incident to the management of the Company's business, property and affairs, B. .Subject to Section 5.313: The Manager is authorized to endorse checks, drafts, and other evidence of indebtedness made payable to the order of the Company, but only for the purpose of deposit into the Company's accounts, and may sign all checks, drafts, and other instruments obligating the Company to pay money, and may sign contracts and obligations on behalf of the Company up `to the amount of V0,000.00. All checks, drafts, and other instruments obligating the Company to pay money, or contracts in an amount of more than $10,000.00, must be signed on behalf of the Company by any Manager and a Member other than the Manager. Anything to the contrary notwithstanding, the procedures for the writing and signing of all checks shall be those procedures in place at CIC or determined by the Majority Interest. C. gars. Meetings of the Managers, if more than one Manager, may be called by any Manager. All meetings shall be held upon four (4) days notice by mail or forty-eight (48) hours notice (or upon such shorter notice period if necessary under the circumstances) delivered personally or by telephone, telegraph or facsimile. A notice need not specify the purpose of any meeting. Notice of a meeting need not be given to any Manager who sighs a waiver of notice or a consent to holding the meeting (which waiver or consent need not specify the purpose of the meeting) or an approval of the minutes thereof, whether before or after the meeting, or who attends the meeting without protesting, prior to its commencement, the lack of notice to such Manager. All such waivers, consents and approvals shall be filed with the Company records or made a part of the minutes of the meeting. A majority of the Managers present, whether or not a quorum is present, may adjourn any meeting to another time and place. If the meeting is adjourned for more than twenty-four (24) hours, notice of any adjournment shall be given prior to the time of the adjourned meeting to the Managers who are not present at the time of the adjournment. Meetings of the Managers may be held at any place within or without the State of California which has been designated in the notice of the meeting or at such place as may be approved by the Managers. Managers may participate in a meeting through use of conference telephone or similar communications' equipment, so long as all Managers participating in such meeting can hear one another. Participation in a meeting in such manner constitutes a presence in person at such meeting. A majority of the authorized number of Managers constitutes a quorum of the Managers for the transaction of business. Except to the extent that this Agreement expressly requires the approval of all Managers, every act or decision done or made by a majority of the Managers present at a meeting duly held at which a quorum is present is the act of the Managers. A, meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of Managers, if any action taken is approved by at least a majority of the required quorum for such meeting. Any action required or permitted to be taken by the Managers may be taken by the Managers without a meeting, if a majority of the Managers individually or collectively consent in writing to such action, unless the action requires the unanimous vote of the Managers, in which case all Managers must consent in writing. Such action by written consent shall have the same force and effect as a majority vote or unanimous vote, as applicable, of such Managers_ The provisions of this Section 5.1C govern meetings of the Managers if the Managers elect, in their discretion, to hold meetings. However, nothing in this Section 5.1C or in this Agreement is intended -14- 12l02l2003 ` 16t"40 11T4072-4241-CHADWICK J 'BRADBURY ',''PAGE '09 •w to require that meetings of Managers be held, it being the'intent of the Members that meetings of Managers are not required. 5.2 Election of Managers, A. I. The Company shall initially have one (1) Manager. The number of Managers of the Company shall be fixed from time to time by the affirmative vote or written consent of a Majority Interest, provided that in no instance shall there be less than one Manager and provided further that if the number of Managers is reduced from more than one to one, the Articles shall be amended to so state, and if the number of Managers is increased to more than one, the Articles shall be amended to delete the statement that the Company has only one Manager. Unless he or she resigns or is removed, each Manager shall hold office until a successor shall have been elected and qualified or, for a term of one (1) year. Managers shall be elected by the affirmative vote or written consent of Members holding a Majority Interest. A Manager need not be a Member, an individual, a resident of the State of California, or a citizen of the United States. B. Re-giZngtonn. Any Manager may resign at any time by giving written notice to the Members and remaining Managers without prejudice to the rights, if any, of the Company under any contract to which the Manager is a parry. The resignation of any Manager shall take effect upon receipt of that notice or at such later time as shall be specified in the notice. Unless otherwise specified in the notice, the acceptance of the resignation shall not be necessary to make it effective. The resignation of a Manager who is also a Member shall not affect the Managers rights as a Member and shall not constitute a withdrawal of a Member. C. RemnYal. Any Manager may be removed at any time, with or without cause, by the affirmative vote of a Majority Interest at a meeting called expressly for that purpose, or by the written consent of a Majority Interest. Any removal shall be without prejudice to the rights, if any, of the Manager under any employment contract and, if the Manager is also a Member, shall not affect the Manager's rights as a Member or constitute a withdrawal of a Member. For purpose of this Section, "cause" shall mean fraud, gross negligence, willful misconduct, embezzlement or a breach of such Manager's obligations under this Agreement or any employment contract with the Company. A Manager also may be removed by the affirmative vote or written consent of a majority of the remaining Managers if such Manager becomes incapable of fulfilling his or her obligations under this Agreement because of injury or physical or mental illness and such incapacity shall exist for thirty (30) working days in the aggregate during any consecutive six (6) month period. D. Any vacancy occurring for any reason in the number of Managers may be filled by the affirmative vote or written consent of Majority Interest. � idol Z 1 a 1A A Powers nf kbna=r_%, Without limiting the generality of Section 5.1, but subject to Section 5.39 and to the express limitations set forth elsewhere in this ,Agreement, the Managers shall have all necessary powers to manage and carry out the purposes, business, property, and affairs of the Company, including, without limitation, the power to exercise on behalf and in the name of the Company all of the powers described in Corporations Code Section 17003, including, without limitation, the power to, (i) Acquire, purchase, renovate, improve, alter, rebuild, demolish, replace, -15- 12/ 02I2003 ' " 16". 40 '1114072'=4241 ''CHADWICK J BRADBURY "PAGE .10 and own real property and any other property or assets that the Managers determine is necessary or appropriate or in the interest of the business of the Company, and to acquire options for the purchase of any such property; . (ii) Sell, exchange, lease, or otherwise dispose of the real property and other property and assets owned by the Company, or any part thereof, or any interest therein; (iii) Borrow money from any party, issue evidences of indebtedness in connection therewith, refinance, increase the amount of, modify, amend, or change the terms of, or extend the time for the payment of any indebtedness or obligation of the Company, and secure such indebtedness ,the mortgage, deed of trust, pledge, security interest, or other lien on Company assets; obligation of any Person; (iv) Guarantee the payment of money or the performance of any contract or (v) Sue on, defend, or compromise any and all claims or liabilities in favor of or against the Company; submit any or all such claims or liabilities to arbitration; and confess a judgment against the Company in connection with any litigation in which the Company is involved; and (vi) Retain legal counsel, auditors, and other professionals in connection with the Company business and to pay therefor such remuneration as the Managers may determine. B. Notwithstanding aay other provisions of this Agreement, no debt or liability of more than $10,000.00 may be contracted on behalf of the Company except by the written consent of al I Members. Additionally, the Managers shall not have authority hereunder to cause the Company to engage in the following transactions without first obtaining the affirmative vote or written consent of a Majority Interest (or such greater Percentage Interests set forth below) of the Members: (i) The sale, exchange or other disposition of all, or substantially all, of the Company's assets occurring as part of a single transaction or plan, or in multiple transactions over a three (3) month period, except in the orderly liquidation and winding up of the business of the Company upon its duly authorized dissolution, shall require the affirmative vote or written consent of Members holding at least fifty-one percent (51 %) in Percentage Interests; (ii)` The merger of the Company with another limited liability company or limited partnership shall require the affirmative vote or written consent of Members holding at least fifty -on percent (51%) in Percentage Interests; provided in no event shall a Member be required to become a general partner in a merger with a limited partnership without his express written consent or unless the agreement of merger- provides each Member with the dissenter's rights described in the Act; (iii) The merger of the Company with a corporation or a general partnership or other Person shall require the affirmative vote or written consent of all Managers and Members; (iv) The establishment of different classes of Members; (v) An alteration of the primary purpose or business of the Company as set forth in Section 2.6; -16, 12/02/2003 `16. 40 "."CHADWICK__ J 'BRADBURY PAGE . 11 (vi) Transactions between the Company and one or more of the Managers or Members or one or more of any Member's Affiliates, or transactions in which one or more Managers or Members, or one or more of any Manager's or Members Affiliates, has a material financial interest; (vii) Without limiting subsection (vi), the lending of money by the Company to any Manager, Member, or officer, (viii) Any act which would make it impossible to carry on the ordinary business of the Company. (ix) The confession of a judgment against the Company; (x) To file a bankruptcy petition on behalf of the Company, and (xi) Any other transaction described in this Agreement as requiring the vote, consent, or approval of the Members. 5.4 Perfnrmanne, of.DUti - Liability of Msansiaers. A Manager shall not be liable to the Company or to any Member for any loss or damage sustained by the Company or any Member, unless the loss or damage shall have been the result of fraud, deceit, gross negligence, reckless or intentional misconduct, or a knowing violation of law by the Manager. The Managers shall perform their managerial duties in good faith, in a manner they reasonably believe to be in the best interests of the Company and its Members, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. A Manager who so performs the duties of Manager shall not have any liability by reason of being or having been a Manager of the Company. In performing their duties, the Managers shall be entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, of the following persons or groups unless they have knowledge concerning the matter in question that would cause such reliance to be unwarranted and provided that the Managers act in good faith arid after reasonable inquiry'when the need therefor is indicated by the circumstances! A. One or more officers, employees or other agents of the Company whom the Managers reasonably believe to be reliable and competent in the matters presented; B. Any attorney, independent accountant, or other person as to matters which the Managers reasonably believe to be within such person's professional or expert competence; or C. A committee upon which the Managers do not serve, duly designated in accordance with a provision of the Articles or this Agreement, as to matters within its designated authority, which committee the Managers reasonably believe to merit competence. 5.5 Deyntion of Time, The Managers are not obligated to devote all of their time or business efforts to the affairs of the Company. The Managers shall devote whatever time, effort, and skill as they deem appropriate for the operation of the Company. 5.6 Comneting Activities. The Managers and their officers, directors, shareholders, partners, -17- '12/0212003 "_ 16:40 _. 1114072=4241 'CHADWICK J -`BRADBURY � - . _. ..PAGE 12 members, managers, agents, employees and Affiliates may engage or invest in, independently or with others, any business activity of any type or description, including without limitation those that might be the same as or similar to the Company's'business and that might be in direct or indirect competition with the Company. Neither the Company nor any Member shall have any right in or to such other ventures or activities or to the income or proceeds derived therefrom. The Managers shall not be obligated to present any investment opportunity or prospective economic advantage to the Company, even if the opportunity is of the character that, if presented to the Company, could be taken by the Company. The Managers shall have the right to hold any investment opportunity or prospective economic advantage for their own account or to recommend such opportunity to Persons other than the Company. The Members acknowledge that the Managers and their Affiliates own and/or manage other businesses, including businesses that may compete with the Company and for the Managers' time. The Members hereby waive any and all rights and claims which they may otherwise have against the Managers and their officers, directors, shareholders, partners, members, managers, agents, employees, and Affiliates as a result of any of such activities, 5,7 Transartinnc hetweea_the Company and The Manao�rrc, , Notwithstanding that it may constitute a conflict of interest, the Managers may, and may cause their Affiliates to, engage in any transaction (including, without limitation, the purchase, sale, lease, or exchange of any property or the rendering of any service, or the establishment of any salary, other compensation, or other terms of employment) with the Company so long as such transaction is not expressly prohibited by this Agreement and so long as the terms and conditions of such transaction, on an overall basis, are fair and reasonable to the Company and are at least as favorable to the Company as those that are generally available from Persons capable of similarly performing them and in similar transactions between parties operating at arm's length,and provided that a Majority Interest of the Members having no interest in such transaction (other than their interests as Members) affirmatively vote or consent in writing to approve the transaction. A transaction between the Managers and/or their Affiliates, on the one hand, and the Company, on the other hand, shall be conclusively determined to constitute a transaction on terms and conditions, on an overall basis, fair and reasonable to the Company and at least as favorable to the Company as those generally available in a similar transaction between parties operating at arm's length if a Majority Interest of the Members having no interest in such transaction (other than their interests as Members) affirmatively vote or consent in writing to approve the transaction. Notwithstanding the foregoing, the Managers shall not have any obligation, in connection with any such transaction between the Company and the Managers or an Affiliate of the Managers, to seek the consent of the Members. 5.8 Liability of Manager t_iMiled_10--Manage6s Assets. Under no circumstances will any director, officer, shareholder, member, manager, partner, employee, agent or Affiliate of any Manager have any personal responsibility for any liability or obligation of the Manager (whether on a theory of alter ego, piercing the corporate veil, or otherwise), and any recourse permitted under this Agreement or otherwise of the Members, any former Member or the Company against a Manager will be limited to the assets of the Manager as they may exist from time to time. 5.9 ga ms to Managm, Except as specified in this ,A,greemen% no Manager or Affiliate of a Manager is entitled to no remuneration for services rendered or goods provided to the Company. The Managers and their Affiliates shall receive only the following payments: A. The Company shall pay the Managers, a monthly fee for services in connection with the management of the Company in the amount of $ 100.00 per year. Such fee may be changed from time to time only by an affirmative vote of Members holding at least a Majority - i 8- 1210212003 111`4072-4241 : - CHADWICK J ' BRADBURY PAGE � 13 Interest of the Members who are not Managers. B. SenciCPS Per(hrn)Mr1 hy pag�are ar Affiliates, The Company shall pay the Managers or Affiliates of the Managers for services rendered or goods provided to the Company to the extent that the Managers are not required to render such services or goods themselves without charge to the Company, and to the extent that the fees paid to such Managers or Affiliates do not exceed the fees that would be payable to an independent responsible third party that is willing to perform such services or provide such goods. C. Upenses. The Company shall reimburse the Managers and their Affiliates for the actual cost of materials used for or by the Company. The Company shall also pay or reimburse the Managers or their Affiliates for organizational expenses (including, without limitation, legal and accounting fees and costs) incurred to form the Company and prepare and file the Articles and this Agreement. Except as otherwise provided herein, the Managers and their Affiliates shall not be reimbursed by the Company for the following expenses: (i) salaries, compensation or fringe benefits of directors, officers or employees of the Managers or their Affiliates; (ii) overhead expenses of the Managers or their Affiliates, including, without limitation, rent and general office expenses; and (ill) the cost of providing any service or goods for which the Managers or their Affiliates are entitled to compensation under this Agreement. gall off•: A. Appointment of Offir.Prs, The Managers may appoint officers at any time. The officers of the Company, if deemed necessary by the Managers, may include a chairperson, president, vice president, secretary, and chief financial officer. The officers shall serve at the pleasure of the Managers, subject to all rights, if any, of an officer under any contract of employment. Any individual may hold any number of offices. No officer need be a resident of the State of California or citizen of the United States. if a Manager is not an individual, such Manager's officers may serve as officers of the Company if elected by the Managers. The officers shall exercise such powers and perform such duties as specified in this Agreement and as shall be determined from time to time by the Managers. B. >3enarLl_, Resignationnd Filling of )Zacsney of Off regs, Subject to the rights, if any, of an officer under a contract of employment, any officer may be removed, either with or without cause, by the Managers at any time. Any officer m y resign at any time by giving written notice to the Managers. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the officer is a parry. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in this Agreement for regular appointments to that office. C. Sa, uics of Officers. Subject to Sections 5.7 and 5.9, the salaries of all officers and agents of the Company shall be fixed by a resolution of the Managers. D. IIldias and Powers of tht C_hairnprsnn. The chairperson, if such an officer be appointed, shall, if present, preside at meetings of the Members and the Managers, and exercise and perform -19- 12/0212003 ' .15:-40 1114072=4241 .CHADWICK J BRADBURY 1'A�GE`" 14 such other powers and duties as may be from time to time assigned to him by the Managers or prescribed by this Agreement. If there is no president, the chairperson shall in addition be the chief executive officer of the Company and shall have the powers and duties prescribed in Section 5. I OE- E. . Subject -to such supervisory powers, if any, as may be given by the Managers to the chairperson, if there be such an off -leer, the president shall be the chief executive officer of the Company, and shall, subject to the control of the Managers, have general and active management of the business of the Company and shall see that all orders and resolutions of the Members and Managers are carried into effect. He or she shall have the general powers and duties of management usually vested in the office of president of a corporation, and shall have such other powers and duties as 'may be prescribed by the Managers or this Agreement. The president shall execute bonds, mortgages and other contracts, except where required or permitted by law to be otherwise signed and executed, and except where the signing and execution thereof shall be expressly delegated by the Managers to some other officer or agent of the Company. F. fl tries nd Pn ym of Vice-P=jdznt The vice-president, or if there shall be more than one, the vice-presideots in the order determined by a resolution of the Managers, shall, in the absence or disability of the president, perform the dutie and exercise the powers of the president and shaft perform such other duties and have such other powe s as the Managers by resolution may from time to time prescribe. j I G. Dudes..and _-eQ3eta�gt- The secretary shall attend all meetings of the Managers and all meetings of the Members, and shall record all the proceedings of the meetings in a book to be kept for that purpose, and shall perform lie duties for the standing committees when required. The secretary shall give, or cause to be given, noti a of all meetings of the Members and Managers and shall perform such other duties as may be prescribe by the ,Managers. The secretary shall have custody of the seal, if any, and the secretary shall have authors ty to affix the same to any instrument requiring it, and when so affixed, it may be attested by his or her si ture. The Managers may give general authority to any other officer to affix the seal of the Company, if any, nd to attest the affixing by his or her signature. The secretary shall keep, or c ause to be kept, at the principal executive office or at the office of the Companys transfer agent or re 91isi rar, as determined by resolution of the Managers, a register, or a duplicate register, showing the names of al Members and their addresses, their Percentage Interests, the number and dare of certificates issued for th same, and the number and date of cancellation of every certificate surrendered for cancellation. The eretary shall also keep all documents described in Section 9.1 and such other documents as may be requ red under the Act. The secretary shall perform such other duties and have such other authority as may be rescribed elsewhere inthis Agreement or from time to time by the Managers. The secretary shall have the eaeral duties, powers and responsibilities of a secretary of a corporation. If the Managers choose to ppoint an assistant secretary or assistant secretaries, the assistant secretaries, in the order of their ser iority, in the absence, disability or inability to act of the secretary, shall perform the duties and exereis the powers of the secretary, and shall perform such other duties as the Managers may from time to time prescribe. 14. Duties and PnWgEq,� Chi f Financial Officer, The chief financial officer shall keep and maintain, or cause to be kept and maikttained, adequate and correct books and records of accounts -20- 12/ 02/ 2003 " 16`: 40 11 T`407,2' 4241 CHADWICK J .BRADBURY PAGE , -15 of the properties and business transactions of the Company, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, Membership Interests and Economic Interests, The books of account shall at all reasonable times be open to inspection by any Manager - The chief financial officer shall have the custody of the funds and securities of the Company, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company, and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Managers. _ The chief financial officer shall disburse the funds of the Cornpan.%y as may be ordered by the Managers, taking proper vouchers for such disbursements, and shall reader to the president and the Managers, at their regular meetings, or when Members so require, at a meeting of the members an account of all his or her transactions as treasurer and of the financial condition of the Company. The chief financial officer shall perform such other duties and shall have such other responsibility and authority as may be prescribed elsewhere in this Agreement or from time to time by the Managers. The chief financial officer shall have the general duties, powers and responsibility of a chief financial officer of a corporation, and shall be the chief financial and accounting officer of the Company. If the Managers choose to elect an assistant treasurer or assistant treasurers the assistant treasurers in the order of their seniority shall, in the absence, disability or inability to act of the chief financial officer, perform the duties and exercise the powers of the chief financial officer, and shal l perform such other duties as the Managers shall from time to time prescribe. S.I i r •tmi+ed_Liabilit�c. No person who is a Manager or officer or both a Manager and officer of the Company shall be personally liable under any judgment of a court, or in any other manner, for any debt, obligation, or liability of the Company, whether that liability or obligation arises in contract, tort, or otherwise, solely by reason of being a Manager or officer or both a Manager and officer of the Company. 5.12 . Except as otherwise provided in this Agreement, Membership interests held by the Managers as Members shall entitle each Manager to all the rights of a Member, including without limitation the economic, voting, information and inspection rights of a Member. ARTICLE VI ALLOCATIONS OF NET PROFITS AND NET LOSSES AND DISTRIBUTIONS 6.1 Allncati.Qns of Net Profit and Net I -n:sc. A- ass. Net Loss shall be allocated to the Members in proportion to their Percentage Interests. Notwithstanding the previous sentence, loss allocations to a Member shall be made only to the extent that such loss allocations will not create a deficit Capital! Account balance for that Member in excess of an amount, if any, equal to such Membees share of Company Minimum Gain. Any loss not allocated to a Member because of the foregoing provision shall be allocated to the other Members (to the extent the other Members are not limited in respect of the allocation of losses under this Section 6.1 A). Any loss reallocated under this Section 6.1A shall be taken into account in computing subsequent allocations of income and -21- 12/ 02I2003 3 6 ' 40 1114,072=4241 CHADWICK J BRADBURY PAGE" 16 losses pursuant to'this Article VI, so that the net amount of any item so allocated and the income and losses allocated to each Member pursuant to this Article VI, to the extent possible, shall be equal to the net amount that would have been allocated to each such Member pursuant to this Article VI if no reallocation of losses had occurred under this Section 6.1 A. B. blAt-Prafit. Net Profit shall be allocated to the Members in proportion to their Percentage Interests. 6.2 gnerisl A11oCAtonnS. Notwithstanding Section 6.1: A. If there is a net decrease in Company Minimum Gain during any Fiscal Year, each Member shall be specially allocated items of Company income and gain for such Fiscal Year (arid, if necessary, in subsequent fiscal years) in an amount equal to the portion of such Member's share of the net decrease in Company Minimum Gain that is allocable to the disposition of Company property subject to a Nonrecourse Liability, which share of such net decrease shall be determined in accordance with Regulations Section 1.704-2(gX2). Allocations pursuant to this Section 6.2A shall be made in proportion to the amounts required to be allocated to each Member under this Section 6.2A. The items to be so allocated shall be determined in accordance with Regulations Section 1.704-2(o. This Section 6.2A is intended to comply with the minimum gaits chargebaek requirement contained in Regulations Section l .704-2(f) and shall be interpreted consistently therewith. a. Chaclzehark of Minimurn . If there is a net decrease in Company Minimum Gain attributable to a Member Nonrecourse Debt, during any Fiscal Year, each member who has a share of the Company Minimum Gain attributable to such Member Nonrecourse Debt (which share shall be determined in accordance with Regulations Section 1.704-2(ix5)) shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, in subsequent Fiscal Years) in an amount equal to that portion of such Member's share of the net decrease in Company Minimum Gain attributable to such Member Nonrecourse Debt that is allocable to the disposition of Company property subject to such Member Nonrecourse Debt (which share of such net decrease shall be determined in accordance with Regulations Section 1.704-2(i)(5)). Allocations pursuant to this Section 6.213 shall be made in proportion to the amounts required to be allocated to each Member under this Section 6.28. The items to be so allocated shall be determined in accordance with Regulations Section 1.704- 2(ix4). This Section 6.28 is intended to comply with the minimum gain chargeback requirement contained in Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith. C. Wnnrgrolias Dediialiou . Any nonrecourse deductions (as defined in Regulations Section 1.704-2(b)(1)) for any Fiscal Year or other period shall be specially allocated to the Members in proportion to their Percentage Interests. D. Member Nonrer-oursc i edurtiow. Whose items of Company loss, deduction, or Code Section 705(a)(2)(B) expenditures which are attributable to Member Nonrecourse Debt for any Fiscal Year or other period shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such items are attributable in accordance with Regulations Section 1.704-2(i), B. OaAlified tncomit-Off-se . If a Member unexpectedly receives any adjustments, allocations, or distributions described in Regulations Section 1.7044(b)(2xii)(d)(4), (5) or (6), or any other event creates a deficit balance in such Members Capital Account in excess of such Member's share of -22- 2/02/2003 '" 1G:°40 `1114072-4241 , CHADWICK J BRADBURY PAGE. 17 Company Minimum Gain. items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate such excess deficit balance as quickly as possible. Any special allocations of items of income and gain pursuant to this Section 6.2E shall be taken into account in computing subsequent alloea4ons of income and gain pursuant to this Article VI so that the net amount of any item so allocated and the income, gain, and losses allocated to each Member pursuant to this Article VI to the extent possible, shall be equal to the net amount that would have been allocated to each such Member pursuant to the provisions of this Section 6.2E if such unexpected adjustments, allocations, or distributions had not occurred. 6.3 Cnde SeetiW 7Q4(4 Altncatlnnc. Notwithstanding any other provision in this Article V1, in accordance with Code Section 704(e) and the Regulations promulgated thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax, purposes and its fair market value on the date of contribution. Allocations pursuant to this Section 6.3 are solely for purposes of federal, state and local taxes. As such, they shall not affect or in any way be taken into account in computing a Membees Capital Account or share of profits, losses, or other items of distributions pursuant to any provision of this ,Agreement. 6.4 Allneatinn nfNgt Prnfita Arid t„nsses anti l)istdhiitinna in Resnect nFa Itacifermd interest, If any Economic Interest is transferred, or is increased or decreased by reason of the admission of a new Member or otherwise, during any Fiscal Year of the Company, Net profit or Net Loss for such Fiscal Year shall be assigned pro rats to each day in -the particular period of such Fiscal Year to which such item is attributable (i.e., the day on or during which it is accrued or otherwise incurred) and the amount of each such item so assigned to any such day shall be allocated to the Member or Assignee based upon his or her respective Economic interest at the close of such day. However, for the purpose of accounting convenience and simplicity, the Company shall treat a transfer of, or an increase or decrease in, an Economic Interest which occurs at any time during a semi-monthly period (commencing with the semi-monthly period including the date hereof) as having been consummated on the last day of such semi-monthly period, regardless of when during such semi-monthly period such transfer, increase, of decrease actually occurs (i.e., sales and dispositions made during the first fifteen (15) days of any month will be deemed to have been made on the 15th day of the month). Notwithstanding any provision above to the contrary, gain or loss of the Company realised in connection with a sale or other disposition of any of the assets of the Company shall be allocated solely to the parties owning Economic Interests as of the date such sale or other disposition occurs. 6,5 DistrihnflOOS, of. DiStrihnrahle Cash by the t'mm�any. Subject to applicable law and any limitations contained elsewhere in this Agreement, the Managers may elect from titre to time to distribute Distributable Cash to the Members, which distributions shall be in the following order of priority: (a) To the Members in proportion to their unreturned Capital Contributions until each Member has recovered his or her Capital Contributions; and (b) To the Members in proportion to their Percentage Interests. All such distributions shall be made only to the Persons who, according to the -23- 12/02/2003 '' 1B 40 ' "1114072-4241 - - �'CHADWICK. J' BRADBURY 'PAGE 18 books and records of the Company, are'the holders of record of the Economic Interests in respect of which such distributions are made on the actual date of distribution. Subject to Section 6.7, neither the Company nor any Manager shall incur any liability for making distributions in accordance with this Section 6.5.' 6.6 Farm of Distributina. A Member, regardless of the nature of the Member's Capital Contribution, has no right to demand and receive any distribution from the Company in any form other than money. Except as provided in Section 10A, no Member may be compelled to accept from the Company a distribution of any asset in kind in lieu of a proportionate distribution of money being made to other Members and no Member may be compelled to accept a distribution of any asset in kind. • �� .�I pit=.� A. No distribution shall be made if, after giving effect to the distribution: (i) The Company would not be able to pay its debts as they become due in the usual course of business! or (ii) The Company's total assets would be less than the sum of its total liabilities plus, unless this Agreement provides otherwise, the amount that would be needed, if the Company Nvere to be dissolved at the time of the distribution, to satisfy the preferential rights of other Members, if any, upon dissolution that are superior to the rights of the Member receiving the distribution. 8. The Managers may base a determination that a distribution is not prohibited on any of the following: (i) Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances; (ii) A fair valuation; or (iii) Any other method that is reasonable in the circumstances. Except as provided in Corporations Code Section 17254(e), the effect of a distribution is measured as of the date the distribution is authorized if the payment occurs within 120 days after the date of authorization, or the date payment is made if it occurs mote than 120 days of the date of authorization. C. A Member or Manager who votes for distribution in violation of this Agreement or the Act is personally liable to the Company for the amount of the distribution that exceeds what could have been distributed without violating this Agreement or the Act if it is established that the Member or Manager did not act in compliance with Section 6.7 or Section 10.4. Any Member or Manager who is so liable shall be entitled to compel contribution from (i) each other Member or Manager who also is so liable and (H) each Member for the amount the Member received with knowledge of facts indicating that the distribution was made in violation of this Agreement or the Act. 6.8 RF.MM a, Distributions. Members and Assignees who receive distributions made in violation of the Act or this Agreement shall return such distributions to the Company. Except for those distributions made in violation of the Act or this Agreement, no Member or Assignee shall be obligated to return any distribution to the Company or pay the amount of any distribution for the account of the -24- 12102720'03' ,,16: 40 '1114072=4241 CHADWICK J BRADBURY ..-PAS : ,19 Company or to any creditor of the Company. The amount of any distribution returned to the Company by a Member or Assignee or paid by a Member or Assignee for the account of the Company or to a creditor of the Company shall be added to the account or accounts from which it was subtracted when it was distributed to the Member or Assignee. 6.9 . The Members are aware of the income tax consequences of the allocations trade by this Article VI and hereby agree to be bound by the provisions of this Article VI its reporting their shares of Company income and loss for income tax purposes. ARTICLE VII TRANSFER AND ASSIGNMI✓NT OF ,INTERESTS 7.1 No Member shall be entitled to transfer, assign convey, sell, encumber or in any way alienate all or any part of his or her Membership Interest (collectively, "transfer") except with the prior written consent of all Members, which consent may be given or withheld, conditioned or delayed (as allowed by this ,Agreement or the Act), as the other Member, may determine in their sole and absolute discretion. Transfers in violation of this Article MY shall only be effective to the extent set forth in Section 7.7. ,After the consummation of any transfer of any part of a Membership Interest, the Membership Interest so transferred shall continue to be subject to the terms and provisions of this Agreement and any further transfers shall be required to comply with all the terms and provisions of this Agreement. 7.2 Furtbgr mtricrions nn Transfer of intg=-g. In addition to other restrictions found in this Agreement, no Member shall transfer, assign, convey, sell, encumber or in any way alienate all or any part of his or her Membership Interest: (i) without compliance with all federal and state securities law, and (ii) if the Membership Interest to be transferred, when added to the total of all other Membership Interests transferred in the preceding twelve (12) consecutive months prior thereto, would cause the tax termination of the Company under Code Section 708(b)(1 xEI)• 7.3 Suhstiti&n of Mgmhars. An Assignee of a Membership Interest shall have the right to become a substitute Member only if (i) the requirements of Sections 7.1 and 7.2 relating to unanimous consent of Members, securities and tax requirements hereof are met, (ii) the Assignee executes an instrument satisfactory to the Managers accepting and adopting the terms and provisions of this Agreement, and (iii) the Assignee pays any reasonable expenses in connection with his or her admission as a new Member. The admission of an Assignee as a substitute Member shall not result in the release of the Member who assigned the Membership Interest from any liability that such Member may have to the Company. 7.4 AP=itt rf Traxtsfeos. The Membership Interest of any Member may be transferred to any other Member, subject to compliance with Section 7.2, and without the prior %Titten consent of the Members or Managers. The )economic Interest of any Member may be transferred subject to compliance with Section 7.2, and without the prior written consent of the Members as required by Section 7.1, upon consent of the Managers, which shall not be unreasonably withheld, by the Member (i) by inter vivos gift or by testamentary transfer to an), spouse, parent, sibling, in-law, child or grandchild of the Member, or to a trust for the benefit of the Member or such spouse, parent, sibling, in-law, child or grandchild of the Member, or (ii) to any Affiliate of the Member; it being agreed that, in executing this Agreement, each Member has consented to such transfers. -25- 12/02/2003 16:401114R72_4241 . CHADWICK ' J BRADBURY PAGE 20 7.5 of Pem1trPA . Any permitted transfer of all or any portion of a Membership Interest or act Economic Interest shall be effective as of the date provided in Section 6.4 following the date upon which the requirements of Sections 7. I, 7.2 and 7.3 have been met. The Managers shall provide the Members with %Titten notice of such transfer as promptly as possible after the requirements of Sections 7.1, 7.2 and 7.3 have been met. Any transferee of a Membership Interest shall take subject to the restrictions on transfer imposed by this Agreement. 7.6 Rights -of Legs) ) nr apnrAri.,ps, If a Member who is an individual dies or is adjudged by a court of competent jurisdiction to be incompetent to manage the Membees person or property, the Membees executor, administrator, guardian, conservator, or other legal representative may exercise all of the Member's rights for the purpose of seating the Member's estate or administering the Membees property, including any power the Member has under the Articles or this Agreement to give an assignee the right to become a Member. If a Member is a corporation, trust, or other entity and is dissolved or terminated, the powers of that Member may be exercised by his or her legal representative or successor. 7•7 . Upon any transfer of a Membership Interest in violation of this Article VII, the transferee shall have no right to vote or participate in the management of the business, property and affairs of the Company or to exercise any rights of a Member. Such transferee shall only be entitled to become an Assignee and thereafter shalt only receive the share of one or more of the Company's Net Profits, Net Losses and distributions of the Company's assets to which the transferor of such Economic Interest would otherwise be entitled. Notwithstanding the immediately preceding sentences, if, in the determination of the Managers, a transfer in violation of this Article VIl would cause the tax termination of the Company under Code Section 708(bXIXB), the transfer shall be null and void and the purported transferee shall not become either a Member or an Assignee. Upon and contemporaneously with any transfer (whether arising out of an attempted charge upon that Members Economic Interest by judicial process, a foreclosure by a creditor of the Member or otherwise) of a Membees Economic Interest (other than in accordance with Section 7.4) which does not at the same time transfer the balance of the rights associated with the Membership Interest transferred by the Member (including, without limitation, the rights of the Member to vote or participate in the management of the business, property and affairs of the Company), the Company shall purchase from the Member, and the Member shall sell to Company for a purchase price of S100, all remaining rights and interests retained by the Member that immediately before the transfer were associated with the. transferred Economic Interest. Such purchase and sale shall not, however, result in the release of the Member from any liability to the Company as a Member. Each Member acknowledges and agrees that the right of the Company to purchase such remaining rights and interests from a Member who transfers a Membership Interest in violation ol'this Article VII is not unreasonable under the circumstances existing as of the date hereof. 7.8 Kaght of rind j geat6tinn. If any Member desires to transfer all or any part of his or her',--, Membership Interest other than pursuant to Section 7.4, such Member shall notify the Company and the other Members in writing of such desire and, for a period often (1 0) days thereafter, the Members and the Company shall negotiate with respect to the purchase of such Members Membership Interest. During such period, the Member desiring to transfer such Membership Interest may not solicit a transferee for such Membership Interest. -26- 12/077/2003 16 -4'0 711-1407 :=4241 CHADWICK J .BRADBURY _.." PAGE .21 <. 7.9 . If the period described in Section 7.8 eXpires without an agreement being reached as to the purchase of the Membership Interest referred to therein, the Member desiring to transfer his or her Membership Interest may solicit transferees. In such event, each time a Member proposes to transfer all or any part of his or her Membership Interest (or as required by operation of law or other involuntary transfer to do so) other than pursuant to Section 7.4, such Member shall frst offer such Membership Interest to the Company and the non -transferring Members in accordance with the following provisions - A. Such Member shall deliver a written notice ("Option Notice") to the Company and the other Members stating (i) such Member's bona fide intention to transfer such Membership Interest, (ii) the Membership Interest to be transferred, (iii) the purchase price and terms of payment for which the Member proposes to transfer such Membership Interest and (iv) the name and address of the proposed transferee. B. Within ten (10) days after receipt of the Option Notice, the Company shall have the right, but not the obligation, to elect to purchase all or any part of the Membership Interest upon the price and terms of payment designated in the Option Notice. If the Option Notice provides for the payrnent of non -cash consideration, the Company may elect to pay the consideration in cash equal to the good faith estimate of the present fair market value of the non -cash consideration offered as determined by the Managers. If the Company exercises such right within such thirty (30) day period, the Managers shall give written notice of that fact to the transferring and non -transferring Members. C. If the Company fails to elect to purchase the entice Membership Interest proposed to be transferred within the thirty (30) day period described in Section 7.9B, the non -transferring Members shall have the right, but not the obligation, to elect to purchase any remaining share of such Membership Interest upon the price and terms of payment designated in the Option Notice. If the Option Notice provides for the payment of non -cash consideration, such purchasing Members each may elect to pay the consideration in cash equal to the good faith estimate of the present fair market value of the non -cash consideration offered as determined by the Managers. Within sixty (60) days after receipt of the Option Notice, each non -transferring Member shall notify the Managers in writing of his or her desire to purchase a portion of the Membership Interest proposed to be so transferred. The failure of any Member to submit a notice within the applicable period shall constitute an election on the part of that Member not to purchase any of the Membership Interest which may be so transferred. Each Member so electing to purchase shall be entitled to purchase a portion of such Membership Interest in the same proportion that the Percentage Interest of such Member bears to the aggregate of the Percentage Interests of all of the Members electing to so purchase the Membership Interest being transferred. In the event any Member elects to purchase none or less than all of his or her pro rata share of such Membership Interest, then the other Members can elect to purchase more than their pro rata share. U. If the Company and the other Members elect to purchase or obtain any or all of the Membership interest designated in the Option Notice, then within the ten (10) day period, the electing Member shall open an escrow for the same and concurrently deposit five percent (5%) of the purchase price (which shall become nonrefundable liquidated damages). and the closing of such purchase shall occur within thirty (30) days after receipt of such notice and the transferring Member, the Company and/or the other Members shall execute such documents and instruments and make such deliveries as may be reasonably required to consummate such purchase. E. If the Company and the other Members elect not to purchase or obtain, or default -27- 12/ 0Z/ 2003 ` 16: 40 11`148?2' 4241 _CHA'DWICK" J "BRADBURY PACE 22 .. in their obligation to purchase or obtain, all of the Membership Interest designated in the Option Notice, then the transferring Member may transfer the portion of the Membership Interest described in the Option Notice not so purchased, to the proposed transferee, providing such transfer (i) is completed kvithin thirty (30) days after the expiration of the Company's and the other Members' right to purchase such Membership Interest, (ii) is made on terms no less favorable to the transferring Member than as designated in the Option Notice, and (iii) complies with Sections 7.1, 7.2 and 7.3 relating to unanimous consent of Members, securities and tax requirements; it being acknowledged by the Members that compliance with Sections 7.8 and 7.9A-D does not modify any of the transfer restrictions in Article VII or otherwise entitle a Member to transfer his or her Membership Interest other than in the manner prescribed by Article VII. If such Membership Interest is not so transferred, the transferring Mernber must give notice in accordance with this Section prior to any other or subsequent transfer of such Membership Interest. 7.10 Tran_qferc Andi 4si�nmPntt of Man}�em' Interests. Notwithstanding Section 7.9, upon the transfer of the Membership Interest oFa Manager, the remaining Managers shall have the first right, pro -rate as to their Membership Interests as Managers, to elect to exercise the right of first refusal set forth in Section 7.9 for a period of test (10) days after receipt of the Option Notice described in Section 7.9A. Such exercise shall be made in writing to the Company. If any Manager fails to exercise his or her rights under this Section 7.10, the other remaining Managers may elect to purchase the balance pro rata. If the remaining Managers elect to purchase less than all of the transferor's Membership Interest, the portion of such Membership Interest not elected to be purchased shall be subject to purchase and sale in accordance with Section 7.9, ARTICLE Vial CONSEQUENCES OF DISSOLUTION EVENTS AND TERMINATION OF MEMBERSHIP INTEREST 8.1 r]icsnhirian EyPnt ar Witham. Upon the occurrence of a Dissolution Event, -or Withdrawal of a Member, the Company shall dissolve unless the remaining Members ("Remaining Members") holding a majority of the Percentage Interests which all Remaining Members hold, consent within thirty (30) days of the Dissolution Event to the continuation of the business of the Company. If the Remaining Members consent to the continuation of the business of the Company, the Company and/or the Remaining Members shall have the right to purchase, and if such right is exercised, the Member whose actions or conduct resulted in the Dissolution Event or Withdrawal ("Former Member") or such Former Member's legal representative shall sell, the Former Membees Membership Interest ("Former Members Interest") as provided in this Article VIII. 8.1(a) Pur ha_ Price, The purchase price for the Former Membees Interest shal l be the Capital Account balance of the Former Member as adjusted pursuant to Section 3.5; provided, however, that if the Former Member, such Former Members legal representative or the Company, deems the Capital Account balance to vary from the fair market value of the Former Member's Interest by more than ten percent (10%), such party shall be entitled to require an appraisal by providing notice of the request for appraisal within thirty (30) days after the determination of the Remaining Members to continue the business of the Company. In such event, the value of the Former Membees Interest shall be determined by three (3) independent appraisers, one (1) selected by the Former Member or such Former Member's legal representative, one selected by the Company, and one (1) selected by the two (2) appraisers so named. The fair market value of the Former klembees Interest shall be the average of the two (2) appraisals closest in amount to each other. In the event the fair market value is determined to vary from the Capital Account -28- 2f 02I2003 ­v 1E: 40...._. `1114072-4241 'CHADWICK XBRADBURY PAGE . 23 balance by less than ten percent (10%), the party requesting such appraisal shall pay*all ex"penses of all the appraisals incurred by the party offering to eater into the transaction at the Capital Account valuation, In all other events, the party requesting the appraisal shall pay one-half of such expense and the other party shall pay one-half of such expense. Notwithstanding the foregoing, if the Dissolution Event results from a breach of this Agreement by the Former Member, the purchase price shall be reduced by an amount equal to the damages suffered by the Company or the Remaining Members as a result of such breach. 8,2 Nntirc of intent to Purchaw. Within thirty (30) days after the Managers have notified the Remaining Members as to the purchase price of the Former lumbers Interest determined in accordance with Section 8.3, each Remaining Member shalt notify the Managers in writing of his or her desire to purchase a portion of the Former Member's Interest, The failure of any Remaining Member to submit a notice within the applicable period shall constitute an election on the part of the Member not to purchase any of the Former Member's Interest. Each Remaining Member so electing to purchase shall be entitled to purchase a portion of the Former Member's Interest in the same proportion that the Percentage Interest of the Remaining Member bears to the aggregate of the Percentage Interests of all of the Remaining Members electing to purchase the Former Membees Interest. 8.3 Flectiart-M Purchase T„tss Th n All of the Farmer Membees P . If any Remaining Member elects to purchase none or less than all of his or her pro rats share of the Former Membees Interest, then the Remaining Members may elect to purchase more than their pro rate share. If the Remaining Members fail to purchase the entire Interest of the Former Member, the Company may purchase any remaining share of the Former Membees Interest. If the Remaining Members and the Company do not elect to purchase all of the Former Member's Interest, such Interest shall be that of an Economic interest only. 8,4 Payment of Purchase Price The purchase price shall be paid by the Company or the Remaining Members, as the case may be, by either of the following methods, each of which may be selected separately by the Company or the Remaining Members: A. The Company or the Remaining Members shall at the closing pay in cash the total purchase price for the Former Membees Interest; or B. The Company or the Remaining Members shall pay at the closing ten percent (l 0%) of the purchase price and the balance of the purchase price shall be paid in five (5) equal annual principal installments, plus accrued interest, and be payable each year on the anniversary date of the closing. The unpaid principal balance shall accrue interest at the current applicable federal rate as provided in the Code for the month in which the initial payment is made, but the Company and the Remaining Members shall have the right to prepay in full or in part at any time without penalty. The obligation of each purchasing Remaining Member, and the Company, as applicable, to pay its portion of the balance due shall be evidenced by a separate promissory note executed by the respective purchasing Remaining Member or the Company, as applicable. Each such promissory note shall be in an original principal amount equal to the portion owed by the respective purchasing Remaining Member or the Company, as applicable. The promissory note executed by each purchasing Remaining Member shall be secured by a pledge of that portion of the Former Member's Interest purchased by such Remaining Member. 8.5 ['.insing of Pure igjA- Zf EQUner Mernheeg TnteWSI, The closing for the sale of a Former Membees Interest pursuant to this Article VIII shall be held at 10:00 a-M. at the principal office of Company no later than sixty (60) days after the determination of the purchase price, except that if the closing date falls -29- 1210212003 "15: 40 _ , . 11140'72 '4241 :CHADWICKJ` BRADBURY `PAGE. 24 . `7 on a Saturday, Sunday, or California legal holiday, then the closing shall be held on the next succeeding business day. At the closing, the Former Member or such Former Members legal representative shall deliver to the Company or the Remaining Members an instrument of transfer (containing warranties of title and no encumbrances) conveying the Former Membees Interest The Former Member or such Former Membees legal representative, the Company and the Remaining Members shall do all things and execute and deliver all papers as may be necessary fully to consummate such sale and purchase in accordance with the terms and provisions of this Agreement. 8,6 PUrnhage Terme Varied by A_=iemcnt. Nothing contained herein is intended to prohibit _ Members from agreeing upon other terms and conditions far the purchase by the Company or any Member of the Membership Interest of any Member in the Company desiring to retire, withdraw or resign, in whole or in part, as a Member. -30- 12IO2I2003 16:"4'0-_ -11' 4077-4241 _ .. '- CHADWICK J-13RADBURY PAGE" `-25 8.7 INTENTIONALLY OMI`[TED. ARTICLE IX ACCOUNTING, REC0I3,13S, REPORTING BY MEMBERS 9.1 Books.Aaocl Records. The books and records of the Company shall be kept, and the financial position and the results of its operations recorded, in accordance with the accounting methods followed for federal income tax purposes. The books and records of the Company shall reflect all the Company . transactions and shall be appropriate and adequate for the Company's business. The Company shall maintain at its principal office in California all of the following: A. A current list of the full name and last known business or residence address of each Member and Assignee set forth in alphabetical order, together with the Capital Contributions, Capital Account and Percentage Interest of each Member and Assignee; B. A currant list of the full name and business ox residence address of each Manager; C. A copy of the Articles and any and all amendments thereto together with executed copies of any powers of attorney pursuant to which the Articles or any amendments thereto have been executed; D. Copies of the Company's federal, state, and local income tax or information returns and reports, if any, for the six (6) most recent taacable years; E. A copy of this Agreement and any and all amendments thereto together with executed copies of any powers of attorney pursuant to which this Agreement or any amendments thereto have been executed; F. Copies of the financial statements of the Company, if any, for the six (6) most recent Fiscal Years; and G. The Company's books and records as they relate to the internal affairs of the Company for at least the current and past four (4) Fiscal Years. A. Upon the request of any Member or Assignee for purposes reasonably related to the interest of that Person as a Member or Assignee, the Managers shall promptly deliver to the requesting Member or Assignee, at the expense of the Company, a copy of the information required to be maintained under Sections 9.1 A, B and D, and a copy of this Agreement B. Each Member, Manager and Assignee has the right, upon reasonable request for purposes reasonably related to the interest of the Person as Member, Manager or Assignee, to; (i) inspect and copy during normal business hours any of the Company records described in Sections 9.1 A through G; and -31- 1210212003 " 16: 4B 71114072=4241 "CHADIII`CK J-BRADBURY ' PAGE.' 25 _ (ii) obtain front the Managers, promptly after their becoming available, a copy of the Company's federal, state, and local income tax or information returns for each Fiscal Year. C. Members representing at least five percent (5%) of the Percentage Interests, or three or more Members, make a written request to the Managers for an income statement of the Company for the initial three-month, six-month, or nine -month period of the current Fiscal Year ended more than thirty (30) days prior to the date of the request, and a balance sheet of the Company as of the end of that period. Such statement shall be accompanied by the report thereon, if any, of the independent accountants engaged by the Company or, if there is no report, the certificate of a Manager that the statement was prepared without audit from the books and records of the Company. If so requested, the statement shall be delivered or mailed to the Members within 30 days thereafter. D. Any request, inspection or copying by a Member or Assignee under this Section 9.2 may be made by that Person or that Person's agent or attorney. E. The Managers shall promptly furnish to a Member a copy of any amendment to the Articles or this Agreement executed by a Manager pursuant to a power of attorney from the Member. 9.3 Annual S atemenh. A. If the Company has snore than thirty-five (35) Members, the Managers shall cause an annual report to be sent to each of the Members not later than one hundred twenty (120) days after the close of the Fiscal Year. The report shall contain a balance sheet as of the end of the Fiscal Year and an income statement and statement of changes in financial position for the Fiscal Year. Such financial statements shall be accompanied by the report thereon, if any, of the independent accountants engaged by the Company or, if there is no report, the certificate of a Manager that the financial statements were prepared without audit from the books and records of the Company. B. The Managers shall cause to be prepared at least annually, at Company expense, information necessary for the preparation of the Members' and Assignees', federal and state income tax returns. The Managers shall send or cause to be sent to each Member or Assignee within ninety (90) days after the end of each taxable year such information as is necessary to complete federal and state income tax or information returns, and, if the Company has thirty-five (35) or fewer Members, a copy of the Company's federal, state, and local income tax or information returns for that year. C. The Managers shall cause to be filed at least annually with the California Secretary of State the statement required udder California Corporations Code § 17060. 9.4 Financial and Q1hAr Information. The Managers shall provide such financial and other information relating to the Company or any other Person in which the Company owns, directly or indirectly, an equity interest, as a Member may reasonably request. The Managers shall distribute to the Members, promptly after the preparation or receipt thereof by the Managers, any financial or other information relating to any Person in which the Company owns, directly or indirectly, an equity interest, including any flings by such Person under the Securities Exchange Act of 1934, as amended, that is received by the Company with respect to any equity interest of the Company in such Person. 9.5 Films. Ile Managers, at Company expense, shall cause the income tax returns for the -32- 12/02/2003 16-40'. "1114072-4241 CWADWICK J BRADBURY' -PAGE .2? _ :... Company to be prepared and timely filed 'with the appropriate authorities. The Managers, at Company expense, shall also cause to be prepared and timely filed, with appropriate federal and state regulatory and administrative bodies, amendments to, or restatements of, the Articles and all reports required to be filed by the Company with those entities under the Act or other then current applicable laws, rules, and regulations. If a Manager required by the Act to execute or file any document faits, after demand, to do so within a reasonable period of time or refuses to do so, any other Manager or Member may prepare, execute and file that document with the California Secretary of State. 9.6 Rank Accounts, The Managers shall maintain the funds of the Company in one or more separate bank accounts in the name of the Company, and shall not permit the funds of the Company to be commingled in any fashion with the funds of any other Person. 9.7 A,gc,tNiaJoLlg Denkinn% and Relian= an Mr.Cs. All decisions as to accounting matters, except as otherwise specifically set forth herein, shall be made by the Managers. The Managers may rely upon the advice of their accountants as to whether such decisions are in accordance with accounting methods followed for federal income tax purposes. 9.8 Ta_x Matters for the Company Hammed by Managers And Tay Matters Drtrtar, The Managers shall from time to time cause the Company to make such tax elections as they deem to be in the best interests of the Company and the Members. The Tax Matters Partner shall represent the Company (at the Company's expense) in connection with all examinations of the Company's affairs by tax authorities, including resulting judicial and administrative proceedings, and shall expend the Company funds for professional services and costs associated therewith. The Tax Matters Partner shall oversee the Company tax affairs in the overall best interests of the Company but shall not have the right to agree to extend any statute of limitations without the approval of a Majority Interest. If for any reason the Tax Matters Partner can no longer serve in that capacity or ceases to be a Member or Manager, as the case may be, a Majority Interest may designate another to be Tax Matters Partner. ARTICLE X DISSOLUTION AND WINDING UP 10.1 Dissolution, The Company shalt be dissolved, its assets shall be disposed of, and its affairs wound up on the first to occur of the following: A. The happening of any event of dissolution specified in the Articles; B. The entry of a decree of judicial dissolution pursuant to Corporations Code Section 1735I; C. The vote of a Majority Interest or of non -defaulting Members holding a majority of the Percentage Interests held by all non -defaulting Members pursuant to Section 3.5C; D. The occurrence of a Dissolution Event and the failure of the Remaining Members to consent in accordance with Section 8.1 to continue the business of the Company within ninety (90) days aver the occurrence of such event or the failure of the Company or the Remaining Members to purchase the Former Membet's Interest as provided in Section 8.2; or E. The sale of all or substantially all of the assets of Company. -33 - 12 f 02/ 2003 ' "16.:- 40 7 ` 111'4072-4241 "CHADWICK J . BRADBURY PAGE' 28 10.2 rertifsZata of Dissolution. 'As soon as possible following the occurrence of any of the events specified in Section 10.1, the Managers who have not wrongfully dissolved the Company or, if none, the Members, shall execute a Certif ic$te of Dissolution in such form as shall be prescribed by the California Secretary of State and file the Certificate as required by the Act. 10.3 WindingJlp. [Upon the occurrence of any event specified in Section 10.1, the Company shall continue solely for the purpose of winding up its affairs in an orderly manner, liquidating its assets, . and satisfying the claims of its creditors. The Managers who have not wrongfully dissolved the Company or, if none, the Members, shell be responsible for overseeing the winding up and liquidation of Company, shall take full account of the liabilities of Company and assets, shall either cause its assets to be sold or distributed, and if sold as promptly as is consistent with obtaining the fair market value thereof, shall cause the proceeds therefrom, to the extent sufficient therefor, to be applied and distributed as provided in Section 10.5. The Persons winding up the affairs of the Company shall give written notice of the commencement of winding up by mail to all known creditors and claimants whose addresses appear on the records of the Company. 10A Distrihutinnc in Kind. Any non -cash asset distributed to one or more Members shall first be valued at its fair market value to determine the Net Profit or Net Loss that would have resulted if such asset were sold for such value, such Net Profit or Net Loss shall then be allocated pursuant to ,article V1, and the Members' Capital Accounts shall be adjusted to reflect such allocations. The amount distributed and charged to the Capital Account of each Member receiving an interest in such distributed asset shall be the fair market value of such interest (net of any liability secured by such asset that such Member assumes or takes subject to). The fair market value of such asset shall be determined by the Managers or by the Members or if any Member objects by an independent appraiser (any such appraiser must be recognized as an expert in valuing the type of asset involved) selected by the Manager or liquidating trustee and approved by the Members. •, . ., - . .,. , . . A. After determining that all the known debts and liabilities of the Company, including, without limitation, debts and liabilities to Members who are creditors of the Company, have been paid or adequately provided for, the remaining assets shall be distributed to the Members in the following order of priority: (i) first, to the Members in satisfaction for distributions under Sections 17201, 17202 or 17255 of the Corporations Code; (R) second, to the members for the return of their contributions; and (M) thereafter, to the Members in the proportions in which they share in distributions. a. The payment of a debt or liability, whether the whereabouts of the creditor is known or unknown, has been adequately provided for if the payment has been provided for by either of the following means: W Payment thereof has been assumed or guaranteed in good faith by one or more financially responsible persons or by the United States government or any agency thereof, and the provision, including the financial responsibility of the Person, was determined in good faith and with reasonable care by the Members or Managers to be adequate at the time of any distribution of the assets pursuant to this Section. -34- 12/02I2003 '"16 `4:B 111'40?2=4'241 --CHADWICK' J BRADBLRY 'PAGE`. 2� The amount of the debt or liability has been deposited as provided in Section 2008 of the Corporations Code. ' This Section 10.513 shall not prescribe the exclusive means of making adequate provision for debts and liabilities. 10.6 i_imitat[cms an Pay=ntc Made in nf4c_n11it]An Except as otherwise specifically provided in this Agreement, each Member shall only be entitled to look solely at the assets of the Company for the . return of his or her positive Capital Account balance and shall have no recourse for his or her Capital Contribution and/or share of Net Profits (upon dissolution or otherwise) against the Managers or any other Member. 10.7 1` Artif rate of C_ancellatien, The Managers or Members who filed the Certificate of Dissolution shall cause to be filed in the office of, and on a form prescribed by, the California Secretary of State, a Certificate of Cancellation of the Articles upon the completion of the winding up of the affairs of the Company. 10.8 No Actinn fnr Diswlutinn. Except as expressly permitted in this ,A,greement, a Member shall not take any voluntary action that directly causes a Dissolution Event. The Members acknowledge that irreparable damage would be done to the goodwill and reputation of the Company if any Member should bring an action in court to dissolve the Company under circumstances where dissolution is not required by Section 10.1. This Agreement has been drawn carefully to provide fair treatment of ail parties and equitable payment in liquidation of the Economic Interests. Accordingly, except where the Managers have failed to liquidate the Company as required by this Article X, each Member hereby waives and renounces his or her right to initiate legal action to seek the appointment of a receiver or trustee to liquidate the Company or to seek a decree of judicial dissolution of the Company on the ground that (a) it is not reasonably practicable to carry on the business of the Company in, conformity with the Articles or this Agreement, or (b) dissolution is reasonably necessary for the protection of the rights or interests of the complaining Member. Damages for breach of this Section 10.10 shall be monetary damages only (and not specific performance), and the damages may be offset against distributions by the Company to which such Member would otherwise be entitled. ARTICLE XI INDEMNIFICATION AND NSURANCE 11.1 Indemnificatinn Qf Agmt . The Company shall defend and indemnify any Member or Manager and may indemnify any other person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of the fact that he or she is or was a Member, Manager, officer, employee or other agent of the Company or that, being or having been such a Member, Manager, officer, employee or agent, he or she is or was serving at the request of the Company as a manager, director, officer, employee or other agent of another limited liability company, corporation, partnership, joint venture, trust or other enterprise (all such persons being referred to hereinafter as an "agent"), to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may hereafter from time to time permit. The Managers shall be authorized, on behalf of the Company, to enter into indemnity agreements from time to time with any Person entitled to be indemnified by the Company hereunder, upon stieh terms and conditions as the Managers deem appropriate -35- 12f 02/2003;.' IS! .40 `T114072=4241 :°CHADWICK J BRADBURY PAGE : 30 in their business judgment. 11.2 insuray= The Company shall have the power to purchase and maintain insurance on behalf of any Person who is or was an agent of the Company against any liability asserted against such Person and incurred by such Person in any such capacity, or arising out of such Person's status as in agent, whether or not the Company would have the power to indemnify such Person against such liability under the provisions of Section 1 l .1 or under applicable law. 11.3 Successfill Defeam. Notwithstanding any other provision of this Agreement, to the extent . that a Manager or officer of the Company has been successful on the merits or otherwise in defense of any Proceeding referred to in Section 11.2, or in defense of any claim, issue or matter therein, such Manager or officer shall be indemnified against Expenses actually and reasonably incurred in connection therewith. 11.4 Determination of CoodLct Any indemnification under Section 11.2 (unless ordered by a court as referred to in such Section) shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the Manager or officer of the Company is proper in the circumstances because such Manager or officer has met the applicable standard of conduct set forth in Section 11.2. Such determination shall be made (i) by the Managers by a majority vote of a quorum consisting of Managers who were not parties to such Proceeding, or (ii) if such quorum is not obtainable or, even if obtainable, a quorum of such disinterested Managers so directs, by independent legal counsel in a written opinion, or (iii) by the Members by a vote of a majority -in -interest of Members, whether or .not constituting a quorum, who were not parties to such Proceeding. 11,5 Pa=ent of Fxne�in Advance. Expenses incurred by a Manager or officer of the Company in connection with a Proceeding shall be paid by the Company in advance of the final disposition of such Proceeding upon receipt of a ,%NTitten undertaking by or on behalf of such Manager or officer to repay such amount if it shall ultimately be determined that such Manager or officer is not entitled to be indemnified by the Company as authorized in this Article XI. 11.6 (n&mnift ► ran of Other Agents. The Company may, but shall not be obligated to, indemnify any Person (other titan a Manager or officer of the Company) who was or is a parry or is threatened to be made a party to, or otherwise becomes involved in, any Proceeding (including any Proceeding by or in the right of the Company) by reason of the fact that such Person is or was an agent of the Company (including Members who are not Managers or officers of the Company), against all Expenses, amounts paid in settlement, judgments, fines, penalties and ERISA excise taxes actually and reasonably incurred by such Person in connection with such Proceeding under the same circumstances and to the same extent as is provided for or permitted in this Article XI with respect to a Manager or officer of the Company. 11.7 IndItMniJU Nnt Rxelusive, The indemnification and advancement of Expenses provided by, or granted pursuant to, the provisions of this Article X1, shall not be deemed exclusive of any other rights to which any Person seeking indemnification or advancement of Expenses may be entitled under any agreement, vote of Managers or Members, or otherwise, both as to action in such Person's capacity as an agent of the Company and as to action in another capacity while serving as an agent. All rights to indemnification under this Article XI shall be deemed to be provided by a contract between the Company and each Manager and officer, if any, of the Company who serves in such capacity at any time while this Agreement and relevant provisions of the Act and other applicable law, if any, are in effect. Any repeal or modification hereof or thereof shall not affect any such rights then existing. 11.8 Ins ++ mnee. The Company shall have the power to purchase and maintain insurance on .36- 12/02/2003' �-Tb'.'40' . .1I140'7"2'=4241 - ':CHADWICK `J' BRADBURY "'PAGE 31 behalf of any Person who is or was an agent of the Company against any liability asserted against such Person and incurred by such Person in any such capacity, or arising out of such Person's status as an agent, whether or not the Company would have the power to indemnify such Person against such liability under the provisions of this Article XI or of Section 17155 of the Act. In the event a Person shall receive payment from any insurance carrier or from the plaintiff in any action against such person with respect to indemnified amounts after payment on account of all or part of such indemnified amounts having been made by the Company pursuant to this Article XI, such Person shall reimburse the Company for the amount, if any, by which the sum of such payment by such insurance carrier or such plaintiff and payments by the Company to such Person exceeds such indemnified amounts; provided, however, that such portions, if any, of such insurance proceeds that are required to be reimbursed_ to the insurance carrier under the terms of its insurance policy shall not be deemed to be payments to such Person hereunder, In addition, upon payment of indemnified amounts under the terms and conditions of this Agreement, the Company, shall be subrogated to such Person's rights against any insurance carrier with respect to such indemnified amounts (to the extent permitted under such insurance policies). Such right of subrogation shall be terminated upon receipt by the Company of the amount to be reimbursed by such Person pursuant to the first sentence of this Section 11.8. 11.9 T4cJrg—F-xfr'11tnm and Ariminktratnrs. The indemnification and advancement of Expenses provided by, or granted pursuant to, this Article XI shall, unless otherwise provided when authorized or ratified, continue as to a Person who has ceased to be an agent of the Company and shall inure to the benefit of such Person's heirs, executors and administrators. A. Any indemnification or advance under Section 11.2 or Section 11.$ shall be made promptly, and in no event later than sixty (60) days, after the Company's receipt of the written request of a Manager or officer of the Company therefor, unless, in the case of an indemnification, a determination shall have been made as provided in Section 11.4 that such Manager or officer has not met the relevant standard for indemnification set forth in Section 11,2. B. The right of a Person to indemnification or an advance of Expenses as provided by this Article X1 shall be enforceable in any court of competent jurisdiction, Neither the failure by the Managers or Members of the Company or its independent legal counsel to have made a determination that indemnification or an advance is proper in the circumstances, nor any actual determination by the Managers or Members of the Company or. its independent legal counsel that indemnification or an advance is not proper, shall be a defense to the action or create a presumption that the relevant standard of conduct has not been met. The burden of proving that indemnification or an advance is not proper shall be on such Person. In any such action, the Person seeking indemnification or advancement of Expenses shall be entitled to recover from the Company any and all expenses of the types described in the definition of Expenses in Section 11,1A of this Agreement actually and reasonably incurred by such Person in such action, but only if he or she prevails therein. 11.11 i_imitationSnn indemnification, No payments pursuant to this Agreement shall be made by the Company: ' A. To indemnify or advance funds to any Person with respect to a Proceeding initiated or brought voluntarily by such Person and not by gray of defense, except as provided in Section 11.1 OB with respect to a Proceeding brought to establish or enforce a right to indemnification under this Agreement, otherwise than as required under California law, but indemnification or advancement of Expenses may be -37- '12/02l20103-l6:'4011T4072-4241 CHADUJ`ICK J BRADBIPY provided by the Company in specific cases if a determination is made in the manner provided in Section 11 A that it is appropriate; or B. If a court of competent jurisdiction finally determines that any indemnification or advance of Expenses hereunder is unlawful. 1 t.12 Partiai indemni r-atinn. If a person is entitled under any provision of this Article XI to indemnification by the Company for a portion of Expenses, amounts paid in settlement, judgments, fines, penalties or ERISA excise taxes incurred by such Person in any Proceeding but not, however, ;for the total _amount thereof, the Company shall nevertheless indemnify such Person for the portion of such Expenses, amounts paid in settlement, judgments, fines, penalties or ERISA excise taxes to which such Person is entitled, ARTICLE XII INVESTMENT REPRESENTATIONS Each Member hereby represents and warrants to, and agrees with, the Managers, the other Members, and the Company as.follows: 12.1 Eme misting Relatlonehi„D nr EX erienee, (i) He or she has a preexisting personal or business relationship with the Company or one or more of its control persons or (ii) by reason of his or her business or financial experience, or by reason of the business or financial experience of his or her financial advisor who is unaffiliated with and who is not compensated, directly or indirectly, by the Company or any affiliate or selling agent of the Company, he or she is capable of evaluating the risks and merits of an investment in the Membership Interest and of protecting his or her own interests in connection with this investment. 12.2 No dv . icing, He or she has not seen, received, been presented, with, or been solicited by any leaflet, public promotional meeting, newspaper or magazine article or advertisement, radio or television advertisement, or any other form of advertising or general solicitation with respect to the sale of the Membership Interest. 12.3 Investment to _nt. He or she is acquiring the Membership Interest for investment purposes for his or her own account only and not with a view to or for sale in connection with any distribution of all or any part of the Membership Interest. No other person will have any direct or indirect beneficial interest in or right to the Membership Interest. 12.4 P, mnae of.Entity. If the Member is a corporation, partnership, limited liability company, trust, or other entity, it was not organized for the specific purpose of acquiring the Membership Interest. 12.6 F.cnnnmir B isk. He or she is financially able to bear the economic risk of an investment in the Membership Interest, including the total loss thereof. 12.7 Na. R,egi,Staition of hd1tmberghi13 Inter s , He or she acknowledges that the Membership Interest has not been registered under the Securities ,Act of 1933, as amended (the "Securities Act"), or qualified under the California Corporate Securities Law of 1968, as amended, in reliance, in part, on his or -Is. 1210272003 "'16:"40 1114072-4241 ;... °CHADWICK J: BRrADBURY PAGE 33 her representations, warranties, and agreements herein. 12.8 Memharsbn interest in Rgs r; .r A Re uri,y, He or she understands that the Membership Interest is a "restricted security" under the Securities Act in that the Membership Interest will be acquired from the Company in a transaction not involving a public offering, and that the Membership Interest may be resold without registration under the Securities Act only in certain limited circumstances and that otherwise the Membership Interest must be held indefinitely. In this connection, he or she understands the resale limit itions imposed by the Securities Act and is familiar with SEC Rule 144, as presently in effect, and the conditions which must be met in order for that Rule to be available for resale of "restricted securities," including the requirement that the securities must be held for at least two years after purchase thereof from the Company prior to resale (three years in the absence of publicly available information about the Company) and the condition that there be available to the public current information about the Company under certain circumstances. He or she understands that the Company has not made such information available to the public and has no present plans to do so. 12.9 No Obli-gation to Register, He or she represents, warrants, and agrees that the Company and the Managers are under no obligation to register or qualify the Membership Interest under the Securities Act or under any state securities law, or to assist him or her in complying with any exemption from registration and qualification. 12.10 No Disposition is Vinlation of tom«. Without limiting the representations set forth above, and without limiting Article VII of this Agreement, he or she will not make any disposition of all or any part of the Membership Interest which will result in the violation by him or her or by the Company of the Securities Act, the California Corporate Securities Law of 1968, or any other applicable securities laws. Without limiting the foregoing, he or she agrees not to make any disposition of all or any part of the Membership Interest unless and until: A. 'Marc is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement and any applicable requirements of state securities laws; or B. (i) He or she has notified the Company of the proposed disposition and has furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and (ii) if reasonably requested by the Managers, he or she has furnished the Company with a written opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of any securities under the Securities Act or the consent of or a permit from appropriate authorities under any applicable state securities law. 12.11 Legeads. He or she understands that the certificates (if any) evidencing the Membership Interest may bear one or all of the following legends: A. "THE SECURITIES REPRESENTED BY THIS CERTIFICATE 14AVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER -39- 12IO2,I2003. ' 16: 4011140724 4241 C HADWICK 'J - BRADBURY PAGE' ' 3q RESTRICTIONS, 'TERMS, AND CONDITIONS Vb'HICII ARE SET FORTH idEREITI IN THE COMPANY'S OPERATING AGREEMENT; A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY" B. Any legend required by applicable state securities laws. 12.12 Investment Rick. He or she acknowledges that the Membership Interestis a speculative investment which involves a substantial degree of risk of loss by him or her of his or her entire investment in the Company, that he or she understands and takes full cognizance of the risk factors related to the purchase of the Membership Interest, and that the Company is newly organized and has no financial or operating history. 12.13 1_nveetmPnr �+: =. He or she is an experienced investor in unregistered and restricted securities of limited liability companies or limited partnerships speculative and high -risk ventures. 12.14 Re -Striations an Imnsferpthility. He or she acknowledges that there are substantial restrictions on the transferability of the Membership Interest pursuant to this Agreement, that there is no public market for the Membership Interest and none is expected to develop, and that, accordingly, it may not be possible for hint or her to liquidate his or her investment in the Company. 12.15 Whrmation Rg ' .wed. He or she has received and reviewed; other documents; and all information he or she considers necessary or appropriate for deciding whether to purchase the Membership Interest. He or she has had an opportunity to ask questions and receive answers from the Company and its Managers and employees regarding the terms and conditions of purchase of the Membership Interest and regarding the business, financial affairs, and other aspects of the Company and has further had the opportunity to obtain all information (to the extent the Company possesses or can acquire such information without unreasonable effort or expense) which he or she deems necessary to evaluate the investment and to verify the accuracy of information otherwise provided to him or her. 12.16 NO Re=, sentations g=Y Company. Neither any Manager, any agent or employee of the Company or of tiny Manager, or any other Person has at any time expressly or implicitly represented, guaranteed, or warranted to him or her that he or she may freely transfer the Membership Interest, that a percentage of profit and/or amount or type of consideration will be realized as a result of an investment in the Membership Interest, that past performance or experience on the part of the Managers or their Affiliates or any other person in any way indicates the predictable results of the ownership of the Membership Interest or of the overall Company business, that any cash distributions from Company operations or otherwise will be made to the Members by any specific date or will be made at all, or that any specific twx benefits will accrue as a result of an investment in the Company. 12.17 Cnn_%n1tatia with Attnrnev, He or she has been advised to consult with his or her own attorney regarding all legal matters concerning an investment in the Company and the tax consequences of participating in the Company, and has done so, to the extent he or she considers necessary. It is acknowledged that Jeffrey E. Fromberg, Esquire acts as counsel only to California Intelligent Communities, LLC in respect to this transaction. 12.18 Tat Cantseauences, He or she acknowledges that the to c consequences to his or her of investing in the Company will depend on his or her particular circumstances, and neither the Company, the Managers, the Members, Thor the partners, shareholders, members, managers, agents, officers, directors, -40- 12 02/2003 `'15:;40 1'I4072=4241 CHADGJICK J-BRADBURY PAGE 35 ..� employees, Affiliates, or consultants of any of them will be responsible or liable for the tax consequences to ' r him or her of an investment in the Company. i He or she will look solely to, and rely upon, his or her own advisers with respect to the tax consequences of this investment. 12,19 N�n AasumnCe of TA,c RPn� . He or she acknowledges that there can be no assurance that the Code or the Regulations will not be amended or interpreted in the future in such a manner so as to deprive the Company and the Members of some or all of the tax benefits they might now receive, nor that some of the deductions claimed by the Company or the allocations of items of income, gain, loss, deduction, or credit among the Members may not be challenged by the Internal Revenue Service. 12.20 lndemai4. He or she shall defend, indemnify and hold harmless the Company, each and every Manager, each and every other Member, and any officers, directors, shareholders, managers, members, employees, partners, agents, attorneys, registered representatives, and control persons of any such entity who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of or arising from any misrepresentation or misstatement of facts or omission to represent or state facts made by him or her including, without limitation, the information in this Agreement, against losses, liabilities, and expenses of the Company, each and every Manager, each and every other Member, and any officers, directors, shareholders, managers, members, employees, partners, attorneys, accountants, agents, registered representatives, and control persons of any such Person (including attorneys' fees, judgments, fines, and amounts paid in settlement, payable as incurred) incurred by such Person in connection with such action, suit, proceeding, or the like, ARTICLE X111 MISCELLANEOUS 13.1 Counsel to the amnany. Counsel to the Company may also be counsel to any Manager or any Affiliate of a Manager, The Managers may execute on behalf of the Company and the Members any consent to the representation of the Company that counsel may request pursuant to the California Rules of Professional Conduct or similar rules in any other jurisdiction ("Rules"). The Company has initially selected Jeffrey E. f romberg, Esquire ("Company Counsel") as legal counsel to the Company. Each Member acknowledges that Company Counsel does not represent any Member in the absence of a clear and e.Vlicit written agreement to such effect between the Member and Company Counsel, and that in the absence of any such agreement Company Counsel shall owe no duties directly to a Member. Notwithstanding any adversity that may develop, in the event any dispute or controversy arises between any Members and the Company, or between any Members or the Company, on the one hand, and a Manager (or Affiliate of a Manager) that Company Counsel represents, on the other hand, then each Member agrees that Company Counsel may represent either the Company or such Manager (or his or her Affiliate), or both, in any such dispute or controversy to the extent permitted by the Rules, and each Member hereby consents to such representation. Each Member further acknowledges that: (a) Company Counsel has represented the interests of California Intelligent Communities, LLC, a California limited liability company in connection with the formation of the Company and the preparation and negotiation of this. Agreement and (b) while communications with Company- Counsel concerning the formation of the Company, its Members and Managers may be confidential with respect to third parties, no Member has any expectation that such communications are confidential with respect to Manager. 41 12/ 02/ 2003 " 16: 40 1 114072=4241 : ' CHADWICK' J � BRADBURY PAGE 36_ 13.2 e ['.Omni -tc- A gt ftau -„ ==—...�.- This Agreement and the Articles, constitute the complete and exclusive statement of agreement among the Members and Managers with respect to the subject matter herein and therein and replace and supersede all prior written and oral agreements or statements by and among the Members and Managers or any of them. No representation, statement, condition or warranty not contained in this Agreement or the Articles will be binding on the Members or Managers or have any force or effect whatsoever. To the extent that any provision of the Articles conflict with any provision of this Agreement, the Articles shall control 13.3 Ainding ffec , Subject to the provisions of this Agreement relating to transferability, this Agreement will be binding upon and inure to the benefit of the Members, and their respective successors and assigns. 13.4 ROAL s in intemg. Except as expressly provided in the Act, nothing in this Agreement shall confer any rights or remedies under or by reason of this Agreement on any Persons other than the Members and Manners and their respective successors and assigns nor shall anything in this Agreement relieve or discharge the obligation or liability of any third person to any party to this Agreement, nor shall any provision give any third person any right of subrogation or action over or against any party to this Agreement, 13.5 PrnnmfnS-.St_a� R - nt-ec, All pronouns and all variations thereof shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the context in which they are used may require, Any reference to the Code, the Regulations, the Act, Corporations Code or other statutes or laws will include all amendments, modifications, or replacements of the specific sections and provisions concerned. 13.6 �. All headings herein are inserted only for convenience and ease of reference and are not to be considered in the construction or interpretation of any provision of this Agreement. 13.7 inte;=aation, In the event any claim is made by any Member relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular Member or his or her counsel. 13,8 Re-fsraa=-ta this Ag=rn_ent. Numbered or lettered articles, sections and subsections herein contained refer to articles, sections and subsections of this Agreement unless othenvise expressly stated. 13.9 Jurisdiction, Each Member hereby consents to the exclusive jurisdiction of the state and federal courts sitting in California, in any action on a claim arising out of, under or in connection with this Agreement or the transactions contemplated by this Agreement. Each Member further agrees that personal jurisdiction over him or her may be effected by service of process by registered or certified mail addressed as provided in Section 13.14 of this Agreement, and that when so made shall be as if served upon him or her personally within the State of California. 13.10 Exhibits. All Exhibits attached to this Agreement are incorporated and shall be treated as if set forth herein. -42- 12102/2003 16 40,,, 1114072-:4241 �CHADWICK'J BRADBURY' PAGE 37 13:11 SUPTAW14, 1'f any provision of this Agreement or the application of such provision to any person or circumstance shall be held invalid,.the remainder of this Agreement or the application of such provision to persons or circumstances other than those to which it is held invalid shall not be affected thereby. 13.12 Add 4innal DnaumentS Piad Arts. Each Member agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions, and conditions of this Agreement and the transactions contemplated hereby. 13.13 Notices, Any notice to be given or to be served upon the Company or any party hereto in connection with this Agreement must be in writing (which may include facsimile) and will be deemed to have been given and received when delivered to the address specified by the parry to receive the notice. Such notices will be given to a Member or Manager at the address specified in Exhibit "A" hereto. Any party may, at any time by giving five (5) days' prior written notice to the other parties, designate any other address in substitution of the foregoing address to which such notice will be givers. 13.14 Amen wrigs, All amendments to this Agreement will be in writing and signed by all the Members. In the absence of any opinion of counsel as to the effect thereof, no amendment to this Agreement or the Articles shall be made which violates the Act or is likely to cause the Company to be taxed as a corporation. 13.15 Reliance on Aigbarity of Pemnn SiM3in�eement. If a Member is not a natural person, neither the Company nor any Member will (a) be required to determine the authority of the individual signing this Agreement to make any commitment or undertaking on behalf of such entity or to determine any fact or circumstance bearing upon the existence of the authority of such individual or (b) be responsible for the application or distribution of proceeds paid or credited to individuals signing this Agreement on behalf of such entity. 13.16 htgsfred in Cnmnagx PPmnP - Waiver of Action for Pgrtitinn. No Member or Assignee has any interest in specific property of the Company. Without limiting the foregoing, each Member and Assignee irrevocably waives during the term of the Company any right that he or she may have to maintain any action for partition with respect to the property of the Company. 13.17 Multiple C4jtnMgmds. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 13.18 Attnrec_FarS. In the event that any dispute between the Company and the Members or among the Members should result in litigations or arbitration, the prevailing party in such dispute shall be entitled to recover from the other parry all reasonable fees, costs and expenses of enforcing any right of the prevailing party, including without limitation, reasonable attorneys' fees and expenses, all of which shall be deemed to have accrued upon the commencement of such action and shall be paid whether or not such action is prosecuted to judgment. Any judgment or order entered in such action shall contain a specific provision providing for the recovery of attorney fees and costs incurred in enforcing such judgment and an award of prejudgment interest from the date of the breach at the maximum rate of interest allowed by law. For the purposes of this Section: (a) attorney fees shall include, without limitation, fees incurred in the following: (1) postjudgment motions; (2) contempt proceedings; (3) garnishment, levy, and debtor and third party examinations; (4) discovery; and (5) bankruptcy litigation and (b) prevailing party shall mean the party -43- 12/02/2003 7-16 49 1114072-4241 7. HADWTCK J BRADBURh PAGE 38 .., who is determined in the proceeding to have prevailed or who prevails by dismissal, default or otherwise. 13.19 Time is of �h�,he�e, All dates and times in this Agreement are of the essence. 13.20 Bemaifigr rjyMT,latiy ,C. The remedies under this Agreement are cumulative and shall not exclude any other remedies to which any person may be lawfully entitled. 13.21 Caasent of She, Within ten (10) days after any individual becomes a Member or a Member marries, such Member shall have his or her spouse execute a consent substantially. in the form attached to this Agreement -44- 12/02I2003 1640 1114072=4241 Y CHfitiDWICK" J BRDBtY .PAGE . ,.. All of the Members of CENTER POINT DEVELOOMENT, LLC, a California limited liability company, have executed this Agreement, effective as of the date written above, MEMBER: OLIPHANT FAMILY TRUST Member BY: Rich Oliphant, Trustee TWELVE STONE TRUST BY: MRJ, INC. BY Dennis French, President -45- V 12/02/2003' ra'.40 111�407`2=4241 DWICK J BRADBURY PAGE"w 40 ` INTENTIONALLY OMITTED CONSENT OF SPOUSE -46- .. 12%02I2003 -- 16: 40 '1114072=4'241 CHADWICK J BRADBURY• ._ PAGE ., .41 _ FXHMIT A CAPITAL CONTRIBUTION OF MEMBERS AND ADDRESSES OF MEMBERS AND MANAGERS AS OF December 15, 2002 _ Membees Capital Member's Oliphant Famil 139 Montere Trust Ave., Suite 139 alrn Desert, C 2260 $33U.33, 3 .33°/ Twelve Stone Trust 4-139 Monterey ve., Suite 139 Palm Desert, C 260 $3,333.33 33,33% RI, Inc. 7-564 Country Club Drive, Suite 100, Palm Desert, CA 2211 0 is Rounded $10.000.000, o/ Oliphant Enterprises 4-139 Monterey Inc., a Californiave., Suite 201 orporation alm Desert, C 2260 -47- 70 �fc P.O. Box 1504 LA QUINTA, CALIFORNIA 92247-1504 kit 78-495 CALLE TAMPICO LA QUINTA, CALIFORNIA 92253 May 31, 2005 Francis A. Wong - Chairman/CEO Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 RE: DDA and DA Amendments — Initial Deposit Agreement Dear Mr. Wong: (760) 7 7 7 - 7 0 0 0 FAX (760) 777-7101 1 i CP Development La Quinta, LLC ("CP Development") has requested that the City of La Quinta ("City") and the La Quinta Redevelopment Agency ("Agency") consider entering negotiations to make certain amendments to the existing Disposition and Development Agreement ("DDA") and the Development Agreement ("DA") with CP Development ("Amendments"). The City and Agency will commence to take the steps necessary, at CP Development's sole expense, not including in-house City/Agency staff time, so that the City and Agency will be able to consider the Amendments and determine whether or not they wish to approve either or both of them. CP Development has indicated that it is prepared to reimburse the City and Agency for all costs associated with the City's and the Agency's consideration of the Amendments, except for in-house staff time. The costs would include Rutan & Tucker's time, RSG's time, and any other third -party cost items. For example, the expenses relating to the noticing of any public hearings would be borne by CP Development. This letter serves as an "Initial Deposit Agreement" by and between CP Development, the City and Agency. To assist the City and Agency in undertaking their consideration of whether or not to approve the Amendments, CP Development agrees to provide the City and Agency with an initial deposit in the amount of $25,000 ("Initial Deposit"). The Initial Deposit shall be deposited with the City, to the attention of the Finance Director, on or before the Effective Date of this Initial Deposit Agreement. The Effective Date shall be the date that CP Development returns a signed copy of its acceptance of the Initial Deposit Agreement to the Agency. The Initial Deposit shall be used to reimburse the City and Agency for all costs incurred by the City and/or Agency in the negotiation, revision, consideration and processing of the Amendments. CP Development shall be responsible for replenishing the deposit to the $25,000 level within ten (10) days of the City or Agency's request for replenishment. The costs which will be reimbursed from the account are all of the costs incurred by the City or Agency relating to the Amendments except for in-house staff time. It is anticipated that the Amendments will be presented to the City and Agency for consideration and potential action in the future. CP Development, the City and Agency understand that the City and Agency is each reserving the right to exercise discretion as to all matters over which the City and Agency are, by law, entitled or required to exercise discretion. By executing this Initial Deposit Agreement, the City and Agency are not committing or agreeing to undertake any activity requiring the subsequent discretion of the City or Agency, or any department of the City or Agency. City and Agency execution of this Initial Deposit Agreement is merely an agreement to allow the necessary work to be completed, at CP Development's expense, to bring the Amendments forward for City and Agency consideration. Nothing in this Initial Deposit Agreement shall be deemed to constitute a commitment by the City or Agency to approve the Amendments, or a prejudgment of the matters required to be considered as part of the decision whether or not to approve the Amendments. Please document CP Development's concurrence with these terms and limitations by signing below and returning the originally executed letter to me, along with the Initial Deposit. Once we have received the executed letter and Initial Deposit, we will instruct Rutan & Tucker and RSG to review the items you sent to us last week. Sincerely, �1 Thomas P. Genovese, City Manager, City of La Quinta Executive Director, La Quinta Redevelopment Agency APPROVED AS TO FORM BY: AI iso LeMoine-B vleputy Attorney City of La Quinta La Quinta Redevelopment Agency ACCEPTANCE OF INITIAL DEPOSIT AGREEMENT: CP DEV PMEN UIN LC By: Date: (v - ,lam • OS G:k'sdoc/mw/wong dda-da init deposit 53105 Page 2 of 2 AMENDMENT NO. 1 TO DISPOSITION AND DEVELOPMENT AGREEMENT THIS AMENDMENT NO. 1 TO DISPOSITION AND DEVELOPMENT AGREEMENT ("Amendment No. 1") is made and entered into as of a2 r , 2004 ("Effective Date") by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"). RECITALS: A. On or about December 18, 2003, the Agency and Developer entered into that certain Disposition and Development Agreement (the "DDA"), pursuant to which Agency agreed to sell to Developer, and Developer agreed to purchase from Agency that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Property") and to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to "Eligible Buyers" at an "Affordable Housing Cost" (as those terms are defined in the DDA (collectively, the "Project"). B. Agency and Developer now desire to amend the DDA to revise (i) certain timeframes in the schedule of performance attached to the DDA; (ii) certain conditions that must be satisfied prior to the Agency's conveyance to Developer of the Property; and (iii) the transfer and assignment provisions. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals which are incorporated herein by this reference and for valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: l . The DDA is hereby amended as follows: 1.1 To replace Section 205.1(d) and Section 205.2(f) with the following: Design Approvals. If Developer elects to purchase the Property pursuant to Option "A", Developer shall have obtained approval by the City of the Design Development Drawings for the Suites Hotel, as set forth in Section 302 herein, schematic design drawings for the Parcel 2 Casitas Development Component, and preliminary engineering drawings for Seeley Drive. If Developer elects to purchase the Property pursuant to Option "B", Developer shall have obtained approval by the City of the Design Development Drawings for the Phase of Development applicable to each Parcel to be acquired at the Closing, as set forth in Section 302 hereof. 882/015610-0061 540839.02 a09/18/04 1.2 To delete Section 205.1(i). 1.3 To revise Section 205.10) by deleting the phrase "the Parcel 2 Casitas Development Component." 1.4 To replace Section 205.1(k) with the following: (k) Performance Bond. The Developer shall have obtained from Developer's contractor and delivered to the Agency evidence, in a form satisfactory to Agency, that said contractor has the ability to obtain Contractor Bonds at the time of the issuance of building permits for the completion of the construction of (i) the Suites Hotel, and Seeley Drive, if Developer has elected to purchase the Property pursuant to Option "A", or (ii) the Phase of Development applicable to each Parcel to be acquired at the Closing, if Developer has elected to purchase the Property pursuant to Option "B". Said Contractor Bonds shall provide that the Agency is authorized to enforce the same as a third party beneficiary 1.5 To replace Section 205.2(h) with the following: (h) Grading Plans and Permits. If Developer elects to purchase the Property pursuant to Option "A", Developer shall have obtained City approval of its final grading plans for the Property, and grading permits shall be ready to be issued (upon payment of necessary fees, posting of required security, and similar items). If Developer elects to purchase the Property pursuant to Option `B", Developer shall have obtained City approval of its final grading plans for the Phase of Development applicable to each Parcel to be acquired at the Closing, and grading permits shall be ready to be issued (on payment of necessary fees, posting of required security, and similar items. 1.6 To add a new Section 311.1(c), as follows: (c) Notwithstanding anything in this Section 311.1 to the contrary, Developer may satisfy its obligation to provide evidence of the financing necessary to develop the Casitas Development (or applicable Phase of Development thereof) by presenting a letter from Lennar Homes of California, Inc. ("Lennar"), certifying that Lennar has the necessary resources to develop the Casitas Development (or applicable Phase of Development thereof), and identifying the source of such resources, in a manner satisfactory to the Agency's Executive Director, in his or her reasonable discretion. 1.7 To replace Section 703.2(c) with the following: (c) A transfer of the Suites Hotel or the Suites Hotel Parcel to a limited liability company in which Developer is the managing member. 882/015610-0061 540839.02 a09/18/04 -2- 1.8 To replace Section 703.2(d) with the following: (d) A transfer of any of the Parcel 8 Sanctuary Villas Component, Sanctuary Villas Parcel 8, the Parcel 9 Sanctuary Villas Component, and/or Sanctuary Villas Parcel 9 to Lennar or to Center Point Sanctuary, LLC, a California limited liability company. 1.9 To replace Section 703.2(f) with the following: (f) A transfer of any of the Parcel 2 Casitas Development Component, Casitas Parcel 2, the Parcel 3 Casitas Development Component, Casitas Parcel 3, the Parcel 4 Casitas Development Component, Casitas Parcel 4, the Parcel 5 Residential Development, Residential Parcel 5, the Parcel 7 Residential Development, and/or Residential Parcel 7 to Lennar. 1.10 To replace the last paragraph of Section 703.2 with the following: In the event of a Transfer by Developer under subparagraphs (a), (b), (c), (d), (e), or (f) above not requiring the Agency's prior approval, Developer nevertheless agrees that at least thirty (30) days prior to such Transfer it shall give written notice to Agency of such assignment and satisfactory evidence that the assignee has assumed in writing through an assignment and assumption agreement all of the obligations of this Agreement; provided, however, that no such assignment and assumption agreement shall be required for transfers under subparagraphs (d) or (f) to Lennar, and upon such assignment Lennar shall be deemed to have assumed only those obligations hereunder that pertain to the Parcel(s) and the Phase(s) of Development transferred to Lennar. In the event such transfer is under subparagraph (c) or (e) above, Developer shall, along with the notice required to be given pursuant to the immediately preceding sentence, provide Agency with evidence that such proposed transferee entity has been duly formed in accordance with the laws of the State of California. Any Transfer by Developer to Lennar of both Residential Parcel 7 and the Parcel 7 Residential Development under subparagraph (f) above shall include the right to receive disbursements of the Agency Loan pursuant to the terms of this Agreement. 1.11 To add a new paragraph to the end of Section 309.1, as follows: Nothing herein constitutes a representation or warranty by Agency that the construction of the Project is not subject to California Health and Safety Code Sections 33423 through 33426, or Chapter 1 of Part 7 of the California Labor Code (commencing with section 1720), and all applicable statutory and regulatory provisions related thereto, and Developer expressly waives any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to the Property or the Project. Developer shall indemnify, defend, and hold Agency harmless, including litigation costs and reasonable attorneys' fees, from and against any and all claims pertaining to the payment of wages for the Property or Project. 882/015610-0061 540839.02 a09/18/04 -3- 1.12 To replace the Schedule of Performance attached to the DDA as Attachment No. 20 with Exhibit "A" hereto, which exhibit is incorporated herein by this reference. 2. For purposes of clarification, all references to "grading plans" and "grading permits" in Section 205 of the DDA, as amended by this Amendment No. 1, shall refer to mass or rough grading, and all references to "grading plans" and "grading permits" in the Schedule of Performance, as amended by this Amendment No. 1, shall refer to precise grading. 3. Agency's approval of this Amendment No. 1 is conditioned upon Developer's execution, concurrently with the execution hereof, of an Indemnification Agreement substantially in the form attached hereto and incorporated herein as Exhibit `B". 4. Except as otherwise expressly provided in this Amendment No. 1, all of the terms and conditions of the DDA shall remain in full force and effect. 5. In the event of any action between Agency and Developer seeking enforcement of any of the terms and conditions to this Amendment No. 1, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 6. This Amendment No. 1 shall be construed according to its fair meaning and as if prepared by both parties hereto. 7. This Amendment No. 1 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Municipal and Superior Courts of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 1. Service of process on Agency shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 8. Time is of the essence of this Amendment No. 1 and of each and every term and provision hereof. 9. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by both Agency and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 10. Signatures of the parties transmitted by facsimile shall be deemed binding. However, each party agrees to submit their original signature to the other party within five (5.) business days after execution hereof. 11. This Amendment No. 1 may be executed in counterparts, each of which, when this Amendment No. 1 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 88v015610-0061 540839.02 a09/18/04 -4- 12. The person(s) executing this Amendment No. 1 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No. 1 on behalf of said party, (iii) by so executing this Amendment No. 1 such parry is formally bound to the provisions of this Amendment No. 1, and (iv) the entering into this Amendment No. 1 does not violate any provision of any other agreement to which such party is bound. [End — Signature Page Follows] 882/015610-0061 540839.02 a09/18/04 -5- IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read this Amendment No. 1, understands it and hereby executes this Amendment No. 1 to be effective as of the day and year first written above. Date: (nx-r -.M. , 2004 Date: ac-r. 7-E , 2004 Date: Ia - a9 , 2004 ATTEST: Jbae-&eek, Agency Secretary APPROVED AS TO FORM: RUTAN TU R, LP By: /zX - a rine Jenson, A en Counsel "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: _ Richard Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, co r orate politic By: Agency ClAr 882/015610-0061 540839.02 a09/18/04 -6- EXHIBIT "A" SCHEDULE OF PERFORMANCE [See Following Pages] 882/015610-0061 540839.02 a09/18/04 -7- ATTACHMENT NO.20 SCHEDULE OF PERFORMANCE' [See attached individual schedules for each of the (i) Sanctuary Villas Development, (ii) Suites Hotel, (iii) Parcel 5 Residential Development and Parcel 7 Residential Development, (iv) Medical Office/Surgical Facility, (v) Parcel 1 Restaurant and Parcel 2 Restaurant, and (vi) Casitas Development Developer shall have a thirty (30) day grace period for the completion of each of the tasks hereinafter described. Agency shall not declare a default for Developer's failure to timely complete any of the tasks described in this Schedule until such thirty (30) day grace period has expired. 1 All days are calendar days in this Schedule of Performance. 882/015610-0061 540839.02 a09/18/04 ' 1 SCHEDULE OF PERFORMANCE FOR SANCTUARY VILLAS DEVELOPMENT (ALL PHASES OF DEVELOPMENT) Item of Performance Time for Completion 1. Developer execution of DDA. Within 7 days after Developer and Agency approve final draft. 2. Developer's submission of complete Site On or before December 31, 2006. Development Permit Application "SDPA", which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan* • Tract Ma 3. Review of SDPA by all applicable City* * Agency will use reasonable efforts to cause such departments. review within 21 days after Developer's submission of SDPA. 4. Agency response to Developer as to City Within 7 days after receipt of final comments, but no comments on SDPA. later than 30 days after Developer's submission of SDPA. 5. Developer and City responses. Developer will respond to any request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 days. 6. Agency publishes Notice of Public Hearing Within 10 days after City responds to Developer's before the Planning Commission. comments in the preceding section. 7. Planning Commission Public Hearing and Approximately 10 days after first publication. consideration of SDPA and Tract Map. 8 City Council consideration of Tract Map.* Within 21 days after Planning Commission approval if required). 9. City's issuance of SDPA, Tract Map (if Within 7 days after approval by both City Council and applicable) and conditions. Planning Commission as applicable). 10A Developer's preparation of final grading Within 180 days after City's issuance of SDPA and plans and Design Development Drawings Tract Map (if applicable). for Sanctuary Villas Parcel 8. lOB Developer's preparation of final grading Within 180 days after Developer's completion of plans and Design Development Drawings construction of Sanctuary Villas Parcel 8. for Sanctuary Villas Parcel 9. 11A. Developer's submission of evidence of Within 120 days after Developer's completion of financing necessary to complete the Parcel Design Development Drawings for Parcel 8 Sanctuary 8 Sanctuary Villas Component Villas Component. 882/015610-0061 540839.02 a09/18/04 _2_ Item of Performance Time for Completion 11A. Developer's submission of evidence of Within 120 days after Developer's completion of financing necessary to complete the Parcel Design Development Drawings for Parcel 9 Sanctuary 9 Sanctuary Villas Component Villas Component. 12. Agency review and approval, approval with Within 30 days after Agency's receipt of applicable conditions, or denial of Developer's evidence of financing. evidence of financing for Parcel 8 Sanctuary Villas Component and Parcel 9 Sanctuary Villas Component. 13A. Developer's submission of grading permit Within 300 days after City's issuance of the SDPA. and building permit applications for SanctuaryVillas Parcel 8. 13B. Developer's submission of grading permit Within 180 days after Developer's completion of and building permit applications for Parcel 8 Sanctuary Villas Component. Sanctuary Villas Parcel 9. 14A. City's issuance of grading permit for Within 56 days after City's receipt of grading permit Sanctuary Villas Parcel 8. application for Sanctuary Villas Parcel 8. 14B. City's issuance of grading permit for Within 56 days after City's receipt of grading permit Sanctuary Villas Parcel 9. application for Sanctuary Villas Parcel 9. 15A. City's issuance of building permit for By the earlier of. (i) within 98 days after City's receipt Sanctuary Villas Parcel 8. of building permit application for Parcel 8 Sanctuary Villas Component, which is 42 days after City's issuance of grading permit for Sanctuary Villas Parcel 8, or (ii) on or before December 31, 2007. 15B. City's issuance of building permit for Within 98 days after City's receipt of building permit Sanctuary Villas Parcel 9. application for Parcel 9 Sanctuary Villas Component, which is 42 days after City's issuance of grading permit for Sanctuary Villas Parcel 9. 16A. Developer commences construction of Within thirty (30) days after City's issuance of Parcel 8 Sanctuary Villas Component. building permits for the Parcel 8 Sanctuary Villas Component. 16B. Developer commences construction of Within thirty (30) days after City's issuance of Parcel 9 Sanctuary Villas Component. building permits for the Parcel 9 Sanctuary Villas Component. 17A. Developer's completion of Parcel 8 Within 30-36 months after City's issuance of final Sanctuary Villas Component. building permits for the Parcel 8 Sanctuary Villas Component. 17B. Developer's completion of Parcel 9 Within 30-36 months after City's issuance of final Sanctuary Villas Component. building permits for the Parcel 9 Sanctuary Villas Component. * In the event that a master grading plan and total parcel map for the entire Property are submitted with the SDPA for the Suites Hotel, then no further master grading plan or tract map is required for the SDPA for the Parcels included in this Schedule and City Council consideration shall not be required. 882/015610-0061 540839.02 a09/18/04 -3- ** Nothing herein shall be construed to limit the City's legislative authority, which City may exercise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. 882/015610-0061 540839.02 a09/18/04 -4- OUTSIDE DATES FOR CLOSING OPTION A Outside Date For Closing for Sanctuary Villas Parcel 8 and Sanctuary Villas Parcel 9: 365 days after the Effective Date. OPTION B Parcel Closing Milestones Sanctuary Villas Parcel 8 Within 180 days after the Developer's completion of the foundation for the Suites Hotel. Sanctuary Villas Parcel 9 Within 180 days after the City's issuance of building permits for the Parcel 8 Sanctuary Villas Component. 882/015610-0061 540839.02 a09/18/04 -5- SCHEDULE OF PERFORMANCE FOR SUITES HOTEL Item of Performance Time for Completion 1. Developer execution of DDA. Within 7 days after Developer and Agency approve final draft. 2. Developer and Agency execute Early Entry Within 7 days after the Effective Date. A Bement. 3. Developer makes purchase election, and Within 7 days after the Effective Date. Agency and Developer open the Initial Escrow or the Property Escrow (as applicable). 4. Agency provides Developer with (i) copies of Within 30 days after the Effective Date. environmental studies and reports regarding the Property and (ii) the Preliminary Title Re ort. 5. Developer submission of complete Site Within 180 days after Effective Date. Development Permit Application "SDPA", which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan • Tract Ma 6. Review of SDPA by all applicable City* Agency will use reasonable efforts to cause such departments. review within 21 days after Developer's submittal receipt of SDPA. 7. Agency response to Developer as to City Within 7 days after Agency's receipt of City's comments on SDPA. final comments, but no later than 30 days after Developer's submission of SDPA. 8. Developer and City Responses. Developer will respond to any request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 da s. 9. Agency publishes Notice of Public Hearing Within 10 days after City responds to Developer's before the Planning Commission. comments in the preceding section. 10. Planning Commission Public Hearing and Approximately 10 days after first publication. consideration of SDPA and Tract Map. 11. City Council consideration of Tract Map. Within 21 days after Planning Commission approval. 'Nothing herein shall be construed to limit the City's legislative authority, which City may excise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. 882/015610-0061 540839.02 a09/18/04 -6- Item of Performance Time for Completion 12. City's issuance of SDPA, Tract Map and Within 7 days after City Council approval. conditions. 13. Developer's preparation of final grading plans On or before September 21, 2004. and Design Development Drawings for the Suites Hotel and Seeley Drive. 14. Developer's submission of (i) evidence of Developer shall provide evidence of financing on financing necessary to complete the Suites or before August 30, 2004; and Developer shall Hotel, and (iii) grading permit and building submit grading and building permit applications permit applications for the Suites Hotel and on or before October 31, 2004. Seeley Drive. 15. Agency review and approval, approval with Within 30 days after Agency's receipt of evidence conditions, or denial of Developer's evidence of financing of financing submitted in Item No. 14. 16. City's issuance of grading permit for the Suites Within 56 days after City's receipt of grading Hotel Parcel, the Parcel on which Developer permit application for the Suites Hotel Parcel, the shall construct the first Phase of Development Parcel on which Developer shall construct the first of the Casitas Development and Seeley Drive. Phase of Development of the Casitas Development, and Seel e Drive. 17. Developer's completion of first pavement lift Within (30) days after Developer's installation of and curbs and gutters of Seeley Drive. the foundation for the Suites Hotel. 18. City's issuance of building permits for the Within 98 days after City's receipt of building Suites Hotel and Seeley Drive. permit application for the Suites Hotel and Seeley Drive, which is 42 days after City's issuance of grading permit for the Suites Hotel and Seeley Drive. 19. Developer commences construction of Suites Within 30 days after Developer's receipt of Hotel. building permits for the Suites Hotel. 20. Completion of Suites Hotel. Before June 30, 2006, subject to the provisions of Section 702 of the DDA. 21. Developer completes final pavement lift of Within one hundred eighty (180) days after Seeley Drive. Developer's completion of the Suites Hotel. Outside Date for Closint for Suites Hotel Parcel, Landscape Parcel C, Landscape Parcel E, and the Seeley Drive Parcel (under Option A or Option B): 365 days after the Effective Date. 882/015610-0061 540839.02 a09/18/04 -7- SCHEDULE OF PERFORMANCE FOR PARCEL 5 RESIDENTIAL, DEVELOPMENT AND PARCEL 7 RESIDENTIAL DEVELOPMENT Item of Performance Time of Completion 1. Developer's execution of the DDA. Within 7 days after Developer and Agency approve final draft. 2. Developer's submission of (i) evidence of On or before December 31, 2005. financing necessary to complete the Parcel 5 Residential Development and the Parcel 7 Residential Development, and (ii) complete Site Development Permit Application "SDPA", including: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan • Tentative Tract Ma 3. Review of SDPA by all applicable City* Agency will use reasonable efforts to cause such departments. review within 21 days after Developer's submission of SDPA. 4. Agency response to Developer as to City Within 7 days after receipt of final comments, but no comments on SDPA. later than 30 days after Developer's submission of SDPA. 5. Developer and City Responses. Developer will respond to any request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 days. 6. Agency publishes Notice of Public Hearing Within 10 days after City responds to Developer's before the Planning Commission. comments in the preceding Section. 7. Planning Commission public hearing and Approximately 10 days after first publication. consideration of SDPA and Tentative Tract Map. 8. City Council consideration of Tentative Within 21 days after Planning Commission approval. Tract Map. 9. City's issuance of SDPA, Tentative Tract Within 7 days after City Council approval. Map and conditions of approval. 10. Preparation of Grading Plans and Design By the earlier of. (i) within 180 days after City's Development Drawings for the Parcel 5 issuance of SDPA and Tentative Tract Map, or (ii) by Residential Development and the Parcel 7 June 30, 2006. Residential Development. 882/015610-0061 540839.02 a09/18/04 _8_ Item of Performance Time of Completion 11. Developer's submission of grading permit Within 120 days after Developer's completion of and building permit application for Design Development Drawings. backbone infrastructure for the Parcel 5 Residential Development and the Parcel 7 Residential Development. 12. City's issuance of Grading Permit for the Within 56 days after City's receipt of grading permit Parcel 5 Residential Development and the application. Parcel 7 Residential Development. 13 City's issuance of building permit for Within 98 days after City's receipt of Building Permit backbone infrastructure for the Parcel 5 application, which is 42 days after City's issuance of Residential Development and the Parcel 7 Grading Permit. Residential Development. 14. Developer's commencement of construction Within 30 days following City's issuance of Building of backbone infrastructure of the Parcel 5 Permits. Residential Development and the Parcel 7 Residential Development. 15 Within 90 days after Developer's completion of Developer's commencement of Construction construction of the backbone infrastructure described of the Parcel 5 Residential Development and in Item 14 above, provided City has not delayed in the Parcel 7 Residential Development. issuing a building permit. 16 Developer's completion of construction of Within 30 months following City's issuance of the Parcel 5 Residential Development. Building Permits for the Parcel 5 Residential Development. 17. Developer's completion of construction of Within 18 months following City's issuance of the Parcel 7 Residential Development Building Permits for the Parcel 7 Residential Development. *Nothing herein shall be construed to limit City's legislative authority, which City may exercise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. OUTSIDE DATES FOR CLOSING OPTION A Outside Date For Closing for Residential Parcel 5 and Residential Parcel 7: 365 days after the Effective Date. OPTION B Outside Date For Closing for Residential Parcel 5 and Residential Parcel 7: 30 days after the Developer's completion of the exterior walls and roof of the, Suites Hotel. 882/015610-0061 540839.02 a09/18/04 -9- SCHEDULE OF PERFORMANCE FOR MEDICAL OFFICE/SURGICAL CILITY (ALL PHASES OF D Item of Performance Time for Completion 1. Developer execution of DDA. Within 7 days after Developer and Agency approve final draft. 2A/B. Developer's submission of complete Site On or before December 31, 2005. Development Permit Application for the Parcel A Medical Office/Surgical Facility Component and for the first and second Phases of Development of the Medical Office/Surgical Facility, "First/Second MOB SDPA", which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan* • Tract Map* 2C. Developer's submission of complete Site Within 90 days after City's issuance of building Development Permit Application for the permits for Lhe first and second Phases of third Phase of Development of the Developme it of the Medical Office/Surgical Medical Office/Surgical Facility, "Third Facility. MOB SDPA," which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan* • Tract Map* 3A. Review of First/Second MOB SDPA by Agency wil I use reasonable efforts to cause such all applicable City** departments. review within 21 days after Developer's submittal of First/Secon MOB SDPA. 3B. Review of Third MOB SDPA by all Agency wil I use reasonable efforts to cause such applicable City departments. review within 21 days after Developer's submittal of Third MOB SDPA. 4A. Agency response to Developer as to City Within 7 days after Agency's receipt of City's final comments on First/Second MOB SDPA. comments, but no later than 30 days after Developer's submission of First/Second MOB SDPA. 882/015610-0061 540839.02 a09/18/04 -10- Item of Performance Time for Completion 4B. Agency response to Developer as to City 'Within 7 days after Agency's receipt of City's final comments on Third MOB SDPA. comments, but no later than 30 days after Developer's submission of Third MOB SDPA. 5. Developer and City Responses. Developer will respond to any request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 days. 6A. Agency publishes Notice of Public Within 10 days after City responds to Developer's Hearing for the First/Second MOB SDPA comments regarding the First/Second MOB SDPA. before the Planning Commission. 6B. Agency publishes Notice of Public Within 10 days after City responds to Developer's Hearing for the Third MOB SDPA before comments regarding the Third MOB SDPA. the Planning Commission. 7A. Planning Commission Public Hearing and Approximately 10 days after first publication of consideration of First/Second MOB notice of the same. SDPA and Tract Map. 7B. Planning Commission Public Hearing and Approximately 10 days after first publication of consideration of Third MOB SDPA and notice of the same. Tract Map. 8A. City Council consideration of Tract Within 21 days after Planning Commission approval Map.* of First/Second MOB SDPA. 8B. City Council consideration of Tract Within 21 days after Planning Commission approval Map. * of Third MOB SDPA. 9A. City's Issuance of First/Second MOB Within 7 days after approval of First/Second MOB SDPA Tract Map, if applicable. SDPA by both Planning Commission and City Council. 9B. City's Issuance of Third MOB SDPA Within 7 days after approval of Third MOB SDPA Tract Map, if applicable. by both Planning Commission and City Council. 10A. Developer's preparation of final grading Within 180 days after City's issuance of plans and Design Development Drawings First/Second MOB SDPA and Tract Map (if for the Parcel A Medical Office/Surgical applicable). Facility Component and the first and second Phases of Development of the Medical Office/Surgical Facility. 10B. Developer's preparation of final grading Within 180 days after City's issuance of Third MOB plans and Design Development Drawings SDPA and Tract Map (if applicable). for the third Phase of Development of the Medical Office/Surgical Facility. 882/015610-0061 540839.02 a09/18/04 -11- Item of Performance Time for Completion 1 IA. Developer's submission of evidence of Within 120 days after Developer's completion of financing necessary to complete the Design Development Drawings for the Parcel A Parcel A Medical Office/Surgical Facility Medical Office/Surgical Facility Component and the Component and the first and second first and second Phases of Development of the Phases of Development of the Medical Medical Office/Surgical Facility. Office/Surgical Facility and of grading permit and building permit applications for the Parcel A Medical Office/Surgical Facility Component and the first and second Phases of Development of the Medical Office/Surgical Facility. 1113. Developer's submission of evidence of Within 120 days after Developer's completion of financing necessary to complete the third Design Development Drawings for the third Phase of Phase of Development of the Medical Development of the Medical Office/Surgical Office/Surgical Facility and of grading Facility. permit and building permit applications for the third Phase of Development of the Medical Office/Surgical Facility. 12A. Agency's review and approval, approval Within 30 days after Agency's receipt of the same. with conditions or denial of Developer's evidence of financing submittal in Item 11A. 12B. Agency's review and approval, approval Within 30 days after Agency's receipt of the same. with conditions or denial of Developer's evidence of financing submittal in Item 1113. 13A. City's issuance of grading permit for the The later of (i) within 56 days after City's receipt of Parcel A Medical Office/Surgical Facility building permit application for first Phase of Component and first Phase of Development of the Medical Office/Surgical Facility Development of the Medical or (ii) upon Developer's completion of foundation Office/Surgical Facility. for Suites Hotel. 13B. City's issuance of grading permit for The later of (i) within 56 days after City's receipt of second Phase of Development of the building permit application for the second Phase of Medical Office/Surgical Facility. Development of the Medical Office/Surgical Facility or (ii) upon Developer's completion of framing of exterior walls of the Suites Hotel. 13C. City's issuance of grading permit for the The later of (i) within 56 days after City's receipt of third Phase of Development of the building permit application for the third Phase of Medical Office/Surgical Facility. Development of the Medical Office/Surgical Facility or (ii) upon Developer's completion of exterior walls and roof for the Suites Hotel. 882/015610-0061 540839.02 a09/18/04 -12- Item of Performance Time for Completion 14A. City's issuance of building permit for By the earlier of. (i) within 98 days after City's Parcel A Medical Office/Surgical Facility receipt of building permit application for the first and first Phase of Development of the Phase of Development of the Medical Medical Office/Surgical Facility. Office/Surgical Facility, which is 42 days after issuance of grading permit for the first Phase of Development of the Medical Office/Surgical Facility, or ii on or before December 31, 2006. 14B. City's issuance of building permit for Within 98 days after City's receipt of building second Phase of Development of the permit application for the second Phase of Medical Office/Surgical Facility. Development of the Medical Office/Surgical Facility, which is 42 days after issuance of grading permit for the second Phase of Development of the Medical Office/Surgical Facility. 14C. City's issuance of building permit for Within 98 days after City's receipt of building third Phase of Development of the permit application for the third Phase of Medical Office/Surgical Facility. Development of the Medical Office/Surgical Facility, which is 42 days after issuance of grading permit for the third Phase of Development of the Medical Office/Surgical Facility. 15A. Developer commences construction of With thirty (30) days after City's issuance of Parcel A Medical Office/Surgical Facility building permits for the first Phase of Development and first Phase of Development of the of the Medical Office/Surgical Facility. Medical Office/Surgical Facility. 15B. Developer commences construction of With thirty (30) days after City's issuance of second Phase of Development of the building permits for the second Phase of Medical Office/Surgical Facility. Development of the Medical Office/Surgical Facility. 15C. Developer commences construction of With thirty (30) days after City's issuance of third Phase of Development of the building permits for the third Phase of Development Medical Office/Surgical Facility. of the Medical Office/Surgical Facility. 16A. Developer's completion of Parcel A Within 30-36 months after City's issuance of Medical Office/Surgical Facility and the building permits for Parcel A Medical first Phase of Development of the Medical Office/Surgical Facility Component and the first Office/Surgical Facility. Phase of Development of the Medical Office/Surgical Facility. 16B. Developer's completion of second Phase Within 30-36 months after City's issuance of of Development of the Medical building permit for second Phase of Development of Office/Surgical Facility. the Medical Office/Surgical Facility Component. 16C. Developer's completion of third Phase of Within 30-36 months after City's issuance of Development of the Medical building permit for third Phase of Development of Office/Surgical Facility. the Medical Office/Surgical Facility Component. * In the event that a master grading plan and total parcel map for the entire Property are submitted with the SDPA for the Suites Hotel, then no further master grading plan or tract map is required for the SDPA for any of the Parcels included in this Schedule and City Council consideration shall not required. 882/015610-0061 540839.02 a09/18/04 -13- ** Nothing herein shall be construed to limit City's legislative authority, which City may exercise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. 882/015610-0061 540839.02 a09/18/04 -14- OUTSIDE DATES FOR CLOSING OPTION A Outside Date for Closing for Medical Office/Surgical Facility Parcel A, Medical Office/Surgical Facility Parcel 10, Medical Office/Surgical Facility Parcel 11, and Medical Office/Surgical Facility Parcel 12: 365 days after the Effective Date. OPTION B Parcel Outside Date for Closing Medical Office/Surgical Facility Parcel A Within 90 days after the Developer's completion of and one of (i) Medical Office/Surgical Facility the foundation for the Suites Hotel. Parcel 10, (ii) Medical Office/Surgical Facility Parcel 11, or (iii) Medical Office/Surgical Facility Parcel 12 One of (i) Medical Office/Surgical Facility Within 90 days after the Developer's completion of Parcel 10, (ii) Medical Office/Surgical Facility framing of all exterior walls of the Suites Hotel. Parcel 11, or (iii) Medical Office/Surgical Facility Parcel 12 The final unpurchased Parcel of the (i) Medical Within 90 days after the Developer's completion of Office/Surgical Facility Parcel 10, (ii) Medical the exterior walls and roof of the Suites Hotel. Office/Surgical Facility Parcel 11, and (iii) Medical Office/Surgical Facility Parcel 12 882/015610-0061 540839.02 a09/18/04 -15 - SCHEDULE OF PERFORMANCE FOR PARCEL 1 RESTAURANT AND PARCEL 13 RESTAURANT Item of Performance Time for Completion l . Developer execution of DDA. Within 7 days after Developer and Agency approve final draft. 2A. Developer's submission of complete Site On or before December 31, 2005. Development Permit Application for Restaurant Parcel 1 "Parcel 1 SDPA", which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan* • Tract Map* 2B. Developer's submission of complete Site Within 180 days after City's issuance of building Development Permit Application for permits for Restaurant Parcel 1. Restaurant Parcel 13 "Parcel 13 SDPA", which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan* • Tract Map* 3A. Review of Parcel 1 SDPA by all Agency will use reasonable efforts to cause such applicable City** departments. review within 21 days after Developer's submittal of Parcel 1 SDPA. 3B. Review of Parcel 13 SDPA by all Agency will use reasonable efforts to cause such applicable City departments. review within 21 days after Developer's submittal of Parcel 13 SDPA. 4A. Agency response to Developer as to City Within 7 days after Agency's receipt of City's comments on Parcel 1 SDPA. final comments on application, but no later than 30 days after Developer's submission of Parcel 1 SDPA. 4B. Agency response to Developer as to City Within 7 days after Agency's receipt of City's comments on Parcel 13 SDPA. final comments on application, but no later than 30 days after Developer's submission of Parcel 13 SDPA. 5. Developer and City Responses. Developer will respond to any request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 days. 882/015610-0061 540839.02 a09/18/04 -16- Item of Performance Time for Completion 6A. Agency publishes Notice of Public Within 10 days after City responds to Developer's Hearing for the Parcel 1 SDPA before the comments regarding the Parcel 1 SDPA. Planning Commission. 6B. Agency publishes Notice of Public Within 10 days after City responds to Developer's Hearing for the Parcel 13 SDPA before comments regarding the Parcel 13 SDPA. the Planning Commission. 7A. Planning Commission's Public Hearing Approximately 10 days after first publication of and consideration of Parcel 1 SDPA and notice of the same. Tract Map. 7B Planning Commission's Public Hearing Approximately 10 days after first publication of and consideration of Parcel 13 SDPA and notice of the same. Tract Map. 8A. City Council's consideration of Tract Map Within 21 days after Planning Commission for Parcel 1.* approval of the Parcel 1 SDPA. 8B. City Council's consideration of Tract Map Within 21 days after Planning Commission for Parcel 13.* approval of the Parcel 13 SDPA. 9A. City's issuance of Parcel 1 SDPA and Within 7 days after approval of Parcel 1 SDPA Tract Map and conditions. and Tract Map by both Planning Commission and City Council. 9B. City's issuance of Parcel 13 SDPA and Within 7 days after approval of Parcel 13 SDPA Tract Map and conditions. and Tract Map by both Planning Commission and City Council. 10A. Developer's preparation of final grading Within 180 days after City issues Parcel 1 SDPA, plan and Design Development Drawings Tract Map, and conditions. for Restaurant Parcel 1. 1013. Developer's preparation of final grading Within 180 days after City issues Parcel 13 plan and Design Development Drawings SDPA, Tract Map, and conditions. for Restaurant Parcel 13. 1 IA. Developer's submission of (i) evidence of Within 90 days after Developer's completion of financing necessary to complete Parcel 1 Design Development Drawings for the Parcel 1 Restaurant, and (ii) grading and building Restaurant. permit applications for Restaurant Parcel 1. 11B. Developer's submission of (i) evidence of Within 20 days after Developer's completion of financing necessary to complete Parcel 1 Design Development Drawings for the Parcel 13 Restaurant, and (ii) grading and building Restaurant. permit applications for Restaurant Parcel 13. 11 C. Developer's submission of grading and Within 180 days after Developer's completion of building permit applications for the Parcel 1 Restaurant. Restaurant Parcel 13. 12A. City's issuance of grading permit for Within 56 days after City's receipt of building Restaurant Parcel 1. permit application for Restaurant Parcel 1. 882/015610-0061 540839.02 a09/18/04 -17- Item of Performance Time for Completion 12B. City's issuance of grading permit for Within 56 days after City's receipt of building Restaurant Parcel 13. permit application for Restaurant Parcel 13. 13A. City's issuance of building permit for Within 98 days after receipt of building permit Parcel 1 Restaurant.' application for Parcel 1 Restaurant, which is 42 days after City's issuance of grading permit for Restaurant Parcel 1. 13B. City's issuance of building permit for By the earlier of. (i) within 98 days after receipt of Parcel 13 Restaurant. building permit application for Parcel 13 Restaurant, which is 42 days after City's issuance of grading permit for Restaurant Parcel 13, or (ii) on or before December 31, 2006. 14A. Developer commences construction of Within thirty (30) days after City's issuance of Parcel 1 Restaurant. building permits for Parcel 1 Restaurant. 14B. Developer commences construction of Within thirty (30) days after City's issuance of Parcel 13 Restaurant. building permits for Parcel 13 Restaurant. 15A. Completion of Parcel 1 Restaurant. Within 30-36 months after City's issuance of building permits for Parcel 1 Restaurant. 15B. Completion of Parcel 13 Restaurant. Within 30-36 months after City's issuance of building permits for the Parcel 13 Restaurant. * In the event that a master grading plan and total parcel map for the entire Property are submitted with the SDPA for the Suites Hotel, then no further master grading plan or tract map is required for the SDPA for any of the Parcels included in this Schedule, and City Council consideration shall not be required. ** Nothing herein shall be construed to limit the City's legislative authority, which City may exercise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. 882/015610-0061 540839.02 a09/18/04 -18- OUTSIDE DATES MEOW CLOSING OPTIONA Outside Closing Date for Closing for Restaurant Parcel 1 and Restaurant Parcel 13: 365 days after the Effective Date. OPTION B Parcel Closing Milestones Restaurant Parcel 1 Within 90 days after the Developer's completion of the foundation for the Suites Hotel. Restaurant Parcel 13 Within 90 days after the City's issuance of building permits for Parcel 13 Restaurant. 882/015610-0061 540839.02 a09/18/04 -19- SCHEDULE OF PERFORMANCE FOR CASITAS DEVELOPMENT (ALL PHASES OF DEVELOPMENT) Item of Performance Time for Completion 1. Developer execution of DDA. Within 7 days after Developer and Agency approve final draft. 2. Developer and Agency execute Early Entry Within 7 days after the Effective Date. Agreement. 3. Developer makes purchase election, and Within 7 days after the Effective Date. Agency and Developer open the Initial Escrow or the Property Escrow (as applicable). 4. Agency provides Developer with (i) copies of Within 30 days after the Effective Date. environmental studies and reports regarding the Property and (ii) the Preliminary Title Report. 5. Developer submission of complete Site Within 180 days after Effective Date. Development Permit Application "SDPA", which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Master Grading Plan • Tract Ma 6. Review of SDPA by all applicable City' Agency will use reasonable efforts to cause such departments. review within 21 days after Developer's submittal receipt of SDPA. 7. Agency response to Developer as to City Within 7 days after Agency's receipt of City's comments on SDPA. final comments, but no later than 30 days after Developer's submission of SDPA. 8. Developer and City Responses. Developer will respond to any request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 days. 9. Agency publishes Notice of Public Hearing Within 10 days after City responds to before the Planning Commission. Developer's comments in the preceding section. 10. Planning Commission Public Hearing and Approximately 10 days after first publication. consideration of SDPA and Tract Map. 11. City Council consideration of Tract Map. Within 21 days after Planning Commission approval. 'Nothing herein shall be construed to limit the City's legislative authority, which City may excise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. 882/015610-0061 540839.02 a09/18/04 -20- Item of Performance Time for Completion 12. City's issuance of SDPA, Tract Map and 'Within 7 days after City Council approval. conditions. 13A. Developer's preparation of Design On or before December 31, 2004. Development Drawings for the first Phase of Development of the Casitas Development. 13B. Developer's preparation of Design On or before June 30, 2005. Development Drawings for the second Phase of Development of the Casitas Development. 13C. Developer's preparation of Design On or before December 31, 2005. Development Drawings for the third Phase of Development of the Casitas Development. 14. Developer's submission of evidence of Within 20 days after Developer's completion of available cash resources to complete the Design Development Drawings for the first Phase Casitas Development (all Phases of of Development of the Casitas Development. Development). 15. Agency review and approval, approval with Within 30 days after Agency's receipt of conditions, or denial of Developer's evidence evidence of financing of financing submitted in Item No. 14. 16. Developer's submission of building permit Within 120 days after Developer's completion of applications for the first Phase of Design Development Drawings for the first Phase Develo ment of the Casitas Development. of Development of the Casitas Development. 17. Developer's submission of building permit Within 120 days after Developer's completion of applications for the second Phase of the first Phase of Development of the Casitas Development of the Casitas Development. Development. 18. Developer's submission of building permit Within 120 days after Developer's completion of applications for the third Phase of the second Phase of Development of the Casitas Development of the Casitas Development. Development 19. City's issuance of building permits for the Within 56 days after City's receipt of building first Phase of Development of the Casitas permit applications for the first Phase of Development Development of the Casitas Development. 20. Developer commences construction of first Within 30 days after Developer's receipt of Phase of Development of the Casitas building permits for the first Phase of Develo ment. Development of the Casitas Development. 21. City's issuance of building permits for the Within 56 days after City's receipt of building second Phase of Development of the Casitas permit application for the second Phase of Development Development of the Casitas Development. 22. Developer commences construction of second Within 30 days after Developer's receipt of Phase of Development of the Casitas building permits for the second Phase of Development. Development of the Casitas Development. 23. City's issuance of building permits for the Within 56 days after City's receipt of building third Phase of Development of the Casitas permit application for the third Phase of Development I Development of the Casitas Development. 882/015610-0061 540839.02 a09/18/04 -21- Item of Performance Time for Completion 24. Developer commences construction of third Within 30 days after Developer's receipt of Phase of Development of the Casitas building permits for the third Phase of Development. Development of the Casitas Development. 25. Completion of first Phase of Development of Within 30-36 months after City's issuance of the Casitas Development. building permits for first Phase of Development of the Casitas Development. 26. Completion of second Phase of Development Within 30-36 months after City's issuance of of the Casitas Development. building permits for second Phase of Development of the Casitas Development. 27. Completion of third Phase of Development of Within 30-36 months after City's issuance of the Casitas Development. building permits for third Phase of Development of the Casitas Development, but in no event later than December-31, 2007. Outside Date for Closing for Suites Hotel Parcel, Landscape Parcel C, Landscape Parcel E, and the Seeley Drive Parcel (under Option A or Option B): 365 days after the Effective Date. 882/015610-0061 540839.02 a09/18/04 -22- INDEMNIFICATION AGREEMENT [See following pages] 882/015610-0061 540839.02 a09/18/04 -23- INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT ("Indemnifica ion Agreement") is made and entered into as of , 2004, by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Clenter Point"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), with reference to the following Recitals. RECITALS A. Center Point and the Agency have entered into that certain Disposition and Development Agreement dated December 18, 2003 (the "DDA"), pursuant to which, among other things, (i) Agency has agreed to sell to Center Point, and Center Point has agreed to purchase from Agency certain real property identified therein as the "Property", which is located in the City of La Quinta, County of Riverside, State of California, and (ii) Center Point has agreed to construct, complete, and operate on the Property a commercial project containing a medical office/surgical facility, a development containing "sanctuary villas," a mid -price suites hotel, a resort -style condominium/casitas development (the "Casitas Development"), two (2) sit- down restaurants, and two (2) single-family residential developments (the "Residential Component"), with forty (40) of the single-family homes restricted for sale to moderate -income buyers at restricted sales prices, all as more particularly described in the DDA (collectively, the "Project). B. Center Point initially informed the Agency that the Residential Component would be constructed by Ehline Development Co., a California corporation ("Ehline Development Co."). As a result, the DDA permits Center Point to transfer and assign the Residential Component to Ehline Development Co. or to an affiliated entity of Ehline Development Co. (an "Affiliated Entity"). The term "Ehline" shall be used hereinafter to refer to, collectively, Ehline Development Co. and the Affiliated Entities. C. Center Point has now requested that the DDA be revised to, among other things, omit Ehline as a permitted assignee/transferee of the Residential Component and to instead permit the assignment/transfer of the Residential Component and also the Casitas Development to Lennar Homes of California, Inc., a California corporation ("Lennar"). D. The Agency has prepared an amendment to the DDA ("Amendment No. 1") that includes the requested assignment/transfer revisions. The Agency has expressly conditioned its approval of Amendment No. 1 on Center Point's execution of an indemnification agreement substantially in the form hereof. E. The parties hereto now wish to impose on Center Point the obligation to indemnify the Agency, as more particularly defined in this Indemnification Agreement, against any claims regarding the assignment/transfer revisions set forth in Amendment No. 1 or resulting from the Agency's approval of Amendment No. 1, or arising from Ehline's entry onto the Property, or Ehline's or Center Point's obligations to third parties including but not limited to those who have prepared plans or conducted work in furtherance of the Project. 882/015610-0061 541417.01 a09/17/04 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: AGREEMENT 1. Indemnification by Center Point. Center Point hereby agrees that it shall indemnify, defend, and hold harmless Agency and Agency's officers, officials, members, employees, agents, consultants, and representatives, from and against any and all claims, liabilities, damages, losses, suits, costs and expenses (including but not limited to expert witness fees and reasonable attorneys' fees) of every kind, nature, and type asserted by any person or entity arising out of the Agency's agreement, as set forth in Amendment No. 1, to revise the assignment/transfer provisions set forth in the DDA, or resulting from the Agency's approval of Amendment No.1, or arising from Ehline's entry onto the Property, or Ehline's or Center Point's obligations to third parties including but not limited to those who have prepared plans or conducted work in furtherance of the Project, including, but not limited to, persons or entities who have designed or prepared plans or conducted any other work related to the Project on behalf of Ehline or Center Point Center Point's indemnification obligations herein are in addition to the indemnification obligations contained in the DDA, and nothing herein is intended to amend or limit Center Point's indemnification obligations set forth in the DDA. In the event of any conflict between the indemnification obligations herein and those contained in the DDA, the indemnification provisions which provide the greatest protection to the Agency shall prevail. 2. Non -liability of Agency Officers and Employees. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Center Point, or any successor or assign of same, in the event of any default or breach by Agency, or for any amount which may become due to Agency, or any successor or assign of same, or for breach of any obligation of the terms of this Indemnification Agreement 3. Successors and Assigns. This Indemnification Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties hereto. 4. Governing Law. This Indemnification Agreement shall be governed by and construed in accordance with the laws of the State of California. 5. Further Assurances. The parties covenant and agree that they will execute such other and further instruments and documents as are or may become necessary or convenient to effectuate and carry out this Indemnification Agreement. 6. Authority of Signatories to Bind Principals. The persons executing this Indemnification Agreement on behalf of their respective principals represent that (i) they have 882/015610-0061 2 541417.01 a09/17/04 been authorized to do so and that they thereby bind the principals to the terms and conditions of this Indemnification Agreement and (ii) their respective principals are properly and duly organized and existing under the laws of, and permitted to do business in, the State of California. 7. Interpretation. The paragraph headings of this Indemnification Agreement are for reference and convenience only and are not part of this Indemnification Agreement. They have no effect upon the construction or interpretation of any part hereof. The provisions of this Indemnification Agreement shall be construed in a reasonable manner to effect the purposes of the parties and of this Indemnification Agreement. 8. Attorney's Fees. In the event that a party to this Indemnification Agreement brings an action against another party hereto by reason of the breach of any condition, covenant, representation or warranty in this Indemnification Agreement, or otherwise arising out of this Indemnification Agreement, the prevailing party in such action shall be entitled to recover from the non -prevailing party expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 9. Counterparts. This Indemnification Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. [END — SIGNATURE PAGE FOLLOWS] 882/015610-0061 3 541417.01 a09/17/04 IN WITNESS WHEREOF, this Indemnification Agreement has been executed by the parties as of the date set forth above. Dated: Dated: Dated: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP By M. Katherine Jenson, Agency Counsel 882/015610-0061 4 541417.01 a09/17/04 "Center Point" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Thomas Genovese Title: Executive Director INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT ("Indemnification Agreement") is made and entered into as of 0&. A 9 , 2004, by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Center Point"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), with reference to the following Recitals. RECITALS A. Center Point and the Agency have entered into that certain Disposition and Development Agreement dated December 18, 2003 (the "DDA"), pursuant to which, among other things, (i) Agency has agreed to sell to Center Point, and Center Point has agreed to purchase from Agency certain real property identified therein as the "Property", which is located in the City of La Quinta, County of Riverside, State of California, and (ii) Center Point has agreed to construct, complete, and operate on the Property a commercial project containing a medical office/surgical facility, a development containing "sanctuary villas," a mid -price suites hotel, a resort -style condominium/casitas development (the "Casitas Development"), two (2) sit- down restaurants, and two (2) single-family residential developments (the "Residential Component"), with forty (40) of the single-family homes restricted for sale to moderate -income buyers at restricted sales prices, all as more particularly described in the DDA (collectively, the "Project). B. Center Point initially informed the Agency that the Residential Component would be constructed by Ehline Development Co., a California corporation ("Ehline Development Co."). As a result, the DDA permits Center Point to transfer and assign the Residential Component to Ehline Development Co. or to an affiliated entity of Ehline Development Co. (an "Affiliated Entity"). The term "Ehline" shall be used hereinafter to refer to, collectively, Ehline Development Co. and the Affiliated Entities. C. Center Point has now requested that the DDA be revised to, among other things, omit Ehline as a permitted assignee/transferee of the Residential Component and to instead permit the assignment/transfer of the Residential Component and also the Casitas Development to Lennar Homes of California, Inc., a California corporation ("Lennar"). D. The Agency has prepared an amendment to the DDA ("Amendment No. I") that includes the requested assignment/transfer revisions. The Agency has expressly conditioned its approval of Amendment No. 1 on Center Point's execution of an indemnification agreement substantially in the form hereof. E. The parties hereto now wish to impose on Center Point the obligation to indemnify the Agency, as more particularly defined in this Indemnification Agreement, against any claims regarding the assignment/transfer revisions set forth in Amendment No. 1 or resulting from the Agency's approval of Amendment No. 1, or arising from Ehline's entry onto the Property, or Ehline's or Center Point's obligations to third parties including but not limited to those who have prepared plans or conducted work in furtherance of the Project. 882/015610-0061 541417.01 a09/17/04 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: AGREEMENT 1. Indemnification by Center Point. Center Point hereby agrees that it shall indemnify, defend, and hold harmless Agency and Agency's officers, officials, members, employees, agents, consultants, and representatives, from and against any and all claims, liabilities, damages, losses, suits, costs and expenses (including but not limited to expert witness fees and reasonable attorneys' fees) of every kind, nature, and type asserted by any person or entity arising out of the Agency's agreement, as set forth in Amendment No. 1, to revise the assignment/transfer provisions set forth in the DDA, or resulting from the Agency's approval of Amendment No. 1, or arising from Ehline's entry onto the Property, or Ehline's or Center Point's obligations to third parties including but not limited to those who have prepared plans or conducted work in furtherance of the Project, including, but not limited to, persons or entities who have designed or prepared plans or conducted any other work related to the Project on behalf of Ehline or Center Point Center Point's indemnification obligations herein are in addition to the indemnification obligations contained in the DDA, and nothing herein is intended to amend or limit Center Point's indemnification obligations set forth in the DDA. In the event of any conflict between the indemnification obligations herein and those contained in the DDA, the indemnification provisions which provide the greatest protection to the Agency shall prevail. 2. Non -liability of Agency Officers and Employees. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to Center Point, or any successor or assign of same, in the event of any default or breach by Agency, or for any amount which may become due to Agency, or any successor or assign of same, or for breach of any obligation of the terms of this Indemnification Agreement 3. Successors and Assigns. This Indemnification Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties hereto. 4. Governing Law. This Indemnification Agreement shall be governed by and construed in accordance with the laws of the State of California. 5. Further Assurances. The parties covenant and agree that they will execute such other and further instruments and documents as are or may become necessary or convenient to effectuate and carry out this Indemnification Agreement. 6. Authority of Signatories to Bind Principals. The persons executing this Indemnification Agreement on behalf of their respective principals represent that (i) they have 882/015610-0061 2 541417.01 a09/17/04 been authorized to do so and that they thereby bind the principals to the terms and conditions of this Indemnification Agreement and (ii) their respective principals are properly and duly organized and existing under the laws of, and permitted to do business in, the State of California. 7. Interpretation. The paragraph headings of this Indemnification Agreement are for reference and convenience only and are not part of this Indemnification Agreement. They have no effect upon the construction or interpretation of any part hereof. The provisions of this Indemnification Agreement shall be construed in a reasonable manner to effect the purposes of the parties and of this Indemnification Agreement. 8. Attorney's Fees. In the event that a party to this Indemnification Agreement brings an action against another party hereto by reason of the breach of any condition, covenant, representation or warranty in this Indemnification Agreement, or otherwise arising out of this Indemnification Agreement, the prevailing party in such action shall be entitled to recover from the non -prevailing party expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 9. Counterparts. This Indemnification Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. [END — SIGNATURE PAGE FOLLOWS] 882/015610-0061 541417.01 a09/17/04 3 IN WITNESS WHEREOF, this Indemnification Agreement has been executed by the parties as of the date set forth above. Dated: 0eq Z o , 2=04- Dated: C-r Zo Zo04 Dated: 4D J 2 g Ztv-)V `r' APPROVED AS TO FORM: RUTAN & TUCKE LLP BA.Koe ' e hngbn, Age ty Counsel 882/015610-0061 4 541417.01 a09/17/04 "Center Point" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member , )- - By: I Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Thomas Genovese Title: Executive Director State of California County of Riverside On LO I a$► [ Q-,o 04 before me, Phyllis Manley, Notary Public, personally appeared Richard R. Oliphant, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. (Seal) -r � State of California ) ss.. County of Riverside ) On I OI'ag) -*%oC3 !4 before me, Phyllis Manley, Notary Public, personally appeared Thomas P. Genovese, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. (Seal) MN+It Y Commimon # ia;? 8 t1Olwy PuW - Cowwoo - RWerside County MMComm. ExpiremOct 16, 2006 INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT ("Indemnification Agreement") is made and entered into as of Qom`: 02R , 2004, by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"), and the CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of California ("City"), with reference to the following Recitals: RECITALS A. On or about December 18, 2003, Developer and the La Quinta Redevelopment Agency ("Agency") entered into that certain Disposition and Development Agreement (the "DDA"), pursuant to which, among other things, (i) Agency agreed to sell to Developer, and Developer agreed to purchase from Agency certain real property identified therein as the "Property", which is located in the City of La Quinta, County of Riverside, State of California, and (ii) Developer agreed to construct, complete, and operate on the Property a commercial project containing a medical office/surgical facility, a development containing privately owned villas (the "Sanctuary Villas Development"), a mid -price suites hotel, a resort -style condominium/casitas development (the "Casitas Development"), two (2) sit-down restaurants, and two (2) single-family residential developments (the "Residential Component"), with forty (40) of the single-family homes restricted for sale to moderate -income buyers at restricted sales prices, all as more particularly described in the DDA (collectively, the "Project). B. Concurrently with the Developer's and Agency's execution of the DDA, Developer and the City entered into that certain Development Agreement dated December 18, 2003, and recorded on January 5, 2004, as Instrument No. 2004-0005256, in the Official Records of Riverside County (the "Development Agreement"), which, among other terms, (i) sets forth a payment schedule for Developer's mitigation payments to the City; (ii) sets forth a schedule for Developer's payment to the City of Three Hundred Forty -Six Thousand Eleven Dollars ($346,011) as Developer's financial obligation toward certain landscaping improvements to be installed on a portion of the Property; (iii) requires Developer, at its sole cost, to construct a neighborhood park on certain real property owned in fee by the City; and (iv) sets forth the extent to which Developer may construct, develop, use and operate the Project, all as more particularly described in the Development Agreement. C. Developer initially informed the City and Agency that the Residential Component would be constructed by Ehline Development Co., a California corporation ("Ehline Development Co."). As a result, both the DDA and Development Agreement, as originally executed, permit Developer to transfer and assign the Residential Component to Ehline Development Co. or to an affiliated entity of Ehline Development Co. (an "Affiliated Entity"). The term "Ehline" shall be used hereinafter to refer to, collectively, Ehline Development Co. and the Affiliated Entities. D. On or about September 23, 2004, Agency and Developer entered into that certain Amendment No. 1 to Disposition and Development Agreement (the "DDA Amendment") to, 882/015610-0061 543302.01 a09/23/04 among other revisions, omit Ehline as a permitted assignee/transferee of the Residential Component and to instead permit the assignment/transfer of the Residential Component and also the Casitas Development and the Sanctuary Villas Development to Lennar Homes of California, Inc., a California corporation ("Lennar"). E. The City has prepared an amendment to the Development Agreement (the "Development Agreement Amendment") to revise the transfer and assignment provisions in the Development Agreement in a manner consistent with the revisions made to the DDA. The City has expressly conditioned its approval of the Development Agreement Amendment on Developer's execution of an indemnification agreement substantially in the form hereof. F. The parties hereto now wish to impose on Developer the obligation to indemnify the City, as more particularly defined in this Indemnification Agreement, against any claims regarding the assignment/transfer revisions set forth in the Development Agreement Amendment or resulting from the City's approval of the Development Agreement Amendment, or arising from Ehline's entry onto the Property, or Ehline's or Developer's obligations to third parties including but not limited to those who have prepared plans or conducted work in furtherance of the Project. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: AGREEMENT 1. Indemnification by Developer. Developer hereby agrees that it shall indemnify, defend, and hold harmless City and City's officers, officials, members, employees, agents, consultants, and representatives, from and against any and all claims, liabilities, damages, losses, suits, costs and expenses (including but not limited to expert witness fees and reasonable attorneys' fees) of every kind, nature, and type asserted by any person or entity arising out of the City's agreement, as set forth in the Development Agreement Amendment, to revise the assignment/transfer provisions set forth in the Development Agreement, or resulting from the City's approval of the Development Agreement Amendment, or arising from Ehline's entry onto the Property, or Ehline's or Developer's obligations to third parties including but not limited to those who have prepared plans or conducted work in furtherance of the Project, including, but not limited to, persons or entities who have designed or prepared plans or conducted any other work related to the Project on behalf of Ehline or Developer 11.1 Developer's indemnification obligations herein are in addition to the indemnification obligations contained in the Development Agreement, and nothing herein is intended to amend or limit Developer's indemnification obligations set forth in the Development Agreement. In the event of any conflict between the indemnification obligations herein and those contained in the Development Agreement, the indemnification provisions which provide the greatest protection to the City shall prevail. 2. Non -liability of City Officers and Employees. No officer, official, member, employee, agent, or representative of City shall be personally liable to Developer, or any 882/015610-0061 543302.01 a09/23/04 -3- successor or assign of same, in the event of any default or breach by City, or for any amount which may become due to City, or any successor or assign of same, or for breach of any obligation of the terms of this Indemnification Agreement 3. Successors and Assigns. This Indemnification Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties hereto. 4. Governing Law. This Indemnification Agreement shall be governed by and construed in accordance with the laws of the State of California. 5. Further Assurances. The parties covenant and agree that they will execute such other and further instruments and documents as are or may become necessary or convenient to effectuate and carry out this Indemnification Agreement. 6. Authority of Signatories to Bind Principals. The persons executing this Indemnification Agreement on behalf of their respective principals represent that (i) they have been authorized to do so and that they thereby bind the principals to the terms and conditions of this Indemnification Agreement and (ii) their respective principals are properly and duly organized and existing under the laws of, and permitted to do business in, the State of California. 7. Interpretation. The paragraph headings of this Indemnification Agreement are for reference and convenience only and are not part of this Indemnification Agreement. They have no effect upon the construction or interpretation of any part hereof. The provisions of this Indemnification Agreement shall be construed in a reasonable manner to effect the purposes of the parties and of this Indemnification Agreement. 8. Attorney's Fees. In the event that a party to this Indemnification Agreement brings an action against another party hereto by reason of the breach of any condition, covenant, representation or warranty in this Indemnification Agreement, or otherwise arising out of this Indemnification Agreement, the prevailing party in such action shall be entitled to recover from the non -prevailing party expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 9. Counterparts. This Indemnification Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. [END — SIGNATURE PAGE FOLLOWS] 882/015610-0061 543302.01 a09/23/04 -4- IN WITNESS WHEREOF, this Indemnification Agreement has been executed by the parties as of the date set forth above. Dated: C � Z$ , ?c=d-¢ Dated: C)c.-r 71g. ?mt4 Dated: 0 Gf 2i1? 2-100 T ATTEST: APPROVED AS TO FORM: RUTAN U%ol 7a� By . Ka eri Jenson, Ci Attorney "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "City" CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of California By: /zvv�� Thomas Genovese Title: Executive Director 882/015610-0061 543302.01 a09/23/04 -5- State of California County of Riverside On i0 I �,Q l�.co 4 before me, Phyllis Manley, Notary Public, personally appeared Richard R. Oliphant, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. (Seal) PMY" MANY comet on # 137M CaNfomio mverode county 10MY Comm. EA*0 OCt 1& 2OOd State of California ) ss. County of Riverside ) On 1 t I QR I 2oD4 before me, Phyllis Manley, Notary Public, personally appeared Thomas P. Genovese, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. (Seal) PMILtJS MIAWY CorrxnWpn # 13769M jq7.0W(xy Puble - CaNiom10 _ Wendde County My Can. Oct 166 -2006 /�in��O/yLo��ts Cj 11/08/2N4 # REPRINT 88:52AM RECEIPT # 1228543 Riverside County Clerk and Recorder 2724 Gateway Drive Riverside, CA 92507 FROM CITY OF LA @UINTA By EPARRA Recordings on this Receipt: 2814-68851,62 thru 2104-0885663 M 2064-8886162 MULTI <NC> 0.60 S 2604-8885863 STANDARD <HC> 0.01 ----------- TOTAL FEE -----> 6.00 ----------- CHANGE -------- > 8.6# Check # RECEIPT INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT ("Indemnification Agreement") is made and entered into as of /floe to , 2004, by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("CP Development"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), with reference to the following Recitals. RECITALS A. CP Development and the Agency have entered into that certain Disposition and Development Agreement dated December 18, 2003, as amended by that certain Amendment No. 1 to Disposition and Development Agreement (the "DDA"), pursuant to which, among other things, (i) Agency has agreed to sell to CP Development, and CP Development has agreed to purchase from Agency certain real property identified therein as the "Property", which is located in the City of La Quinta, County of Riverside, State of California, and (ii) CP Development has agreed to construct, complete, and operate on the Property a commercial project containing a medical office/surgical facility, a development containing "sanctuary villas," a mid -price suites hotel, a resort -style condominium/casitas development (the "Casitas Development"), two (2) sit- down restaurants, and two (2) single-family residential developments (the "Residential Component"), with forty (40) of the single-family homes restricted for sale to moderate -income buyers at restricted sales prices, all as more particularly described in the DDA (collectively, the "Project). B. The DDA requires CP Development to procure and obtain, as of the effective date of the DDA until the time specified therein, certain policies of insurance, as more specifically described in the DDA (the "Insurance Requirements"). C. CP Development has procured insurance (the "CP Insurance") which does not fully satisfy the Insurance Requirements. D. CP Development has opened an escrow to effect Agency's conveyance to CP Development of the Property (the "Escrow"), and has requested that the Agency close the Escrow and convey to CP Development the Property, notwithstanding that the CP Insurance does not fully comply with the Insurance Requirements. In connection therewith, CP Development has represented to the Agency that it will not conduct any construction or any other activities which are not covered by the CP Insurance on the Property until such time as CP Development has procured insurance which satisfies the Insurance Requirements, as determined by* the Agency's Executive Director. E. The Agency has agreed to close the Escrow, provided CP Development executes this Indemnification Agreement. F. The parties hereto now wish to impose on CP Development the obligation to indemnify the Agency and the City of La Quinta, as more particularly defined in this Indemnification Agreement, against any claims that would be covered by insurance that complies with the Insurance Requirements, but that are not covered by the CP Insurance, 882/015610-0061 556041.01 all/08/04 IN WITNESS WHEREOF, this Indemnification Agreement has been executed by the parties as of the date set forth above. Dated: Dated: Dated: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP By athe 'ne Jenson, Agency Counsel 882/015610-0061 4 556041.01 all/08/04 "CP Development" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Thomas Genovese Title: Executive Director including, but not limited to, claims regarding damage or injury to persons or property resulting from (i) automobiles; or (ii) construction activities. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: AGREEMENT 1. Indemnification by CP Development. CP Development hereby agrees that it shall indemnify, defend, and hold harmless Agency and City and their respective officers, officials, members, employees, agents, consultants, and representatives, from and against any and all claims, liabilities, damages, losses, suits, costs and expenses (including but not limited to expert witness fees and reasonable attorneys' fees) of every kind, nature, and type asserted by any person or entity that would be covered by insurance that complies with the Insurance Requirements, but that are not covered by the CP Insurance, including, but not limited to, claims regarding damage or injury to persons or property resulting from (i) automobiles; or (ii) construction activities. CP Development's indemnification obligations herein are in addition to the indemnification obligations contained in the DDA, and nothing herein is intended to amend or limit CP Development's indemnification obligations set forth in the DDA. In the event of any conflict between the indemnification obligations herein and those contained in the DDA, the indemnification provisions which provide the greatest protection to the Agency shall prevail. 2. Representations and warranties by CP Development. CP Development hereby represents and warrants that it will not commence construction activities, or any other activities for which the CP Insurance does not provide coverage as required by the Insurance Requirements, until such time as it has procured insurance that complies with all of the Insurance Requirements, as determined by the Agency's Executive Director. 3. Non -liability of Agency Officers and Employees. No officer, official, member, employee; agent, or representative of Agency shall be personally liable to CP Development, or any successor or assign of same, in the event of any default or breach by Agency, or for any amount which may become due to Agency, or any successor or assign of same, or for breach of any obligation of the terms of this Indemnification Agreement 4. Successors and Assi rg_is. This Indemnification Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties hereto. 5. Governing Law. This Indemnification Agreement shall be governed by and construed in accordance with the laws of the State of California. 882/015610-0061 2 556041.01 all/08/04 6. Further Assurances. The parties covenant and agree that they will execute such other and further instruments and documents as are or may become necessary or convenient to effectuate and carry out this Indemnification Agreement. 7. Authorily of Signatories to Bind Principals. The persons executing this Indemnification Agreement on behalf of their respective principals represent that (i) they have been authorized to do so and that they thereby bind the principals to the terms and conditions of this Indemnification Agreement and (ii) their respective principals are properly and duly organized and existing under the laws of, and permitted to do business in, the State of California. 8. Interpretation. The paragraph headings of this Indemnification Agreement are for reference and convenience only and are not part of this Indemnification Agreement. They have no effect upon the construction or interpretation of any part hereof. The provisions of this Indemnification Agreement shall be construed in a reasonable manner to effect the purposes of the parties and of this Indemnification Agreement. 9. Attorney's Fees. In the event that a party to this Indemnification Agreement brings an action against another party hereto by reason of the breach of any condition, covenant, representation or warranty in this Indemnification Agreement, or otherwise arising out of this Indemnification Agreement, the prevailing party in such action shall be entitled to recover from the non -prevailing party expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 10. Counterparts. This Indemnification Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. [END — SIGNATURE PAGE FOLLOWS] 882/015610-0061 3 556041.01 all/08/04 IN WITNESS WHEREOF, this Indemnification Agreement has been executed by the parties as of the date set forth above. Dated: 'k6 %4 to *2==4- Dated:,.,c t b 2 4 Dated: Z1440-�d q ATTEST: APPROVED AS TO FORM: RUTAN & TUCKER, LLP M M. Katherine Jenson, Agency Counsel 882/015610-0061 4 556041.01 all/08/04 "CP Development" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: :� Q . Ll�r Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager .,By: Richard R. Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Thomas Genovese Title: Executive Director IN WITNESS WHEREOF, this Indemnification Agreement has been executed by the parties as of the date set forth above. Dated: Dated: Dated: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP By athe 'ne Jenson, Agency Counsel 882/015610-0061 4 556041.01 all/08/04 "CP Development" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Thomas Genovese Title: Executive Director lurner Turner Construction Company 44-139 Monterey Avenue Suite 201 Palm Desert, California 92260 phone: 760.340.6161 fax: 760.340.6411 October 28, 2004 Mark Weiss Assistant City Manager City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Dear Mr. Weiss: Please be advised Turner Construction Company has a total bonding capacity in excess of $1.5 billion, and currently has available capacity, and is willing and able to provide, bonding for the project to be constructed by CP Development La Quinta, LLC on the real property located southeast of the Miles Avenue and Washington Street intersection, in the City of La Quinta, County of Riverside, State of California, pursuant to that certain Disposition and Development Agreement entered into by and between the La Quinta Redevelopment Agency and CP Development La Quinta, LLC on or about December 18, 2003. Very truly yours, <: Tom Donohue Manager cc: Francis A. Wong 11/10/2004 7:19 PAGE 001/002 Fax Server a�*fit AO rsicy 11/10/2004 To: La Quinta Redevelopment Attn: Assistant to the Executive Director Fax No.: 17607777101 From: Barbara Keep File No.: RRI-1611281 Property: Vacant Land, La Quinta, CA Subject: Seller's Estimate for review and signature. This message Is for the designated recipient only and may. aontain 'privileged or confidential Information.. V you have received it in error, please notify the sender immediately and delete the original. Any other use of the information by you Is prohibited. V you do not receive as pages as indicated or have problems in receiving this fax, please contact the sender at (951) 787-1700 x1758 . 11/10/2004 7:19 PAGE 002/.002 Fax Server F mtAmetican Title Company 362514th Street • Riverside, CA 92501 Seller's Estimated Settlement Statement Amended: Tuesday Nov 9, 2004 1:4 PM Property: Vacant Land, La Quinta, CA Buyer: CP Development La Quints, LLC Address: 77 900 Avenue of the States, Palm Desert, CA 92211 Seller: La Quinta Redevelopment Agency Address: 78495 Calle Tampico, La Quinta, CA 92253 File No: RRI 1611281 Officer: Debra Dunn/bk New Loan No: Settlement Date: Disbursement Date: 11/19/2004 Print Date: 1'1/10/2004, 7:19 AM ::t:::::::t@:e!@: a:::::::@:ete�@::@. t..@ t in ::.ee:e:•: : et : ++ . ,. ..k..,. ., ea..................... .. A.9trls..gg++ :::t::::::::::::x°�:::::::::::::::x�.;.4xM�,�,4,.r:::%t.,,s�.;,"i.,.�9.ti.�.�'�J�,., °'�r .�.1�lF •. Y ......._........._..... Consideration: r' :r. ' Sg •, M. i" eti....y'"'"i diyi�in " :: � et ::::...e.:....t.t...:: Total Consideration 7,109,634.00 Title/Escrow Charges to: ALTA Standard 1992 w/Regional Exceptions - First American Tide Company 9,954.00 Escrow Fee - First American Title Company 3,554.50 Wire Fee - First American Title Company 15.00 County Documentary Transfer Tax = First American Title Company 7,921.00 Cash (X To) ( From) Seller 7,088,289.50 7,109,634.00 7,109,634.00 Notice — This Estimated Settlement Statement is subject to changes, corrections or additions at the time of final computation of the Settlement Statement. SELLER(S): La Quinta Redevelopment Agency, a public body, corporate and politic By:., Executive Director AMENDMENT NO.2 TO DISPOSITION AND DEVELOPMENT AGREEMENT THIS AMENDMENT NO. 2 TO DISPOSITION AND DEVELOPMENT AGREEMENT ("Amendment No. 2") is made and entered into as of ee % 2004 by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"). RECITALS: A. On or about December 18, 2003, the Agency and Developer entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which Agency agreed to sell to Developer, and Developer agreed to purchase from Agency that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Property") and to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to "Eligible Buyers" at an "Affordable Housing Cost" (as those terms are defined in the Original DDA (collectively, the "Project"). B. On or about October 28, 2004, Agency and Developer entered into that certain Amendment No. 1 to Disposition and Development Agreement ("Amendment No. 1 ") which amended the Original DDA to revise (i) certain timeframes in the schedule of performance attached to the Original DDA; (ii) certain conditions that must be satisfied prior to the Agency's conveyance to Developer of the Property; and (iii) the transfer and assignment provisions. The Original DDA, as modified by Amendment No. 1, is hereinafter referred to as the "DDA". C. Agency and Developer now wish to further amend the DDA to revise the Option Agreement attached thereto as Attachment No. 14A (the "Original Option Agreement") to provide for the Agency's agreement to subordinate "Repurchase Option I" in the same manner, and subject to the same terms and conditions, as the Agency has agreed to subordinate "Repurchase Option III" (as those terms are defined in the Original Option Agreement) in order to accommodate Developer's acquisition and development lender. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals which are incorporated herein by this reference and for valuable consideration the receipt and sufficiency of which is. hereby acknowledged, the parties hereto agree as follows: 1. , The DDA is hereby amended to replace the Original Option Agreement with the Option Agreement attached hereto and incorporated herein as Exhibit "A". 882/015610-0061 562647.01 a12/02/04 -1 _ 2. Except as otherwise expressly provided in this Amendment No. 2, all of the terms and conditions of the DDA shall remain in full force and effect. 3. In the event of any action between Agency and Developer seeking enforcement of any of the terms and conditions to this Amendment No. 2, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 4. This Amendment No. 2 shall be construed according to its fair meaning and as if prepared by both parties hereto. 5. This Amendment No. 2 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Municipal and Superior Courts of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 2. Service of process on Agency shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 6. Time is of the essence of this Amendment No. 2 and of each and every term and provision hereof. 7. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by both Agency and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 8. This Amendment No. 2 may be executed in counterparts, each of which, when this Amendment No. 2 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 9. The person(s) executing this Amendment No. 2 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No. 2 on behalf of said party, (iii) by so executing this Amendment No. 2 such party is formally bound to the provisions of this Amendment No. 2, and (iv) the entering into this Amendment No. 2 does not violate any provision of any other agreement to which such party is bound. [End — Signature Page Follows] 882/015610-0061 562647.01 a12/02/04 _2_ IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read this Amendment No. 2, understands it, and hereby executes this Amendment No. 2 to be effective as of the day and year first written above. "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member Date: I2 - 0-7 , 2004 By: y�ai Richard Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager Date: t Z - d? 92004 By: , C�4 Richard Oliphant Its: President Date: 92004 ATTEST: �n�r k, Agency Secretary APPROVED AS TO FORM: RUT AN C R, LT- I(T�a By; c, e ' e Jenson, Ag y Counsel "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Agen Chair 882/015610-0061 562647.01 a12/02/04 _3_ EXHIBIT "A" OPTION AGREEMENT [See Following Document #556650] 882/015610-0061 562647.01 a12/02/04 "�" FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director (SPACE ABOVE THIS LINE FOR RECORDING USE) (EXEMPT FROM RECORDING FEE PER GOV. CODE § 27383) OPTION AGREEMENT NOTICE: THIS OPTION AGREEMENT CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS OPTION AGREEMENT ("Option Agreement") is made this day of , 2004 (the "Effective Date"), by CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"). RECITALS A. Developer has entered into a Disposition and Development Agreement dated December 18, 2003, and amended October 28, 2004 (the "DDA") with the La Quinta Redevelopment Agency ("Agency"), pursuant to which Agency conveyed to Developer that certain real property located southeast of the Miles Avenue and Washington Street intersection, in the City of La Quinta, County of Riverside, State of California (the "Site"). All defined terms used herein shall have the same meaning as set forth in the DDA unless otherwise stated. The Site is legally described in Exhibit "A" attached hereto and incorporated herein. B. Pursuant to the DDA, Developer has agreed to construct on the Site a commercial development that consists of a medical office/surgical facility ("Medical Office/Surgical Facility"); a development containing approximately twenty-six (26) sanctuary villas ("Sanctuary Villas Development"); a mid -price suites hotel containing approximately one hundred thirty-four (134) guest rooms ("Suites Hotel"); a resort -style condominium/casitas project containing approximately one hundred thirty-six (136) condominium/casitas units ("Casitas Development"); two (2) sit-down restaurants (individually, a "Restaurant," and collectively, the "Restaurants"); a residential development containing thirteen (13) single-family homes ("Parcel 5 Residential Development"); and a residential development containing fifty-four (54) single-family homes ("Parcel 7 Residential Development"), forty (40) of which shall be restricted for sale to Eligible Buyers at an Affordable Housing Cost (collectively, the "Project"). Certain components of the Project shall be constructed in multiple phases, as follows: The Medical Office/Surgical Facility shall be constructed in four (4) phases; the Casitas Development shall be constructed in three (3) 882/015610-0061 556650.04 a12/02/04 phases; and the Sanctuary Villas Development shall be constructed in two (2) phases. Each phase of the Medical Office/Surgical Facility, the Casitas Development, and the Sanctuary Villas Development, and each of the Suites Hotel, the Parcel 5 Residential Development, the Parcel 7 Residential Development, and each Restaurant constitutes a "Phase of Development," as further described in the DDA. C. Each Phase of Development shall be constructed on the Site in accordance with the site map attached hereto and incorporated herein as Exhibit "D" (the "Site Map"), as further described in the DDA. D. As a condition to the Agency's conveyance of the Site to Developer, Developer was required to grant to Agency an option to repurchase the Site, or a portion thereof, from Developer, if (i) Developer fails to commence, continuously proceed with, or complete construction of the Project or any particular Phase of Development within certain specified time frames, or (ii) Developer transfers the Site, or portion thereof, in violation of the terms of the DDA, all as further described herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals and all of the terms and conditions contained in the DDA, Developer hereby grants to Agency the following repurchase options: l . Repurchase Option I - Failure to Commence Construction Subject to Section 4(f), Developer hereby grants to Agency an exclusive option to repurchase the Site, or any portion thereof, if Developer fails to commence construction of the Project within the times set forth in the Commencement and Completion Schedule attached hereto and incorporated herein as Exhibit `B" (collectively, "Repurchase Option I"). Agency's Repurchase Option I shall also include the option to purchase any "Related Parcel" to the Option I Parcel(s) on which Developer has not yet commenced construction. For the purposes of this Option Agreement, (a) the term "commence construction" shall mean Developer's completion of mass grading for the entire Site, subject to Section 4(f) below, and (b) the term "Related Parcel" shall mean any Parcel that has a substantially similar use as another Parcel, as set forth in Exhibit "C", which is attached hereto and incorporated herein by this reference. In the event of Developer's failure to commence construction of the Project within the time period described above, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the expiration of the time period described above (after expiration of the cure period described in Sections 4(b) and 4(c) hereof) ("Repurchase Option I Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option I by giving written notice to Developer ("Agency's Notice of Option 1 Exercise"), in accordance with Section 5 of this Option Agreement, prior to the expiration of the Repurchase Option I Period. Notwithstanding anything herein to the contrary, (i) failure of Agency to exercise the Repurchase Option I with respect to Developer's failure to timely commence construction of the Project shall not constitute a waiver 882/015610-0061 556650.04 a12/02/04 -2- by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's failure to timely commence construction of the Project, and shall not constitute a waiver of Agency of its exercise of this Repurchase Option I with respect to Developer's failure to timely commence construction of a particular Phase of Development; and (ii) failure of Agency to exercise the Repurchase Option I with respect to Developer's failure to timely commence construction of a particular Phase of Development shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other Agreement for Developer's failure to timely commence construction of that Phase of Development and shall not constitute a waiver of Agency of its exercise of this Repurchase Option I with respect to Developer's failure to timely commence construction of any other Phase of Development. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of any other Developer breach of the terms or conditions of the DDA. (b) Repurchase Price - Repurchase Option I Agency's repurchase price for the Site, or portion thereof, or for the Option I Parcel(s) and any Related Parcels Agency is entitled, and elects, to purchase ("Repurchase Option I Repurchase Price"), shall be seventy-five percent (75%) of Developer's Purchase Price for the Site, portion thereof, or applicable Parcel(s), as set forth in Exhibit "D", which is attached hereto and incorporated herein by this reference. In the event that there are any outstanding and valid mortgages or deeds of trust against the Site at the time that Repurchase Option I is exercised, the Agency agrees that the Repurchase Option I Repurchase Price shall be paid to the lender on any such valid, recorded deeds of trust or mortgages, up to the then outstanding balance due under same. Any portion of the Repurchase Option I Repurchase Price not so needed to extinguish existing loans shall be paid to Developer. (c) Termination of Repurchase Option I Once Developer has commenced construction of the Project, -Repurchase Option I shall be deemed to be expired, and Agency agrees, within fifteen (15) days of the commencement of construction, to execute and record a termination of Repurchase Option I. 2. Repurchase Option II - Failure to Continuously Proceed With or Complete Construction Developer hereby grants to Agency an exclusive option to repurchase any individual Parcel then -comprising the Site ("Option II Parcel(s)"), and any Related Parcel(s) to the Option II Parcel(s) on which Developer has not yet commenced construction if, after commencement of construction of the Phase of Development to be constructed on the Option II Parcel(s), Developer fails to continuously proceed with, and complete, construction of such Phase of Development on the Option II Parcel(s) (collectively, "Repurchase Option II"). For purposes of this Option Agreement, "continuously proceed with construction" shall be defined as construction that is interrupted, if at all, for periods of no longer than thirty (30) days; and "completion of construction of the Phase of Development" shall be defined as City's final inspection of the Phase of Development by the date set forth in the Commencement and Completion Schedule, subject to Section 4(f) below ("Completion Deadline"). In the event of Developer's failure to continuously proceed with construction, or to complete construction of 882/015610-0061 556650.04 a12/02/04 -3- any Phase of Development by the Completion Deadline, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the applicable Completion Deadline (after expiration of the cure period described in Sections 4(b) and 4(c) hereof) ("Repurchase Option II Period"). (a) Exercise of Option . Agency shall exercise the Repurchase Option II by giving written notice to Developer, in accordance with Section 5 of this Option Agreement, prior to the expiration of the Repurchase Option II Period. Failure of Agency to exercise the Repurchase Option II with respect to a particular Phase of Development shall constitute a waiver by Agency of Developer's breach of its obligation to continuously proceed with and complete construction of that Phase of Development within the time set forth in the Commencement and Completion Schedule. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of Developer's obligation to continuously proceed with and complete construction of any other Phase of Development within the time set forth in the Commencement and Completion Schedule, or of any other Developer breach of the terms or conditions of the DDA. (b) Determination of Repurchase Price - Repurchase Option II Agency's repurchase price for the Option II Parcel(s) and any Related Parcel(s) Agency is entitled, and elects, to purchase ("Repurchase Option II Repurchase Price"), shall be the sum of (a) Developer's Purchase Price for the Option II Parcel(s) plus thirty-three and three -tenths percent (33.3%) of "Developer's Construction Costs," and (b) seventy-five percent (75%) of Developer's Purchase Price for the Related Parcel(s) Developer is entitled, and elects, to purchase. For purposes of this Option Agreement, the term "Developer's Construction Costs" shall mean, with respect to development of the Phase of Development to be constructed on the Option II Parcel(s), the lesser of (i) construction costs actually incurred by Developer for development of said Phase of Development from the DDA Date to the date Agency's exercises this Repurchase Option II (the "Construction Period"), and (ii) the constructions costs for the Construction Period set forth in Developer's Preliminary Budget, as approved by Agency as part of Agency's approval of Developer's financing, in accordance with Section 311 of the DDA, which costs may include (i) the amount paid by Developer to the contractor or contractors performing the works of improvement; (ii) reasonable inspection and testing costs paid by Developer to independent third party engineers or consultants in conjunction with said works of improvement (but not including costs, fees, charges, or profits allocated to Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer; (iii) costs and fees paid by Developer to independent third party engineers or consultants with respect to the planning, design, and engineering of the works of improvement (but not including costs, fees, charges, or profits allocated to the Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer); and (iv) the costs and fees incurred by Developer, if any, to obtain financing for the construction of the works of improvement. 882/015610-0061 556650.04 a12/02/04 -4- 3. Repurchase Option III - Transfer of the Site Developer hereby grants to Agency an exclusive option to repurchase (i) the Site if, prior to the time Agency issues a Release of Construction Covenants for any Phase of Development to be constructed thereon, Developer transfers or suffers an involuntary transfer of the Site in violation of the terms of the DDA; or (ii) any of the individual Parcels then -comprising the Site (the "Option III Parcels)") and any Related Parcel(s) to the Option III Parcel(s) on which Developer has not yet commenced construction if, prior to the time Agency issues a Release of Construction Covenants for the Phase of Development to be constructed on the Option III Parcel(s), Developer transfers or suffers an involuntary transfer of the Option III Parcel(s) (collectively, "Repurchase Option III"). In the event of Developer's transfer of the Site or any individual Parcels then -comprising the Site in violation of the DDA, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the transfer that gives rise to Agency's option under this Section ("Repurchase Option III Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option III by giving written notice to Developer ("Agency's Notice of Option III Exercise"), in accordance with Section 5 of this Option Agreement, prior to the expiration of the Repurchase Option III Period. Notwithstanding anything herein to the contrary, (i) failure of Agency to exercise the Repurchase Option III with respect to Developer's transfer or sufferance of an involuntary transfer of the Site shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Site, and (ii) failure of Agency to exercise the Repurchase Option III with respect to Developer's transfer or sufferance of an involuntary transfer of a Parcel shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Parcel, and shall not constitute a waiver by Agency of its exercise of this Repurchase Option III with respect to any other Parcel then -comprising the Site. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of any other Developer breach of the terms or conditions of the DDA. (b) Repurchase Price - Repurchase Option III Agency's repurchase price for the Site or for the Option III Parcel(s) and any Related Parcels Agency is entitled, and elects, to purchase ("Repurchase Option III Repurchase Price") shall be as follows: i) In the event Developer has not yet commenced construction of the Project or applicable Phase of Development at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III Price shall be the Repurchase Option I Repurchase Price, as set forth in Section 1(b) of this Option Agreement. ii) In the event Developer has commenced construction of the Project or applicable Phase of Development at the time Agency exercises its Repurchase Option III, 882/015610-0061 556650.04 a12/02/04 -5- Agency's Repurchase Option III Repurchase Price shall be (1) for the Option III Parcel(s), the Repurchase Option II Repurchase Price, as set forth in Section 2(b) of this Option Agreement, and (2) for the Related Parcels Agency is entitled, and elects, to purchase, the Repurchase Option I Repurchase Price, as set forth in Section 1(b) of this Option Agreement. 4. Additional Terms Applicable to the Repurchase Options The following additional terms shall apply to Repurchase Option I, Repurchase. Option II, and Repurchase Option III: (a) Successors and Assigns. The Repurchase Option I, Repurchase Option II, and Repurchase Option III created hereby shall be irrevocable by Developer and, subject to any subordination by Agency in accordance with paragraph (e) below, shall be binding upon the successors and assigns of Developer. (b) Developer's Right to Cure Certain Defaults. Notwithstanding anything herein to the contrary, Agency shall not be entitled to exercise Repurchase Option I or Repurchase Option II until Agency has provided a written notice to Developer regarding Developer's failure to commence, continuously proceed with, or complete, construction of the Project (with any of the above failures referred to hereinafter as an "Option Triggering Event"), and Developer has not, within sixty (60) days after receipt of such notice, cured, corrected, or remedied such Option Triggering Event, or, for those Option Triggering Events that cannot reasonably be cured, corrected, or remedied within sixty (60) days, commenced to cure, correct or remedy such Option Triggering Event within said sixty (60) day period, and diligently prosecute the same to completion. (c) Notice of Default to Mortgagee or Deed of Trust Molders; Right to Cure. With respect to any mortgage or deed of trust granted by Developer whenever the Agency may deliver any notice or demand to Developer with respect to an Option Triggering Event, the Agency shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage or deed of trust which has previously requested such notice in writing, including but not limited to 1 st Centennial Bank, which is providing to Developer an acquisition and development loan (the "A&D Loan"). Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Property (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. (d) No Agency Obli ag tion. Notwithstanding any covenant, term, or provision in this Section 4 to the contrary, Agency shall not be obligated to exercise Repurchase Option I, Repurchase Option II, or Repurchase Option III. 882/015610-0061 556650.04 a12/02/04 -6- (e) Termination of Option Agreement. In the event Developer commences and completes construction of any particular Phase of Development and Agency has not exercised Repurchase Option I, Repurchase Option II, or Repurchase Option III, Agency shall execute and record a termination of this Option Agreement with respect to the underlying Parcel of said Phase of Development within fifteen (15) business days after the final and permanent Certificate of Occupancy for the Phase of Development is issued by the City. (f) Enforced Delay. Notwithstanding anything to the contrary herein, in addition to specific provisions of this Option Agreement, performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency shall not excuse performance by Agency unless the act or failure is caused by the acts or omissions of Developer); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise commercially reasonable efforts to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within thirty (30) days following the commencement of the cause. The following shall not be considered as events or causes beyond the control of Developer, and shall not entitle Developer to an extension of time to perform: (i) Developer's failure to obtain financing for the Project or for any Phase of Development, (ii) Developer's failure to negotiate agreements with prospective tenants or users for the Project or for any Phase of Development, (iii) interest rates or (iv) economic or market conditions. Times of performance under this Option Agreement may also be extended by mutual written agreement by Agency and Developer. Agency's Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. (g) Subordination. The Agency agrees to subordinate this Option Agreement to the A&D Loan, to Developer's construction loan(s) for each Phase of Development and to the deed of trust securing Developer's investor's loan for Developer's construction of the Suites Hotel on the Suites Hotel Parcel, the Parcel 2 Casitas Development Component on Casitas Parcel 2, the Parcel 3 Casitas Development Component on Casitas Parcel 3, and the Parcel 4 Casitas Development Component on Casitas Parcel 4, and to execute a subordination agreement evidencing same, to be recorded in the official records of the County Recorder for the County of Riverside, provided all of the following conditions are met: i) Loan Amount. (1) for the Parcel A Medical Office/Surgical Facility Component, the Parcel 1 Restaurant, the Parcel 5 Residential Development, the Parcel 7 Residential Development, the Parcel 8 Sanctuary Villas Component, the Parcel 9 Sanctuary Villas Component, the Parcel 10 Medical Office/Surgical Facility Component, the Parcel 11 882/015610-0061 556650.04 a12/02/04 -7- Medical Office/Surgical Facility Component, the Parcel 12 Medical Office/Surgical Facility Component, and the Parcel 13 Restaurant, the maximum cumulative principal amount of the construction loan for the applicable Phase of Development shall not exceed ninety percent (90%) of the lender's appraised value of the Parcel on which said Phase of Development shall be constructed, upon completion of the Phase of Development, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction, and (2) for the Suites Hotel, the Parcel 2 Casitas Development Component, the Parcel 3 Casitas Development Component, and the Parcel 4 Casitas Development Component, the maximum cumulative principal amount, collectively, of Developer's construction loan plus Developer's investor's loan, shall not exceed ninety percent (90%) of the lender's appraised value of the Parcel on which the applicable Phase of Development shall be constructed, upon completion of the Phase of Development, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction; ii) Use of Loan Proceeds. The loan(s) shall obligate Developer to expend loan proceeds for no other purpose than the applicable Phase of Development; and iii) Notice and Agency's Opportunity to Cure. The loan(s) shall provide that any notice of a Developer breach or default shall also be sent to the Agency at the address listed in Section 5 and that upon receipt of such notice, Agency shall have the right to (A) cure the noticed breach or default, (B) negotiate with the lender regarding the noticed breach or default, and (C) purchase the Site from Developer subject to the construction lender's deed of trust, without the consent of Developer or the holder of the construction lender's deed of trust, and that Agency's exercise of the foregoing rights shall not, in and of itself, give rise to any right on the part of the lender to accelerate the amounts due under the loan. (h) Agency's Investigation of Site. Agency shall have forty-five (45) days after the occurrence of an event that triggers Agency's ability to exercise any of Repurchase Option I, Repurchase Option II, or Repurchase Option III to enter upon the Site (or applicable portion thereof) to conduct any tests, inspections, investigations, or studies of the condition of the Site (or applicable portion thereof). Developer shall permit Agency access to the Site (or applicable portion thereof) for such purposes. Agency's obligation to close "Escrow" (as defined below) shall be subject to Agency's approval of any environmental and other site testing conducted by Agency in Agency's discretion. Agency shall indemnify, defend, and hold harmless Developer and its officers, directors, shareholders, employees, agents, and representatives from and against all claims, liabilities, or damages, and including expert witness fees and reasonable attorney's fees and costs, arising out of any such testing, inspection, or investigatory activity on the Site (or applicable portion thereof). (i) Escrow Provisions. i) Within five (5) business days after Agency has exercised Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable), or as soon thereafter as reasonably practicable, an escrow shall be opened ("Escrow") with an escrow company selected by Agency for the reconveyance of the Site (or applicable portion thereof) to Agency ("Escrow Holder"). Escrow shall be deemed opened on the date that a fully executed 882/015610-0061 556650.04 a12/02/04 -8- copy of this Option Agreement and a notice of exercise of option prepared by Agency are delivered to Escrow Holder ("Opening of Escrow"). Escrow Holder shall notify Developer and Agency in writing of the date of the Opening of Escrow promptly following the opening of the Escrow. ii) Escrow shall close on or before the date that is ninety (90) days after the Opening of Escrow ("Close of Escrow" or "Closing Date"). The terms "Close of Escrow" and "Closing Date" shall mean the date the grant deed conveying fee title to Agency ("Agency Grant Deed") is recorded in the Office of the County Recorder of the County of Riverside, State of California. Possession of the Site, or portion thereof, shall be delivered to Agency at the Close of Escrow. iii) This Option Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of Developer and Agency to Escrow Holder as well as an agreement between Developer and Agency. In the event of any conflict between the provisions of this Option Agreement and Escrow Holder's standard instructions, this Option Agreement shall prevail. iv) The Escrow shall be subject to Agency's approval of a then -current preliminary title report. Any monetary lien(s) or encumbrance(s) shown on such preliminary title report that is (are) created concurrent with or after the close of escrow that conveyed the Site from Agency to Developer shall be removed by Developer at its sole expense prior to the Close of Escrow pursuant to this Section 4(i) unless such exception(s) is (are) accepted by Agency in its sole discretion; provided, however, that Agency shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title existing on the date of recordation of the Grant Deed to the Site (in the form of Attachment No. 4 to the DDA); and (iii) matters shown as printed exceptions in the standard form ALTA policy of title insurance. In the event the Site is encumbered by a mortgage or deed of trust, Agency shall be permitted to unilaterally instruct Escrow Holder to satisfy the indebtedness secured thereby out of the proceeds payable to .Developer through the foregoing Escrow. Any additional amount necessary to satisfy such indebtedness shall be paid by Developer. v) On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Agency shall deposit in Escrow (i) the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price; (ii) one-half (1 /2) of the escrow fees; (iii) the portion of the title insurance premium attributable to any extra or extended coverages, or any additional charge resulting from Agency's request that the amount of insurance be higher than the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price; and (iv) any and all additional instruments or other documents required from Agency (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Developer shall deposit in Escrow (i) the Agency Grant Deed, executed and acknowledged; (ii) one-half (1 /2) of the escrow fees; and (iii) any and all additional instruments or other documents required from Developer (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. Developer shall also be 882/015610-0061 556650.04 a12/02/04 -9- required to pay for documentary tax stamps, recording fees, and for an ALTA standard form owner's policy of title insurance in the amount of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price (as applicable), showing title vested in Agency free and clear of all liens and encumbrances except those permitted by paragraph (4) above (the "Title Policy"). Agency's receipt of the Title Policy shall be a condition to the Close of Escrow. Any other costs and expenses shall be allocated between the parties in the manner customary for a commercial property conveyance in Riverside County. vi) If, on or before the Closing Date, Escrow Holder has received all of the documents and funds listed in paragraph (5) above, and Escrow Holder is in a position to cause the Title Policy to be issued to Agency, and provided Agency has approved of the condition of the Site, or applicable portion thereof, Escrow Holder shall close the Escrow by taking the following actions: (i) recording the Agency Grant Deed in the office of the County Recorder of the County of Riverside, California, and delivering the recorded Agency Grant Deed to Agency; (ii) causing the Title Policy to be issued to Agency; and (iii) delivering the applicable of the Option I Repurchase Price, the Option II Repurchase Price, or the Option III Repurchase Price to Developer. 0) Agency's Right to Acquire the Site. Notwithstanding anything herein to the contrary, upon Agency's exercise of Repurchase Option I, Repurchase Option II, or Repurchase Option III, Developer's commencement to cure the default that led to Agency's exercise shall not affect Agency's right to close the Escrow and acquire the Site (or applicable portion thereof). (k) Agency's Repurchase of Uncompleted Portions of the Property. Notwithstanding anything herein to the contrary, in the event that as a result of Agency exercising Repurchase Option II or Repurchase Option III Agency acquires Residential Parcel 5 and/or Residential Parcel 7, if Developer has obtained a Certificate of Completion from the City for one or more of the lots that comprise either of said Parcels, (i) the provisions of this Option Agreement shall apply only to that portion of Residential Parcel 5 and/or Residential Parcel 7 (as applicable) for which Certificates of Completion have not been issued ("Uncompleted Portion of the Repurchase Property") and any calculations for determining the Repurchase Option II Repurchase Price or the Repurchase Option III Repurchase Price (as applicable) shall be based solely upon the Uncompleted Portion of the Repurchase Property, and (ii) Developer agrees to cooperate with Agency to effect the subdivision of the Uncompleted Portion of the Repurchase Property from the completed portions of Residential Parcel 5 and/or Residential Parcel 7 (as applicable) (those portions of the Repurchase Property for which Certificates of Completion have been issued). (1) Agency's Repurchase in Accordance With Site MgR The parties acknowledge and agree that the Site Map is not a legal description and that Developer intends to record a parcel map against the Site that will create legal parcels that differ from the lots depicted on the Site Map (the "Parcel Map"). Notwithstanding the recordation of the Parcel Map, the parties intend that the options granted herein are granted with respect to the lots as depicted in the Site Map and that such lots may or may not constitute legal parcels; provided, however, that if the Agency exercises its rights granted herein after the Parcel Map has been recorded, the outer 882/015610-0061 556650.04 a12/02/04 -1 0" boundaries of the lot(s) purchased shall not extend beyond the outer boundaries of the corresponding parcel as depicted on the Parcel Map. 5. Notices, Demands and Communications Between the Parties Formal notices, demands, and communications between Agency and Developer shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to: To Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, California 92626 Attn: M. Katherine Jenson, Esq. To Developer: CP Development La Quinta, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant With copies to: Selzer, Ealy, Hemphill & Blasdell, LLP 777 Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill and Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed in the manner provided above shall be deemed effective on the second business day following deposit in the United States mail. Such written notices, demands, and communications shall be sent in the same manner to such other addresses as either party may from time to time designate by mail. 6. Agency's Option to Acquire Plans If Agency exercises Repurchase Option I, Repurchase Option II, or Repurchase Option III in accordance with this Agreement, at the option of the Agency, which may be exercised in the Agency's sole and absolute discretion, the Developer shall deliver to the Agency an executed assignment in a form reasonably acceptable to the Agency of the Developer's right to use all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, 882/015610-0061 556650.04 a12/02/04 -11- landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to (i) the construction of the Project on the Site or (ii) if Agency acquires less than all of the Site, the construction of the Phases(s) of Development applicable to the Parcels which the Agency is acquiring (the "Plans"), together with copies of all of the Plans, as have been prepared for the development of the Site or applicable portion thereof to date of the termination. Notwithstanding the foregoing, however, Developer does not covenant to convey to the Agency the copyright or other ownership rights of third parties. Agency understands and agrees that the assignment to Agency under this Section 6 is subject and subordinate to any assignment which Developer may make to a lender providing financing for the Project or applicable Phase of Development, and Agency agrees to execute any documents required by such lender acknowledging and effectuating such subordination of Agency's rights in and to the assignment. Agency's acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall assume all risks in the use of the Plans. 7. Applicable Law and Forum; Attorney's Fees The Municipal and Superior Courts of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Option Agreement. This Option Agreement shall be governed by, and construed under, the laws of the State of California. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Option Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Option Agreement. The rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Service of process on Agency shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. If either party to this Option Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Option Agreement, the party prevailing in the final judgment in such action or proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable attorney's fees. Attorney's fees shall include reasonable costs for investigating such action, conducting discovery, retaining expert witnesses, and all other necessary costs the court allows which are incurred in such litigation. 8. Nonliability of Agency Officials and Employees No officer, official, employee, agent, or representative of Agency shall be personally liable to Developer or any successor in interest, in the event of any default or breach by Agency, or for any amount which may become due to Developer or its successor, or for breach of any obligation of the terms of this Option Agreement. 882/015610-0061 556650.04 a12/02/04 -12- 9. Nondiscrimination Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, or ancestry with respect to this Option Agreement or use of the Site. 10. Interpretation The terms of this Option Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Option Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Option Agreement. 11. Entire Agreement This Option Agreement integrates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Option Agreement must be in writing and signed by the appropriate authorities of the party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of Agency and Developer. 12. Counterparts This Option Agreement may be executed in counterparts, each of which, after all the parties hereto have signed this Option Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 13. Severability In the event any section or portion of this Option Agreement shall be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect, and the parties hereto shall take further actions as may be reasonably necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this Option Agreement. [END - SIGNATURES ON NEXT PAGE] 882/015610-0061 556650.04 a12/02/04 -13- IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first above written. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member Un- Its: Richard R. Oliphant Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "AGENCY" LA QUINTA REDEVELOPMENT AGENCY a public body, corporate and politic By: Its: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Executive Director 882/015610-0061 556650.04 a12/02/04 -14- STATE OF CALIFORNIA ) ) ss COUNTY OF ) On , before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ) ss COUNTY OF ) On , before me, 91 personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA 882/015610-0061 556650.04 a12/02/04 -15- ) ss COUNTY OF On , before me, 31 personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 556650.04 a12/02/04 -16- EXHIBIT "A" LEGAL DESCRIPTION OF THE SITE IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO.23971-1, ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 00027'38" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026'40" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 89033'22" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 00026'40" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41 °42'33", AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044132" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45027'41 ", AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 10897% O.R. THENCE SOUTH 00012'13" EAST ALONG SAID EASTERLY LINE, A DISTANCE OF 790.73 FEET TO AN ANGLE POINT THEREIN; 882/015610-0061 556650.04 a12/02/04 -17- THENCE SOUTH 43056'42' WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42059'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 02057'46 % AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C" AND ITS NORTHWESTERLY PROLONGATION NORTH 64021'03" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO.255528, O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 86011'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 005'41 ", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 75033'02" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17033'23" EAST; THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00032'28", AN ARC DISTANCE OF 23.61 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT B, SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; 882/015610-0061 556650.04 a12/02/04 -18- THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06", AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006156" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013' 18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02012'44"5, AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 67006'56" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001' 12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19058'08"9 AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028'37" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36057'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18051135113, AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (I,850,000 SQUARE FEET), MORE OR LESS. 882/015610-0061 556650.04 a12/02/04 -19- P.O.C. CTR. 1 /4 COR. SEC. 19 �s " MILES AVENUE S ° E oo N 89`31'" E 487.01' 23 N 89.33 22 E 960.27 L7 . N 00.28'37" W 153.41' S 00'26'40" ^ 112.88' E T.P.0.S. U �^ S 44744'32" E 0 90.06' N S N 66'01'1 " SITE 89'47'47" E 239.56' .. (R) AREA-42.47 AC. o L4 PORTION OF THE S. 1 /2 OF » � SEC. 19, T.5S., R.7E., S.B.M. W (R) L5 a' N 7553 N o vt1Es R PT. B cn N f. <Y C N �T N 86' 11'26" E R LINE DATA � NUMBER DIRECTION DISTANCE Ll . S W. I WW1 " E 397.49' L2 N, 48'09'56" W 22.00' L3 . N. '75:33`02" 1E 4.22' L4 N 6T06'56" E 20.00' L5 S 67'06'56" W 20.00' L6 N .00'26'4.0" W 20.00' L7 N 8933'22" E 80.00' �� EXCEPTION N PARCEL 6� PT. A � �:�JK " (R) N 475'27" � H G_ (R) I) s4�'o341 CURVE DATA NUMBER DELTA RADIUS ARC LENGTH TANGENT Ct 41'42'33" 440.00 320.30 167.62 C2 45:2741." 80.00 63.48 33.52 C3 02'57'46" 4565.17 236.07 118.06 C4 19*24'03" 2500.00 846.52. 427.35 C5. 11-05'41" 2072.00 401.22 201.24 C6 1758'08" 2002.00 729.11. 368.29 C7.. 10712'44" 2072.00 80.00 40.01 C8 017410.6" 2092.00 280:60 140.51 C9 00'32'28" 2500_00 123.61 11.81 C10. 18'51'35 2500.00 822.91 415.21 Lz ,r J.N. 1612 882/015610-0061 556650.04 a12/02/04 -20- EXHIBIT "B" COMMENCEMENT AND COMPLETION SCHEDULE Phase of Development Parcel A Medical Office/Surgical Facility Component First Phase of Development of the Medical Office/Surgical Facility Second Phase of Development of the Medical Office/Surgical Facility Third Phase of Development of the Medical Office/Surgical Facility Parcel 1 Restaurant Parcel 2 Casitas Development Component Parcel 3 Casitas Development Component Parcel 4 Casitas Development Component Parcel 5 Residential Development Parcel 7 Residential Development The first Phase of Development of the Sanctuary Villas Development The second Phase of Development of the Sanctuary Villas Development Parcel 13 Restaurant Time for Completion of Construction (measured from date City issues final building Time for Commencement of Rermits for applicable Phase of Construction Development) January 30, 2007 36 months January 30, 2007 January 30, 2007 514 days after City's issuance of applicable SDPA, but in no event later than April 30, 2008 454 days after City's issuance of applicable SDPA, but in no event later than January 31, 2007 July 26, 2006 July 26, 2006 July 26, 2006 April 30, 2007 April 30, 2007 January 30, 2008 364 days after completion of the first Phase of Development of the Sanctuary Villas Development, but in no event later than January 30, 2012 454 days after City's issuance of applicable SDPA, but in no event later than January 31, 2007 36 months 36 months 36 months 36 months 36 months 36 months 36 months 18 months 18 months 36 months 36 months 36 months 882/015610-0061 556650.04 a12/02/04 -21- Time for Commencement of Phase of Development Construction Seeley Drive December 31, 2004 Suites Hotel January 30.2005 Time for Completion of Construction (measured from date City issues final building hermits for avvlicable Phase of Development) 180 days after Developer's completion of Suites Hotel l8 months 882/015610-0061 556650.04 a12/02/04 -22- EXHIBIT "C" RELATED PARCELS The following are groupings of Parcels which are deemed to be Related Parcels: 1. Sanctuary Villas Parcel 8 and Sanctuary Villas Parcel 9. 2. Casitas Parcel 2, Casitas Parcel 3, and Casitas Parcel 4. 3. Medical Office/Surgical Facility Parcel A, Medical Office/Surgical Facility Parcel 10, Medical Office/Surgical Facility Parcel 11, and Medical Office/Surgical Facility Parcel 12. 4. Residential Parcel 5 and Residential Parcel 7. 5. Suites Hotel Parcel, Restaurant Parcel 1 and Restaurant Parcel 13. 882/015610-0061 556650.04 al2/02/04 -23- EXHIBIT "D" PURCHASE PRICE Sanctuary Villas Parcel 8 $ 841,193.42 Sanctuary Villas Parcel 9 2479,409.82 Casitas Parcel 2 5109,563.92 Casitas Parcel 3 7739,718.02 Casitas Parcel 4 654,511.46 Landscape Parcel C 0 Landscape Parcel E 0 Landscape Parcel H 0 Landscape Parcel I 0 Medical Office/Surgical Facility A 1,4553,219.64 Medical Office/Surgical Facility 10 1649190.15 Medical Office/Surgical Facility 11 276,649.17 Medical Office/Surgical Facility 12 1649,190.15 Residential Parcel 5 135,694.34 Residential Parcel 7 557,028.39 Restaurant Parcel 1 206,924.58 Restaurant Parcel 13 2513,908.18 Seeley Drive Parcel 0 Suites Hotel Parcel 753,475.39 Well Site Parcel 116,957.37 Property $791099634.00 882/015610-0061 556650.04 a12/02/04 -24- LOTS LANDM * L s tOT t - RESTAURANT , LOT 2 —RESORT RESORT CA$ETA$ *LOT "D' 1OT ..t. oa4 .e. . LOT 3 - RESORT CASITAS LOT 1 LOT4 r RESORT CASITAS 0s2 «. LOT S - RESIDENTIAL * LOT S - PARK LOT 7 - RESIDENTIAL *LOT 'C' 14297 ..r. LOT a - THE SANCTUARYa3 «.. o LOT '8 - THE SANCTUARY LOT 10 ' MEDICAL OFFICE BUILDINGS LOT-1i - MEDICAL OFFICE BUILDINGS N LOT 12 MEDICAL OFFICE .13ULMGS LOT 13 - RESTAURANT LOT 14 - HOTEL *LOT 'E y4� ar. Ll7 oe CQMAM LOTS LAND USE LOT A' - - MEDICAL OFFICE PARKM / LANDSCAPE LOT -'B' - - - SEELEY DRIVE 0LOT.'C' - 2(Y PARKWAY (WASHINGTON STREET) * LOT •D' - - - - CITY LANDSCAPE ENTRY * LOT,:7E• - - - • 2w PARKWAY (WAW494 iTON STREET) LOT 'F• - - - - WELLSITE * LOT 'G' - - - WELLSITE (N.A.P) * LOT-'H' - - 20' PARKWAY (MILES AVENUE) * LOT r - - - ' - - 20` PARKWAY (MILES AVENUE) EXHIBIT "E" SITE MAP * LOT 5450 ar. -0.12 «. - - �n LOyTpp'G• i{ 0 .art' LOT W� m 0.. . i« r. *LOT 8 tts796../, z.5e at. V 40 12 12 . LOT 7 3&99d- . V - at. q K. COT $ 117s2 74 ct - iT 9' as ar. * 'hew parcels are not being cmveyed by tioR - the IA Qttb t Ralavalopmmt Agency. IW Zhay era depictod on this Site Map fob cmvmieace of rof«moa only. NOVEMBER 2% 2003 882/015610-0061 556650.04 a12/02/04 -25- IRREVOCABLE ESCROW INSTRUCTIONS REGARDING ORDER OF RECORDATION To: Ms. Dunn, Escrow Agent Escrow Number: RRI-1611281 In connection with the sale of certain real property (the "Property") that is the subject of this escrow (the "Escrow") by the La Quinta Redevelopment Agency ("Agency") to CP Development La Quinta, LLC ("Developer") we are providing you with an Option Agreement (the "Final Option Agreement") and a Subordination Agreement. You are hereby instructed to record the documents at the closing of the Escrow in the following order: 1. Grant Deed 2. Final Option Agreement 3. 1st Centennial Deed of Trust 4. Subordination Agreement 5. Declaration 6. Lennar Deed of Trust In the event you do not have all of the documents listed above, and/or are unable to record such documents in the designated order, you are not authorized to close the Escrow and are instructed to await further joint.instructions from Agency and Developer. You are hereby instructed to destroy the two previous Option Agreements that have been provided to you in connection with this escrow. All prior escrow instructions not inconsistent with those described herein shall remain in full force and effect. These instructions shall be irrevocable except by the written agreement of both Agency and Developer. CP DEV OPMENT L TA, LLC BY: ITS: MAy���c�Er-tt� LA QUINTA REDEVELOPMENT AGEN BY: ITS: RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attn: City Clerk DOC N 2004—OSSM063 11/08/2004 08:00A Fee:NC Page i of 15 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk 8 Recorder M $ U PAGE SIZE DA PCOR NOCOR SMF MISC. A R L COPY LONG I REFUND NCHG EXAM (Exempt from Recording Fee per Gov't Code § 27383) CE AMENDMENT NO.1 TO DEVELOPMENT AGREEMENT THIS AMENDMENT NO. 1 TO DEVELOPMENT AGREEMENT ("Amendment No. 1") is made and entered into as of 2004 ("Effective Date") by and between the CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of California (the "City"), and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"). RECITALS: A. The La Quinta Redevelopment Agency ("Agency") is the fee owner of that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Site"). The Site is legally described in Exhibit "Al, which is attached hereto and incorporated herein by this reference. B. On or about December 18, 2003, the Agency and Developer entered into that certain Disposition and Development Agreement (the "DDA"), pursuant to which Agency agreed to sell to Developer, and Developer agreed to purchase from Agency, the Site, and to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single- family residential developments, with forty (40) of the single-family homes restricted for sale to "Eligible Buyers" at an "Affordable Housing Cost" (as those terms are defined in the DDA (collectively, the "Project"). C. By virtue of the DDA, the Developer has an equitable interest in the Site. By its execution of the consent form attached to this Amendment No. 1, the Agency consents to recordation of this Amendment No. 1 against the Site. D. Concurrently with the execution of the DDA, the City and Developer entered into that certain Development Agreement dated December 18, 2003, and recorded on January 5, 2004, as Instrument No. 2004-0005256, in the Official Records of the County of Riverside (the 882/015610-0061 543302.01 a09/23/04 "Development Agreement"), for purposes of (i) identifying the terms, conditions, and regulations for the construction of the Project, certain components of which constitute a Planned Development (as defined in Civil Code Section 1351(k)); (ii) setting forth a payment schedule for the Developer's payment to the City of certain amounts designed to compensate the City in the event that certain components of the Project fail to generate specified levels of transient occupancy tax (as that term is used in La Quinta Municipal Code Chapter 3.24) (hereinafter, "transient occupancy tax" or "TOT"); (iii) setting forth a payment schedule for the Developer's payment to the City of Three Hundred Forty -Six Thousand Eleven Dollars ($346,011), to cover the Developer's contribution towards the cost of certain landscaping improvements the City desires to install within certain portions of the real property adjacent to the Site; (iv) requiring the Developer, at its sole cost, to construct a neighborhood park on certain real property owned in fee by the City; and (v) setting forth the extent to which Developer may construct, develop, use and operate the Project. E. On or about September 23, 2004, Agency and Developer entered into that certain Amendment No. 1 to Disposition and Development Agreement (the "DDA Amendment") to revise (i) certain timeframes in the schedule of performance attached to the DDA; (ii) certain conditions that must be satisfied prior to the Agency's conveyance to Developer of the Site; and (iii) the transfer and assignment provisions in the DDA. F. City and Developer now wish to amend the Development Agreement to revise the transfer and assignment provisions in the Development Agreement in a manner consistent with the revisions made to the DDA transfer and assignment provisions pursuant to the DDA Amendment. G. The City Council has determined that this Amendment No. 1 is consistent with the City's General Plan and the Specific Plan, including the goals and objectives thereof. 0 H. All actions taken by City have been duly taken in accordance with all applicable ,GD OD � legal requirements, including the California Environmental Quality Act (Public Resources Code GD 0 Section 21000, et seq.) ("CEQA"), and all other requirements for notice, public hearings, r CU CU GD OD findings, votes and other procedural matters. @ 0 I. On October 5, 2004, the City Council adopted its Ordinance No. 395 approving this Amendment No. 1. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for valuable consideration the receipt and sufficiency of which is •� hereby acknowledged, the parties hereto agree as follows: 1. The Development Agreement is hereby amended as follows: 1.1 To replace Section 7.2.c with the following: C. A transfer of the Suites Hotel or the Suites Hotel Parcel to a limited liability company in which Developer is the managing member. 882/015610-0061 543302.01 a09/23/04 1.2 To replace Section 7.2.d with the following: d. A transfer of any of the Villas Residential Development, Villas Residential Development Parcel, Cluster/Perimeter Residential Development, Cluster/ Perimeter Residential Development Parcel, Casitas Development, or the Casitas Development Parcel(s) to Lennar Homes of California, Inc., a California corporation ("Lennar"). 1.3 To replace Section 7.2.e with the following: e. A transfer of the Sanctuary Villas Development or the Sanctuary Villas Parcel(s) to Lennar or to Center Point Sanctuary, LLC, a California limited liability company. 1.4 To replace the last paragraph of Section 7.2 with the following: In the event of a Transfer by Developer under subparagraphs (a) through (f) above not requiring the City's prior approval, Developer nevertheless agrees that at least thirty (30) days prior to such Transfer it shall give written notice to City of such assignment and satisfactory evidence that the assignee has assumed in writing through an assignment and assumption agreement all of the obligations of Developer of this Agreement; provided, however, that no such assignment and assumption agreement shall be required for transfers under subparagraphs (d) or (e) to Lennar, and upon such assignment Lennar shall be deemed to have assumed only those obligations hereunder that pertain to the portion of the Site and the component of the Project transferred to Lennar. In the event such transfer is under subparagraph (c) or (f) above, Developer shall, along with the notice required to be given pursuant to the immediately preceding sentence, provide City with evidence that such proposed transferee entity has been duly formed in {,, 0 accordance with the laws of the State of California. GDOD10 GD 0 0 2. City's approval of this Amendment No. 1 is conditioned upon Developer's execution, GD % "' concurrently with the execution hereof, of an Indemnification Agreement substantially in the form attached hereto and incorporated herein as Exhibit "B". 3. Except as otherwise expressly provided in this Amendment No. 1, all of the terms and conditions of the Development Agreement shall remain in full force and effect. 4. In the event of any action between City and Developer seeking enforcement of any of the terms and conditions to this Amendment No. 1, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 5. This Amendment No. 1 shall be construed according to its fair meaning and as if prepared by both parties hereto. 6. This Amendment No. 1 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Municipal and Superior Courts of the State of California in and for the County of Riverside, or 882/015610-0061 543302.01 a09/23/04 3 such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 1. Service of process on City shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 7. Time is of the essence of this Amendment No. 1 and of each and every term and provision hereof. 8. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by both City and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 9. Signatures of the parties transmitted by facsimile shall be deemed binding. However, each party agrees to submit their original signature to the other party within five (5) business days after execution hereof. 10. This Amendment No. 1 may be executed in counterparts, each of which, when this Amendment No. 1 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 11. The person(s) executing this Amendment No. 1 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No. 1 on behalf of said party, (iii) by so executing this Amendment No. 1 such party is formally bound to the provisions of this Amendment No. 1, and (iv) the entering into this Amendment No. 1 does not violate any provision of any other agreement to which such party is bound. [End — Signature Page Follows] 2064-8885963 882/015610-0061 543302.01 a09/23/04 IN WITNESS WHEREOF, City and Developer each hereby represents that it has read this Amendment No. 1, understands it; and hereby executes this Amendment No. 1 to be effective as of the day and year first written above. Date: 2 . , 2004 Date: C.:r �$ , 2004 Date: ePct Z F , 2004 ATTEST: Jun , City Clerk APPROVED AS O FORM: 7Z � rRUTUC P By. ne Jenson, to Attorney "Developer" CP DEVELOPMENT LA QUINTA; LLC, a California limited liability company` By: Oliphant Family Trust Its: Member By: Richard Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager B Y• Richard Oliphant Its: President "City" CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of C o By: City Manager 1111111111111111111111111111111111111111111111111111 1iiee�8�6� 882/015610-0061 543302.01 a09/23/04 STATE OF CALIFORNIA ) ) ss COUNTY OF ) On oI a-8 I Z4t,�4 , before men personally appeared personally known to me (or proved to me on th basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. ,V"wan # INow Sib904 pMNlicio CouMY ° Oct tb [SEAL] STATE OF CALIFORNIA ) ) ss COUNTY OFF _� ) Notary Public 1 personally appeared�-a-ha-a- personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. W M, -�- 'MhL 'M' "ft' - (a , iLz Jc� M4MACorrrrMon # 1370,18 Notary Public Notwy KAft - CMw-joI Riverside County My Corm►. EMW Oct 16► 2006 C004-0$$�063 11/08/2004 08:00A 6 of 15 882/015610-0061 543302.01 a09/23/04 EXHIBIT "A" LEGAL DESCRIPTION OF THE SITE IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO. 23971-13, ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 00027'38" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026'40" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 89033'22" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 0002640" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41042'33"9 AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044'32" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45027'41 ", AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 108979, O.R. lul llll1 11 111lal lu 11 lull lu lill 7 of 15 11ie�4eee+ea6een 882/015610-0061 543302.01 a09/23/04 1 THENCE SOUTH 00012' 13" EAST ALONG SAID EASTERLY LINE, A DISTANCE OF 790.73 FEET TO AN ANGLE POINT THEREIN; THENCE SOUTH 43056'42' WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL licit, A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42059'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 02057146119 AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL licit AND ITS NORTHWESTERLY PROLONGATION NORTH 64021'03" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO.2555289 O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO, SAID POINT BEARS NORTH 86011'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 005'41 ", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 75033102" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17033123" EAST; 2904-9885963 882/015610-0061 543302.01 a09/23/04 -2- THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00 32 28 , AN ARC DISTANCE OF 23,61 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT B. SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06"3, AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006'56" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013' 18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02012'44", AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 67006'56" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001' 12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19058'08", AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028'37" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36057'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18051'35"9, AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. 2864-9885963 882/015610-0061 543302.01 a09/23/04 "3" SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (19,850,000 SQUARE FEET), MORE OR LESS. 2904-0885963 882/015610-0061 543302.01 a09/23/04 �- EXHIBIT "B" INDEMNIFICATION AGREEMENT [See Following Pages] '/5663 �8SO: 098 8 882/015610-0061 543302.01 a09/23/04 _ 1 INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT ("Indemnification Agreement") is made and entered into as of , 20049 by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"), and the CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of California ("City"), with reference to the following Recitals: RECITALS A. On or about December 18, 2003, Developer and the La Quinta Redevelopment Agency ("Agency") entered into that certain Disposition and Development Agreement (the "DDA"), pursuant to which, among other things, (i) Agency agreed to sell to Developer, and Developer agreed to purchase from Agency certain real property identified therein as the "Property", which is located in the City of La Quinta, County of Riverside, State of California, and (ii) Developer agreed to construct, complete, and operate on the Property a commercial project containing a medical office/surgical facility, a development containing privately owned villas (the "Sanctuary Villas Development"), a mid -price suites hotel, a resort -style condominium/casitas development (the "Casitas Development"), two (2) sit-down restaurants, and two (2) single-family residential developments (the "Residential Component"), with forty (40) of the single-family homes restricted for sale to moderate -income buyers at restricted sales prices, all as more particularly described in the DDA (collectively, the "Project). B. Concurrently with the Developer's and Agency's execution of the DDA, Developer and the City entered into that certain Development Agreement dated December 18, 2003, and recorded on January 5, 2004, as Instrument No. 2004-0005256, in the Official Records of Riverside County (the "Development Agreement"), which, among other terms, (i) sets forth a payment schedule for Developer's mitigation payments to the City; (ii) sets forth a schedule for Developer's payment to the City of Three Hundred Forty -Six Thousand Eleven Dollars GD 10 ($346,011) as Developer's financial obligation toward certain landscaping improvements to be "� co o installed on a portion of the Property; (iii) requires Developer, at its sole cost, to construct a GD % ~ neighborhood park on certain real property owned in fee by the City; and (iv) sets forth the GD CU% extent to which Developer may construct, develop, use and operate the Project, all as more particularly described in the Development Agreement. C. Developer initially informed the City and Agency that the Residential Component would be constructed by Ehline Development Co., a California corporation ("Ehline Development Co."). As a result, both the DDA and Development Agreement, as originally executed, permit Developer to transfer and assign the Residential Component to Ehline Development Co. or to an affiliated entity of Ehline Development Co. (an "Affiliated Entity"). The term "Ehline" shall be used hereinafter to refer to, collectively, Ehline Development Co. and the Affiliated Entities. D. On or about September 23, 2004, Agency and Developer entered into that certain Amendment No. 1 to Disposition and Development Agreement (the "DDA Amendment") to, 882/015610-0061 543302.01 a09/23/04 -2- among other revisions, omit Ehline as a permitted assignee/transferee of the Residential Component and to instead permit the assignment/transfer of the Residential Component and also the Casitas Development and the Sanctuary Villas Development to Lennar Homes of California, Inc., a California corporation ("Lennar"). E. The City has prepared an amendment to the Development Agreement (the "Development Agreement Amendment") to revise the transfer and assignment provisions in the Development Agreement in a manner consistent with the revisions made to the DDA. The City has expressly conditioned its approval of the Development Agreement Amendment on Developer's execution of an indemnification agreement substantially in the form hereof. F. The parties hereto now wish to impose on Developer the obligation to indemnify the City, as more particularly defined in this Indemnification Agreement, against any claims regarding the assignment/transfer revisions set forth in the Development Agreement Amendment or resulting from the City's approval of the Development Agreement Amendment, or arising from Ehline's entry onto the Property, or Ehline's or Developer's obligations to third parties including but not limited to those who have prepared plans or conducted work in furtherance of the Project. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: AGREEMENT 1. Indemnification by Developer. Developer hereby agrees that it shall indemnify, defend, and hold harmless City and City's officers, officials, members, employees, agents, consultants, and representatives, from and against any and all claims, liabilities, damages, losses, cc suits, costs and expenses (including but not limited to expert witness fees and reasonable CD�?attorneys' fees) of every kind, nature, and type asserted by any person or entity arising out of the coo City's agreement, as set forth in the Development Agreement Amendment, to revise the CEOassignment/transfer provisions set forth in the Development Agreement, or result ing from the GD C City's approval of the Development Agreement Amendment, or arising from Ehline s entry onto the Property, or Ehline's or Developer's obligations to third parties including but not limited to those who have prepared plans or conducted work in furtherance of the Project, including, but not limited to, persons or entities who have designed or prepared plans or conducted any other work related to the Project on behalf of Ehline or Developer 11.1 Developer's indemnification obligations herein are in addition to the indemnification obligations contained in the Development Agreement, and nothing herein is intended to amend or limit Developer's indemnification obligations set forth in the Development Agreement. In the event of any conflict between the indemnification obligations herein and those contained in the Development Agreement, the indemnification provisions which provide the greatest protection to the City shall prevail. 2. Non -liability of City Officers and Employees. No officer, official, member, employee, agent, or representative of City shall be personally liable to Developer, or any 882/015610-0061 _ 543302.01 a09/23/04 -3 successor or assign of same, in the event of any default or breach by City, or for any amount which may become due to City, or any successor or assign of same, or for breach of any obligation of the terms of this Indemnification Agreement 3. Successors and Assigns. This Indemnification Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties hereto. 4. Governing Law. This Indemnification Agreement shall be governed by and construed in accordance with the laws of the State of California. 5. Further Assurances. The parties covenant and agree that they will execute such other and further instruments and documents as are or may become necessary or convenient to effectuate and carry out this Indemnification Agreement. 6. Authority of Signatories to Bind Principals. The persons executing this Indemnification Agreement on behalf of their respective principals represent that (i) they have been authorized to do so and that they thereby bind the principals to the terms and conditions of this Indemnification Agreement and (ii) their respective principals are properly and duly organized and existing under the laws of, and permitted to do business in, the State of California. 7. Interpretation. The paragraph headings of this Indemnification Agreement are for reference and convenience only and are not part of this Indemnification Agreement. They have no effect upon the construction or interpretation of any part hereof. The provisions of this Indemnification Agreement shall be construed in a reasonable manner to effect the purposes of the parties and of this Indemnification Agreement. 8. Attorney's Fees. In the event that a party to this Indemnification Agreement brings an action against another party hereto by reason of the breach of any condition, covenant, representation or warranty in this Indemnification Agreement, or otherwise arising out of this Indemnification Agreement, the prevailing party in such action shall be entitled to recover from the non -prevailing party expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 9. Counterparts. This Indemnification Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. [END — SIGNATURE PAGE FOLLOWS] 2894-0885663 882/015610-0061 _ 543302.01 a09/23/04 IN WITNESS WHEREOF, this Indemnification Agreement has been executed by the parties as of the date set forth above. Dated: - Dated: Dated: ATTEST: City Clerk APPROVED AS TO FORM: RUTAN & TUCKER, LLP By M. Katherine Jenson, City Attorney "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "City" CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of California Bv: Thomas Genovese Title: Executive Director 2094-0885063 982/015610-0061 543302.01 a09/23/04 _5 t N cordino RequeSt Y Re �. � First American Title Company RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:) La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attention: Executive Director Doc a 0004-0s7s 143 12/09/2004 08:00A Fee:NC Page 1 of 32 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder NIL, Wn I i III IL Ja EMEENMOMM2021 MWENWOMMMIFFAiVa MW (Space Above for Recorder's Use) (Exempt from Recordation Fee per Gov. Code § 27383) DECLARATION OF COVENANTS, CONDITIONS, T AND RESTRICTIONS FOR PROPERTY SG THIS DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS FOR PROPERTY (the "Declaration") is made by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company (the "Covenantor") and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency" or "Covenantee") as of the Jd4-4 day of A& VA006e e , 2004. RECITALS A. Covenantor is the fee owner of record of that certain real property (the "Property") located in the City of La Quinta, County of Riverside, State of California, legally described in the attached Exhibit "A", which Property Covenantor acquired from Agency pursuant to a Grant Deed recorded concurrently herewith. B. This Declaration and the Grant Deed described in Recital A are part of a redevelopment project described in that certain Disposition and Development Agreement entered into by and between Covenantor and Covenantee on or about December 18, 2003, and amended on or about October 28, 2004 (the "DDA"). As described in the DDA, the Property includes not less than fifty-four (54) single family lots on each of which Covenantor shall construct a single family home, forty (40) of which single family homes shall be held for sale to "Eligible Buyers" (the "Affordable Housing Component") (as that term is defined in Section Lf hereof) (the "Project"). To assist Covenantor with the construction of the Affordable Housing Component, Covenantee has agreed to provide financial assistance to Covenantor, in the form of a loan (the "Covenantee Loan"). Repayment of the Covenantee Loan will be secured by a promissory note (the "Note") and a deed of trust (the "Deed of Trust"). The DDA provides that at the close of escrow for Covenantor's sale of one of the "Affordable Homes" (as that term is defined in Section Lb hereof) to an Eligible Buyer, Covenantor may transfer a portion of the Covenantee Loan to such Eligible Buyer, in the form of downpayment assistance provided from the Covenantor to the Eligible Buyer, and the outstanding balance due from Covenantor to Covenantee under the Note and the Deed of Trust will automatically be reduced by a like amount, all as further described in the DDA. 882/015610-0061 555941.02 al1/09/04 C. The Property is within the La Quinta Redevelopment Project No. 2 (the "Project Area") in the City of La Quinta and is subject to the provisions of the Redevelopment Plan for the Project Area (the "Redevelopment Plan"). D. The Community Redevelopment Law (California Health and Safety Code 33000 et seq.) provides that a redevelopment agency shall establish covenants running with the land in furtherance of redevelopment plans. NOW, THEREFORE, THE COVENANTEE AND THE COVENANTOR AGREE AS FOLLOWS: 1. Definitions. a. "Affordability Period" for each Affordable Home shall be forty-five (45) years from the date said Affordable Home is transferred to an Eligible Buyer, as evidenced by the recordation of a Buyer Affordable Housing Agreement by said Eligible Buyer. b. "Affordable Homes" shall mean the forty (40) single family homes in the Project that are restricted for sale to Eligible Buyers. Any individual such home shall be referred to as an "Affordable Home." Each of the Affordable Homes shall be subject to the restrictions of this Declaration. C. "Affordable Housing Cost" shall be that purchase price which would result in monthly housing payments, including the cost for a thirty (30) year mortgage for that portion of the purchase price which is to be paid in the form of loan proceeds under currently prevailing mortgage loan rates or the interest rate of any below -market mortgage program for which such purchaser has obtained a first trust deed loan, of (i) for households which earn not more than one hundred ten percent (110%) of Riverside County median income, not less than twenty-eight percent (28%) of the gross income of the household, nor more than thirty-five percent (35%) of one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate for the Affordable Home, or (ii) if the gross income of the household exceeds one hundred ten percent (110%) of Riverside County median income, not more than thirty-five percent (35%) of the actual gross income of the household. A sample calculation of an Affordable Housing Cost for the Affordable Homes is set forth on Exhibit `B", which is attached hereto and incorporated herein by this reference ("Calculation of Affordable Housing Costs"). d. "Buyer Affordable Housing Documents" shall collectively refer to the following documents, all of which shall be required to be executed by each buyer of an Affordable Home to assure the affordability of the Affordable Home to Eligible Buyers: (i) an affordable housing agreement that prohibits the resale of the Affordable Home except to an Eligible Buyer and grants the Covenantee an option to purchase the Affordable Home ("Option to Purchase") in the event the buyer is unable to locate an Eligible Buyer ("Buyer Affordable Housing Agreement"); (ii) a Memorandum reciting Covenantee's Option to Purchase ("Buyer Memorandum re Option to Purchase"); (iii) a promissory note ("Buyer Promissory Note") whose terms shall include a second deed of trust securing the Buyer Promissory Note ("Buyer Second Trust Deed"); and (iv) a disclosure statement acknowledging and consenting to all of the 8821015610-0061 555941.02 a11/09/04 2 affordability restrictions contained in the aforementioned documents ("Buyer Disclosure Statement"). e. "Covenantor" shall mean Covenantor and any successor in interest of Covenantor to the Site or any portion thereof. f. "Eligible Buyer" shall mean a buyer of one of the Affordable Homes in the Project who qualifies as a "person or family of moderate income" within the meaning of California Health and Safety Code Section 50093 (i.e., households whose household income, adjusted for family size, do not exceed one hundred twenty percent (120%) of the Riverside County Median Income). g. "Owner" shall mean an Eligible Buyer to whom Covenantor has conveyed fee title to one of the Affordable Homes or any successor in interest to said Eligible Buyer to all or any portion of the Affordable Home. h. "Proposed Buyer" shall mean a person or family determined to be an Eligible Buyer, to whom the Covenantor or any successor Owner desires and proposes to Transfer an Affordable Home. i. "Purchase Housing Cost" for an Eligible Buyer purchasing an Affordable Home shall be a cost that includes all of the following associated with that Affordable Home, estimated or known as of the date of the proposed sale of the Affordable Home: (1) Principal and interest on a fixed rate mortgage loan including any rehabilitation loans, and any loan insurance fees associated therewith. (2) Property taxes and assessments. (3) Fire and casualty insurance covering replacement value of property improvements. (4) Any homeowner association fees. (5) Estimate of utilities cost. (6) Estimate of property maintenance costs. The sum of (1) through (6), inclusive, shall not exceed the Affordable Housing Cost. j. "Sales Price" shall mean all sums paid by an Eligible Buyer to Covenantor for, or in conjunction with, the acquisition of an Affordable Home, including the purchase price designated in any purchase agreement, consideration for personal property and all other costs and fees paid by the Eligible Buyer to or for the benefit of the Covenantor. k. "Transfer" shall mean (i) any sale, assignment, or transfer of an interest in an Affordable Home, including, without limitation, a fee simple interest, tenancy in common, 882/015610-0061 555941.02 a11/09/04 3 joint tenancy, community property, tenancy by the entireties, life estate, or other limited estate, leasehold interest or any rental of the Affordable Home, or (ii) any interest evidenced by a land contract. 1. "Unrestricted Homes" shall mean the fourteen (14) single-family homes in the Project that are not restricted for sale to Eligible Buyers. Each individual such home shall be referred to as an "Unrestricted Home." Notwithstanding the foregoing, this Declaration shall be subordinate to the lien of a first deed of trust against the Property, and shall not impair the rights of any institution or lender which is the maker of a loan secured by such first deed of trust, or such lender's assignee or successor in interest, to exercise its remedies under the deed of trust in the event of default under the first deed of trust by the Covenantor. Such remedies under the first deed of trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, the affordability covenants and the transfer restrictions set forth in Sections 1, 2, 3 and 7 of this Declaration as to each lot covered by this Declaration that is the subject to the foreclosure, shall be forever terminated and shall have no further effect as to the Property or any transferee thereafter; provided, however, if the holder of such deed of trust acquired title to the Property pursuant to a deed or assignment in lieu of foreclosure, said Sections 1, 2, 3 and 7 of this Declaration shall automatically terminate upon such acquisition of title, provided that (i) the Covenantee has been given written notice of a default under such first deed of trust; and (ii) the Covenantee shall not have cured the default under such first deed of trust within the thirty (30) day period provided in such notice sent to the Covenantee. Notwithstanding any other provision hereof, the nondiscrimination covenants and the maintenance requirements set forth in this Declaration shall remain in full force and effect as to the Property and any transferee. 2. Sale of Affordable Homes. Covenantor agrees that Covenantor shall sell each Affordable Home to an Eligible Buyer at an Affordable Housing Cost and that during the Affordability Period for such Affordable Home each subsequent resale thereof by the then -Owner shall be to an Eligible Buyer at an Affordable Housing Cost. Covenantor agrees that this Declaration shall be recorded against the Property concurrently with the close of escrow pursuant to which Covenantor acquired fee title to the Property. Covenantor agrees to commence to market each Affordable Home not later than the completion of construction of said Affordable Home and agrees to sell the Affordable Homes on a proportionate basis with the Unrestricted Homes. For example, Covenantor agrees to sell two (2) Affordable Homes prior to selling each Unrestricted Home. Escrow for the Transfer of an Unrestricted Home by Covenantor to a purchaser shall not close until after escrow closes for the Transfer of two (2) of the Affordable Homes. In the event Covenantor sells all of the homes in the Project, but does not sell all forty (40) of the Affordable Homes to Eligible Buyers, then within thirty (30) days after the close of escrow for the last home sold (whether such home is an Affordable Home or an Unrestricted Home), Covenantor shall be required to (i) repay to Covenantee the then -outstanding balance owed under the Note, in accordance with the terms thereunder, and, to the extent permitted by law, (ii) pay to Covenantee the sum of One Hundred Fifty Thousand Dollars ($150,000) for each 982/015610-0061 555941.02 a11/09/04 -4- Affordable Home that was sold to a buyer who does not qualify as an Eligible Buyer (the "Damage Amount"); provided, however, that nothing herein shall be deemed to limit Covenatee's remedy for a violation under this Section 2 to seeking monetary damages, and Covenantee shall be entitled to pursue any other equitable remedy permitted by law, including specific performance or injunctive relief, to prevent such a violation. For example, if Covenantor sells 20 of the homes in the Project as Unrestricted Homes, and 34 of the homes in the Project as Affordable Homes, then Covenantor shall pay to Covenantee, in addition to all amounts then -outstanding under the Note, the sum of $900,000 [(40 — 34) x $150,000]. THE PARTIES HERETO AGREE THAT THE DAMAGE AMOUNT CONSTITUTES A REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT COVENANTEE WOULD SUFFER DUE TO THE DEFAULTS BY COVENANTOR SET FORTH IN THIS SECTION 2, CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE EXECUTION DATE HEREOF, INCLUDING THE RELATIONSHIP OF THE DAMAGE AMOUNT TO THE RANGE OF HARM TO COVENANTEE AND ACCOMPLISHMENT OF COVENANTEE' S PURPOSE OF ASSISTING IN THE PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE BUYERS THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT. THE DAMAGE AMOUNT SET FORTH IN THIS SECTION 2 SHALL BE THE SOLE DAMAGES REMEDIES FOR THE DEFAULTS SET FORTH IN THIS SECTION 2, BUT NOTHING IN THIS SECTION 2 SHALL BE INTERPRETED TO LIMIT COVENANTEE' S REMEDY FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY. IN PLACING ITS INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN REPRESENTED BY COUNSEL OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY COUNSEL TO EXPLAIN THE CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT. kt- COVENANTEE'S INITIALS: COVENANTOR'S INITIALS. Notwithstanding any of the above, nothing herein is intended to preclude the Covenantee's recovery of its attorney's fees and costs incurred to enforce this Section, as provided in Section 14. For purposes of satisfying the requirement that all of the Affordable Homes shall be occupied by Eligible Buyers: (a) an individual or family who qualifies as an Eligible Buyer at the time he or she first takes title to an Affordable Home will be deemed an Eligible Buyer as long as he or she continues to hold title to such Affordable Home even though the Eligible Buyer subsequently ceases to meet the income requirements of an Eligible Buyer, and (b) when an Owner releases title to an Affordable Home, such home will be considered as occupied by an Eligible Buyer if it is held vacant and available for such occupancy until title is transferred to another Eligible Buyer. 882/015610-0061 555941.02 a] 1/09/04 5 3. Restrictions on Transfer by Sale of the Propelly or Any Affordable Home. a. For the duration of the Affordability Period, Covenantor, for itself and any subsequent Owner of an Affordable Home, hereby subjects the Property to certain restrictions and limits the price at which Covenantor or any Owner of an Affordable Home may sell and/or resell said Affordable Home and the persons to whom Covenantor or any Owner of an Affordable Home may sell said Affordable Home. b. COVENANTOR UNDERSTANDS THAT THE DETERMINATION OF THE SALES PRICE FOR THE AFFORDABLE HOMES CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, PROPERTY TAXES AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED AND THAT THE SALES PRICE PERMITTED HEREUNDER FOR THE AFFORDABLE HOMES MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR FURTHER ACKNOWLEDGES THAT IN SETTING THE SALES PRICE FOR THE AFFORDABLE HOMES, THE PRIMARY OBJECTIVE OF THE COVENANTEE AND THIS DECLARATION IS TO PROVIDE HOUSING TO ELIGIBLE BUYERS AT AN AFFORDABLE HOUSING COST. THE SALES PRICE MAY BE LESS THAN OTHER SIMILAR PROPERTIES WHICH HAVE NO RESTRICTIONS. Covenantor's Initials C. Transfer of an Affordable Home. Covenantor may Transfer an Affordable Home only in strict accordance with the provisions of this Declaration. Specifically, during the Affordability Period, Covenantor may transfer an Affordable Home (i) only to an Eligible Buyer whose assets immediately prior to the close of escrow for the Affordable Home do not exceed the limits set forth in the Asset Limitation Requirements set forth in the La Quinta Housing Program Implementation Manual, (ii) only if the Purchase Housing Cost does not exceed the Affordable Housing Cost for the Eligible Buyer; and (iii) only if the Transfer has previously been approved in writing by the Covenantee. In order to comply with this Subsection 3(c), Covenantor must calculate the Affordable Housing Cost for the Proposed Buyer of the Affordable Home in accordance with the definition set forth in Section 1(c) of this Declaration. The Covenantor should contact the Covenantee housing staff to obtain assistance in determining this calculation. After calculating the Affordable Housing Cost for the Proposed Buyer, the Covenantor must ensure that the sum of the Sales Price and all costs listed in the definition of Purchase Housing Cost set forth in Section l (i) of this Declaration does not exceed an Affordable Housing Cost. The calculation of the Sales Price under this Section 3(c) is illustrated by example in the Calculation of Affordable Housing Cost. d. Notwithstanding anything to the contrary in this Section 3, at close of the escrow pursuant to which the Covenantor shall transfer an Affordable Home to an Eligible 882/015610-0061 555941.02 al1/09/04 -6- Buyer, the Eligible Buyer shall execute a complete set of Buyer Affordable Housing Documents as described in Section 1(d) hereof. e. The foregoing provisions will apply to every successive Transfer during the Affordability Period except that the then -Owner shall be responsible for complying with the requirements of the Covenantor as set forth in this Section 3. 4. Process to Complete Transfer by Sale of Affordable Homes. Prior to the Transfer by sale of an Affordable Home, Covenantor shall do all of the following: a. Notice to Covenantee: Covenantor shall send to the Covenantee in care of the La Quinta Housing Department (or its successor), at P.O. Box 1504, La Quinta, California 92253, the form attached hereto and incorporated herein as Exhibit "C" ("Request for Approval of Proposed Buyer") fully completed and executed by the Covenantor and the Proposed Buyer. b. Qualification of Proposed Buyer. No Transfer shall occur unless and until determination is made based on the Request for Approval of Proposed Buyer that the Proposed Buyer (i) intends to occupy the Affordable Home as the Proposed Buyer's principal residence and (ii) is an Eligible Buyer whose assets at the close of escrow for the Affordable Home do not exceed the limits set forth in the Asset Limitation Requirements, which are attached to the La Quinta Housing Program Implementation Manual as Attachment 1. Each Request for Approval of Proposed Buyer shall include a statement by the Proposed Buyer certifying its intent with regard to the occupancy of the Affordable Home and as to the truth and accuracy of all information supplied as to the Gross Income (calculated as set forth in 25 Cal. Code of Regs., Section 6914) of the Proposed Buyer. Covenantor shall certify pursuant to the Request for Approval of Proposed Buyer the information provided on said request form. Covenantor shall be entitled to rely on the information on the Request for Approval of Proposed Buyer and attachments thereto in making the determination required by this subsection 4(b) unless the Covenantor has knowledge of, or a reasonable basis for belief as to the inaccuracy or falsehood of the Request for Approval of Proposed Buyer. C. Affordable Home Sales Price. The Sales Price for the Affordable Home shall not exceed the maximum price at which the Purchase Housing Cost to be paid by the Proposed Buyer would not exceed the Affordable Housing Cost. The calculation of the Sales Price under this subsection is illustrated by the Calculation of Affordable Housing Cost. However, in determining the Affordable Housing Cost, the family size of the Proposed Buyer shall be deemed to be 1 person in the case of a studio Affordable Home, 2 persons in the case of a 1 bedroom Affordable Home, 3 persons for a 2 bedroom Affordable Home, 4 persons for a 3 bedroom Affordable Home, or 5 persons for a 4 bedroom Affordable Home. If the actual family size of the Proposed Buyer is larger, then the actual family size shall be used. d. Certificates from Covenantor and Proposed Buyer. With respect to each initial sale of an Affordable Home, Covenantor shall submit to the Covenantee, not later than four (4) weeks prior to close of escrow on the sale of the Affordable Home, a certificate that (i) the Covenantor has made the affirmative determinations required by Section 4(b) above and (ii) 882/015610-0061 555941.02 al1/09/04 7 the Sales Price conforms with Section 4(c) above. The Covenantor shall concurrently submit to the Covenantee the Request for Approval of Proposed Buyer and all attachments thereto and all other documents or material with regard to information required by Section 4(a) and/or (b) above, whether or not relied on by the Covenantor. Further, the Covenantor and Proposed Buyer each shall certify in writing, in a form acceptable to the Covenantee, that the Transfer shall be closed in accordance with, and only with, the terms of the sales contract and other documents submitted to and approved by the Covenantee and that all consideration delivered by the Proposed Buyer to Covenantor has been fully disclosed to the Covenantee. The written certificate shall also include a provision that, in the event a Transfer is made in violation of the terms of this Declaration or false or misleading statements are made in any documents or certificate submitted to the Covenantee for its approval of the Transfer, the Covenantee shall have the right to file an action at law or in equity to seek termination and/or rescission of the sales contract and/or declare the sale void, notwithstanding the fact that the Transfer may have closed and become final as between Covenantor and its Proposed Buyer. In the event Covenantor fails to comply with Sections 4(a) or 4(b) above, any costs, liabilities or obligations incurred by the Covenantor and its Proposed Buyer for the return of any monies paid or received or for any costs and legal expenses, shall be borne jointly and severally by the Covenantor and its Proposed Buyer and such parties shall hold the City of La Quinta ("City") and Covenantee harmless and reimburse their expenses, legal fees and costs for any action and City and/or Covenantee take in enforcing the terms of this Section 4(d). e. Execution of Buyer Affordable Housing Documents. Notwithstanding anything to the contrary in this Agreement, at close of escrow of the sale of the Affordable Home from the Covenantor to an Eligible Buyer, the Eligible Buyer shall execute a complete set of Buyer Affordable Housing Documents. The Buyer Affordable Housing Documents require, among other things, that during the Affordability Period for said Affordable Home, (i) the Affordable Home must be owner -occupied at all times and cannot be rented or leased; (ii) the Affordable Home may only be Transferred at an Affordable Housing Cost to an Eligible Buyer; and (iii) the maximum permitted sales price for the Affordable Home may be less than fair market value. f. Delivery of Documents. Upon the close of the proposed Transfer, the Covenantor shall provide the Covenantee with a certified copy of the recorded documents, a copy of the final sales contract, settlement statement, escrow instructions, all certificates required by this Section 4 and any other documents which the Covenantee may request. COVENANTOR UNDERSTANDS THAT THE DETERMINATION. OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED BUYER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE AFFORDABLE HOME AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR FURTHER ACKNOWLEDGES THAT IN SETTING THE TRANSFER PRICE THE 882/015610-0061 555941.02 al1/09/04 -8- PRIMARY OBJECTIVE OF THE COVENANTEE AND THIS DECLARATION IS TO PROVIDE HOUSING TO ELIGIBLE BUYERS AT AN AFFORDABLE HOUSING COST. The covenant contained in this Section 4 Affordable Home, shall automatically terminate an Expiration Date set forth in Section 12 hereof 5. Nondiscrimination Covenants d shall run with the land and, as to each be of no further force or effect upon the Covenantor by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall Covenantor itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. Covenantor, and its successors and assigns, shall refrain from restricting the rental or lease (if permitted by Covenantee) or sale of the Property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases, or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: a. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." C. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the 882/015610-0061 555941.02 a]1/09/04 9 premises, nor shall the transferee himself of herself, or any person claiming under or through him -or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees or vendees of the premises." Nothing in this Section 5 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. The covenants in this paragraph 5 shall run with the land in perpetuity. 6. Maintenance of Property Covenantor shall properly maintain the buildings, landscaping and yard areas on the Property as follows: a. No improperly maintained landscaping shall be visible from public rights - of -way, including: (1) no lawns with grasses in excess of six (6) inches in height; (2) no untrimmed hedges; (3) no trees, shrubbery, lawns, and other plant life dying from lack of water or other necessary maintenance; and (4) no trees and shrubbery grown uncontrolled without proper pruning; (5) no vegetation so overgrown as to be likely to harbor rats or vermin; (6) no dead, decayed, or diseased trees, weeds, and other vegetation. b. No yard areas shall be left unmaintained, including: (1) no broken or discarded furniture, appliances, and other household equipment stored in yard areas for periods exceeding one (1) week; (2) no packing boxes, lumber, trash, dirt, and other debris stored in yards for periods exceeding one (1) week in areas visible from public property or neighboring properties; (3) no unscreened trash cans, bins, or containers stored for unreasonable periods in areas visible from public property or neighboring properties; and areas. (4) no vehicles parked or stored in areas other than approved parking C. No buildings may be left in an unmaintained condition, including: (1) no violations of state law, Uniform Codes, or City ordinances; 882/015610-0061 _ 1 O- 555941.02 a11/09/04 (2) no condition that constitutes an unsightly appearance that detracts from the aesthetics or property value of the subject property or constitutes a private or public nuisance; (3) no broken windows or chipped, cracked, or peeling paint; and (4) no conditions constituting hazards and/or inviting trespassers or malicious mischief; and (5) no graffiti. 7. Covenantee's Right of Reverter Covenantee shall have the additional right, at its option, to reenter and take possession of the Property, or portion thereof, with all improvements thereon and revest in the Covenantee the estate theretofore conveyed to the Covenantor, if after conveyance of title to the Property and prior to issuance of the Certificate of Completion for the lot or lots in question, the Covenantor shall: a. Fail to proceed with the construction of the Project as required by the DDA (subject to any force majeure delays) for a period of ninety (90) days after written notice of such abandonment or suspension from the Covenantee subject to any force majeure delays under Section 702 of the DDA; or b. Abandon or substantially suspend construction of the improvements for a period of ninety (90) days (subject to any force majeure delays) after written notice of such abandonment or suspension from the Covenantee; or C. Transfer or suffer any involuntary transfer of the Property or any part thereof in violation of the DDA. Such right to reenter, repossess and revest to the extent provided in this Declaration shall be subordinate and subject to and be limited by and shall not defeat, render invalid or limit: (1) Any mortgage, deed of trust or other security instrument permitted by the DDA; or (2) Any rights or interest provided in the DDA for the protection of the holder of such mortgages, deeds of trust or other security instruments. Upon the revesting in the Covenantee of title to the Property or any part thereof as provided in this Section 7, the Covenantee shall, pursuant to its responsibilities under state law, use its best efforts to resell the Property or part thereof as soon and in such manner as the Covenantee shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan to a qualified and responsible party or parties (as determined by the Covenantee) who will assume the obligation of making or completing the improvements, or such other improvements in their stead, as shall be satisfactory to the Covenantee and in accordance 882/015610-0061 555941.02 al 1/09/04 -11- with the uses specified for the Property or part thereof in the Redevelopment Plan. Upon such resale of the Property, the proceeds thereof shall be applied: (i) First, to reimburse the Covenantee on its own behalf or on behalf of the City for all costs and expenses incurred by the Covenantee (excluding salaries to personnel and other items of overhead of the Covenantee or the City) in connection with the recapture, management and resale of the Property or part thereof (but less any income derived by the Covenantee from the Property or part thereof in connection with such management); all taxes, assessments and water and sewer charges with respect to the Property or part thereof (or, in the event the Property is exempt from taxation or assessment or such charges during the period of ownership, then such taxes, assessments or charges as determined by the County of Riverside assessing official as would have been payable if the Property were not so exempt); any payments made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Covenantor; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Property or part thereof; and any amounts otherwise owing the Covenantee by the Covenantor; and (ii) Second, to reimburse the Covenantor up to the amount equal to the sum of: (a) the Purchase Price paid to the Covenantee by the Covenantor for the Property (or allocable to the part thereof); plus (b) the costs and expenses incurred by the Covenantor for the development of the Property and for construction of the improvements existing on the Property at the time of the reentry and repossession; less (c) any gains or income withdrawn or made by the Covenantor from the Property or the improvements thereon. Any balance remaining after such reimbursements shall be retained by the Covenantee as its property. To the extent that the rights established in this Section 7 involve a forfeiture, it must be strictly interpreted against the Covenantee, the party for whose benefit it is created. The rights established in this Section 7 are to be interpreted in light of the fact that the Covenantee will convey the Property to the Covenantor for development and not for speculation. 8. Covenants Do Not Impair Liens. No violation or breach of covenants, conditions, restrictions, provisions, or limitations contained in this Declaration shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security instrument. 9. Conflict with Other Laws; Severability. In the event that any provision of this Declaration is found to be contrary to applicable law, then the contrary provisions of this Declaration shall be deemed to mean those provisions which are enforceable and consistent with such laws and policies. The remaining portions of this Declaration shall be deemed modified in a manner which is consistent with the goals and intent of this Declaration to provide housing at an Affordable Housing Cost to Eligible Buyers. 882/015610-0061 -12- 555941.02 a11/09/04 Every provision of this Declaration is intended to be severable. In the event any term or provision of this Declaration is declared by a court of competent jurisdiction to be unlawful, invalid or unenforceable for any reason, such determination shall not affect the balance of the terms and provisions of this Declaration, which terms and provisions shall remain binding and enforceable. 10. Covenants for Benefit of City and Covenantee. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and the City and such covenants shall run in favor of the Covenantee and the City for the entire period during which such covenants shall be in force and effect, without regard to whether the Covenantee or the City is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee and the City, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 11. Notices, Demands and Communications. Written notices, demands and communications between the Covenantor and the Covenantee shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same - day or overnight courier service that provides a receipt showing date and time delivery, or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, as follows: Covenantor: CP Development La Quinta, LLC 77-900 Avenue of the States Palm Desert, CA 92611 Attn: Richard Oliphant copy to: Selzer, Ealy, Hemphill & Blasdel, LLP 777 Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill and Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Covenantee: La Quinta Redevelopment Agency Attention: Executive Director 78-495 Calle Tampico La Quinta, CA 92253 882/015610-0061 555941.02 al1/09/04 -13- copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. Such addresses for notice may be changed from time to time upon notice to the other party. Any written notice, demand or communication shall be deemed received immediately if delivered by hand or by reputable delivery service that provides a receipt with date and time of delivery and shall be deemed received on the third (3rd) calendar day from the date it is postmarked if delivered by registered or certified mail, postage prepaid, return receipt requested. 12. Expiration Date. This Declaration shall automatically terminate and be of no further force or effect as to each Affordable Home as of the termination of the Affordability Period for said Affordable Home, as described in Section 1 a hereof. 13. Effect on Unrestricted Homes. Notwithstanding anything herein to the contrary, with the exception of the nondiscrimination provisions set forth in Section 5 hereof, the provisions in this Declaration shall be effective only against the Affordable Homes, and shall not be effective or enforceable against the Unrestricted Homes. 14. Attorney's Fees. In the event any party hereto brings suit to enforce the terms of this Declaration or on account of breach hereof, the party not prevailing in such suit shall pay all reasonable costs and expenses incurred by the other party in such suit, including, without limitation, court costs, attorneys' fees, and expert witness fees 15. Counterparts. This Declaration may be executed in counterparts each of which, when both Covenantor and Covenantee have signed this Declaration, shall be deemed an original and shall constitute one and same instrument. [end — signature page follows] 882/015610-0061 555941.02 al1/09/04 -14- IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf of their respective officers hereunto duly authorized as of the date set forth above. } ad A (Coy nature ,�; must _l' M, :`Public) "COVENANTEE" THE LA QUINTA REDEVELOPMENT AG a blic body, co or e d politic By. Its: Executive Director "COVENANTOR" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By. Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President APPROVED AS TO FORM RUW & TUCKER LLP ; / I " �P 7 11A I A orney for the La Q ' edevelo t _ Agency 882/015610-0061 555941.02 a11/09/04 -15- STATE OF CALIFORNIA ) ) ss COUNTY OF giv _rsiae ) On November 10, 2004 , before me, Regenla Hensley, Notary Public a personally appeared THOpMS P . GENOVESE personally known tome ) to be the person(s) whose name(s) ism subscribed to the within instrument and acknowledged to me that he/,g� executed the same in hi authorized capacity(ies), and that by his signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. r STATE OF CALIFORNIA ) ) ss COUNTY OF Riverside ) On 1T.) I q0o Ll before me, personally appeared RTCHARu R. OLTPHANT personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. 882/015610-0061 -16- 555941.02 al1/09/04 STATE OF CALIFORNIA ) ) ss COUNTY OF ) On , before me, 31 personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 _ 17- 555941.02 a11/09/04 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY [See following pages] 882/015610-0061 555941.02 al1/09/04 EXHIBIT "A" LEGAL DESCRIPTION IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA; PARCEL 8 OF UNRECORDED PARCEL MAP NO. 31116 LYING WITHIN A PORTION OF THE SOUTHEAST QUARTER OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, SAN BERNARDINO BASE AND MERIDIAN, DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SOUTHEAST QUARTER; THENCE NORTH 89033'22" EAST ALONG THE NORTHERLY LINE OF SAID SOUTHEAST QUARTER, ALSO BEING THE CENTERLINE OF MILES AVENUE, A DISTANCE OF 927.69 FEET; THENCE PERPENDICULAR TO LAST MENTIONED COURSE, SOUTH 00026 38"EAST A DISTANCE OF 459.52 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 44044'32" EAST A DISTANCE OF 91.61 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 45027'41" AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO LAST MENTIONED CURVE NORTH 89°47'47" EAST A DISTANCE OF 239.56 FEET TO A POINT ON THE WESTERLY LINE OF TRACT MAP NO.23995-5, ON FILE IN BOOK 280, PAGES 73 THROUGH 75 INCLUSIVE, OF MAPS, RECORDS OF RIVERSIDE COUNTY CALIFORNIA; THENCE SOUTH 00012'13" EAST ALONG SAID WESTERLY LINE AND THE WESTERLY LINES OF TRACT MAP NO.23995-3 ON FILE IN BOOK 273, PAGES 48 THROUGH 51, INCLUSIVE, OF MAPS, AND TRACT MAP NO. 23995-8 ON FILE IN BOOK 284, PAGES 81 THROUGH 84, INCLUSIVE, OF MAPS, ALL IN THE RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, A DISTANCE OF 790.73 FEET; THENCE CONTINUING ALONG THE WESTERLY LINE OF SAID TRACT MAP NO.23995-8 SOUTH 43 5644 WEST A DISTANCE OF 152.65 FEET; THENCE LEAVING SAID WESTERLY LINE NORTH 50°10'13" WEST A DISTANCE OF 547.43 FEET; THENCE NORTH 03033'12" EAST A DISTANCE OF 536.86 FEET TO THE EXHIBIT "A" LEGAL DESCRIPTION BEGINNING OF A NON -TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 440.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 27033'13" WEST; THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 21033124", AN ARC DISTANCE OF 165.54 FEET TO THE TRUE POINT OF BEGINNING. SUBJECT TO EXISTING EASEMENTS AND RIGHTS OF WAY OF RECORD. CONTAINING 391,757 SQUARE FEET OR 8.993 ACRES, MORE OR LESS LAND fCHARLES HARRIS REG. EXP. 12/31= NO. 4989 OF -oop Pa EXHIBIT "A" W w ---------------���� Wl �1�------------ wo -----------_ N 89'33'22" E 997.30'--_---_ .-_ _------------- E� zi MILES VENUE_---- --� ----------------------------------------- i------ P.O.C. N NW COR. �' I SE 1/4 SEC. 19 W, � _ I NI I of IIN I I �me o� Q I I 1 "=200' r.IIRVE DATA NUMBER DELTA RADIUS ARC LENGTH TANGENT Cl 21'33'24" 440.00 165.54 83.76 C2 4527'41 " 80.00 63.48 33.52 I INE DATA NUMBER DIREC ION DISTANCE L1 S 43' 6'44" W 152.65' L2 S 44'44'32" E 91.61' EXHIBIT B CALCULATION OF AFFORDABLE HOUSING COST "Affordable Housing Cost" for the purposes of the Affordable Housing Agreement is that purchase price (inclusive of the proceeds of the Homebuyer Assistance) which would result in a monthly housing cost which is not less than twenty-eight percent (28%) of the gross income of the purchaser and does not exceed the greater of (a) the product of thirty-five percent (35%) times one hundred ten percent (110%) of Riverside County median income adjusted for family size appropriate for the unit for Eligible Buyers earning not more than one hundred ten percent (110%) of Riverside County median income, or (b) the product of thirty-five percent (3 5%) of the actual gross income of the household for Eligible Buyers earning more than one hundred ten percent (110%) of Riverside County median income. The following is a worksheet of how to calculate Affordable Housing Cost using the two methods set forth above: A. All Moderate Income Buyers Monthly housing costs may not exceed 1/12 of 35% x 110% of Riverside County Median Income adjusted for family size appropriate for the unit. For a two- bedroom housing Unit, monthly housing costs may not exceed 1/12 of 35% x 110% of Riverside County Median Income for a family of 3 (example of Median Income is $45,900 in Riverside County pursuant to regulations issued by the California Department of Housing and Community Development in March 2003, or $1,473). Monthly Housing Costs include: a. Mortgage Principal and Interest b. Private Mortgage Insurance C. Property Taxes d. Fire/Casualty Insurance e. Property Maintenance f. Utilities Allowance g. Homeowner's Association ("HOA") Fees For example, in the following situation, for a 2 bedroom housing Unit, assuming an 8% interest rate on a conventional loan, and assuming a down payment of at least 3% of the purchase price and an average second trust deed loan from the Agency of $60,000, the maximum loan amount would be $137,880 and the maximum purchase price would be $204,000 (down payment of $6,120 + Agency Loan of $60,000 + first trust deed loan of $137,880). The foregoing is based upon the following monthly housing costs: 882/015610-0061 555941.02 al l/09/04 a. Mortgage Principal and Interest $13005.00 b. Private Mortgage Insurance (Included in $0.00 Mortgage Interest Rate) C. Property Taxes $203.00 d. Fire/Casualty Insurance (Included in HOA) $45.00 e. Property Maintenance $20.00 f. Utilities Allowance $65.00 g. Homeowner's Association $120.00 TOTAL: $13,45 8.00 B. Buyer's Income is between 110% and 120% of Riverside County Median Income Under method (b), monthly housing costs may not exceed 1/12 of 35% of the purchaser's income, instead of the formula set forth in paragraph (a) above. For example, if the purchaser is a three -person household earning $54,000 monthly housing costs may not exceed $1,575. The maximum sales price would be calculated in the same manner as in paragraph (a) above. For example, if all the other assumptions stated in that paragraph also apply herein, the purchaser's maximum loan amount would be $149,520, and the maximum purchase price, absent the Agency Second Trust Deed Loan would be $156,000. The foregoing is based upon the following monthly housing costs: a. Mortgage Principal and Interest $1,090.00 b. Private Mortgage Insurance (Included in $0.00 Mortgage Interest Rate) C. Property Taxes $225.00 d. Fire/Casualty Insurance (Included in HOA) $50.00 e. Property Maintenance $20.00 f. Utilities Allowance $65.00 g. Homeowner's Association $120.00 TOTAL: $1,570.00 882/015610-0061 555941.02 al1/09/04 2 The foregoing are intended to be examples of how to calculate affordable housing cost, and the actual numbers will vary depending upon such factors as changes in median income, interest rates, amount of down payment, etc. Please see attached chart of Riverside County median income for moderate income purchasers. RIVERSIDE COUNTY 2003 Affordable Housing Costs for Home Purchase Programs for Persons of Moderate Income(3) (Income figures based on Department of Housing and Community Development Income Limits dated March, 2003) 1 Person Household 2 Person Household 3 Person Household Median Median Median Income $35,700 Income $40v800 Income $459900 Monthly Affordable Monthly Monthly Annual Housing Annual Affordable Annual Affordable Income(') Cost(2) Income Housing_Cost Income Housing Cost $42,850 $1,145 $48,950 $1,309 $55,100 $1,473 4 Person Household 5 Person Household 6 Person Household Median Median Median Income $51,000 Income $55,100 Income $590150 Monthly Monthly Monthly Annual Affordable Annual Affordable Annual Affordable Income Housing Cost Income Housing Cost Income Housing Cost $61,200 $1,636 $66,100 $1,768 $71,000 $1,898 7 Person Household 8 Person Household Median Median Income $639250 Income $679300 Monthly Monthly Annual Affordable Annual Affordable Income Housing Cost Income Housing Cost $75,900 $2,029 $80,800 1 $2,159 DEFINITIONS: 1. Annual Income: Gross income from all sources for all members of the household. 2. Monthly Housing Costs: Amount of mortgage payment principal and interest, mortgage insurance, property taxes, and property insurance. 882/015610-0061 555941.02 a11/09/04 3 3. Moderate Income Affordable Housing Costs: Assumes affordable housing costs computed at 35% of 110% of median income; may not be less than 28% of household's gross income. 982/015610-0061 555941.02 al1/09/04 4 EXHIBIT C REQUEST FOR APPROVAL OF PROPOSED BUYER [SEE ATTACHED PAGES] 882/015610-0061 555941.02 a11/09/04 REQUEST FOR APPROVAL OF PROPOSED BUYER THIS FORM MUST BE DELIVERED TO THE AGENCY BEFORE PROCEEDING WITH ANY TRANSFER OF THE PROPERTY. La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Project Officer Re: Request for Approval of Proposed Buyer To Whom It May Concern: The undersigned is the owner of real property in La Quinta, located at (the "Property"), which was developed with assistance from the Agency ("Owner"). The Owner now desires to transfer the Property and by this letter is requesting the Agency to approve the proposed buyer. l . The Proposed Buyer is: Name: Current Address: Telephone Number: 2. The terms of the proposed transfer are (a) Sales price of $ . This sales price is based on the lesser of W Fair market value; or The maximum price at which the Purchase Housing Cost of the Proposed Buyer would not exceed Affordable Housing Cost. The calculation of the Sales Price under this subsection (ii) is illustrated in Exhibit `B" to the Declaration of Covenants, Conditions, and Restrictions for Property. 882/015610-0061 555941.02 all/09/04 IN ORDER TO ANSWER QUESTION 2(b) YOU MUST CALCULATE THE PROPOSED SALES PRICE BASED ON AFFORDABLE HOUSING COST, TAKING INTO CONSIDERATION ALL ITEMS LISTED IN THE DEFINITION OF PURCHASE HOUSING COST. (b) Price of any personal property being sold by the Owner to the proposed buyer: $ . (If none, so state.) (c) The price of $ to be paid by the proposed buyer for any services of Owner. (If none, so state). (d) All other amounts of money or other consideration, if any, concerning the Property or any other matter to be paid by the proposed buyer to the Owner: $ (If none, so state.) (e) Sources of payment of sales price: Sales price $ Cash down payment $ 1 st loan $ 2nd loan $ Other (describe) $ Total $ (f) The financing obtained by the proposed buyer to purchase the Property is as follows: 1 st Loan: Loan amount $ Monthly payments: $ Interest rate If variable interest, describe adjustment mechanism: Due date: Balloon payment amount: Points and fees: 882/015610-0061 555941.02 a11/09/04 _3_ Lender: Lender's address: 2nd Loan: Loan amount: $ Monthly payments: $_ Interest rate _ If variable interest, describe adjustment mechanism: Due date: Balloon payment amount: Points and fees: Lender: Lender's address: Other Loans: (describe, if none, so state) (g) The monthly Purchase Housing Cost to be paid by the proposed buyer: 1 st loan monthly payment: $ 2nd loan monthly payment: $ Other loans monthly payment: $ Taxes and assessments (1 / 12 of $ yearly taxes and assessments): Insurance (1 / 12 of yearly $ premium): Homeowner's dues: $ Total: $ 982/015610-0061 555941.02 al 1/09/04 _q _ 3. The proposed buyer represents, warrants and covenants the following: (a) The Property will be the principal residence of the proposed buyer. (b) The combined maximum annual income for all household members of the proposed buyer is $ . (This figure must include all sources of income.) (c) The proposed buyer will deliver to the Agency a signed financial statement on a form acceptable to the Agency. 4. The proposed buyer's household consists of the following persons who will reside in the Property: Adults (18 or over) - [name of each] : Minors (under 18) [name of each] : 5. The proposed buyer must submit to the Owner, on a form available from the Owner, an income certification so the Owner may determine if the proposed buyer is an Eligible Buyer. 6. A true and correct copy of the proposed buyer's most recent tax return to the U.S. Internal Revenue Service is attached hereto. 7. A true and correct copy of the purchase and sale or other agreement between the Owner and the proposed buyer is attached hereto. 882/015610-0061 555941.02 A 1/09/04 5 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. OWNER: Date signature signature print name print name street address telephone city state zip code PROPOSED BUYER: Date signature signature print name print name street address telephone city state zip code 882/015610-0061 _L _ 555941.02 al1/09/04 L Owner's Certification Based on the Proposed Buyer's Certificate above, and all documents attached hereto, Owner hereby certifies that: (1) Proposed Buyer is an Eligible Buyer; and (2) The monthly Purchase Housing Cost to be paid by the Proposed Buyer shall not exceed the monthly Affordable Housing Cost. [Capitalized terms used above are defined in the Agreement to which this certificate is attached unless otherwise provided herein.] OWNER: [Name] Date: 882/015610-0061 555941.02 A 1/09/04 % . Requested By Recording man First American iitie Co p Y FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director Doc N 0004-0S-7S138 12/09/2004 08:00A Fee:NC Page 1 of 25 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder i rINkv I qor (SPACE ABOVE THIS LINE FOR RECORDING USE) (EXEMPT FROM RECORDING FEE PER GOV. CODE § 27383) OPTION AGREEMENT T NOTICE: THIS OPTION AGREEMENT CONTAINS A SUBORDINATION SG CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE J PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE l LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. 140 THIS OPTION AGREEMENT ("Option Agreement") is made this t% day of , N 2004 (the "Effective Date"), by CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"). RECITALS A. Developer has entered into a Disposition and Development Agreement dated December 18, 2003, and amended October 28, 2004 (the "DDA") with the La Quinta Redevelopment Agency ("Agency"), pursuant to which Agency conveyed to Developer that certain real property located southeast of the Miles Avenue and Washington Street intersection, in the City of La Quinta, County of Riverside, State of California (the "Site"). All defined terms used herein shall have the same meaning as set forth in the DDA unless otherwise stated. The Site is legally described in Exhibit "A" attached hereto and incorporated herein. B. Pursuant to the DDA, Developer has agreed to construct on the Site a commercial development that consists of a medical office/surgical facility ("Medical Office/Surgical Facility"); a development containing approximately twenty-six (26) sanctuary villas ("Sanctuary Villas Development"); a mid -price suites hotel containing approximately one hundred thirty-four (134) guest rooms ("Suites Hotel"); a resort -style condominium/casitas project containing approximately one hundred thirty-six (136) condominium/casitas units ("Casitas Development"); two (2) sit-down restaurants (individually, a "Restaurant," and collectively, the "Restaurants"); a residential development containing thirteen (13) single-family homes ("Parcel 5 Residential Development"); and a residential development containing fifty-four (54) single-family homes ("Parcel 7 Residential Development"), forty (40) of which shall be restricted for sale to Eligible Buyers at an Affordable Housing Cost (collectively, the "Project"). Certain components of the Project shall be constructed in multiple phases, as follows: The Medical Office/Surgical Facility shall be constructed in four (4) phases; the Casitas Development shall be constructed in three (3) 882/015610-0061 556650.04 a12/02/04 y phases; and the Sanctuary Villas Development shall be constructed in two (2) phases. Each phase of the Medical Office/Surgical Facility, the Casitas Development, and the Sanctuary Villas Development, and each of the Suites Hotel, the Parcel 5 Residential Development, the Parcel 7 Residential Development, and each Restaurant constitutes a "Phase of Development," as further described in the DDA. C. Each Phase of Development shall be constructed on the Site in accordance with the site map attached hereto and incorporated herein as Exhibit "D" (the "Site Map"), as further described in the DDA. D. As a condition to the Agency's conveyance of the Site to Developer, Developer was required to grant to Agency an option to repurchase the Site, or a portion thereof, from Developer, if (i) Developer fails to commence, continuously proceed with, or complete construction of the Project or any particular Phase of Development within certain specified time frames, or (ii) Developer transfers the Site, or portion thereof, in violation of the terms of the DDA, all as further described herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals and all of the terms and conditions contained in the DDA, Developer hereby grants to Agency the following repurchase options: 1. Repurchase Option I - Failure to Commence Construction Subject to Section 4(f), Developer hereby grants to Agency an exclusive option to repurchase the Site, or any portion thereof, if Developer fails to commence construction of the Project within the times set forth in the Commencement and Completion Schedule attached hereto and incorporated herein as Exhibit "B" (collectively, "Repurchase Option I"). Agency's Repurchase Option I shall also include the option to purchase any "Related Parcel" to the Option I Parcel(s) on which Developer has not yet commenced construction. For the purposes of this Option Agreement, (a) the term "commence construction" shall mean Developer's completion of mass grading for the entire Site, subject to Section 4(f) below, and (b) the term "Related Parcel" shall mean any Parcel that has a substantially similar use as another Parcel, as set forth in Exhibit which is attached hereto and incorporated herein by this reference. In the event of Developer's failure to commence construction of the Project within the time period described above, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the expiration of the time period described above (after expiration of the cure period described in Sections 4(b) and 4(c) hereof) ("Repurchase Option I Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option I by giving written notice to Developer ("Agency's Notice of Option 1 Exercise"), in accordance with Section 5 of this Option Agreement, prior to the expiration of the Repurchase Option I Period. Notwithstanding anything herein to the contrary, (i) failure of Agency to exercise the Repurchase Option I with respect to Developer's failure to timely commence construction of the Project shall not constitute a waiver 882/015610-0061 556650.04 a12/02/04 by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's failure to timely commence construction of the Project, and shall not constitute a waiver of Agency of its exercise of this Repurchase Option I with respect to Developer's failure to timely commence construction of a particular Phase of Development; and (ii) failure of Agency to exercise the Repurchase Option I with respect to Developer's failure to timely commence construction of a particular Phase of Development shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other Agreement for Developer's failure to timely commence construction of that Phase of Development and shall not constitute a waiver of Agency of its exercise of this Repurchase Option I with respect to Developer's failure to timely commence construction of any other Phase of Development. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of any other Developer breach of the terms or conditions of the DDA. (b) Repurchase Price - Repurchase Option I Agency's repurchase price for the Site, or portion thereof, or for the Option I Parcel(s) and any Related Parcels Agency is entitled, and elects, to purchase ("Repurchase Option I Repurchase Price"), shall be seventy-five percent (75%) of Developer's Purchase Price for the Site, portion thereof, or applicable Parcel(s), as set forth in Exhibit "D", which is attached hereto and incorporated herein by this reference. In the event that there are any outstanding and valid mortgages or deeds of trust against the Site at the time that Repurchase Option I is exercised, the Agency agrees that the Repurchase Option I Repurchase Price shall be paid to the lender on any such valid, recorded deeds of trust or mortgages, up to the then outstanding balance due under same. Any portion of the Repurchase Option I Repurchase Price not so needed to extinguish existing loans shall be paid to Developer. (c) Termination of Repurchase Option I Once Developer has commenced construction of the Project, Repurchase Option I shall be deemed to be expired, and Agency agrees, within fifteen (15) days of the commencement of construction, to execute and record a termination of Repurchase Option I. 2. Repurchase Option II - Failure to Continuously Proceed With or Complete Construction Developer hereby grants to Agency an exclusive option to repurchase any individual Parcel then -comprising the Site ("Option II Parcel(s)"), and any Related Parcel(s) to the Option II Parcel(s) on which Developer has not yet commenced construction if, after commencement of construction of the Phase of Development to be constructed on the Option II Parcel(s), Developer fails to continuously proceed with, and complete, construction of such Phase of Development on the Option II Parcel(s) (collectively, "Repurchase Option II"). For purposes of this Option Agreement, "continuously proceed with construction" shall be defined as construction that is interrupted, if at all, for periods of no longer than thirty (30) days; and "completion of construction of the Phase of Development" shall be defined as City's final inspection of the Phase of Development by the date set forth in the Commencement and Completion Schedule, subject to Section 4(f) below ("Completion Deadline"). In the event of Developer's failure to continuously proceed with construction, or to complete construction of 882/015610-0061 556650.04 a12/02/04 3 any Phase of Development by the Completion Deadline, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the applicable Completion Deadline (after expiration of the cure period described in Sections 4(b) and 4(c) hereof) ("Repurchase Option II Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option II by giving written notice to Developer, in accordance with Section 5 of this Option Agreement, prior to the expiration of the Repurchase Option II Period. Failure of Agency to exercise the Repurchase Option II with respect to a particular Phase of Development shall constitute a waiver by Agency of Developer's breach of its obligation to continuously proceed with and complete construction of that Phase of Development within the time set forth in the Commencement and Completion Schedule. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of Developer's obligation to continuously proceed with and complete construction of any other Phase of Development within the time set forth in the Commencement and Completion Schedule, or of any other Developer breach of the terms or conditions of the DDA. (b) Determination of Repurchase Price - Repurchase Option II Agency's repurchase price for the Option II Parcel(s) and any Related Parcel(s) Agency is entitled, and elects, to purchase ("Repurchase Option II Repurchase Price"), shall be the sum of (a) Developer's Purchase Price for the Option II Parcel(s) plus thirty-three and three -tenths percent (33.3%) of "Developer's Construction Costs," and (b) seventy-five percent (75%) of Developer's Purchase Price for the Related Parcel(s) Developer is entitled, and elects, to purchase. For purposes of this Option Agreement, the term "Developer's Construction Costs" shall mean, with respect to development of the Phase of Development to be constructed on the Option II Parcel(s), the lesser of (i) construction costs actually incurred by Developer for development of said Phase of Development from the DDA Date to the date Agency's exercises this Repurchase Option II (the "Construction Period"), and (ii) the constructions costs for the Construction Period set forth in Developer's Preliminary Budget, as approved by Agency as part of Agency's approval of Developer's financing, in accordance with Section 311 of the DDA, which costs may include (i) the amount paid by Developer to the contractor or contractors performing the works of improvement; (ii) reasonable inspection and testing costs paid by Developer to independent third party engineers or consultants in conjunction with said works of improvement (but not including costs, fees, charges, or profits allocated to Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer; (iii) costs and fees paid by Developer to independent third party engineers or consultants with respect to the planning, design, and engineering of the works of improvement (but not including costs, fees, charges, or profits allocated to the Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer); and (iv) the costs and fees incurred by Developer, if any, to obtain financing for the construction of the works of improvement. 882/015610-0061 556650.04 a12/02/04 4 3. Repurchase Option III - Transfer of the Site Developer hereby grants to Agency an exclusive option to repurchase (i) the Site if, prior to the time Agency issues a Release of Construction Covenants for any Phase of Development to be constructed thereon, Developer transfers or suffers an involuntary transfer of the Site in violation of the terms of the DDA; or (ii) any of the individual Parcels then -comprising the Site (the "Option III Parcel(s)") and any Related Parcel(s) to the Option III Parcel(s) on which Developer has not yet commenced construction if, prior to the time Agency issues a Release of Construction Covenants for the Phase of Development to be constructed on the Option III Parcel(s), Developer transfers or suffers an involuntary transfer of the Option III Parcel(s) (collectively, "Repurchase Option III"). In the event of Developer's transfer of the Site or any individual Parcels then -comprising the Site in violation of the DDA, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the transfer that gives rise to Agency's option under this Section ("Repurchase Option III Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option III by giving written notice to Developer ("Agency's Notice of Option III Exercise"), in accordance with Section 5 of this Option Agreement, prior to the expiration of the Repurchase Option III Period. Notwithstanding anything herein to the contrary, (i) failure of Agency to exercise the Repurchase Option III with respect to Developer's transfer or sufferance of an involuntary transfer of the Site shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Site, and (ii) failure of Agency to exercise the Repurchase Option III with respect to Developer's transfer or sufferance of an involuntary transfer of a Parcel shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Parcel, and shall not constitute a waiver by Agency of its exercise of this Repurchase Option III with respect to any other Parcel then -comprising the Site. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of any other Developer breach of the terms or conditions of the DDA. (b) Repurchase Price - Repurchase Option III Agency's repurchase price for the Site or for the Option III Parcel(s) and any Related Parcels Agency is entitled, and elects, to purchase ("Repurchase Option III Repurchase Price") shall be as follows: i) In the event Developer has not yet commenced construction of the Project or applicable Phase of Development at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III Price shall be the Repurchase Option I Repurchase Price, as set forth in Section I (b) of this Option Agreement. ii) In the event Developer has commenced construction of the Project or applicable Phase of Development at the time Agency exercises its Repurchase Option III, 882/015610-0061 _ 556650.04 a12/02/04 -5 Agency's Repurchase Option III Repurchase Price shall be (1) for the Option III Parcel(s), the Repurchase Option II Repurchase Price, as set forth in Section 2(b) of this Option Agreement, and (2) for the Related Parcels Agency is entitled, and elects, to purchase, the Repurchase Option I Repurchase Price, as set forth in Section 1(b) of this Option Agreement. 4. Additional Terms Applicable to the Repurchase Options The following additional terms shall apply to Repurchase Option I, Repurchase Option II, and Repurchase Option III: (a) Successors and Assigns. The Repurchase Option I, Repurchase Option II, and Repurchase Option III created hereby shall be irrevocable by Developer and, subject to any subordination by Agency in accordance with paragraph (e) below, shall be binding upon the successors and assigns of Developer. (b) Developer's Right to Cure Certain Defaults. Notwithstanding anything herein to the contrary, Agency shall not be entitled to exercise Repurchase Option I or Repurchase Option II until Agency has provided a written notice to Developer regarding Developer's failure to commence, continuously proceed with, or complete, construction of the Project (with any of the above failures referred to hereinafter as an "Option Triggering Event"), and Developer has not, within sixty (60) days after receipt of such notice, cured, corrected, or remedied such Option Triggering Event, or, for those Option Triggering Events that cannot reasonably be cured, corrected, or remedied within sixty (60) days, commenced to cure, correct or remedy such Option Triggering Event within said sixty (60) day period, and diligently prosecute the same to completion. (c) Notice of Default to Mortgagee or Deed of Trust Holders, Right to Cure. With respect to any mortgage or deed of trust granted by Developer whenever the Agency may deliver any notice or demand to Developer with respect to an Option Triggering Event, the Agency shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage or deed of trust which has previously requested such notice in writing, including but not limited to 1 st Centennial Bank, which is providing to Developer an acquisition and development loan (the "A&D Loan"). Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Property (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. (d) No Agency Obligation. Notwithstanding any covenant, term, or provision in this Section 4 to the contrary, Agency shall not be obligated to exercise Repurchase Option I, Repurchase Option II, or Repurchase Option III. 882/015610-0061 556650.04 a12/02/04 6 (e) Termination of Option Agreement. In the event Developer commences and completes construction of any particular Phase of Development and Agency has not exercised Repurchase Option I, Repurchase Option II, or Repurchase Option III, Agency shall execute and record a termination of this Option Agreement with respect to the underlying Parcel of said Phase of Development within fifteen (15) business days after the final and permanent Certificate of Occupancy for the Phase of Development is issued by the City. (f) Enforced Delay. Notwithstanding anything to the contrary herein, in addition to specific provisions of this Option Agreement, performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency shall not excuse performance by Agency unless the act or failure is caused by the acts or omissions of Developer); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise commercially reasonable efforts to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within thirty (30) days following the commencement of the cause. The following shall not be considered as events or causes beyond the control of Developer, and shall not entitle Developer to an extension of time to perform: (i) Developer's failure to obtain financing for the Project or for any Phase of Development, (ii) Developer's failure to negotiate agreements with prospective tenants or users for the Project or for any Phase of Development, (iii) interest rates or (iv) economic or market conditions. Times of performance under this Option Agreement may also be extended by mutual written agreement by Agency and Developer. Agency's Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. (g) Subordination. The Agency agrees to subordinate this Option Agreement to the A&D Loan, to Developer's construction loan(s) for each Phase of Development and to the deed of trust securing Developer's investor's loan for Developer's construction of the Suites Hotel on the Suites Hotel Parcel, the Parcel 2 Casitas Development Component on Casitas Parcel 2, the Parcel 3 Casitas Development Component on Casitas Parcel 3, and the Parcel 4 Casitas Development Component on Casitas Parcel 4, and to execute a subordination agreement evidencing same, to be recorded in the official records of the County Recorder for the County of Riverside, provided all of the following conditions are met: i) Loan Amount. (1) for the Parcel A Medical Office/Surgical Facility Component, the Parcel 1 Restaurant, the Parcel 5 Residential Development, the Parcel 7 Residential Development, the Parcel 8 Sanctuary Villas Component, the Parcel 9 Sanctuary Villas Component, the Parcel 10 Medical Office/Surgical Facility Component, the Parcel 11 882/015610-0061 556650.04 a12/02/04 7 Medical Office/Surgical Facility Component, the Parcel 12 Medical Off ce/Surgical Facility Component, and the Parcel 13 Restaurant, the maximum cumulative principal amount of the construction loan for the applicable Phase of Development shall not exceed ninety percent (90%) of the lender's appraised value of the Parcel on which said Phase of Development shall be constructed, upon completion of the Phase of Development, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction, and (2) for the Suites Hotel, the Parcel 2 Casitas Development Component, the Parcel 3 Casitas Development Component, and the Parcel 4 Casitas Development Component, the maximum cumulative principal amount, collectively, of Developer's construction loan plus Developer's investor's loan, shall not exceed ninety percent (90%) of the lender's appraised value of the Parcel on which the applicable Phase of Development shall be constructed, upon completion of the Phase of Development, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction; ii) Use of Loan Proceeds. The loan(s) shall obligate Developer to expend loan proceeds for no other purpose than the applicable Phase of Development; and iii) Notice and Agency's Opportunity to Cure. The loan(s) shall provide that any notice of a Developer breach or default shall also be sent to the Agency at the address listed in Section 5 and that upon receipt of such notice, Agency shall have the right to (A) cure the noticed breach or default, (B) negotiate with the lender regarding the noticed breach or default, and (C) purchase the Site from Developer subject to the construction lender's deed of trust, without the consent of Developer or the holder of the construction lender's deed of trust, and that Agency's exercise of the foregoing rights shall not, in and of itself, give rise to any right on the part of the lender to accelerate the amounts due under the loan. (h) Agency's Investigation of Site. Agency shall have forty-five (45) days after the occurrence of an event that triggers Agency's ability to exercise any of Repurchase Option I, Repurchase Option II, or Repurchase Option III to enter upon the Site (or applicable portion thereof) to conduct any tests, inspections, investigations, or studies of the condition of the Site (or applicable portion thereof). Developer shall permit Agency access to the Site (or applicable portion thereof) for such purposes. Agency's obligation to close "Escrow" (as defined below) shall be subject to Agency's approval of any environmental and other site testing conducted by Agency in Agency's discretion. Agency shall indemnify, defend, and hold harmless Developer and its officers, directors, shareholders, employees, agents, and representatives from and against all claims, liabilities, or damages, and including expert witness fees and reasonable attorney's fees and costs, arising out of any such testing, inspection, or investigatory activity on the Site (or applicable portion thereof). (i) Escrow Provisions. i) Within five (5) business days after Agency has exercised Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable), or as soon thereafter as reasonably practicable, an escrow shall be opened ("Escrow") with an escrow company selected by Agency for the reconveyance of the Site (or applicable portion thereof) to Agency ("Escrow Holder"). Escrow shall be deemed opened on the date that a fully executed 882/015610-0061 _ 556650.04 a12/02/04 -g copy of this Option Agreement and a notice of exercise of option prepared by Agency are delivered to Escrow Holder ("Opening of Escrow"). Escrow Holder shall notify Developer and Agency in writing of the date of the Opening of Escrow promptly following the opening of the Escrow. ii) Escrow shall close on or before the date that is ninety (90) days after the Opening of Escrow ("Close of Escrow" or "Closing Date"). The terms "Close of Escrow" and "Closing Date" shall mean the date the grant deed conveying fee title to Agency ("Agency Grant Deed") is recorded in the Office of the County Recorder of the County of Riverside, State of California. Possession of the Site, or portion thereof, shall be delivered to Agency at the Close of Escrow. iii) This Option Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of Developer and Agency to Escrow Holder as well as an agreement between Developer and Agency. In the event of any conflict between the provisions of this Option Agreement and Escrow Holder's standard instructions, this Option Agreement shall prevail. iv) The Escrow shall be subject to Agency's approval of a then -current preliminary title report. Any monetary lien(s) or encumbrance(s) shown on such preliminary title report that is (are) created concurrent with or after the close of escrow that conveyed the Site from Agency to Developer shall be removed by Developer at its sole expense prior to the Close of Escrow pursuant to this Section 4(i) unless such exception(s) is (are) accepted by Agency in its sole discretion; provided, however, that Agency shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title existing on the date of recordation of the Grant Deed to the Site (in the form of Attachment No. 4 to the DDA); and (iii) matters shown as printed exceptions in the standard form ALTA policy of title insurance. In the event the Site is encumbered by a mortgage or deed of trust, Agency shall be permitted to unilaterally instruct Escrow Holder to satisfy the indebtedness secured thereby out of the proceeds payable to Developer through the foregoing Escrow. Any additional amount necessary to satisfy such indebtedness shall be paid by Developer. v) On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Agency shall deposit in Escrow (i) the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price; (ii) one-half (1/2) of the escrow fees; (iii) the portion of the title insurance premium attributable to any extra or extended coverages, or any additional charge resulting from Agency's request that the amount of insurance be higher than the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price; and (iv) any and all additional instruments or other documents required from Agency (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Developer shall deposit in Escrow (i) the Agency Grant Deed, executed and acknowledged; (ii) one-half (1 /2) of the escrow fees; and (iii) any and all additional instruments or other documents required from Developer (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. Developer shall also be 882/015610-0061 556650.04 a12/02/04 9 required to pay for documentary tax stamps, recording fees, and for an ALTA standard form owner's policy of title insurance in the amount of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price (as applicable), showing title vested in Agency free and clear of all liens and encumbrances except those permitted by paragraph (4) above (the "Title Policy"). Agency's receipt of the Title Policy shall be a condition to the Close of Escrow. Any other costs and expenses shall be allocated between the parties in the manner customary for a commercial property conveyance in Riverside County. vi) If, on or before the Closing Date, Escrow Holder has received all of the documents and funds listed in paragraph (5) above, and Escrow Holder is in a position to cause the Title Policy to be issued to Agency, and provided Agency has approved of the condition of the Site, or applicable portion thereof, Escrow Holder shall close the Escrow by taking the following actions: (i) recording the Agency Grant Deed in the office of the County Recorder of the County of Riverside, California, and delivering the recorded Agency Grant Deed to Agency; (ii) causing the Title Policy to be issued to Agency; and (iii) delivering the applicable of the Option I Repurchase Price, the Option II Repurchase Price, or the Option III Repurchase Price to Developer. 0) Agency's Right to Acquire the Site. Notwithstanding anything herein to the contrary, upon Agency's exercise of Repurchase Option I, Repurchase Option II, or Repurchase Option III, Developer's commencement to cure the default that led to Agency's exercise shall not affect Agency's right to close the Escrow and acquire the Site (or applicable portion thereof). (k) Agency's Repurchase of Uncompleted Portions of the Property. Notwithstanding anything herein to the contrary, in the event that as a result of Agency exercising Repurchase Option II or Repurchase Option III Agency acquires Residential Parcel 5 and/or Residential Parcel 7, if Developer has obtained a Certificate of Completion from the City for one or more of the lots that comprise either of said Parcels, (i) the provisions of this Option Agreement shall apply only to that portion of Residential Parcel 5 and/or Residential Parcel 7 (as applicable) for which Certificates of Completion have not been issued ("Uncompleted Portion of the Repurchase Property") and any calculations for determining the Repurchase Option II Repurchase Price or the Repurchase Option III Repurchase Price (as applicable) shall be based solely upon the Uncompleted Portion of the Repurchase Property, and (ii) Developer agrees to cooperate with Agency to effect the subdivision of the Uncompleted Portion of the Repurchase Property from the completed portions of Residential Parcel 5 and/or Residential Parcel 7 (as applicable) (those portions of the Repurchase Property for which Certificates of Completion have been issued). (1) Agency's Repurchase in Accordance With Site Map The parties acknowledge and agree that the Site Map is not a legal description and that Developer intends to record a parcel map against the Site that will create legal parcels that differ from the lots depicted on the Site Map (the "Parcel Map"). Notwithstanding the recordation of the Parcel Map, the parties intend that the options granted herein are granted with respect to the lots as depicted in the Site Map and that such lots may or may not constitute legal parcels; provided, however, that if the Agency exercises its rights granted herein after the Parcel Map has been recorded, the outer 882/015610-0061 556650.04 a12/02/04 -1 O- boundaries of the lot(s) purchased shall not extend beyond the outer boundaries of the corresponding parcel as depicted on the Parcel Map. 5. Notices Demands and Communications Between the Parties Formal notices, demands, and communications between Agency and. Developer shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to: To Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, California 92626 Attn: M. Katherine Jenson, Esq. To Developer: CP Development La Quinta, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant With copies to: Selzer, Ealy, Hemphill & Blasdell, LLP 777 Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill and Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed in the manner provided above shall be deemed effective on the second business day following deposit in the United States mail. Such written notices, demands, and communications shall be sent in the same manner to such other addresses as either party may from time to time designate by mail. 6. Agency's Option to Acquire Plans If Agency exercises Repurchase Option I, Repurchase Option II, or Repurchase Option III in accordance with this Agreement, at the option of the Agency, which may be exercised in the Agency's sole and absolute discretion, the Developer shall deliver to the Agency an executed assignment in a form reasonably acceptable to the Agency of the Developer's right to use all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, 882/015610-0061 -11- 556650.04 a12/02/04 landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to (i) the construction of the Project on the Site or (ii) if Agency acquires less than all of the Site, the construction of the Phases(s) of Development applicable to the Parcels which the Agency is acquiring (the "Plans"), together with copies of all of the Plans, as have been prepared for the development of the Site or applicable portion thereof to date of the termination. Notwithstanding the foregoing, however, Developer does not covenant to convey to the Agency the copyright or other ownership rights of third parties. Agency understands and agrees that the assignment to Agency under this Section 6 is subject and subordinate to any assignment which Developer may make to a lender providing financing for the Project or applicable Phase of Development, and Agency agrees to execute any documents required by such lender acknowledging and effectuating such subordination of Agency's rights in and to the assignment. Agency's acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall assume all risks in the use of the Plans. 7. Applicable Law and Forum; Attorney's Fees The Municipal and Superior Courts of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Option Agreement. This Option Agreement shall be governed by, and construed under, the laws of the State of California. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Option Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Option Agreement. The rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Service of process on Agency shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. If either party to this Option Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Option Agreement, the party prevailing in the final judgment in such action or proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable attorney's fees. Attorney's fees shall include reasonable costs for investigating such action, conducting discovery, retaining expert witnesses, and all other necessary costs the court allows which are incurred in such litigation. 8. Nonliability of Agency Officials and Employees No officer, official, employee, agent, or representative of Agency shall be personally liable to Developer or any successor in interest, in the event of any default or breach by Agency, or for any amount which may become due to Developer or its successor, or for breach of any obligation of the terms of this Option Agreement. 882/015610-0061 _ 556650.04 a12/02/04 - I Z 9. Nondiscrimination Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, or ancestry with respect to this Option Agreement or use of the Site. 10. Interpretation The terms of this Option Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Option Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Option Agreement. 11. Entire Agreement This Option Agreement integrates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Option Agreement must be in writing and signed by the appropriate authorities of the party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of Agency and Developer. 12. Counterparts This Option Agreement may be executed in counterparts, each of which, after all the parties hereto have signed this Option Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 13. Severability In the event any section or portion of this Option Agreement shall be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect, and the parties hereto shall take further actions as may be reasonably necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this Option Agreement. [END - SIGNATURES ON NEXT PAGE] 882/015610-0061 556650.04 a12/02/04 -13 - IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first above written. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "AGENCY" LA QUINTA REDEVELOPN a 'c b y, corporate By:, ' Its: Executive Director Agency T AGENCY c 882/015610-0061 -14- 556650.04 a12/02/04 STATE OF CALIFORNIA )SS .r COUNTY OF On .*" c ei» bee ao , before me, e personally appeared c ' personally known to me ( e) to be the person(s) whose name(s) is/ere subscribed to the within instrument and acknowledged to me that he/sheAhoy executed the same in his/h rAheir authorized capacity(ies), and that by his/herl4heir signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. REGEMA FENMY Not Public conxranton # 15214]2= Notory PubMc - C ft WerAde County MyCcx w. Oct2 IM STATE OF CALIFORNIA ) ss, COUNTY OF Fr On •y . % , before me, ems personally appeared %- ' personally known to me ( to be the person(s) whose name(s) is/ere subscribed to the within instrument and acknowledged to me that he/she they executed the same in his/herfthcir authorized capacity(ies), and that by his/keddwk signature(s) on the instrument the person(s) or the entity upon behalf of which the. person(s) acted, executed the instrument. [SEAL] STATE OF CALIFORNIA 882/015610-0061 556650.04 a12/02/04 -1 S- ) ss COUNTY OF ) On , before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary Public [SEAL] 882/015610-0061 -16- 556650.04 a12/02/04 EXHIBIT "A" LEGAL DESCRIPTION OF THE SITE IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO.23971-1, ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 00027138" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026140" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 89033'22" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 00026'40" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41 °42'33", AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044132" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45027'41 ", AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 108979, O.R. THENCE SOUTH 00012' 13" EAST ALONG SAID EASTERLY LINE, A DISTANCE OF 790.73 FEET TO AN ANGLE POINT THEREIN; 882/015610-0061 -17- 556650.04 a12/02/04 THENCE SOUTH 43056'42' WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42059'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 02057'46", AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C" AND ITS NORTHWESTERLY PROLONGATION NORTH 64021'03" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO.2555289 O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 86011'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 005'41 ", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 75033102" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17033123" EAST; THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00032'28", AN ARC DISTANCE OF 23.61 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT B, SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; 882/015610-0061 -18- 556650.04 a12/02/04 THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06", AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006'56" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013'18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02012'44", AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 67006'56" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001' 12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19058'08", AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028'37" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36057'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18051135", AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (1985000 SQUARE FEET), MORE OR LESS. 882/015610-0061 -19- 556650.04 a12/02/04 P.O.C. CTR. 1 /4 COR. SEC. 19 in u) ' MILES AVENUE ZS o75.00" E� _ _ L6 75.00 N 8W31'23" E 487.01' N 89'33'22" E 960.27' L7 £- jr N 00'28'37 W S 00'26'40" E 153.41' in 112.88' T.P.O.S. v �n S 44'44'32" E y \ 90.06' �O � C2 2 (� N 8" E N 66'01 1 SITE 239.56' (R) AREA-42.47 AC. L4 PORTION OF THE S. 1 /2 OF °' ,,,,,, ,,,,," „ n SEC. 19, T.5S., R.7E., S.B.M. w L5-'l v PR`ES L3 1 "=300' 11'26" E I IAIC nATA NUMBER DIRECTION DISTANCE L7 S 00'18'01" E 397.49' L2 N 48'09'56" W 22.00 L3 N 75'33'02" E 4.22' L4 N : 67'06'56" E 20.00' L5 S 67 06'56" W 20.00'. L6 N 00'26'40" W 20.00' L7 77 89'33'22" E 80.00' t'%IIQvc nATA N N�75'53'46" E o /-PT. B b °/0 EXCEPTION I _ PARCEL atK RADIUS ARC LENGTH TANGENT 41'42'33' 440.00 320.30 167.62 45'27'41" 80.00 63.48 33.52 02'57'46" 4565.17 236.07 118.06 19'24'03" 2500.00 846.52 427.35 HDELTA 11 *05'.41 " 2072.00 401.22 201.24 19'58 08" 2092.00 729.11 368.29 02'12'44" 2072.00 80.00 40.01 07'41'06" 2092.00 280.60 140.51 00'32'28" 2500.00 23.61 11.81 C10 18'51'35" 2500.02 822.91 415.21 PT. A n 0 r N s42r.°3i �V 444 84 L2 J.N. 1612 882/015610-0061 -20- 556650.04 a12/02/04 EXHIBIT "B" COMMENCEMENT AND COMPLETION SCHEDULE Time for Completion of Construction (measured from date City issues final building Time for Commencement of permits for applicable Phase of Phase of Development Construction Development) Parcel A Medical Office/Surgical Facility January 30, 2007 36 months Component First Phase of Development of the Medical January 30, 2007 Office/Surgical Facility Second Phase of Development of the Medical January 30, 2007 Office/Surgical Facility Third Phase of Development of the Medical 514 days after City's Office/Surgical Facility issuance of applicable SDPA, but in no event later than April 30, 2008 Parcel 1 Restaurant 454 days after City's issuance of applicable SDPA, but in no event later than January 31, 2007 Parcel 2 Casitas Development Component July 26, 2006 Parcel 3 Casitas Development Component July 26, 2006 Parcel 4 Casitas Development Component July 26, 2006 Parcel 5 Residential Development April 30, 2007 Parcel 7 Residential Development April 30, 2007 The first Phase of Development of the Sanctuary January 30, 2008 Villas Development The second Phase of Development of the 364 days after completion of Sanctuary Villas Development the first Phase of Development of the Sanctuary Villas Development, but in no event later than January 30, 2012 Parcel 13 Restaurant 454 days after City's issuance of applicable SDPA, but in no event later than January 31, 2007 36 months 36 months 36 months 36 months 36 months 36 months 36 months 18 months 18 months 36 months 36 months 36 months 882/015610-0061 556650.04 a12/02/04 2 1 Seeley Drive Suites Hotel Time for Commencement of Phase of Development Construction December 3112004 January 30. 2005 Time for Completion of Construction (measured from date City issues final building permits for applicable Phase of Development) 180 days after Developer's completion of Suites Hotel 18 months 882/015610-0061 -22- 556650.04 a12/02/04 EXHIBIT " C" RELATED PARCELS The following are groupings of Parcels which are deemed to be Related Parcels: 1. Sanctuary Villas Parcel 8 and Sanctuary Villas Parcel 9. 2. Casitas Parcel 2, Casitas Parcel 3, and Casitas Parcel 4. 3. Medical Office/Surgical Facility Parcel A, Medical Office/Surgical Facility Parcel 10, Medical Office/Surgical Facility Parcel 11, and Medical Office/Surgical Facility Parcel 12. 4. Residential Parcel 5 and Residential Parcel 7. 5. Suites Hotel Parcel, Restaurant Parcel 1 and Restaurant Parcel 13. 882/015610-0061 -23- 556650.04 a12/02/04 EXHIBIT "D" PURCHASE PRICE Sanctuary Villas Parcel 8 Sanctuary Villas Parcel 9 Casitas Parcel 2 Casitas Parcel 3 Casitas Parcel 4 Landscape Parcel C Landscape Parcel E Landscape Parcel H Landscape Parcel I Medical Office/Surgical Facility A Medical Office/Surgical Facility 10 Medical Office/Surgical Facility 11 Medical Office/Surgical Facility 12 Residential Parcel 5 Residential Parcel 7 Restaurant Parcel 1 Restaurant Parcel 13 Seeley Drive Parcel Suites Hotel Parcel Well Site Parcel Property $ 841,193.42 247,409.82 510,563.92 773,718.02 654,511.46 0 0 0 0 1,455,219.64 164,190.15 276,649.17 164,190.15 135,694.34 557,028.39 206,924.58 2515908.18 0 753,475.39 116,957.37 $7,1095634.00 882/015610-0061 -24- 556650.04 a12/02/04 EXHIBIT "E" SITE MAP LOTS LAND USE * LOT 'r * LOT •H' 54 6o 23W cf. cc. 0.54 a. MILES AVENUE a12 � LOT - RESTAURANT LOT 2 - RESORT CASITAS *LOT 'D'14930 a.f. 0.34 ac. LOT 3 LOT 3 - RESORT CASITAS LOT 1 3.44 149..r. cc. 40188 •.f. o.92 oc. LOT 5 LOT 4 - RESORT CASITAS 92.19 c. a LOT 5 - RESIDENTIAL LOT 4 1z8826 a.f. 2.91 cc. .79 *LOT 6 - PARK LOT 14 LOT 2 145894 cf. LOT 7 - RESIDENTIAL *LOT •C• 98934 cf. 3.35 cc' 2.27 a. 14297 of LOT 8 - THE SANCTUARY 0.33 120233 Bt. LOT 9 - THE SANCTUARY LOT 10 - MEDICAL OFFICE BUILDINGS� % LOT 13 AN13 cf. 1.12 cc. LOT •A` LOT 11 - MEDICAL OFFICE BUILDINGS 282058 cf. LOT 12 01 6.47 cc. 311555 «t. LOT 12 - MEDICAL OFFICE BUILDINGS �M LOT 13 RESTAURANT LOT 10 LOT .1LOT 11 0.73 cc. 51 10 LOT 14 HOTEL *LOT 23 oo�f. 'E' 5456 cf. 0.13 oc. �r,gmmON LOTS LAND- USE LOT •A' ------ MEDICAL OFFICE PARKING / LANDSCAPE LOT •A' LOT 'f. LOT •B' ------ SEELEY DRIVE 22641 .52 cc. *LOT •C- - - - - - - - 20' PARKWAY (WASHINGTON STREET) LOT `D- - - CITY LANDSCAPE ENTRY LOT 8 * LOT 'E• - - - - - - 20' PARKWAY (WASHINGTON STREET) 48 o5acf. LOT 'F• - - - - - - - WELLSITE * LOT "G- - - - - - - - WELLSITE (N.A.P.) * Them parcels are not being conveyed by the 1A Quints RedeveWpmmt Agency * LOT 'H• - - 20' PARKWAY (MILES AVENUE) 11zy am dgilcted on ty Site Map for * LOT •I' - - - - - - - 20' PARKWAY (MILES AVENUE) convenience ofreference only. * LOT 'G' zse0o52 oc 0.. * LOT a 116796 s.f. 2.68 a. LOT 7 391588 cf. 8.99 cc. LOT 8 163122 cf. 3.74 cc. J Z X� w JU 0 C C�0 LCO 4JJ jr� 0 J U I i ti w R=� N.T.S. NOVEMBER 21. 2003 882/015610-0061 -25- 556650.04 a12/02/04 Recording Requested BY First American Title Company Recording Requested By And When Recorded Mail To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attention: Executive Director DOC a 2004-OS70142 12/09/2004 08:00A Fee:NC Page 1 of 13 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder M S U PA6'E SIZE DA I PCOR NOCOR SMF MISC. 4NCHGXAM A I R L COPY I LONG I REFUND []Exempt From kewrding Fee Per Gov. Cone § 6103] SUBORDINATION AGREEMENT SG NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. THIS SUBORDINATION AGREEMENT ("Agreement") is entered into as of December q, 2004, by and among the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"), and 1" CENTENNIAL BANK ("Lender"). RECITALS A. Developer owns fee title to the real property described on Attachment No. "1" attached hereto and incorporated herein by reference (the "Property"). B. Agency and Developer have entered into that certain Disposition and Development Agreement dated December 18, 2003, and amended October 28, 2004 (the "DDA"), pursuant to which the Agency conveyed the Property to the Developer for purposes of constructing on the Property a mixed use development consisting of a medical office/surgical facility; a development containing approximately twenty-six (26) sanctuary villas; a mid -price suites hotel containing approximately one hundred thirty-four (134) guest rooms; a resort -style condominium/casitas project containing approximately one hundred thirty-six (13 6) condominium/casita units; two (2) sit-down restaurants; a residential development containing thirteen (13) single-family homes; and a residential development containing fifty-four (54) single-family homes; forty (40) of which shall be restricted for sale to Eligible Buyers at an Affordable Housing Cost (collectively, the "Project"). Certain components of the Project shall be constructed in multiple phases (each, a "Phase of Development"). C. As a condition to the Agency's conveyance of the Property to Developer, the DDA required that the Developer grant the Agency an option to repurchase the Property or portions thereof ("Repurchase Option"), if Developer (i) fails to commence, continuously proceed with, or complete construction of the Project or any particular Phase of Development within certain specified time frames, or (ii) transfers the Property, or portion thereof, in violation of the terms of the DDA, all as further described in the Repurchase Option. Developer has EPH/GENESIS/ SUBORDINATION executed the Repurchase Option and that document was recorded in the official records of the County Recorder for the County of Riverside, California on the same herewith. D. Developer has executed or is about to execute a deed of trust, in favor of Lender, encumbering the Property to secure a promissory note dated November 8, 2004 in the sum of Twenty -One Million, Six Hundred and Twenty -Eight Thousand Dollars ($21,628,000.00) (the "Lender Loan"), payable with interest and upon the terms and conditions described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). E. The Lender is willing to make the Lender Loan provided the Lender Deed of Trust is a lien or charge upon the Property prior and superior to the Repurchase Option and provided that the Agency will specifically and unconditionally subordinate the Repurchase Option to the lien or charge of the Lender Deed of Trust. F. It is for the mutual benefit of the Lender, the Agency and Developer that the Lender make the Lender Loan to Developer. The Agency has agreed that the Lender Deed of Trust shall, when recorded, constitute a lien or charge upon the Property which is unconditionally prior and superior to the Repurchase Option, subject to the specific terms and provisions of this Agreement. NOW, THEREFORE, in consideration of the mutual benefits accruing to the Agency, Lender and Developer, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby declared, understood and agreed as follows: 1. Subordination by Agency 1.1 Subordination of Agency Deed of Trust to Lender Deed of Trust The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder) shall unconditionally be and remain at all times a lien or charge on the Property, prior and superior to the Repurchase Option, together with all rights and privileges of Agency thereunder, but subject to the terms and conditions of this Agreement. 1.2 Covenant of Agency The Agency declares, agrees and acknowledges that to Agency's actual knowledge, without duty of inquiry or investigation, there is no breach, event of default or default existing under the DDA or the Repurchase Option or any circumstances, event, omission or failure of condition which would constitute such a breach, default, or event of default after notice or lapse of time, or both. 2. Reliance by Lender and Agency The Lender would not make the Lender Loan and the Agency would not have agreed to subordinate the Repurchase Option without this Agreement and each of the undersigned understands that in reliance upon, and in consideration of, this subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other EPII/GENESIS/ 2 SUBORDINATION obligations are being and will be entered into which would not be made or entered into but for such reliance upon this subordination. 3. Rights of Agency 3.1 Default Under Lender Deed of Trust In the event of a breach or default by Developer under the terms of the Lender Deed of Trust, the party alleging such default shall provide the Agency with written notice of such breach or default concurrently with providing such notice to Developer. Upon receipt of such notice of breach or default, the parties hereto agree that Agency shall have each of the following rights so long as the Repurchase Option encumbers any portion of the Property or interest therein: (a) To cure the noticed default at ,any time prior to the foreclosure of the Lender Deed of Trust. In connection therewith, the Lender agrees that, upon written request by Agency received by Lender at least five (5) days prior to the date set for foreclosure sale under the Lender Deed of Trust, Lender shall postpone the foreclosure sale for thirty (30) days, during which thirty (30) day period Agency shall have the right to cure the noticed default, and that, in the event of a nonmonetary default which is susceptible to being cured only when the Agency has obtained possession of the Property, the Agency shall have as long as necessary (x) to obtain possession of the Property by exercising the Repurchase Option and (y) to cure the default, so long as the Agency does so with reasonable and continuous diligence. (b) To negotiate with the Lender regarding the noticed default at any time prior to the foreclosure of the Lender Deed of Trust or other lien. (c) To purchase the Property from Developer, subject to the Lender Deed of Trust without the consent of the Developer. Upon written notice from Agency to Lender exercising the Repurchase Option and received by Lender at least five (5) days prior to the date set for foreclosure sale under the Lender Deed of Trust, Lender shall postpone the foreclosure sale for the time reasonably necessary to allow Agency to complete the purchase of the Property. The purchase price for the Property and escrow procedures shall be as set forth in the Repurchase Option. The Lender agrees that, in the absence of any default by the Developer under the Lender Loan, the exercise of any of the rights set forth in this Section 3.1 by Agency shall not give rise to any right on the part of the Lender to exercise any right to accelerate the amounts due under the Lender Loan. Agency agrees that nothing in this section 3.1 shall prevent the Lender from exercising its rights and remedies under the Lender Deed of Trust in the event of Developer's default thereunder, provided however, that in that event, Agency shall have the right to cure Developer's default in accordance with Section 3.1(a) above. 3.2 Exercise of Repurchase Option The Lender hereby agrees that in the event that Agency exercises the Repurchase Option, said action shall not give rise to any right on the part of the Lender to accelerate the amounts due on the Lender Loan so long as Developer is not in default of its obligations under the Lender Loan. EPH/GENESIS/ 3 SUBORDINATION In the event of such default at the time the Agency exercises the Repurchase Option, the Agency shall have the right to cure Developer's default as provided in Section 3.1(a) above. 3.3 Disbursements Lender, in making disbursements of the proceeds of said Loan, is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom disbursements thereof are made and any application or use of such proceeds for purposes other than those provided in the documents evidencing and securing such Loan shall not defeat the subordination herein made in whole or in part. 3.4 Enforcement of Use Restrictions Nothing set forth in this Agreement shall prevent the Agency from enforcing the terms of the DDA or any other agreement between Developer and Agency with respect to the Property. 4. Miscellaneous 4.1 Entire Agreement This Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and the Repurchase Option, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Repurchase Option or the DDA which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Property. 4.2 Successors and Assigns This Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law This Agreement shall be construed according to the laws of the State of California. 4.4 Severability If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. EPWGENESIS/ 4 SUBORDINATION 4.5 Notice Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by personal delivery, by mailing the same by registered or certified mail, return receipt requested, postage prepaid, or by a reputable same day or overnight delivery service that provides a receipt showing date and time of delivery, to the party to whom the notice is directed at the address of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be deemed given (i) upon receipt if by personal delivery or by delivery service, or (ii) forty-eight (48) hours after deposit in the United States mail, if sent by mail pursuant to the foregoing. If to Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attention: Executive Director With copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626-1998 Attn: Katherine Jenson If to Developer: CP Development La Quinta, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant With copy to: Ealy, Hemphill & Blasdell, LLP 777 E. Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill And Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong EPINGENESIS/ 5 SUBORDINATION If to Lender: 1 St Centennial Bank 101 East Redlands Boulevard, Suite 106 Redlands, California 92373 Attn: Clifford N. Schnoonover. With copy to: King & Associates 140 Newport Center Drive, Suite 250 Newport Beach, California 92660-6977 Attn: Raymond King 4.6 Attorneys' Fees In the event that any action, suit or other proceeding is brought to enforce the obligations of under this Agreement, the prevailing party shall be entitled to receive all of such party's costs and expenses of suit, including attorneys' fees, expert witness fees, and all costs incurred in each and every action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Counterparts This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. f au R "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic r7>1 By: Executive Director EPH/GENESIS/ SUBORDINATION on APPROVED AS TO FORM RUTAN & TUCKER, LLP By: Agency Counsel "DEVELOPER" CP DEVELOPMENT LA A, LLC, a Californi lifted lia ' lity om an By: Its: tLA. Me-A119EW-- [Signatures Continued on Next Page] EPH/GENESIS/ SUBORDINATION "LENDER" 1 sT CE NNIAL BANK By: V n Its: By: 6aAj� Its: V- P [End of Signatures] [Remainder of Page Intentionally Left Blank] EPH/GENESIS/ SUBORDINATION STATE OF CALIFORNIA ) ss: COUNTY OF ) On� . � �ooL before me, a notary public, personally appeared —7,1c 6ar d ri�nT personally known to me (of prevcd to fHo ^" the >,""sof to be the person(s) whose name(s) is/.am subscribed to the within instrument and acknowledged to me that heAshefthcy executed the same in hisAkef4heir authorized capacity(ies), and that by his/herAiwir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. [S Conx16"I f 1WA$ NOW;Zo - CWMW RhW*s county I* MyCgYm.E>�iresOCt2�, 2a1d STATE OF CALIFORNIA ) ) ss. COUNTY O � ) On o O o before me, a notary public, personally appeared 7;6 • ;: �..(or;; +„ mp nn tlx: haef p personally known to me �-� c to be the person(s) whose name(s) is/ar-e—subscribed to the within instrument and acknowledged to me that he/sheAhey- executed the same in his/h@4thQ4r authorized capacity(ies), and that by his/herkheir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. [SEAL] Conwrrion # NiQi�!;1 No�aiy R�bNc • CaNbmio Wenido County Ibly Comm. E0w OCt 2& 2n8 EPH/GENESIS/ 9 SUBORDINATION STATE OF CALIFORNIA ) . ) ss. COUNTY OF 'y m/no) On � 6d before me, a notary public, personally appeared -_— 1016 1 ersonally known to me ed on tis e e to be the person(s) whose name(s) )(are subscribed to the within instrument and acknowledged to me that V/W/they executed the same in *er/their authorized capacity(ies), and that by h(sr/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary ublic [SEAL] ��. SANDRA M. PARMER 1. M Commission # 1374024 Z = ��' Notary Public - California Z San Bernardino County > My Comm. Expires Sep IQ 2006 EPH/GENESIS/ 10 SUBORDINATION ATTACHMENT NO. 1 LEGAL DESCRIPTION OF PROPERTY IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO. 23971-15 ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 00027138" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026'40" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 89033'22" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 00026'40" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41 °42'33 % AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044132" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45027'41 % AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 10897% O.R. EPH/GENESIS/ SUBORDINATION THENCE SOUTH 00012' 13" EAST ALONG SAID EASTERLY LINE, A DISTANCE. OF 790.73 FEET TO AN ANGLE POINT THEREIN; THENCE SOUTH 43056'42' WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42059'27 EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 02057'46"5 AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL licit AND ITS NORTHWESTERLY PROLONGATION NORTH 64021'03" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO.255528, O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 86011'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 005'41 ", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 75033102" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17033123" EAST; THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00032'28", AN ARC DISTANCE OF 23.61 FEET TO A POINT HEREINAFTER EPH/GENESIS/ 2 SUBORDINATION REFERRED TO AS POINT B, SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06 % AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006156" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013' 18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02012'44", AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 67006156" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001' 12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19058'08", AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028137" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36057'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18051'35", AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (1,85000 SQUARE FEET), MORE OR LESS. EPWGENESIS/ 3 SUBORDINATION INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT ("Indemnification Agreement") is made and entered into as of M&Sc 4 1v , 2005, by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company (`Developer"), and the CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of California (`City"), with reference to the following Recitals: RECITALS A. On or about December 18, 2003, Developer and the La Quinta Redevelopment Agency (`Agency") entered into that certain Disposition and Development Agreement (the "DDA"), pursuant to which, among other things, the Agency sold to CP Development certain real property identified therein as the "Property", which is located in the City of La Quinta, County of Riverside, State of California, for CP Development's construction, completion, and operation thereon of a commercial project containing a medical office/surgical facility, a development containing "sanctuary villas," a mid -price suites hotel, a resort -style condominium/casitas development (the "Casitas Development"), two (2) sit-down restaurants, and two (2) single-family residential developments (the "Residential Component"), with forty (40) of the single-family homes restricted for sale to moderate -income buyers at restricted sales prices, all as more particularly described in the DDA (collectively, the "Project). B. Concurrently with the Developer's and Agency's execution of the DDA, Developer and the City entered into that certain Development Agreement dated December 18, 2003, and recorded on January 5, 2004, as Instrument No. 2004-0005256, in the Official Records of Riverside County (the "Official Records"), and amended by that certain Amendment No. 1 to Development Agreement dated October 28, 2004, and recorded on November 8, 2004, as Instrument No. 2004-0885063, in the Official Records (the "Development Agreement"), which, among other terms, (i) sets forth a payment schedule for Developer's mitigation payments to the City; (ii) sets forth a payment schedule for Developer's financial contribution toward certain landscaping improvements to be installed on a portion of the Property; (iii) requires Developer, at its sole cost, to construct a neighborhood park on certain real property owned in fee by the City; and (iv) sets forth the extent to which Developer may construct, develop, use and operate the Project, all as more particularly described in the Development Agreement. C. The Development Agreement requires CP Development to procure and obtain, as of the effective date of the Development Agreement until the time specified therein, certain policies of insurance, as more specifically described in the Development Agreement (the "Insurance Requirements"). D. CP Development has procured insurance (the "CP Insurance") which does not fully satisfy the Insurance Requirements. Specifically, the CP Insurance does not provide coverage for automobiles. E. CP Development desires to close its construction loan and begin construction of the Project, notwithstanding that the CP Insurance does not fully comply with the Insurance 882/015610-0061 587953.01 a03/07/05 Requirements. In connection therewith, CP Development has represented to the City that it does not currently, and will not, during the course of construction, and during the time CP Development is required by the Development Agreement to maintain insurance, own, lease or hire any automobiles. F. The City has agreed not to issue a Notice of Default to CP Development concerning the deficiencies with the CP Insurance, provided CP Development executes this Indemnification Agreement. G. The parties hereto now wish to impose on CP Development the obligation to indemnify the City and the Agency, as more particularly defined in this Indemnification Agreement, against any claims, including, without limitation, claims regarding damage or injury to persons or property, that would be covered by automobile insurance that complies with the Insurance Requirements, but that are not covered by the CP Insurance NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: AGREEMENT I. Indemnification by CP Development. CP Development hereby agrees that it shall indemnify, defend, and hold harmless the City and the Agency and their respective officers, officials, members, employees, agents, consultants, and representatives, from and against any and all claims, liabilities, damages, losses, suits, costs and expenses (including but not limited to expert witness fees and reasonable attorneys' fees) of every kind, nature, and type asserted by any person or entity, including, without limitation, claims regarding damage or injury to persons or property, that would be covered by automobile insurance that complies with the Insurance Requirements, but that are not covered by the CP Insurance. Developer's indemnification obligations herein are in addition to the indemnification obligations contained in the Development Agreement, and nothing herein is intended to amend or limit Developer's indemnification obligations set forth in the Development Agreement. In the event of any conflict between the indemnification obligations herein and those contained in the Development Agreement, the indemnification provisions which provide the greatest protection to the City shall prevail. 2. Representations and Warranties by CP Development. CP Development hereby represents and warrants that it does not currently, and will not, during the course of construction, and during the time CP Development is required by the Development Agreement to maintain insurance, own, lease or hire any automobiles. 3. Non -liability of City Officers and Employees. No officer, official, member, employee, agent, or representative of City shall be personally liable to Developer, or any successor or assign of same, in the event of any default or breach by City, or for any amount 882/015610-0061 2 587953.01 a03/07/05 which may become due to CP Development, or any successor or assign of same, or for breach of any obligation of the terms of this Indemnification Agreement 4. Successors and Assigns. This Indemnification Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties hereto. 5. Governing Law. This Indemnification Agreement shall be governed by and construed in accordance with the laws of the State of California. 6. Further Assurances. The parties covenant and agree that they will execute such other and further instruments and documents as are or may become necessary or convenient to effectuate and carry out this Indemnification Agreement. 7. Authority of Signatories to Bind Principals. The persons executing this Indemnification Agreement on behalf of their respective principals represent that (i) they have been authorized to do so and that they thereby bind the principals to the terms and conditions of this Indemnification Agreement and (ii) their respective principals are properly and duly organized and existing under the laws of, and permitted to do business in, the State of California. 8. Interpretation. The paragraph headings of this Indemnification Agreement are for reference and convenience only and are not part of this Indemnification Agreement. They have no effect upon the construction or interpretation of any part hereof. The provisions of this Indemnification Agreement shall be construed in a reasonable manner to effect the purposes of the parties and of this Indemnification Agreement. 9. Attorney's Fees. In the event that a party to this Indemnification Agreement brings an action against another parry hereto by reason of the breach of any condition, covenant, representation or warranty in this Indemnification Agreement, or otherwise arising out of this Indemnification Agreement, the prevailing parry in such action shall be entitled to recover from the non -prevailing party expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 10. Counterparts. This Indemnification Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. [END — SIGNATURE PAGE FOLLOWS] 882/015610-0061 J 587953.01 a03/07/05 IN WITNESS WHEREOF, this Indemnification Agreement has been executed by the parties as of the date set forth above. Dated: %�QLc JA 1 b ZodS Dated: MARC," to . 2ooS Dated: D �� ATTEST: City Clerk APPROVED AS TO FORM: RUTAN & TUCKER, L By KCIKtheri a Jtinison, Ci ttorney 882/015610-0061 4 587953.01 a03/07/O5 "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By. Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: __ - " 'Q_ ( Richard R. Oliphant Its: President CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of California By: ' Thomas Genovese Title_ City Manager INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT ("Indemnification Agreement")is made PENT 2005 b and between CP DEVELOPMENT and entered into as of �i�1 a,�a► 10 Y LA QUINTA, LLC, a California limited liability company ("CP Development"), and t he LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (he "Agency"), with reference to the following Recitals. RECITALS A. CP Development and the Agency have entered into that certain Disposition and Development Agreement dated December 18, 2003, as amended by that certain Amendment No. 1 to Disposition and Development Agreement dated October 28, 2004, and by that certain the Amendment No. 2 to Disposition and Development Agreement dated December 7, 2004 ( "DDA"), pursuant to which, among other things, Agency sold to CP Development certain real property identified therein as the "Property", which is located in the City of La Quinta, County of Riverside, State of California, for CP Development's construction, completion, and operation thereon of a commercial project containing a medical office/surgical facility, a development containing "sanctuary villas," a mid -price suites hotel, a resort -style condominium/casitas development (the "Casitas Development"), two (2) sit-down restaurants, and two (2) single- family residential developments (the "Residential Component"), with forty (40) of the single- family homes restricted for sale to moderate -income buyers at restricted sales prices, all as more particularly described in the DDA (collectively, the "Project). B. The DDA requires CP Development to procure and obtain, as of the effective date of the DDA until the time specified therein, certain policies of insurance, as more specifically described in the DDA (the "Insurance Requirements"). C. CP Development has procured insurance (the "CP Insurance") which does not fully satisfy the Insurance Requirements. Specifically, the CP Insurance does not provide coverage for automobiles. D. CP Development desires to close its construction loan and begin construction of the Project, notwithstanding that the CP Insurance does not fully comply with the Insurance Requirements. In connection therewith, CP Development has represented to the Agency that it does not currently, and will not, during the course of construction, and until such time as the Agency issues a Release of Construction Covenants certifying CP Developments success ful completion of the Project, own, lease or hire any automobiles. E. The Agency has agreed not to issue a Notice of Default to CP Development concerning the deficiencies with the CP Insurance, provided CP Development executes this Indemnification Agreement. F. The parties hereto now wish to impose on CP Development the obligation to indemnify the Agency and the City of La Quinta, as more particularly defined in this Indemnification Agreement, against any claims, including, without limitation, claims regarding 882/015610-0061 587941.01 a03/07/05 damage or injury to persons or property, that would be covered by automobile insurance that complies with the Insurance Requirements, but that are not covered by the CP Insurance. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: AGREEMENT 1. Indemnification b CP Development. CP Development hereby agrees that it shall indemnify, defend, and hold harmless Agency and City and their respective officers, officials, members, employees, agents, consultants, and representatives, from and against any and all claims, liabilities, damages, losses, suits, costs and expenses (including but not limited to expert witness fees and reasonable attorneys' fees) of every kind, nature, and type asserted by any person or entity, including, without limitation, claims regarding damage or injury to persons or property, that would be covered by automobile insurance that complies with the Insurance Requirements, but that are not covered by the CP Insurance. CP Development's indemnification obligations herein are in addition to the indemnification obligations contained in the DDA, and nothing herein is intended to amend or limit CP Development's indemnification obligations set forth in the DDA. In the event of any conflict between the indemnification obligations herein and those contained in the DDA, the indemnification provisions which provide the greatest protection to the Agency shall prevail. 2. Representations and Warranties by CP Development. CP Development hereby represents and warrants that it does not currently, and will not, during the course of construction, and until such time as the Agency issues a Release of Construction Covenants certifying CP Development's successful completion of the Project, own, lease or hire any automobiles. 3. Non liOfficers and Employees. No officer, official, member, employee, agent, or representative of Agency shall be personally liable to CP Development, or any successor or assign of same, in the event of any default or breach by Agency, or for any amount which may become due to CP Development, or any successor or assign of same, or for breach of any obligation of the terms of this Indemnification Agreement 4. Successors and Assigns. This Indemnification Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties hereto. 5. Governing Law. This Indemnification Agreement shall be governed by and construed in accordance with the laws of the State of California. 882/015610-0061 2 587941.01 a03/07/05 6. Further Assurances. The parties covenant and agree that they will execute such other and further instruments and documents as are or may become necessary or convenient to effectuate and carry out this Indemnification Agreement. 7. Authority of Signatories to Bind Principals. The persons executing this Indemnification Agreement on behalf of their respective principals represent that (i) they have been authorized to do so and that they thereby bind the principals to the terms and conditions of this Indemnification Agreement and (ii) their respective principals are properly and duly organized and existing under the laws of, and permitted to do business in, the State of California. 8. Interpretation. The paragraph headings of this Indemnification Agreement are for reference and convenience only and are not part of this Indemnification Agreement. They have no effect upon the construction or interpretation of any part hereof. The provisions of this Indemnification Agreement shall be construed in a reasonable manner to effect the purposes of the parties and of this Indemnification Agreement. 9. Attorn y's Fees. In the event that a party to this Indemnification Agreement brings an action against another party hereto by reason of the breach of any condition, covenant, representation or warranty in this Indemnification Agreement, or otherwise arising out of this Indemnification Agreement, the prevailing party in such action shall be entitled to recover from the non -prevailing party expert witness fees, and its reasonable attorney's fees and costs. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery. 10. Counterparts. This Indemnification Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. [END — SIGNATURE PAGE FOLLOWS] 882/015610-0061 3 587941.01 a03/07/05 IN WITNESS WHEREOF, this Indemnification Agreement has been executed by the parties as of the date set forth above. "CP Development" Dated: Maau.4 I . ZmS Dated: PAbr es.a t o . 2.•c 5 -P&le 1.5-" Dated: ATTEST: i-vi Agency Se retary APPROVED AS TO FORM: RUTAN & TUCKEIR, LLP By M. Kat rine Jenso 2x1gency Counsel 882/015610-0061 4 587941.01 a03/07/05 CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: �C Y Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Thomas Genovese Title: Executive Director Recording Requested By And When Recorded Mail To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attention: Executive Director DOC # 2005-0793715 09/26/2005 08:00A Fee:NC Page 1 of 14 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder 1111111111111111111111111111111111111111111111111111111 M S U PAGE SIZE DA PCOR NOCOR SMF misc. tNCHG A I R I L 11 COPY LONG REFUND I EXAM SUBORDINATION AGREEMENT NOTICE; THIS SUBORDINATION AGREEMENT RESULTS I INTEREST IN THE PROPERTY BECOMING SUBJECT T O THIS SUBORDINATION AGREEMENT ("Agreement") is entered into as of September /J, 2005, by and among the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency'), CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"), and 1st CENTENNIAL BANK ("Lender"). RECITALS A. Developer owns fee title to the real property described on Attachment No. " ' attached hereto and incorporated herein by reference (the "Property"). Agency and Developer have entered into that certain Disposition and Development Agreement dated December 18, 2003, and amended October 28, 2004, and December 7, 2004 (as amended, the "DDA"), pursuant to which the Agency conveyed. the Property to the Developer for purposes of constructing on the Property a mixed use development consisting of a medical office/surgical facility; a development containing approximately twenty- six (26) sanctuary villas; a mid -price suites hotel containing approximately one hundred thirty- four (134) guest rooms; a resort -style condominium/casitas project containing approximately one hundred thirty-six (136) condominium/casita units; two (2) sit-down restaurants; a residential development containing thirteen (1.3) single-family homes; and a residential development containing fifty-four (54) single-family homes; forty (40) of which shall be restricted for sale to "Eligible Buyers" at an "Affordable Housing Cost" (as those terms are defined in the DDA) (collectively, the "Project"). Certain components of the Project shall be constructed in multiple phases (each, a "Phase of Development"). C. As a condition to the Agency's conveyance of the Property to Developer, the DDA required that the Developer grant the Agency an option to repurchase the Property or portions thereof ("Repurchase Option"), if Developer (i) fails to commence, continuously proceed with, or complete construction of the Project or any particular Phase of Development within certain specified time frames, or (ii) transfers the Property, or portion thereof, in violation. of the terms of the DDA, all as further described in that certain Option Agreementexecuted by 882/015610-0061 639800.02 a09/08/05 4_ and between the Agency and the Developer on or about December 7, 2004, which Option Agreement was recorded in the Official Records of the County Recorder for the County of Riverside, California (the "Official Records' on December 9, 2004, as Instrument No. 2004- 0979138. D. On or about December 7, 2004, Developer, Agency, and Lender entered into that certain Subordination Agreement (the "Initial Subordination Agreement") pursuant to which Agency subordinated the Repurchase Option to that certain deed of trust executed by Developer in favor of Lender (the "Initial Lender Deed of Trust") to secure a promissory note dated November 8, 2004 (the "Initial Note"), in the sum of Twenty -One Million, Six Hundred and Twenty -Eight Thousand Dollars ($21,628,000.00) (the "Initial Loan") The Initial Subordination Agreement was recorded in the Official Records on December 9, 2004, as Instrument No. 2004- 0979142. The Initial Deed of Trust was recorded in the Official Records on /'&A1 de1> as Instrument No. vktic, K- 7 '7' /& `fi r E. Developer has executed or is about to execute a deed of trust, in favor of Lender, encumbering the Property to secure a promissory note dated September q�, 2005, in the sum of Three Million One Hundred Seventy Thousand Dollars ($3,170,000.00) (the "Lender Loan"); payable with interest and upon the terms and conditions described in such note (respectively, the "Lender Deed of Trust" and "Lender Note"). The Lender Loan will be used to pay down Three Million Dollars ($3,000,000.00) of the Initial Loan, such that the outstanding principal balance of the Initial Loan, after the paydown, will be Eighteen Million Six hundred Twenty -Eight y_�J Thousand Dollars ($18,628,000.00). @ oi� r� C��✓ �G' j` `�/�7t h'4'``�' F. The Lender is willing to make the Lender Loan provided the Lender Deed of Trust is a lien or charge upon the Property prior and superior to the Repurchase Option and provided that the Agency will specifically and unconditionally subordinate the Repurchase Option to the lien.or charge of the Lender Deed of Trust. G. It is for the mutual benefit of the Lender, the Agency and Developer that the Lender make the Lender Loan to Developer. The Agency has agreed that the Lender Deed of Trust shall, when recorded, constitute a lien or charge upon the Property which is unconditionally prior and superior to the Repurchase Option, subject to the specific terms and provisions of this Agreement. NOW, THEREFORE, in consideration of the mutual benefits accruing to the Agency, Lender and Developer, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby declared, understood and agreed as follows: Subordination by Agency 1.1 Subordination of Agency Deed of Trust to Lender Deed of Trust The Lender Deed of Trust (and any renewals or extensions of, or advances, including interest, thereunder) shall unconditionally be and remain at all times a lien or charge on the Property, prior and superior to the Repurchase Option, together with all rights and privileges of Agency thereunder, but subject to the terms and conditions of this Agreement. $82/015610-0061 -2- 639800.02 s09/08/05 1.2 Covenant of Agency. The Agency declares,. agrees and acknowledges that to Agency's actual knowledge, without duty of inquiry or investigation, there is no breach, event of default or default existing under the DDA or the Option Agreement or any circumstances, event, omission or failure of condition which would constitute such a breach, default, or event of .default after notice or lapse of time, or both. 2. Reliance by Lender and A eg ncy The Lender would not make the Lender Loan and the Agency would not have agreed to subordinate the Repurchase Option without this Agreement and each of the undersigned understands that in reliance upon, and in consideration of, this subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for such reliance upon this subordination. Rights of Agency 3.1 Default Under Lender Deed of Trust In the event of a breach or default by Developer under the terms of the Lender Deed of Trust, the party alleging such default shall provide the Agency with written notice of such breach or default concurrently with providing such notice to Developer. Upon receipt of such notice of breach or default, the parties hereto agree that Agency shall have each of the following rights so long as the Option Agreement encumbers any portion of the Property or interest therein: (a) To cure the noticed default at any time prior to the foreclosure of the Lender Deed of Trust. In connection therewith, the Lender agrees that, upon written request by Agency received by Lender at least five (5) days prior to the date set for foreclosure sale under the Lender Deed of Trust, Lender shall postpone the foreclosure sale for thirty (30) days, during which thirty (30) day period Agency shall have the right to cure the noticed default, and that, in the event of a nonmonetary default which is susceptible to being cured only when the Agency has obtained possession of the Property, the Agency shall have as long as necessary .(x) to obtain possession of the Property by exercising the Repurchase Option and (y) to cure the default, so long as the Agency does so with reasonable and continuous diligence. (b) To negotiate with the Lender regarding the noticed default at any time prior to the .foreclosure of the Lender Deed of Trust or other lien. (c) To purchase the Property from Developer, subject to the Lender Deed of Trust without the consent of the Developer. Upon written notice from Agency to Lender exercising the Repurchase Option and received by Lender at least five (5) days prior to the date set for foreclosure sale under the Lender Deed of Trust, Lender shall postpone the foreclosure sale for the time reasonably necessary to allow Agency to complete the purchase of the Property. The purchase price for the Property and escrow procedures shall be as set forth in the Option Agreement. 8821015610-0061 639800.02 a09/08105 _3 _ The Lender agrees that, in the absence of any default by the Developer under the Lender Loan, the exercise of any of the rights set forth in this Section 3.1 by Agency shall not give rise to any right on the part of the Lender to exercise any right to accelerate the amounts due under the Lender Loan. Agency agrees that nothing in this section 3.1 shall prevent the Lender from exercising its rights and remedies under the Lender Deed of Trust in the event of Developer's default thereunder, provided however, that in that event, Agency shall have the right to cure Developer's default in accordance with Section 3.1(a) above. 3.2 Exercise of Repurchase Option The Lender hereby agrees that in the event that Agency exercises the Repurchase Option, said action shall not give rise to any right on the part of the Lender to accelerate the amounts due on the Lender Loan so long as Developer is not in default of its obligations under the Lender Loan. In the event of such default at the time the Agency exercises the Repurchase Option, the Agency shall have the right to cure Developer's default as provided in Section 3.1(a) above. 3.3 Disbursements Lender, in making disbursements of the proceeds of said Loan, is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom disbursements thereof are made and any application or use of such proceeds for purposes other than those provided in the documents evidencing and securing such Loan shall not defeat the subordination herein made in whole or in part. 3.4 Enforcement of Use Restrictions Nothing set forth in this Agreement shall prevent the Agency from enforcing the terms of the DDA or any -other agreement between Developer and Agency with respect to the Property. 4. Miscellaneous 4.1 Entire Agreement This Agreement shall be the whole and only agreement with regard to the matters set forth herein and shall supersede and cancel, but only insofar as would affect the priority between the Lender Deed of Trust and the Option Agreement, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Repurchase Option or the DDA which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages, upon the Property. 4.2 Successors and Assigns This Agreement shall inure to and bind the heirs, legatees, devisees, administrators, executors, successors and assigns of the parties hereto. 4.3 California Law This Agreement shall be construed according to the laws of the State of California. 8821015610-0061 639900.02 a09/08/05 -4- 4.4 Severability If any term, provision, condition or covenant of this Agreement or the application thereof to any ' party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which -it is held invalid .or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 4.5 Notice Any notice, demand, request, consent, approval or communication that any party desires or is required to give to another party or any other person must be in writing and may be given by personal delivery, by mailing the same by registered or certified mail, return receipt requested, postage prepaid, or by a reputable same day or overnight delivery service that provides a receipt showing date and time of delivery, to the party to whom the notice is directed at the address of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be deemed given (i) upon receipt if by personal delivery or by delivery service, or (ii) forty-eight (48) hours after deposit in the United States mail, if sent by mail pursuant to the foregoing. If to Agency: La Quinta Redevelopment Agency 78495 Calle Tampico La Quinta, CA 92253 Attention: Executive Director With copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626-1998 Attn: M. Katherine Jenson If to Developer: CP Development La Quinta, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant With copy to: My, Hemphill & Blasdell, LLP 777 E. Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill And Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong 882/015610-0061 _ 639800.02 a09108/05 -5 . If to Lender: 1" Centennial Bank 101 East Redlands Boulevard, Suite 106 Redlands, California 92373 Attn: Clifford N. Schnoonover. With copy to: King & Associates 140 Newport Center Drive, Suite 250 Newport Beach, California 92660-6977 Attn: Raymond King 4.6 Attorneys' Fees In the event that any action, suit or other proceeding is brought to enforce the obligations under this Agreement, the prevailing party shall be entitled to receive all of such party's costs and expenses of suit, including attorneys' fees, expert witness fees, and all costs incurred in each and every action, suit or other proceeding, including any and all appeals or petitions therefrom. 4.7 Counterparts This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document. [End — Signature Page Follows] 9821015610-0061 639800,02 a09/08/05 -6- IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "AGENCY" APPROVED AS TO FORM RUTAN & TUCKER, LLP By: Agency ounsel LA QUINTA REDEVELOPMENT AGENCY, a publie-beady orporate and oli (� Ey:T Executive Director "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member SIGNED IN COUNTERPART Richard R. Oliphant Its: Trustee By: Oliphant Enterprises Its: Manager SIGNED IN COUNTERPART M. Richard R. Olphant Its: President 882/015610-0061 _ 639800.02 a09/08/05 _7 IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first written above. NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENTS. "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a pub"y orporate and I' By: Executive Director h L_..,. I► APPROVED AS TO FORM RUTAN & TUCKER, LLP y: e ��7z�z Agency ounsel "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its:. Member By; �, Richard R. Olip t Its: Trustee By: Oliphant Enterprises Its: Manager By: Richard k Olphant Its: President 892/01561OM61 639800.02 a09/0W5 "LENDER" I'T CENTENNIAL BANK By. cor-ftioru m. 6cnoonover tS: Sr Vivo President By: a,,U -- arl�een tezen es Its: Vice President 882/015610-0061 639800.02 a%1080 STATE OF CALIFORNIA } COUNTY OF ,F1�_�'"-5 Ongoobefore me, a -notary public, personally appeared %h s a personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose narne(s) is/we. subscribed to -the within instrument and acknowledged to me that he/ska4hey executed the same in hisUAlwir' authorized capacity(ies), and that by his/ir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. r STATE OF CALIFORNIA ) ) ss. COUNTY OF ��tt4/—'rn� ) _ On 15105_ before me, a notary public, personally appeared (C - , personally known to me (or Pr to be the person(s) whose names) istare subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS nay hand and official seal. Notary Public (SEAL] c. awwoaw CommhWn #1 1521142 "ao" Pubc RWerJftcouMN MY COMM. EVM Oct 22, 200ar 8821015610.0061 639800.02 A0910=5 STATE OF CALIFORNIA ) • ) COUNTY OF ) ss. On I /,3 o'tOo.S' before me, a notary public, personally appeared %1 personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/aye subscribed to the within instrument and acknowledged to me that he/she ltey executed the same in his/heir authorized capacity(ies), and that by his/kef4keir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. STATE OF CALIFORNIA COUNTY OF On Not ublic ) ss. before me, a notary public personally known to me (or proved personally appeared to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public [SEAL] 882/015610-0061 639800.02 a09/08/05 GOVERNMENT CODE SECTION 27361.7 I CERTIFY UNDER THE PENALTY OF PERJURY THAT THE NOTARY STAMP ON THE DOCUMENT TO WHICH THIS STATEMENT IS ATTACHED READS AS FOLLOWS: NAME OF NOTARY: REGENIA HENSLEY COMMISSION NO. 1521423 DATE COMMISSION EXPIRES: OCT 23, 2008 DATE OF EXECUTION: SEPTEMBER 23, 2005 PLACE OF EXECUTION: COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA GEOFF TAYLOR STATE OF CALIFORNIA ) ss. COUNTY OF J/W) On L • 9 . before me, a notary public, personally appeared 0J� j j -1 , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary ubli r [SEAL] SANDRA M. PARMER Commission # 1374024 Z ; -m Notary Public - California Zz San Bernardino County My Comm. Expires Sep 10, 2006 882/015610-0061 639800.02 a09/08/05 ATTACHMENT NO. 1 LEGAL DESCRIPTION OF PROPERTY PARCELS 1, 3 AND 5 THROUGH 9, INCLUSIVE, OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE -,*AS PER MAP RECORDED IN BOOK 212 OF PARCEL MAPS, PAGES 60 TO 66, RECORDS OF SAID COUNTY. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 9, 2004 AS INSTRUMENT NO. 04-979137 OFFICIAL RECORDS. 882/015610-0061 639800.02 a09/08/05 AMENDMENT NO.3 TO DISPOSITION AND DEVELOPMENT AGREEMENT THIS AMENDMENT NO. 3 TO DISPOSITION AND DEVELOPMENT AGREEMENT ("Amendment No. 3") is made and entered into as of Ald Y, -� 2005 by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"). RECITALS: A. On or about December 18, 2003, the Agency and Developer entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which Agency agreed to sell to Developer, and Developer agreed to purchase from Agency that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Property") and to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to Eligible Buyers at an Affordable Housing Cost (collectively, the "Project"). B. On or about October 28, 2004, Agency and Developer entered into that certain Amendment No. 1 to Disposition and Development Agreement ("Amendment No. 1") which amended the Original DDA to revise (i) certain timeframes in the schedule of performance attached to the Original DDA; (ii) certain conditions that had to be satisfied prior to the Agency's conveyance to Developer of the Property; and (iii) the transfer and assignment provisions. C. On or about December 7, 2004, Agency and Developer entered into that certain Amendment No. 2 to Disposition and Development Agreement ("Amendment No. 2") which amended the Original DDA, as amended by Amendment No. 1, to provide for the Agency's agreement to subordinate Repurchase Option I in the same manner, and subject to the same terms and conditions, as the Agency had agreed to subordinate Repurchase Option III in order to accommodate Developer's acquisition and development lender. Concurrently with the parties' execution of Amendment No. 2, Agency conveyed to Developer the Property. The Original DDA, as modified by Amendment No. 1 and Amendment No. 2, is hereinafter referred to as the "DDA." D. On or about April 4, 2005, Parcel Map No. 31116, in the City of La Quinta, was filed in the Official Records of the County of Riverside in Book 212 of Parcel Maps at pages 60- 66, inclusive (the "Parcel Map"). The Parcel Map created legal parcels within the Property that differ from the parcels depicted on the Site Map attached to the DDA. In particular: (i) the Parcel Map created one legal parcel for development thereon of the Casitas Development (identified thereon as "Parcel 2"), where the Site Map had depicted the Casitas Development on three parcels; (ii) the Parcel Map created one legal parcel for development thereon of the Sanctuary Villas (identified thereon as "Parcel 7"), where the Site Map had depicted the Sanctuary Villas on two parcels; and (iii) the Parcel Map created one legal parcel for 882/015610-0085 617012.07 a10/28/05 -1- development thereon of the Medical Office/Surgical Facility (identified thereon as "Parcel 6"), where the Site Map had depicted the Medical Office/Surgical Facility on four parcels. The Parcel Map also created "Parcel 1" and "Parcel 5" for development thereon of the two restaurants to be constructed as part of the Project, "Parcel 3" and "Parcel 8" for the development thereon of two residential developments to be constructed as part of the Project, "Parcel 4" for the development thereon of the Suites Hotel, and "Parcel 9" for development thereon of a public park Developer agreed to develop pursuant to that certain Development Agreement entered into by the City and the Developer on or about December 18, 2003, and recorded in the Official Records of the County of Riverside on January 5, 2004, as Instrument No. 2004-0005256, as amended by that certain Amendment No. 1 to Development Agreement, executed on or about October 28, 2004, and recorded in the Official Records of the County of Riverside on November 8, 2004, as Instrument No. 2004-0885063 (the "Development Agreement"). A copy of the Parcel Map is attached hereto and incorporated herein as Exhibit "A". All subsequent references herein to a "Parcel" shall mean a parcel that has been created on the Parcel Map. E. Concurrently with the preparation and processing through the City hereof, Developer has prepared and is processing through the City (i) an amendment to the Center Point Specific Plan, also known as Specific Plan No. SP2001-055, as previously amended by City Council Resolution No. 2003-035, on June 3, 2003, to modify the uses permitted on certain portions of the Property (the "Specific Plan Amendment'), and (ii) an amendment to the Development Agreement, to modify the description of the Project and certain obligations of the Developer set forth therein (the "Development Agreement Amendment'). F. The parties now wish to amend the DDA to (i) modify certain components of the Project, and (ii) revise the timeframe for completion of the Suites Hotel in the Schedule of Performance, in accordance with the terms and conditions of this Amendment No. 3. The parties contemplate that the City Council will consider the Specific Plan Amendment and the Development Agreement Amendment concurrently with its consideration of this Amendment No. 3. Unless defined herein to the contrary, all capitalized terms in this Amendment No. 3 shall have the meanings ascribed in the DDA. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. The DDA is hereby amended as follows: 1.1 To revise the description of the Project to mean a commercial development consisting of a medical office/surgical facility (the "Medical Office/Surgical Facility") containing no more than 195,000 square feet; a mid -price suites hotel containing one hundred thirty-three (133) guest rooms (the "Suites Hotel'); a resort -style condominium/casitas project containing approximately one hundred sixty four (164) condominium/casitas units (the "Casitas 892/015610-0085 _ 617012.07 a10/28/05 -Z Development"); two (2) sit-down restaurants (the "Restaurants"); and a residential development containing up to sixty (60) single-family homes (the "Residential Development"), forty (40) of which shall be restricted for sale to Eligible Buyers at an Affordable Housing Cost (the "Affordable Housing Component"), and to make other conforming changes to the definitions in the DDA to make them consistent herewith and with the Parcels depicted on the Parcel Map, as described in Recital D. 1.2 To delete all of the references to the Parcel 5 Residential Development and the Sanctuary Villas. The parties hereby agree that the Parcel 5 Residential Development and the Sanctuary Villas are no longer components of the Project. 1.3 To provide that the Casitas Development will be constructed on Parcel 2 and Parcel 3. Developer acknowledges that it has transferred and assigned, or intends to transfer and assign, the rights and obligations under the DDA to develop the Casitas Development to Lennar Homes of California, Inc., a California corporation ("Lennar") and that Lennar intends to prepare a new tract map (the "New Tract Map") that merges Parcel 2 with Parcel 3. 1.4 To provide that the Medical Office/Surgical Facility will be constructed on Parcel 6 and Parcel 7. Developer intends to prepare a lot line adjustment that merges Parcel 6 with Parcel 7, and transfers a portion of Parcel 7 to Parcel 8 (the Lot Line Adjustment"). The Developer contemplates that the new Parcel created by merging Parcel 6 with Parcel 7 will consist of approximately 13.63 acres, and that Parcel 8 will, after the Lot Line Adjustment, consist of approximately 9.45 acres. Within thirty (30) days after the later of (i) the date the Lot Line Adjustment has been processed, or (ii) the date the New Tract Map has been approved by the La Quinta City Council, the Developer's engineers shall prepare and submit to the Agency a new site map (the "New Site Map") that reflects the changes effected by the New Tract Map and the Lot Line Adjustment. Upon confirmation by the Agency that the New Site Map accurately reflects said changes, the New Site Map shall automatically replace the Site Map currently attached to the DDA. 1.5 To replace Section 201.1 with the following: 201.1 Option "A". If Developer elects Option "A", Developer shall purchase the Property from Agency all at once, through one escrow (the "Property Escrow"), in accordance with the escrow provisions of Section 202 hereto. Notwithstanding the use of the term "Property Escrow" in this Section 201.1, all of the general requirements for each Escrow, as set forth in Section 202, shall apply to the Property Escrow, and every reference to an "Escrow" in this Agreement shall be deemed to include the "Property Escrow". Notwithstanding Developer's ownership of all of the Property, Developer shall be required to comply with the following limitations regarding its construction of the Project (for purposes of this Section 201.1, the term "construction" shall not include grading the Property and/or installing wet and dry utilities, all of which activities Developer shall be entitled to undertake pursuant to the Early Entry Agreement, as described in Section 305 hereof): 882/015610-0085 617012.07 a10/28/05 -3- (a) The First Permitted Phase of Construction. Upon Developer's acquisition of the Property, Developer may construct only the Suites Hotel, the Casitas Development, the Restaurants, and Seeley Drive (the "First Permitted Phase of Construction"). (b) The Second Permitted Phase of Construction. Upon Developer's completion of (i) the installation of the foundation for the Suites Hotel, as determined by City's Building Inspector, and (ii) the first pavement lift and the curbs and gutters of Seeley Drive, as verified by the City Engineer, Developer may construct, in addition to those items permitted to be constructed as part of the First Permitted Phase of Construction, (a) one of the buildings that comprise the Medical Office/Surgical Facility, containing not more than 75,000 square feet, and (b) twenty (20) of the Affordable Homes on Parcel 8 (the "Second Permitted Phase of Construction"). Notwithstanding anything herein to the contrary, Developer shall construct on Parcel 6 and/or Parcel 7 not less than one (1) parking space for each 250 square feet of the Medical Office/Surgical Facility to be developed thereon, whether such development occurs during this Second Permitted Phase of Construction or any subsequent phase of construction. (c) The Third Permitted Phase of Construction. Upon Developer's completion of the framing of all of the exterior walls of the Suites Hotel, as determined by the City's Building Inspector, Developer may construct, in addition to those items permitted to be constructed as part of the First Permitted Phase of Construction and the Second Permitted Phase of Construction, (i) the remaining twenty (20) Affordable Homes on Parcel 8, and (ii) one of the buildings that comprise the Medical Office/Surgical Facility, containing no more than 80,000 square feet (the "Third Permitted Phase of Construction"). (d) The Fourth Permitted Phase of Construction. Upon Developer's completion of the construction of the exterior walls and roof of the Suites Hotel, as verified by Developer's project architect for the Suites Hotel and confirmed by City's Building Inspector, Developer may construct, in addition to those items permitted to be constructed as part of the First Permitted Phase of Construction, the Second Permitted Phase of Construction, and the Third Permitted Phase of Construction, (i) the final building that comprises the Medical Office/Surgical Facility, containing no more than 40,000 square feet, and (ii) the Unrestricted Homes on Parcel 8. 1.6 To replace the Scope of Development, attached to the DDA as Attachment No. 8, with the Scope of Development attached hereto and incorporated herein as Exhibit `B". 1.7 To replace the Time for Completion in item 20 of the Schedule of Performance for Suites Hotel (Completion of Suites Hotel) with the following: "Before December 31, 2006, subject to the provisions of Section 702 of the DDA." 882/015610-0085 617012.07 a10/28/05 _4_ 2. Developer is in the process of preparing a new site plan for the Residential Development (the "New Residential Site Plan"). Upon City's approval of the New Residential Site Plan, the Residential Parcel 7 Site Map that is attached to the DDA as Attachment No. 7 will be automatically replaced with the New Residential Site Plan. 3. Except as otherwise expressly provided in this Amendment No. 3, all of the terms and conditions of the DDA shall remain in full force and effect. 4. This Amendment No. 3 shall not be effective unless and until the City Council has approved the Specific Plan Amendment and the Development Agreement Amendment, and the Developer and City have executed the Development Agreement Amendment. 5. In the event of any action between Agency and Developer seeking enforcement of any of the terms and conditions to this Amendment No. 3, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 6. This Amendment No. 3 shall be construed according to its fair meaning and as if prepared by both parties hereto. 7. This Amendment No. 3 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Municipal and Superior Courts of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 3. Service of process on Agency shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 8. Time is of the essence of this Amendment No. 3 and of each and every term and provision hereof. 9. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by both Agency and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 10. This Amendment No. 3 may be executed in counterparts, each of which, when this Amendment No. 3 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 11. The person(s) executing this Amendment No. 3 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No. 3 on behalf of said party, (iii) by so executing this Amendment No. 3 such party is formally bound to the provisions of this Amendment No. 3, and (iv) the entering into this Amendment No. 3 does not violate any provision of any other agreement to which such party is bound. 882/015610-0085 _ 617012.07 a10/28/05 _5 IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read this Amendment No. 3, understands it, and hereby executes this Amendment No. 3 to be effective as of the day and year first written above. Dater , 2005 Date: L-6v. i , 2005 Date:- , 2005 ATTEST: eek, Agency Secret APPROVED AS TO FORM: RUTAN TUCr P , _ ,Y' By: M. Kath rine Jenso Agency Counsel "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: Richard Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a pub body, corporate and po By: Executive Director 882/015610-0085 617012.07 a10/28/05 -6_ EXHIBIT "A" PARCEL MAP [See following pages] 882/015610-0085 _ 617012.07 a10/28/05 _1 V W w x w x K u ggyyY rzi. oIo'SW og n � � Q! 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EXHIBIT `B" SCOPE OF DEVELOPMENT [See following pages] 882/015610-0085 _ 617012.07 a 10/28/05 _ 1 ATTACHMENT NO. 8 SCOPE OF DEVELOPMENT I. GENERAL SUMMARY This document outlines the general requirements for the improvements to be constructed on the Property. Specific details are addressed in the Center Point Project Specific Plan SP2001- 055, as amended by Resolution No. 2003-35, which was duly adopted by the City Council on June 3, 2003, and as amended by the Specific Plan Amendment, which was duly adopted by the City Council on IV0 ✓. / . 40d.T , by Resolution No. v2ou 5-086 ("Specific Plan"), and in the construction plans that will be prepared for the development. The Property is identified as APN 604-04-12, APN 604-04-13, APN 604-04-23, and APN 604-04-37, located southeast of the intersection of Miles Avenue and Washington Street in the City of La Quinta, and is approximately 42.47 acres in size. The Specific Plan provides for the development of a commercial development project that contains all of the following: (i) a medical office/surgical facility ("Medical Office/Surgical Facility"), (ii) a mid -price suites hotel containing 133 guest rooms ("Suites Hotel"), (iii) a resort -style condominium/casitas project containing approximately 164 casitas units ("Casitas Development"), (iv) 2 sit-down restaurants (the "Restaurants"), and (v) a single family residential development containing approximately 60 units ("Residential Development'), all as further described below. II. PROJECT COMPONENTS A. Medical Office/Surgical Facility The Medical Office/Surgical Facility, which will be constructed on approximately 13.63 acres, will contain approximately 195,000 square feet, in the aggregate, and house a medical office and surgical center, which will provide an Ambulatory Surgery Center, GI Center, Imaging Center, Cancer Treatment Center, Physical and Occupational Therapy services, Industrial Rehabilitation services, Urgent Care Center, Draw Station and a Pharmacy. The facility will provide individual offices for physicians associated with the facility, as well as areas for patient treatment and diagnosis and beds for short term stays. The facility will not include emergency room facilities, and all patient care will be on a pre -arranged basis. The maximum height of the Medical Office/Surgical Facility buildings will be three (3) stories and forty five (45) feet in height on Parcel 6, and two (2) stories and thirty-three (33) feet in height on Parcel 7. B. Suites Hotel The Suites Hotel, which will be constructed on approximately 3.42 acres, will consist of a three-story, "extended stay" hotel having 133 units. The Suites Hotel will be branded as a Homewood Suites by Hilton, or another national brand which has a centralized reservation system, such as a Hawthorne Suites or a Staybridge Suites Hotel by Holiday Inn, and will offer both parlor and one bedroom suites, all of which will include fully equipped kitchens. The Suites Hotel will also have a public lobby area, a pool and an exercise facility. The Suites Hotel 882/015610-0085 _ 617012.07 a10/28/05 -] will be one of the components of the Project that will be constructed in the first phase of development of the overall Project. The Suites Hotel will have 134 parking spaces for hotel guests, and the parking area landscaping will provide shading. C. Casitas Development The Casitas Development, which will be constructed on approximately 10.81 acres, will consist of the construction of approximately 164 condominiums, which will be located adjacent to the Suites Hotel. The buildings within the Casitas Development will be one and two stories in height. Each of the condominium units is expected to contain two bedrooms. The Casitas Development will also contain pool areas for the use of condominium owners and guests. Each condominium unit will be individually sold, fully furnished, to a private owner. All owners will be encouraged to make their unit available for transient rentals when not in use, and all such transient uses will be subject to the City's transient occupancy tax ordinance. The Casitas Development is expected to be constructed in approximately nine (9) phases, with the first phase including approximately 24 units. This first phase will be constructed concurrently with the Suites Hotel, as part of the first phase of the overall Project. The Casitas Development will have approximately 262 parking spaces, and the parking area landscaping will provide shading in accordance with the Specific Plan. D. Restaurants The overall Project includes two Restaurant pads, with one pad on approximately .91 acres, and the other pad on approximately 1.10 acres. One of the pads will be used for the construction of a "dinner house" Restaurant to provide a quality dining experience for owners and guests within the Project. The second Restaurant will be a full -service, sit-down style Restaurant offering, at a minimum, breakfast and lunch. The individual design and construction of the Restaurants will be determined when the operators are identified. Neither Restaurant will be of the "fast food" or "quick serve" type, and neither will be permitted to have a drive through. E. Single Family Development The Project will contain one single family development (the "Residential Development"). The Residential Development will be constructed on approximately 9.45 acres, and will consist of up to 60 one- and two-story single-family homes. The eastern perimeter of the development, which is adjacent to the existing residential development, will be developed with one-story single-family homes. Forty (40) of the homes in the Residential Development will be restricted for sale to moderate -income families at an affordable housing cost. The residential units within the Residential Development will range in size from 1250 square feet to 2800 square feet. All units will have a two car garage. The Residential Development will include common area with pools, barbeque areas and passive play areas. F. Development Concept The Property shall be improved by the Developer in accordance with the provisions of this Agreement, the Specific Plan, and all applicable codes, ordinances, and statutes including 882/015610-0085 617012.07 a10/28/05 -2- requirements and procedures set forth in the La Quinta Municipal Code, and the Redevelopment Plan regulations adopted in conjunction with or subsequent to execution of this Agreement. G. On -Site Development and Improvements Developer shall prepare such plans, reports, and studies, and obtain such permits and approvals as required, including, but not limited to, grading plans for construction of the Project. Plans shall be prepared by a licensed civil engineer in good standing and subject to the approval of the Director of Public Works. Developer shall grant and permit all necessary and appropriate utility easements and rights for the development of the Project, including but not limited to sanitary sewers, storm drains, water, electrical power, telecommunications, natural gas, cable television, etc. H. Landscaping Developer shall be responsible to fully landscape the Project in accordance with the Specific Plan and landscape plans approved by the City. Developer shall also be responsible for the maintenance obligations set forth in the Easement Agreement that pertain to Landscape Parcel C, Landscape Parcel E, Landscape Parcel H, Landscape Parcel I, and the Parkway Areas. I. Public Improvements Developer shall be responsible for the construction of Seeley Drive, the interim street through the Project, and all other public improvements that may be identified per the Specific Plan including, but not limited to, all required internal utilities. All such construction shall be done to City specification. Additionally, Developer shall be responsible for obtaining and delivering to the City such bonds or other improvement security as City may require in accordance with applicable law, including but not limited to payment and performance bonds. Upon Developer's completion of Seeley Drive, Developer shall dedicate the same to the City for use as a public street. J. Development Standards All development on the Property shall conform to the development standards set forth in the Specific Plan, and other applicable City codes and development standards. 882/015610-0085 _3 617012.07 a10/28/05 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attn: Citv Clerk DOC # 2005-1045418 12/19/2005 08:00A Fee:NC Page 1 of 19 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder 11111111111111111 IN 111111111111111111111111111111111 M S U PA,,E s�zF1 DA PCOR Noc',P , eF MIS'� 1 w rA R GGPY LONG REFUND NCHG E 1AM i Space Above This Line for Recorder's Use (Exempt from Recording Fee per Gov't Code § 27383) AMENDMENT NO. 2 TO DEVELOPMENT AGREEMENT THIS AMENDMENT NO. 2 TO DEVELOPMENT AGREEMENT ("Amendment No. 2") is made and entered into as of NOK. /7 , 2005 ("Effective Date") by and between the CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of California (the "City"), and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"). RECITALS: A. On or about December 18, 2003, the La Quinta Redevelopment Agency ("Agency") and Developer entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which Agency agreed to sell to Developer, and Developer agreed to purchase from Agency, that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Site"), and to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/c.asitas development, two (2) sit-down restaurants, and two (2) single- family residential developments, with forty (40) of the single-family homes restricted for sale to "Eligible Buyers" at an "Affordable Housing Cost" (as those terms are defined in the DDA (collectively, the "Project"). The Site is legally described in Exhibit "A", which is attached .hereto and incorporated herein by this reference. B. Concurrently with the execution of the Original DDA, the City and Developer entered into that certain Development Agreement dated December 18, 2003, and recorded on January 5, 2004, as Instrument No. 2004-0005256, in the Official Records of the County of Riverside (the "Original Development Agreement"), for purposes of (1) identifying the terms, conditions, and regulations for the construction of the Project, certain components of which constitute a Planned Development (as defined in Civil Code Section 1351(k)); (11) setting forth a payment schedule for the Developer's payment to the City of certain amounts designed to compensate the City in the event that certain components of the Project fail to generate specified levels of transient occupancy tax (as that term is used in La Quinta Municipal Code Chapter 892/015610-0061 620306.02 a10/04/05 3.24); (iii) setting forth a payment schedule for the Developer's payment to the City of Three Hundred Forty -Six Thousand Eleven Dollars ($346,011), to cover the Developer's contribution towards the cost of certain landscaping improvements installed within certain portions of the real property adjacent to the Site; (iv) requiring the Developer, at its sole cost, to construct a neighborhood park on certain real property owned in fee by the City; and (v) setting forth the extent to which Developer may construct, develop, use and operate the Project. C. On or about October 28, 2004, (i) Agency and Developer entered into that certain Amendment No. 1 to Disposition and Development Agreement ("Amendment No. 1 to DDA") to revise (a) certain timeframes in the schedule of performance attached to the Original DDA; (b) certain conditions that had to be satisfied prior to the Agency's conveyance to Developer of the Site; and (c) the transfer and assignment provisions in the Original DDA, and (ii) City and Developer entered into that certain Amendment No. 1 to Development Agreement (Amendment No. 1 to Development Agreement") to revise the transfer and assignment provisions in the Original Development Agreement. The Original Development Agreement, as modified by Amendment No. 1 to Development Agreement, is hereinafter referred to as the "Development Agreement." D. On or about December 7, 2004, Agency and Developer entered into that certain Amendment No. 2 to Disposition and Development Agreement ("Amendment No. 2 to DDA") which amended the Original DDA, as amended by Amendment No. 1 to DDA, to provide for the Agency's agreement to subordinate Repurchase Option I in the same manner, and subject to the same terms and conditions, as the Agency had agreed to subordinate Repurchase Option III in order to accommodate Developer's acquisition and development lender. Concurrently with the parties' execution of Amendment No. 2 to DDA, Agency conveyed to Developer the Property. The Original DDA, as modified by Amendment No. 1 and Amendment No. 2, is hereinafter referred to as the "DDA." E. On or about April 4, 2005, Parcel Map No. 31116, in the City of La Quinta, was filed in the Official Records of the County of Riverside in Book 212 of Parcel Maps at pages 60- 66, inclusive (the "Parcel Map"). The Parcel Map created legal parcels within the Site that differ from the parcels depicted on the Site Map attached to the Development Agreement. In particular: (i) the Parcel Map created one legal parcel for development thereon of the Casitas Development (identified thereon. as "Parcel 2"), where the Site Map had depicted the Casitas Development on three parcels; (ii) the Parcel Map created one legal parcel for development thereon of the Sanctuary Villas Development (identified thereon as "Parcel 7"), where the Site Map had depicted the Sanctuary Villas Development on two parcels; and (iii) the Parcel Map created one legal parcel for development thereon of the Medical Office/Surgical Facility (identified thereon as "Parcel 6"), where the Site Map had depicted the Medical Office/Surgical Facility on four parcels. The Parcel Map also created "Parcel 1" and "Parcel 5" for development thereon of the Restaurants, "Parcel 3" for development thereon of the Villas Residential Development, "Parcel 4" for development thereon of the Suites Hotel, "Parcel 8" for development thereon of the Cluster/Perimeter Residential Development, and "Parcel 9" for development thereon of a public park. A copy of the Parcel Map is attached hereto and incorporated herein as Exhibit "B". All further references herein to a "Parcel" shall mean the parcel created on the Parcel Map. 6203006.02a]004/05 III IIIIIII IIIIIII IIII IIII IIIIIII IIII IIIIII III IIIIIIIIIIIII 1'2 19 2r�05 c''1GOR F. Concurrently with the preparation and processing through the City hereof, (1) the Developer has prepared and is processing through the City an amendment to the Center Point Specific Plan, also known as Specific Plan No. SP2001-055, as previously amended by City Council Resolution No. 2003-035, on June 3, 2003, to modify the uses permitted on certain portions of the Property (the "Specific Plan Amendment"), and (ii) the Agency and Developer have prepared that certain Amendment No. 3 to Disposition and Development Agreement ("Amendment No. 3 to DDA") to modify certain components of the Project and revise the timeframe set forth in the DDA for Developer's completion of the Suites Hotel. G. The City and Developer now desire to amend the Development Agreement to modify the description of the Project and certain obligations of the Developer set forth therein. The parties contemplate that, concurrently with the City Council's consideration of this Amendment No. 2, the City Council will consider the Specific Plan Amendment and the Agency Board will consider Amendment No. 3 to DDA. H. The City Council has determined that this Amendment No. 2 is consistent with the City's General Plan and the Specific Plan, including the goals and objectives thereof. I. All actions taken by City have been duly taken in accordance with all applicable legal requirements, including the California Environmental Quality Act (Public Resources Code Section 21000, et seq.) ("CEQA"), and all other requirements for notice, public hearings, findings, votes and other procedural matters. ,, // J. On "VD V. os , 2005, the City Council adopted its Ordinance No. ' c� 3 approving this Amendment No. 2. Unless otherwise specified herein, all capitalized terms in this Amendment No. 2 shall have the meaning ascribed in the Development Agreement. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. The Development Agreement is hereby amended as follows: 1.1 To replace Section 3.1 with the following: 3.1 Development of the Project-, Planned Development. Developer shall construct the Project on the Site in accordance with the Development Plan. The Project shall consist of a mixed -use residential and commercial development with the following components: (A) a mid -price suites hotel containing approximately one hundred twenty-nine (129) guest rooms ("Suites Hotel") to be constructed on Parcel 4; 620 06.610 0/04/OS IIIIIII IIIIIII IIII III) IIIIIII IIII IIIIII III IIIII IIII IIII 1�. Ll GiGc'r_N} F1 If�0N (B) a resort -style condominium/casitas project containing approximately one hundred sixty-four (164) condominium/casitas units ("Casitas Development") to be constructed on Parcel 2 and Parcel 3; (C) a residential development containing approximately sixty (60) detached, single family homes (the "Residential Development"), to be constructed on Parcel 8; with (i) fourteen (14) of the homes ("Unrestricted Homes") within the Residential Development to be sold on a market rate basis; and (ii) forty (40) of the homes ("Affordable Homes") within the Residential Development to be marketed and sold to moderate income buyers at an affordable housing cost (as those terms are defined in Health & Safety Code Section 50093); (D) two (2) restaurants (the "Restaurants"), with one Restaurant to be constructed on Parcel 1 and one Restaurant to be constructed on Parcel 5; (E) a medical office/surgical facility ("Medical Office/Surgical Facility") to be constructed on Parcel 6 and Parcel 7; and The Residential Development and the Casitas Development shall each constitute a Planned Development, and shall be developed and operated in compliance with Section 1350, et seq. of the Civil Code. 1.2 To revise Section 3.3.1 to replace the phrase "the Casitas Development Parcel" with "Parcel 2 and Parcel 3." 1.3 To delete, in its entirety, Section 3.3.2. 1.4 To replace, in their entirety, Sections 3.4.1 through 3.4.7 with the following: 3.4.1 General. During the Term of this Agreement, Developer or the Casitas Development HOA, as applicable, shall make the payments to City described in this Section 3.4. The payments under this Section 3.4 are not the exclusive development impact fees for the Project and nothing in this Section 3.4 shall be construed as a limitation on the right of the City to impose, levy, or assess the Site other development fees as permitted by applicable law. 3.4.2 Developer's Payments of One -Time Mitigation Fees. Developer shall pay to the City, for each unit in the Casitas Development, with such payment due upon the first close of escrow for each such unit, the sum of One Thousand Five Hundred Eighty -Five Dollars ($1,585). 62 306.02 a 0 04/05 111111111111111111111111111111111111111 I I IIIII IIII 1111 12, 1 J1, 4 r A 1 '1 3.4.3 Casitas Development Annual Mitigation Fee; Termination. During the term of this Agreement, on each July 1st following the Effective Date ("Annual Mitigation Payment Date"), the Casitas Development HOA shall pay to the City an annual mitigation fee ("Casitas Development Annual Mitigation Fee") covering the annual period of the prior July 1 through the June 30 occurring immediately preceding the Annual Mitigation Payment Date (the "Operative Year") [provided, however, the first Operative Year shall commence on the Effective Date of this Agreement and end on the next occurring June 30). The Casitas Development Annual Mitigation Fee shall be the collective sum of One Hundred Fifty Dollars ($150) [as the same may increase by the CPI in accordance with Section 3.4.7] for each unit ("Casitas Development Unit Fee") in the Casitas Development that has been sold to a purchaser, as evidenced by the close of escrow for such unit, prior to the applicable Annual Mitigation Payment Date regardless of when or in which Operative Year the unit was sold. Notwithstanding anything herein to the contrary, the Casitas Development Annual Mitigation Fee shall not be required to be paid for any Operative Year in which the City has received transient occupancy taxes derived from, collectively, the Suites Hotel and the Casitas Development, which equal or exceed Five Hundred Forty -Six Thousand One Hundred Thirty -One Dollars ($546,131) [as the same may increase by the CPI in accordance with Section 3.4.7] (the "Minimum Annual TOT Amount") for the applicable Operative Year. Notwithstanding the paragraph above, if the City has received the Minimum Annual TOT Amount in each of three (3) consecutive Operative Years, the Casitas Development HOA's obligation to pay the Casitas Development Annual Mitigation Fee shall be terminated and shall be of no further force or effect. 3.4.4 [Intentionally Omitted] 3.4.5 Payment of Casitas Development Public Facilities Fee. In addition to the other payments required to be paid pursuant to this Section 3.4, the Casitas Development HOA shall be required to pay to the City the sum of five percent (5%) of any rental amount charged for occupancy of a unit in the Casitas Development which is rented for a period of more than thirty (30) days (the "Casitas Development Public Facilities Fee"). The Casitas Development Public Facilities Fee shall be due and payable to the City within thirty (30) days after any such occupancy terminates, regardless of whether the rent, or any amount thereof, was collected. If the unit is provided free of charge or at a discount, as consideration for a service provided to the owner of the unit or to the Casitas Development HOA and/or for promotional or marketing purposes, the rent shall be deemed to be the higher of (i) the value of the services received; or (ii) the average rent of all of the units in the Casitas Development during the period the unit was provided. Notwithstanding the foregoing, the requirement to pay the Casitas Development Public Facilities Fee shall not apply in the case where an owner of a Casitas Development unit provides his or her Casitas 620306.02 a100061 /04/05 111111111111111111111111111111111111111111111111111 Jill 1�. 10 �1.JcIFF} Fl41 00A Development unit to a person who is a relative of the owner, for no consideration, for a period of more than thirty (30) days. 3.4.6 [Intentionally Omitted] 3.4.7 Consumer Price Index Adjustments. Each of the Casitas Development Annual Mitigation Fee, the Casitas Development Unit Fee, and the Minimum Annual TOT Amount shall be adjusted annually, on each May 1 st during the term of this Agreement, by the Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles - Riverside -Orange County average, All Items, 1982-84 = 100, published by the United States Department of Labor, Bureau of Labor Statistics (the "CPI"), by comparing the CPI existing on the immediately prior March 1st to the CPI existing on the March 1st of the previous year. No adjustment shall be made in any year in which there has been a decrease in the CPI. If the CPI is no longer published at any point during the Term of this Agreement, a comparable index shall be selected by the parties. 1.5 To revise Section 3.4.10 to replace the phrase "on the Villas Residential Development Parcel or the Cluster/Perimeter Residential Development Parcel" with the phrase "within the Residential Development." 1.6 To replace, in its entirety, Section 3.5 with the following: 3.5 Park Improvements. Developer agrees to develop a neighborhood park on Parcel 9, in accordance with the list of park improvements set forth in Exhibit "D" hereto (the "Park Improvements") and all applicable City and State laws and regulations. Prior to Developer's entry onto Parcel 9, Developer shall enter into an Early Entry Agreement with the City substantially in the form of which is attached hereto as Exhibit "E". The Park Improvements shall be completed and accepted by the City prior to, and as a condition of, the City's final inspection of the first unit in the Residential Development. 2. Developer acknowledges that it has transferred and assigned, or intends to transfer and assign, the rights and obligations under the DDA to develop the Casitas Development to Lennar Homes of California, Inc., a California corporation ("Lennar") and that Lennar intends to prepare a new tract map (the "New Tract Map") that merges Parcel 2 with Parcel 3. 3. Developer intends to prepare a lot line adjustment that merges Parcel 6 with Parcel 7, and transfers a portion of Parcel 7 to Parcel 8 (the Lot Line Adjustment"). The Developer contemplates that the new Parcel created by merging Parcel 6 with Parcel 7 will consist of approximately 13.63 acres, and that Parcel 8 will, after the Lot Line Adjustment, consist of approximately 9.45 acres. Within thirty (30) days after the later of (i) the date the Lot Line Adjustment has been processed, or (ii) the date the New Tract Map has been approved by the La Quinta City Council, the Developer's engineers shall prepare and submit to the City a new site map (the "New Site Map") that reflects the changes effected by the New Tract Map and the Lot 6203 6.02a 100 04/OS , 11111111111111111111111111111111111111111111111111 IN 1�.21� i1 }�F1�1�Fi��H Line Adjustment. Upon confirmation by the City that the New Site Map accurately reflects said changes, the New Site Map shall automatically replace the Site Map currently attached to the Development Agreement as Exhibit A-2. 4. This Amendment No. 2 shall not be effective unless and until (i) the City Council has approved the Specific Plan Amendment; (ii) the Agency Board has approved Amendment No. 3 to DDA; and (iii) Agency and Developer have executed Amendment No. 3 to DDA. 5. Except as otherwise expressly provided in this Amendment No. 2, all of the terms and conditions of the Development Agreement shall remain in full force and effect. 6. In the event of any action between City and Developer seeking enforcement of any of the terms and conditions to this Amendment No. 2, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 7. This Amendment No. 2 shall be construed according to its fair meaning and as if prepared by both parties hereto. 8. This Amendment No. 2 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Municipal and Superior Courts of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 2. Service of process on City shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 9. Time is of the essence of this Amendment No. 2 and of each and every term and provision hereof. 10. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by both City and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 11. Signatures of the parties transmitted by facsimile shall be deemed binding. However, each party agrees to submit their original signature to the other party within five (5) business days after execution hereof. 12. This Amendment No. 2 may be executed in counterparts, each of which, when this Amendment No. 2 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 13. The person(s) executing this Amendment No. 2 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No. 2 on behalf of said party, (iii) by so executing this Amendment No. 2 such party is formally bound to the provisions of this a_II0���} 1 2. 00 0 620IIIIIIIIIIIIIIIIIIIIIIII (IIII IIII IIIIII III IIIII IIII IIII 1 li°`rF FaFaH 6203066..02 a]a10/04/OS I of 1:3 Amendment No. 2, and (iv) the entering into this Amendment No. 2 does not violate any provision of any other agreement to which such party is bound. IN WITNESS WHEREOF, City and Developer each hereby represents that it has read this Amendment No. 2, understands it, and hereby executes this Amendment No. 2 to be effective as of the day and year first written above. Date: K Jvu . -Z-1 , 2005 Date: kj W Zl , 2005 Date: / ; / 12005 ATTEST. Ju gr k; City Clerk APPROVED'AS TO FOB: RUTAN & TU lR, LLP y: � M. Katherine Jenson, City Attorney "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Membe By. ° � -�� Richard Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: , )-,Z� i j- Richard Oliphant Its: President "City" CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of California City Manager 6882/01561-061 20 06.02 a100/04/OS IIIIIII IIIIIII IIII IIII IIIIIII IIII IIIIII III IIIII 1111 IN12.`I1� cr1Ft 11 f STATE OF CALIFORNIA ) ss COUNTY OF/ On IV6 ►� �D0 S , before me personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/aye subscribed to the within instrument and acknowledged to me that he/ahe4key executed the same in his/l hr! r authorized capacity(ies), and that by his/hef*&4 signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. REGENIA HENSLEY Commission # 1521423 ONotary Public - Cdiforrda Rverside County My Comm. Expires Oct23, 2008 STATE OF CALIFORNIA ) ) ss COUNTY OF f ) Nota ublic On d - w, before me, '' f personally appeared _ f personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/a>`e subscribed to the within instrument and acknowledged to me that he/sho44tey executed the same in his/her#keir authorized capacity(ies), and that by his/hefAheir signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. REGENIA HENSLEY Commission 1521423 Notary Public �d Notary Public - California ` Riverside County [ My Comm. Expires Oet 23, 2008 620306.020a 0 04/05 IIIIIII IIIIIII IIII IIII IIIIIII IIII IIIIII III IIIII IIII IIII 1�. 1r1 'ii� P-'f J. �EaH EXHIBIT "A" LEGAL DESCRIPTION OF THE SITE Parcels 1-8 of Parcel Map 31116, in the City of La Quinta, as per Map filed in Book 212, Pages 30-66, inclusive, of Parcel Maps, in the Office of the County Recorder of Riverside County. 62 3054101 '6.02 a 0/04/OS IIII IIII IIII IIIIIII IIII IIIIII III IIIIII III IIII l L1,0, 11 ofNCaH IIIlilllll EXHIBIT "B" PARCEL MAP [See Following Pages] 882/015610-0061 IIIIIII IIIIIII IIII IIII IIIIIII IIII IIIIII III IIIIII III Jill 1" 1Jia5'lf , tF4�1Faf�M 620306.02 a10/04/05 E" a �Po WffW w W Wz oz i VP w Him o� ����Szk' �� R-Wc£'9'0• .- a�Q' Nayy �iSZ g��ti�a�=� 5= or SoW �2ii�O<� U�✓1� � F =�v � _� �Z ¢ 00 ny �` �R� s III HIM III IIII `°`:=d (1) 41 < W ? 4 u Mu [Q7 a m W Mom- <ry z N W Ili O 1- 2 CLo a (z 0- 4 U '� o n N ZN O 2 � Jowv � ��? • m oWa=� w a W m _ CL axa9.Y % as nx/. i N is swear CD (06 cm wil Cs� <lo n wi �■ 4 oo�6 II I Z - O 0 w og tom ��o 1-- -am dap 3 ra.�wrmM p o n p 6 .<I �op �y � vl tli own �WY a�o G�� op32 0�� - oi o a 0 0 5 r a o d Y UuN�7 o� o a o ooN>o to i� �o= 72 ?2 '- e oai rcz p rc ��n w `wFo"� �w _ o — — _ v — � , Or N W a © a ��e a �nWm •4 '`�r oC �PD n� r 8 - LOAM 3 +.wroz M .cs.clm n SC)MLIv38 do sisrs <Y�419L M,1t,GIDO n> I.It 9�02 M _Oti.GIDp Ni I e rp iiiiii III IN 86888658�$�9,58g8$8$$$888 Ell A555ka 3 g5:.; 5g gkizF�E� -------------- S zx YZZZZ xxxxx2S ZZZ22 ZZ2Z2 ' .� 775m7���3���J7� 0 I °. ; < 0 LU W i 0,1 � id `.O. 101 aP v N ( i, tz � ~ �m N �h0 < �3N S h h W v) z a a O o "Mcr c26 c1� � C1, L i Q W % iSOO V z`o�N Uo 0 u L, iCr—mh .Q 6SI14 M CI LI �6[ I Wi Ury m �k Gj a o ¢ � < ��� d �\Q'♦ \\\ S\or \ y < / W W J \\m3 tlrr.row /__ a p U a wY ~dK aWxzgxgg i La IL J is_�aes< a = x. 91 -to $ mo0. o/ 1 -s s �N WAN cM1l aY % �•M1/\ Q ter ��g IIIIIII IIIIIII lill INIIIIIII lill 111111111111111111111111 l2r 19J 1 FI��}�'410 110RH �� n ��p88 a - aq ags�s,a Rsa ^s�$a�8:2�=""s3?4R���"- oas_g�$Rk� 88888 SS 8g�pqy 8888N888.888g � npo^ SSSSSBE$S$BRBRp ^8$88868 QQ«ri�$+i8g B Im 3C�IIRR�������Y. ZZSu.�d� -------------------------------------------------------- g.8e��:li8g>i6 R$�R�F=83gZRW gSRB $'• g7 SSg^g�B4:t�aS�B�F.e.-^re:n8:8 tas ...... W. assaW..�W..aW «S:. 27� Ws.+ 9 3"x�.7R WazsW saa sWW..� 'R z .....zz2 ZZxx ............... ........x222zx. zz ^-kk w�h�777777��^.7� 3�7��J$: 7^J'935-D5B� _ vi` 1NIOd IYD"301 m wY U a �i: 8 d�RAAn#$o� 88g.88g8g$888�868888888888B$8.8888,88. - -? 7RARr` assss 83Rn8 o�xxx-^ ..s ssss:sss rax��asx^s-^ n 'aRRR 6� ax::x ¢�s s2g2C "'ssW Wr.Wr.WWWW �g�o$gl]l7�srh�,a J a Jr FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director (SPACE ABOVE TIUS LIM: FOR RECORDING USE) (EXEMPT FROM RECORDUIG FEE PER GOV CODE § 27383 ) AMENDED AND RESTATED OPTION AGREEMENT NOTICE: THIS AMENDED AND RESTATED OPTION AGREEMENT CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS AMENDED AND RESTATED OPTION AGREEMENT ("Amended and Restated Option Agreement") is made this day of / 2006 (the "Effective Date"), by CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"). RECITALS A. Developer is the fee owner of certain real property located southeast of the Miles Avenue and Washington Street intersection, in the City of La Quinta, County of Riverside, State of California (the "Site"). The Site is legally described in Exhibit "A" attached hereto and incorporated herein. B. On or about December 18, 2003, the Agency and Developer entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which Agency sold to Developer the Site and Developer agreed to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to Eligible Buyers at an Affordable Housing Cost (collectively, the "Original Project"). C. Agency and Developer have previously amended the Original DDA on four (4) occasions, on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, and on or about __ , 2006 (the "Prior DDA Amendments") The Original DDA, as amended by the Prior DDA Amendments, is hereinafter referred to as the "DDA." D. Pursuant to the DDA, Agency and Developer entered into that certain Option Agreement on December 7, 2004, which was recorded on December 9, 2004, as Instrument No. 992 UIGfiI(WAS h 2004-0979138, in the Official Records of the County of Riverside (the "Option Agreement"). The Option Agreement grants to Agency an option to repurchase the Site, or a portion thereof, from Developer, if (i) Developer fails to commence, continuously proceed with, or complete construction of the Project or portion thereof within certain specified time frames, or (ii) Developer transfers the Site, or portion thereof, in violation of the terms of the DDA, all as further described herein. E. On or about April 4, 2005, Parcel Map No. 31116, in the City of La Quinta, was filed in the Official Records of the County of Riverside in Book 212 of Parcel Maps at pages 60- 66, inclusive (the "Parcel Map"). The Parcel Map created legal parcels within the Site that differ from the lots depicted on the Site Map attached to the DDA and on the Site Map attached to the Option Agreement. In particular: (i) the Parcel Map created one legal parcel for development thereon of the Casitas Development (identified thereon as "Parcel 2"), where the Site Map had depicted the Casitas Development on three lots; (E) the Parcel Map created one legal parcel for development thereon of the Sanctuary Villas (identified thereon as "Parcel 7"), where the Site Map had depicted the Sanctuary Villas on two lots, and (iii) the Parcel Map created one legal parcel for development thereon of the Medical Office/Surgical Facility (identified thereon as "Parcel 6"), where the Site Map had depicted the Medical Office/Surgical Facility on four lots. The Parcel Map also created "Parcel 1" and "Parcel 5" for development thereon of the two restaurants to be constructed as part of the Project, "Parcel 3" and "Parcel 8" for the development thereon of two residential developments to be constructed as part of the Project, and "Parcel 4" for the development thereon of the Suites Hotel. All subsequent references herein to a "Parcel" shall mean a parcel that has been created on the Parcel Map or a lot or parcel that has been created by a lot line adjustment processed and recorded subsequent to the recordation of the Parcel Map. F. Pursuant to the Prior DDA Amendments, Agency agreed to permit Developer to expand the Casitas Development onto Parcel3, and to expand the Medical Office/Surgical Facility onto Parcel 7. In April, 2006, Developer processed Lot Line Adjustment No. 2006-452 whereby "Parcel 6" and a portion of "Parcel T' were merged into a single parcel (the "MOB Parcel"), which MOB Parcel is more particularly described on Exhibit `B" attached hereto and incorporated herein by this reference. G. Pursuant to that certain Amendment No.4 to Disposition and Development Agreement entered into on or about 2006 by and between Agency and Developer ("Amendment No. 4 to DDA"), Agency agreed to modify certain provisions of the Option Agreement. H. The parties hereto now wish to replace, in its entirety, the Option Agreement with this Amended and Restated Option Agreement. 1. Except as otherwise expressly provided herein, the terms used herein shall have the meanings ascribed in the DDA. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals and all of the terms and conditions contained in the DDA, Developer and Agency hereby agree as follows: 682411%I�uY11L1 _i- Replacement of Option Agreement The Option Agreement is hereby replaced, in its entirety, with this Amended and Restated Option Agreement 2. Repurchase Option I - Failure to Commence Construction Pursuant to the terms of the Option Agreement, Developer granted to Agency an exclusive option to repurchase the Site, or any Parcel thereof, if Developer failed to commence construction of the Project or Parcel within the times set forth in the Commencement and Completion Schedule attached to the Option Agreement (collectively, "Repurchase Option T'). For the purposes of the Option Agreement, (a) the term "commence construction" was defined to mean Developer's completion of mass grading for the entire Site. Developer completed mass grading of the entire Site on or about-' 200 , and therefore Agency hereby acknowledges and agrees that Repurchase Option I as descried in the Option Agreement has now terminated and is of no further effect. 3. Repurchase Oxon II - Failure to Continuously Proceed With or Complete Construction F_xc�t MOB Parcel Developer hereby grants to Agency an exclusive option to repurchase any individual Parcel then -comprising the Site ("Option II Parcel(s)") if, after commencement of construction of the Phase of Development to be constructed on the Option II Parcel(s), Developer fails to continuously proceed with, and complete, construction of such Phase of Development on the Option II Parcel(s) (collectively, "Repurchase Option in. For purposes of this Option Agreement, "continuously proceed with construction" shall be defined as construction that is interrupted, if at all, for periods of no longer than thirty (30) days; and "completion of construction of the Phase of Development" shall be defined as City's final inspection of the Phase of Development by the date set forth in the Completion Schedule attached hereto and incorporated herein as Exhibit"C", subject to Section 6(f) below ("Completion Deadline'). In the event of Developer's failure to continuously proceed with construction, or to complete construction of any Phase of Development by the Completion Deadline, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the applicable Completion Deadline (after expiration of the cure period described in Sections 6(b) and 6(c) hereof) ("Repurchase Option II Period"). Agency acknowledges that concurrently with the recordation hereof, Developer has conveyed fee title to the MOB Parcel to Eisenhower Medical Center, a California nonprofit public benefit corporation ("EMC"), for a purchase price of Ten Million Eight Hundred Thousand Dollars ($10,800,000) ("EMC Purchase Price"). Notwithstanding anything in this Section 3 to the contrary, Agency's Repurchase Option II rights with respect to the MOB Parcel shall be as set forth in Section 4 below. (a) Exercise of Option Agency shall exercise the Repurchase Option II by giving written notice to Developer, in accordance with Section 7 of this Option Agreement, prior to the expiration of the Repurchase Option II Period. Failure of Agency to exercise the Repurchase Option II with respect to a particular Phase of Development shall constitute a waiver by Agency of Developer's breach of BR2'U756I U-a0N'� A- its obligation to continuously proceed with and complete construction of that Phase of Development within the time set forth in the Completion Schedule. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of Developer's obligation to continuously proceed with and complete construction of any other Phase of Development within the time set forth in the Completion Schedule, or of any other Developer breach of the terms or conditions of the DDA. (b) Determination of Repurchase Price - Repurchase Option II (Except MOB Parcel Agency's repurchase price for the Option II Parcel(s) ("Repurchase Option II Repurchase Price"), shall be the sum of Developer's Purchase Price for the Option II Parcel(s) plus thirty-three and three -tenths percent (33.3%) of "Developer's Construction Costs." For purposes of this Option Agreement, the term "Developer's Construction Costs' shall mean, with respect to development of the Phase of Development to be constructed on the Option II Parcel(s), the lesser of (i) construction costs actually incurred by Developer for development of said Phase of Development from the DDA Date to the date Agency's exercises this Repurchase Option 11 (the "Construction Period"), and (ii) the constructions costs for the Construction Period set forth in Developer's Preliminary Budget, as approved by Agency as part of Agency's approval of Developer's financing, in accordance with Section 311 of the DDA, which costs may include (i) the amount paid by Developer to the contractor or contractors performing the works of improvement; (ii) reasonable inspection and testing costs paid by Developer to independent third party engineers or consultants in conjunction with said works of improvement (but not including costs, fees, charges, or profits allocated to Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer; (iii) costs and fees paid by Developer to independent third party engineers or consultants with respect to the planning, design, and engineering of the works of improvement (but not including costs, fees, charges, or profits allocated to the Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer); and (iv) the costs and fees incurred by Developer, if any, to obtain financing for the construction of the works of improvement. 4. RMurchase Option II — Failure to Continuously Proceed With or Complete Construction (MOB Parcel) Agency shall be entitled to exercise Repurchase Option II with respect to the MOB Parcel if, after acquiring the Site, EMC fails to continuously proceed with, and complete, construction of at least a 40,000 square foot Medical Office/Surgical Facility building (the "First MOB Building"). For purposes of this Section 4, "continuously proceed with construction" shall have the meaning ascribed in Section 3; and "completion of construction of the First MOB Building" shall be defined as City's final inspection of said building on or before the applicable Completion Deadline. In the event of EMC's failure to continuously proceed with construction, or to complete construction of the First MOB Building by the Completion Deadline, Agency shall be entitled to exercise, but is not obligated to exercise, applicable Repurchase Option II with respect to the MOB Parcel for a period of ninety (90) days following the applicable Completion Deadline (after expiration of the cure period described in Sections 6(b) and 6(c) hereof). xn_' OI561(4kIR'� �— (a) Exercise of Option Agency shall exercise the Repurchase Option II with respect to the MOB Parcel in the manner described in paragraph 3(a) above. (b) Determination of Repurchase Price — Repurchase Option II (MOB Parch The Agency's Repurchase Option II Price for the MOB Parcel shall be equal to Ten Million Eight Hundred Thousand Dollars ($10,800,000) plus thirty-three and three -tenths percent (33.3%) of "EMC's Construction Costs." For purposes of this Amended and Restated Option Agreement, the term "EMC's Construction Costs" shall mean the lesser of (i) construction costs actually incurred by EMC for development of the MOB Parcel to the date Agency exercises Repurchase Option II with respect to the MOB Parcel (the "EMC Construction Period"), and (ii) the construction costs for the EMC Construction Period set forth in EMC's Preliminary Budget, which costs may include (A) the amount paid by EMC to the contractor or contractors performing the works of improvement, (B) reasonable inspection and testing costs paid by EMC to independent third party engineers or consultants in conjunction with said works of improvement (but not including costs, fees, charges, or profits allocated to EMC 's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with EMC; (C) costs and fees paid by EMC to independent third party engineers or consultants with respect to the planning, design, and engineering of the works of improvement (but not including costs, fees, charges, or profits allocated to the EMC's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with EMC); and (D) the costs and fees incurred by EMC, if any, to obtain financing for the construction of the works of improvement. 5. Reourchase Option III - Transfer of the Site Developer hereby grants to Agency an exclusive option to repurchase (i) the Site if, prior to the time Agency issues a Release of Construction Covenants for any Phase of Development to be constructed thereon, Developer transfers or suffers an involuntary transfer of the Site in violation of the terms of the DDA; or (ii) any of the individual Parcels then -comprising the Site (the "Option III Parcels)") if, prior to the time Agency issues a Release of Construction Covenants for the Phase of Development to be constructed on the Option III Parcel(s), Developer transfers or suffers an involuntary transfer of the Option III Parcel(s) (collectively, "Repurchase Option I➢P'). In the event of Developer's transfer of the Site or any individual Parcels then - comprising the Site in violation of the DDA, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the transfer that gives rise to Agency's option under this Section ("Repurchase Option III Period"). Notwithstanding the foregoing, Agency shall not have a Repurchase Option III to repurchase (i) the Site, or any portion thereof, as a result of Developer's transfer to EMC of the MOB Parcel, or (ii) the MOB Parcel for any transfer by Developer of any portion of the Site or Project. Any subsequent transfer of the MOB Parcel by EMC in violation of the DDA shall entitle Agency to exercise Repurchase Option III with respect to the MOB Parcel. (a) Exercise of Option Agency shall exercise the Repurchase Option III by giving written notice to Developer ("Agency's Notice of Option III Exercise"), in accordance with Section 7 of this Option 88'_ UI c61 W p8ti —�— Agreement, prior to the expiration of the Repurchase Option III Period. Notwithstanding anything herein to the contrary, (i) failure of Agency to exercise the Repurchase Option III with respect to Developer's transfer or sufferance of an involuntary transfer of the Site shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Site, and (ii) failure of Agency to exercise the Repurchase Option III with respect to Developer's transfer or sufferance of an involuntary transfer of a Parcel shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Parcel, and shall not constitute a waiver by Agency of its exercise of this Repurchase Option III with respect to any other Parcel then -comprising the Site. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of any other Developer breach of the terms or conditions of the DDA. (b) Repurchase Price - Repurchase Option 11I. Agency's repurchase price for the Site or for the Option III Parcel(s) ("Repurchase Option III Repurchase Price") shall be equal to the Repurchase Option II Repurchase Price, as set forth in Section 3(b) or 4(b) (as applicable) of this Option Agreement. 6. Additional Terms Applicable to the Repurchase Options The following additional terms shall apply to Repurchase Option II and Repurchase Option III. All rights and defenses of Developer under this Section 6 shall be rights and defenses of EMC with respect to the MOB Parcel: (a) Successors and Assigns. Repurchase Option I1 and Repurchase Option III created hereby shall be irrevocable by Developer and, subject to any subordination by Agency in accordance with paragraph (e) below, shall be binding upon the successors and assigns of Developer. (b) Developer's Right to Cure Certain Defaults. Notwithstanding anything herein to the contrary, Agency shall not be entitled to exercise Repurchase Option II until Agency has provided a written notice to Developer regarding Developer's failure to continuously proceed with or complete construction of the Project or any Phase of Development (with any of the above failures referred to hereinafter as an "Option Triggering Event"), and Developer has not, within sixty (60) days after receipt of such notice, cured, corrected, or remedied such Option Triggering Event, or, for those Option Triggering Events that cannot reasonably be cured, corrected, or remedied within sixty (60) days, commenced to cure, correct or remedy such Option Triggering Event within said sixty (60) day period, and diligently prosecute the same to completion. (c) Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by Developer whenever the Agency may deliver any notice or demand to Developer with respect to an Option Triggering Event, the Agency shall at the same time deliver a copy of such notice or demand to each holder A%?�1561R�b8s of record of any mortgage or deed of trust which has previously requested such notice in writing, including but not limited to 1st Centennial Bank, which is providing to Developer an acquisition and development loan (the "A&D Loan"). Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Property (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. (d) No Agency Obligation. Notwithstanding any covenant, term, or provision in this Section 6 to the contrary, Agency shall not be obligated to exercise Repurchase Option II or Repurchase Option III. (e) Termination of Option Agreement. In the event Developer commences and completes construction of any particular Phase of Development and Agency has not exercised Repurchase Option II or Repurchase Option III, Agency shall execute and record a termination of this Option Agreement with respect to the underlying Parcel of said Phase of Development within fifteen (15) business days after the final and permanent Certificate of Occupancy for the Phase of Development is issued by the City. Notwithstanding anything herein to the contrary, upon the "Medical Office/Surgical Facility Release Date," which, as used herein, shall mean the earlier of (i) the date Developer completes construction of the First MOB Building, as evidenced by City's issuance of a certificate of occupancy therefor, and (ii) the date construction on the First MOB Building has commenced, provided that completion bonds naming the Agency as a beneficiary with the right to enforce are in place that guarantee completion of the same, this Option Agreement shall be deemed terminated with respect to the MOB Parcel, and Agency shall execute and record a partial termination hereof with respect to said Parcel. (f) Enforced Delay. Notwithstanding anything to the contrary herein, in addition to specific provisions of this Option Agreement, performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs, riots; floods; earthquakes; fires; casualties, supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation, unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other parry, acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency shall not excuse performance by Agency unless the act or failure is caused by the acts or omissions of Developer); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall 882,0611WAMi _........ 1 ...... -7- continue to exercise commercially reasonable efforts to minimize the period of the delay. An extension of time for any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within thirty (30) days following the commencement of the cause. The following shall not be considered as events or causes beyond the control of Developer, and shall not entitle Developer to an extension of time to perform: (i) Developer's failure to obtain financing for the Project or for any Phase of Development, (ii) Developer's failure to negotiate agreements with prospective tenants or users for the Project or for any Phase of Development, (iii) interest rates or (iv) economic or market conditions. Times of performance under this Option Agreement may also be extended by mutual written agreement by Agency and Developer. Agency's Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. (g) Subordination. The Agency agrees to subordinate this Option Agreement to the A&D Loan, to Developer's construction loan(s) for each Phase of Development and to the deed of trust securing Developer's investor's loan for Developer's construction of the Suites Hotel on the Suites Hotel Parcel and the Casitas Development on Parcel 2 and on Parcel 3 and to execute a subordination agreement evidencing same, to be recorded in the official records of the County Recorder for the County of Riverside, provided all of the following conditions are met: i) Loan Amount. (1) for the Medical Office/Surgical Facility, the Restaurant to be developed on Parcel 1, and the Restaurant to be developed on Parcel 5, the maximum cumulative principal amount of the construction loan for the applicable Phase of Development shall not exceed ninety percent (901/6) of the lender's appraised value of the Parcel on which said Phase of Development shall be constructed, upon completion of the Phase of Development, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction, and (2) for the Suites Hotel and the Casitas Development, the maximum cumulative principal amount, collectively, of Developer's construction loan plus Developer's investor's loan, shall not exceed ninety percent (90%) of the lender's appraised value of the Parcel(s) on which the applicable Phase of Development shall be constructed, upon completion of the Phase of Development, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction, ii) Use of Loan Proceeds. The loan(s) shall obligate Developer to expend loan proceeds for no other purpose than the applicable Phase of Development, and iii) Notice and Agency's Opportunity to Cure. The loan(s) shall provide that any notice of a Developer breach or default shall also be sent to the Agency at the address listed in Section 7 and that upon receipt of such notice, Agency shall have the right to (A) cure the noticed breach or default, (B) negotiate with the lender regarding the noticed breach or default, and (C) purchase the Site from Developer subject to the construction lender's deed of RR_'01?6 W=5 trust, without the consent of Developer or the holder of the construction lender's deed of trust, and that Agency's exercise of the foregoing rights shall not, in and of itself, give rise to any right on the part of the lender to accelerate the amounts due under the loan. (h) Agency's Investation of Site. Agency shall have forty-five (45) days after the occurrence of an event that triggers Agency's ability to exercise either of Repurchase Option II or Repurchase Option III to enter upon the Site (or applicable portion thereof) to conduct any tests, inspections, investigations, or studies of the condition of the Site (or applicable portion thereof). Developer shall permit Agency access to the Site (or applicable portion thereof) for such purposes. Agency's obligation to close "Escrow" (as defined below) shall be subject to Agency's approval of any environmental and other site testing conducted by Agency in Agency's discretion. Agency shall indemnify, defend, and hold harmless Developer and its officers, directors, shareholders, employees, agents, and representatives from and against all claims, liabilities, or damages, and including expert witness fees and reasonable attorney's fees and costs, arising out of any such testing, inspection, or investigatory activity on the Site (or applicable portion thereof). (i) Escrow Provisions. i) Within five (5) business days after Agency has exercised Repurchase Option I, Repurchase Option II, or Repurchase Option Ili (as applicable), or as soon thereafter as reasonably practicable, an escrow shall be opened ("Escrow") with an escrow company selected by Agency for the reconveyance of the Site (or applicable portion thereof) to Agency ("Escrow Holder"). Escrow shall be deemed opened on the date that a fully executed copy of this Option Agreement and a notice of exercise of option prepared by Agency are delivered to Escrow Holder ("Opening of Escrow"). Escrow Holder shall notify Developer and Agency in writing of the date of the Opening of Escrow promptly following the opening of the Escrow. ii) Escrow shall close on or before the date that is ninety (90) days after the Opening of Escrow ("Close of Escrow" or "Closing Date"). The terms "Close of Escrow" and "Closing Date" shall mean the date the grant deed conveying fee title to Agency ("Agency Grant Deed") is recorded in the Office of the County Recorder of the County of Riverside, State of California. Possession of the Site, or portion thereof, shall be delivered to Agency at the Close of Escrow. iii) This Option Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of Developer and Agency to Escrow Holder as well as an agreement between Developer and Agency. In the event of any conflict between the provisions of this Option Agreement and Escrow Holder's standard instructions, this Option Agreement shall prevail. iv) The Escrow shall be subject to Agency's approval of a then -current preliminary title report. Any monetary lien(s) or encumbrance(s) shown on such preliminary title report that is (are) created concurrent with or after the close of escrow that conveyed the Site from Agency to Developer shall be removed by Developer at its sole expense prior to the Close of Escrow pursuant to this Section 4(i) unless such exception(s) is (are) accepted by Agency in -Q- its sole discretion; provided, however, that Agency shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title existing on the date of recordation of the Grant Deed to the Site (in the form of Attachment No. 4 to the DDA); and (iii) matters shown as printed exceptions in the standard form ALTA policy of title insurance. In the event the Site is encumbered by a mortgage or deed of trust, Agency shall be permitted to unilaterally instruct Escrow Holder to satisfy the indebtedness secured thereby out of the proceeds payable to Developer through the foregoing Escrow. Any additional amount necessary to satisfy such indebtedness shall be paid by Developer. v) On or before 1:00 p.m, on the last business day preceding the scheduled Closing Date, Agency shall deposit in Escrow (i) the applicable of the Repurchase Option II Repurchase Price or the Repurchase Option III Repurchase Price; (ii) one-half (1/2) of the escrow fees; (iii) the portion of the title insurance premium attributable to any extra or extended coverages, or any additional charge resulting from Agency's request that the amount of insurance be higher than the applicable of the Repurchase Option II Repurchase Price or the Repurchase Option III Repurchase Price; and (iv) any and all additional instruments or other documents required from Agency (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Developer shall deposit in Escrow (i) the Agency Grant Deed, executed and acknowledged, (ii) one-half (1/2) of the escrow fees; and (iii) any and all additional instruments or other documents required from Developer (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. Developer shall also be required to pay for documentary tax stamps, recording fees, and for an ALTA standard form owner's policy of title insurance in the amount of the Repurchase Option II Repurchase Price or the Repurchase Option III Repurchase Price (as applicable), showing title vested in Agency free and clear of all liens and encumbrances except those permitted by paragraph (iv) above (the "Title Policy"). Agency's receipt of the Title Policy shall be a condition to the Close of Escrow. Any other costs and expenses shall be allocated between the parties in the manner customary for a commercial property conveyance in Riverside County. vi) If, on or before the Closing Date, Escrow Holder has received all of the documents and funds listed in paragraph (v) above, and Escrow Holder is in a position to cause the Title Policy to be issued to Agency, and provided Agency has approved of the condition of the Site, or applicable portion thereof, Escrow Holder shall close the Escrow by taking the following actions: (i) recording the Agency Grant Deed in the office of the County Recorder of the County of Riverside, California, and delivering the recorded Agency Grant Deed to Agency; (ii) causing the Title Policy to be issued to Agency; and (iii) delivering the applicable Repurchase Price to Developer. (j) Agency's Right to Acquire the Site. Notwithstanding anything herein to the contrary, upon Agency's exercise of Repurchase Option II or Repurchase Option III, Developer's commencement to cure the default that led to Agency's exercise shall not affect Agency's right to close the Escrow and acquire the Site (or applicable portion thereof). RR'_ a7 Sfi7tu41Nti (k) Agency's Repurchase of Uncom�eted Portions of the Property. Notwithstanding anything herein to the contrary, in the event that as a result of Agency exercising Repurchase Option II or Repurchase Option III Agency acquires Parcel 8, if Developer has obtained a Certificate of Completion from the City for one or more of the lots that comprise said Parcel, (i) the provisions of this Option Agreement shall apply only to that portion of Parcel 8 for which Certificates of Completion have not been issued ("Uncompleted Portion of the Repurchase Property") and any calculations for determining the Repurchase Option II Repurchase Price or the Repurchase Option III Repurchase Price (as applicable) shall be based solely upon the Uncompleted Portion of the Repurchase Property, and (ii) Developer agrees to cooperate with Agency to effect the subdivision of the Uncompleted Portion of the Repurchase Property from the completed portions of Parcel 8 (those portions of the Repurchase Property for which Certificates of Completion have been issued). 7. Notices_ Demands and Communications Between the Parties Formal notices, demands, and communications between Agency and Developer shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to: To Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. To Developer: CP Development La Quinta, LLC 77-564 Country Club Drive, Suite 100 Palm Desert, CA 92211 Attn: Richard Oliphant With copies to: Ealy, Hemphill, Blasdell & Oleson, LLP 777 Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill and Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed in the manner provided above shall be deemed effective on the second business day following deposit in the United States mail. Such written notices, as2 of cetwns< —� �— demands, and communications shall be sent in the same manner to such other addresses as either party may from time to time designate by mail. 8. AAen_ 's Option to Acquire Plans If Agency exercises Repurchase Option II or Repurchase Option III in accordance with this Agreement, at the option of the Agency, which may be exercised in the Agency's sole and absolute discretion, the Developer shall deliver to the Agency an executed assignment in a form reasonably acceptable to the Agency of the Developer's right to use all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to (i) the construction of the Project on the Site or (ii) if Agency acquires less than all of the Site, the construction of the Phases(s) of Development applicable to the Parcels which the Agency is acquiring (the "Plans"), together with copies of all of the Plans, as have been prepared for the development of the Site or applicable portion thereof to date of the termination. Notwithstanding the foregoing, however, Developer does not covenant to convey to the Agency the copyright or other ownership rights of third parties. Agency understands and agrees that the assignment to Agency under this Section 6 is subject and subordinate to any assignment which Developer may make to a lender providing financing for the Project or applicable Phase of Development, and Agency agrees to execute any documents required by such lender acknowledging and effectuating such subordination of Agency's rights in and to the assignment. Agency's acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall assume all risks in the use of the Plans. 9. Apnlicable Law and Forum Attorney's Fees The Superior Court of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Option Agreement. This Option Agreement shall be governed by, and construed under, the internal laws of the State of California without regard to conflict of law principles. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Option Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Option Agreement. The rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Service of process on Agency shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. If either party to this Option Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Option Agreement, the party prevailing in the final judgment in such action or proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable attorney's fees. Attorney's fees shall include reasonable costs for investigating such action, conducting discovery, retaining expert witnesses, and all other necessary costs the court allows which are incurred in such litigation. 88201 Wfw 181 r. ---.- ... ._ .1 -1?- 10. Nonliabili of Agency Officials and Employees No officer, official, employee, agent, or representative of Agency shall be personally liable to Developer or any successor in interest, in the event of any default or breach by Agency, or for any amount which may become due to Developer or its successor, or for breach of any obligation of the terms of this Option Agreement. 11. Nondiscrimination Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, or ancestry with respect to this Option Agreement or use of the Site. 12 Interpretation The terms of this Option Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Option Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Option Agreement. 13 Entire Agreement This Option Agreement integrates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Option Agreement must be in writing and signed by the appropriate authorities of the parry to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of Agency and Developer. 14. Count_ a arcs This Option Agreement may be executed in counterparts, each of which, after all the parties hereto have signed this Option Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 15, Severability In the event any section or portion of this Option Agreement shall be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect, and the parties hereto shall take further actions as may be reasonably necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this Option Agreement. [END - SIGNATURES ON NEXT PAGE] 882,n seiaUs,.,. IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first above written. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Q. Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: lam. Richard R. Oliphant Its: President "AGENCY" LA QUINTA REDEVELOPMENT AGENCY a public body, corporate and politic Executive Director CIA APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency NX] of Sfi I(uttltls -14- IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first above written. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "AGENCY" LA QUINTA REDEVELOPMENT AGENCY a public body, corporate and politic By: Its: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Executive Director 8821015610-0085 735889 03 a0921 /06 -14- STATE OF CALIFORNIA ) ss COUNTYOF On L 1yi U Pefore me, _ personally appeared i' , :' , personally known to me (or probed to me on_ the basis of satisfactory evidence) to be the person(s) whose name(z) is/are subscribed to the within instrument and acknowledged to me that he/slle4heq executed the same in hisAwfAheir authorized capacity(ies), and that by his/her/"r signature(s) on the instrument the persons) or the entity upon behalf of which the person a) acted, executed the instrument. Witness my hand and official seal. C. BRANDOW COMMUlon * 1521142 r Notary Public - \ %1MVC0MM-EVkft0Ct22,2M8P Notary Pubk . Caftpda RNemft STATE OF �ALIFORNIA ) )ss COUNTY OF On �. • .�� , before me, _ personally appeared personally known to me (or proved tv me of -th"asis-el` satisfaactvey evidence) to be the person(s) whose namef,,8'J is/are subscribed to the within instrument and acknowledged to me that he/she4hey executed the same in his/he4their authorized capacity(ies), and that by his/her/their signature(�) on the instrument the person(,A or the entity upon behalf of which the person^w acted, executed the instrument. Witness my hand and official seal. - 'i1i [SEAL] A Notary Public 8820I 5616('085 _ 1 �_ STATE OF CALIFORNIA 1 COUNTY OF RIVERSIDE 1 ss. CITY OF LA QUINTA 1 On October 20, 2006 , before me, Regenia Hensley, Notary Public, personally appeared THOMAS P. GENOVESE, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. REMIA HENSLEYw Notary Public Commission # 1521423 Expiration: October 23, 2008 (Seal) S R Jilt .41 EXHIBIT "A" LEGAL DESCRIPTION OF THE SITE IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCELS 1 THRU 5, INCLUSIVE, OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212 OF PARCEL MAPS, AT PAGES 60-66, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS, AND PARCELS "A" AND "B" OF LOT LINE ADJUSTMENT NO. 2006-452 APPROVED BY THE CITY OF LA QUINTA AND RECORDED APRIL 19, 2006 AS INSTRUMENT NO. 0280726, OR, BEING ADJUSTED PARCELS 6, 7 AND 8 OF PARCEL MAP NO. 31116 AS SHOWN BY MAP ON FILE IN BOOK 212 OF PARCEL MAPS, AT PAGES 60-66, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS, ALL BEING IN SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M. 882N75610-0085 73588903 a09R1/06 EXHIBIT'B" LEGAL DESCRIPTION OF MOB PARCEL PARCEL"A" OF LOT LINE ADJUSTMENT NO. 2006-452, MORE PARTICULARLY DESCRIBED AS FOLLOWS: IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCEL 6 TOGETHER WITH THAT PORTION OF PARCEL 7 OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS, BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST EASTERLY CORNER OF SAID PARCEL 7; THENCE ALONG THE SOUTHEASTERLY, SOUTHWESTERLY AND NORTHWESTERLY BOUNDARY LINES OF SAID PARCEL 7 THROUGH THE FOLLOWING FIVE (5) COURSES: (1) SOUTH 43°56'44" WEST, A DISTANCE OF 357.95 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 4,565.17 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 42°59'27" EAST; (2) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 02057'46", AN ARC DISTANCE OF 236.07 FEET TO A POINT, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 40001'41" EAST; (3) THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'35" EAST, A DISTANCE OF 11.03 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 2,500.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 36057'2T' EAST; (4) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 05043'47", AN ARC DISTANCE OF 250.01 FEET TO A POINT, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 31013'40" EAST; (5) THENCE NON -TANGENT TO SAID CURVE NORTH 28°29'24" EAST, A DISTANCE OF 153.02 FEET TO AN ANGLE POINT IN THE SOUTHEASTERLY BOUNDARY LINE OF SAID PARCEL 6 OF PARCEL MAP NO. 31116, THENCE LEAVING THE BOUNDARY LINES OF SAID PARCEL 7 AND ALONG THE SOUTHWESTERLY, WESTERLY, NORTHERLY AND EASTERLY LINES OF SAID PARCEL 6 THROUGH THE FOLLOWING FIFTEEN (15) COURSES: (1) THENCE NORTH 61030'36" WEST, A DISTANCE OF 150.00 FEET; 88^_015611MM85 (2) THENCE SOUTH 28°29'24" WEST A DISTANCE OF 150.35 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 2,500.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 27047'20" EAST; (3) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 09043' 18", AN ARC DISTANCE OF 424.19 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 2,095.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 75025'34" EAST; (4) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 02056'54", AN ARC DISTANCE OF 107.80 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE EASTERLY, HAVING A RADIUS OF 18.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 72°28'40" WEST; (5) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 27042'25", AN ARC DISTANCE OF 8.70 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE WESTERLY, HAVING A RADIUS OF 82.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 79°48'55" EAST; (6) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 29001'21", AN ARC DISTANCE OF 41.54 FEET TO THE BEGINNING OF A COMPOUND CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 2,107.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 71°09'44" EAST; (7) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 03016'31", AN ARC DISTANCE OF 120.45 FEET; (8) THENCE NON -TANGENT TO LAST SAID CURVE NORTH 22°46'41" EAST, A DISTANCE OF 5.77 FEET; (9) THENCE NORTH 67°06'56" EAST, A DISTANCE OF 52.05 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 540.00 FEET; (10) THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 15052'03", AN ARC DISTANCE OF 149.55 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 810.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 38045'07" WEST; (11) THENCE NORTHEASTERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 31010'05", AN ARC DISTANCE OF 440.63 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHERLY, HAVING 882 01 W 0+➢18' A RADIUS OF 840.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 07035'02" EAST; (12) THENCE EASTERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 13034'42", AN ARC DISTANCE OF 199.07 FEET, (13) THENCE NON -TANGENT TO LAST SAID CURVE SOUTH 16°39' 14" EAST, A DISTANCE OF 55.87 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 250.00 FEET; (14) THENCE SOUTHERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 20041'22", AN ARC DISTANCE OF 90.27 FEET; (15) THENCE TANGENT TO SAID CURVE SOUTH 04°02'08" WEST A DISTANCE OF 333.46 FEET TO THE NORTHWESTERLY PROLONGATION OF THE NORTHEASTERLY LINE OF SAID PARCEL 7; THENCE LEAVING SAID BOUNDARY LINES OF PARCEL 6 AND ALONG SAID PROLONGATION AND SAID NORTHEASTERLY LINE OF PARCEL 7 SOUTH 50010' 13" EAST, A DISTANCE OF 592.88 FEET TO THE POINT OF BEGINNING. SUBJECT TO EXISTING EASEMENTS, COVENANTS, RIGHTS AND RIGHTS -OF -WAY OF RECORD. CONTAINING 588,702 SQUARE FEET OR 13.515 ACRES, MORE OR LESS. 881 ut Sa1uu185 Phase of Development Restaurant to be developed on Parcel I Casitas Development (Parcel2) Casitas Development (Parcel 3) Suites Hotel (Parcel d) Restaurant to be developed on Parcel 5 First MOB Building (MOB Parcel) Residential Development (Parcel 8) Seeley Drive EXHIBIT "C" COMPLETION SCHEDULE Time for Completion of Construction (measured from date Citt issues final buildme permits for applicable Phase of Develonment) 36 months 36 months 36 months 23 months 36 months 36 months 18 months 180 days after Developer's completion of Suites Hotel RV 0116W,081 EXHIBIT "D„ PURCHASE PRICE Parcel 1 (Restaurant) 206,924.58 Casitas Parcel 2 $1,938, 793.41 Casitas Parcel 3 135,694.34 Parcel 4 (Suites Hotel) 753,475.39 Parcel 5 (Restaurant) 251,908.18 Parcel B of Lot Line Adjustment No. 2006-452 557,028 39 (Residential Development) Landscape Parcel C 0 Landscape Parcel E 0 Landscape Parcel H 0 Landscape Parcel I 0 Seeley Drive Parcel 0 Well Site Parcel 116,957.37 NX2 0156101085 AMENDMENT NO.4 TO DISPOSITION AND DEVELOPMENT AGREEMENT THIS AMENDMENT NO. 4 TO DISPOSITION AND DEVELOPMENT AGREEMENT ("Amendment No. 4") is made and entered into as of 4��, � 2006 by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"). RECITALS: A. On or about December 18, 2003, the Agency and Developer entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which Agency sold to Developer that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Property") and Developer agreed to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to Eligible Buyers at an Affordable Housing Cost (collectively, the "Original Project"). B. Agency and Developer have previously amended the Original DDA on three (3) occasions, on or about October 28, 2004, on or about December 7, 2004, and on or about November 2, 2005 (the "Prior DDA Amendments"). The Original DDA, as amended by the Prior Amendments, is hereinafter referred to as the "DDA" and the Original Project, as amended by the Prior Amendments, is hereinafter referred to as the "Project." C. Developer has previously processed Lot Line Adjustment No. 2006-452 whereby "Parcel6" and a portion of "Parcel 7," which were parcels designated in the DDA for the development of the Medical Office/Surgical Facility, were merged into a single parcel (the "MOB Parcel"), which MOB Parcel is more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference. D. Developer has entered into a purchase and sale agreement with Eisenhower Medical Center, a California non-profit public benefit corporation ("Eisenhower"), pursuant to which Developer has agreed to sell to Eisenhower the MOB Parcel (the "Eisenhower Purchase Agreement"). Eisenhower has indicated that it will only acquire the MOB Parcel from the Developer if the Agency and Developer modify certain terms set forth in the Option Agreement entered into by and between the Agency and Developer on or about December 7, 2004, and recorded on December 9, 2004, as Instrument No. 2004-0979138, in the Official Records (the "Option Agreement"). E. Pursuant to the terms and conditions of this Amendment No. 4, Developer and Agency now wish to (i) modify certain terms set forth in the Option Agreement; and (ii) set forth additional terms and conditions pertaining to Agency's agreement to enter into this Amendment No. 4. Unless defined herein to the contrary, all capitalized terms in this Amendment No. 4 shall have the meanings ascribed in the DDA. 882/015610-0085 735527 04 a] 0/13/06 '�' AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: The DDA is hereby amended as follows: 1. Within three (3) days after the execution hereof, Developer and Agency shall open an escrow account (the "Escrow") with the escrow agent handling the closing under the Eisenhower Purchase Agreement (the "Escrow Agent"). At the closing contemplated under the Eisenhower Purchase Agreement (the "Eisenhower Closing"), all of the proceeds from the Eisenhower Closing, which shall be an amount not less than Ten Million Eight Hundred Thousand Dollars ($10,800,000) (the "Eisenhower Sales Proceeds"), shall be deposited by the Escrow Agent in the Escrow, in an interest bearing account. The Escrow Agent shall release from the Escrow portions of the Eisenhower Sales Proceeds only in the following manner: 1.1 The Escrow Agent may release a portion of the Eisenhower Sales Proceeds in an amount equal to the release price required to obtain the release of the MOB Parcel from the lien of the first mortgage on the Property ("MOB Release Price"); provided, however, that the MOB Release Price shall not exceed Nine Million Eight Hundred Thousand Dollars ($9,800,000). Said portion of the Eisenhower Sales Proceeds shall be released directly to the lender with a first mortgage on the Property (the "Developer's Mortgagee"). 1.2 In the event that the MOB Release Price is less than Nine Million Eight Hundred Thousand Dollars ($9,800,000), the Escrow Agent shall release to Developer additional Eisenhower Sales Proceeds in an amount that, when combined with the amount released to Developer's Mortgagee pursuant to Section 1.1 above, equals Nine Million Eight Hundred Thousand Dollars ($9,800,000), for Developer's use in completing the Suites Hotel. 1.3 The Escrow Agent shall release to Developer the remaining One Million Dollars ($1,000,000) of the Eisenhower Sales Proceeds, plus all interest accrued thereon, on the "Medical Office/Surgical Facility Release Date," which, as used herein, shall mean the earlier of (i) the date Developer completes construction of the first building of the Medical Office/Surgical Facility, with such building containing at least forty thousand square feet (40,000 sf.) of space (the "First MOB Building"), as evidenced by City's issuance of a certificate of occupancy therefor; or (ii) the date construction on the First MOB Building has commenced, provided that completion bonds naming the Agency as a beneficiary with the right to enforce are in place that guarantee completion of the same. In the event that prior to the Medical Office/Surgical Facility Release Date Agency exercises its option to purchase the MOB Parcel as provided in the "Amended and Restated Option Agreement" (as that term is defined in Section 2.1 below), then the Escrow Agent shall release such remaining portion of the Eisenhower Sales Proceeds then held in the Escrow to Agency to partially fund Agency's repurchase of the MOB Parcel from Eisenhower. 882 015610-0085 ,2_ 735527 04 a10. 13'06 Developer and Agency shall prepare and provide to Escrow Agent escrow instructions mutually acceptable to both parties which incorporate and address all of the provisions in this Section 1. 2. Concurrently with the Eisenhower Closing, all of the following shall occur: 2.1 Developer and Agency shall execute and record in the Official Records an Amended and Restated Option Agreement substantially in the form attached hereto and incorporated herein as Exhibit "B" (the "Amended and Restated Option Agreement"). 2.2 Developer and Eisenhower shall provide Agency with an assignment and assumption agreement in the form attached hereto and incorporated herein as Exhibit "C" that has been executed by Developer and Eisenhower, pursuant to which Developer assigns to Eisenhower and Eisenhower assumes and agrees to be bound by all of the terms and conditions in the DDA applicable to the MOB Parcel and the Medical Office/Surgical Facility. Agency agrees that, only as to the MOB Parcel and the Medical Office/Surgical Facility, all references to the "Developer" in the DDA and in the Grant Deed by which the Agency conveyed the Property to the Developer ("Grant Deed"), shall be deemed to be references to Eisenhower from and after the effective date of the assignment and assumption agreement. Notwithstanding anything herein or in the DDA to the contrary, after such conveyance to Eisenhower, Eisenhower shall be permitted to transfer and assign its interests in the MOB Parcel and in the DDA to a limited liability company in which Eisenhower is the sole member, or to a corporation in which Eisenhower is the sole shareholder. 3. Notwithstanding anything herein or in the DDA to the contrary, as of the Medical Office/Surgical Facility Release Date, Agency's right of reverter and power of termination pursuant to Section 607 of the DDA and in the Grant Deed shall terminate with respect to the MOB Parcel. Agency's right of reverter and power of termination with respect to the remaining Parcels comprising the Property shall survive such termination in accordance with the terms of the Amended and Restated Option Agreement. 4. Nothing herein or in the DDA constitutes a representation or warranty by Agency that the construction of the Project or any portion thereof is not subject to California Health and Safety Code Sections 33423 through 33426, or Chapter 1 of Part 7 of the California Labor Code (commencing with section 1720), and all applicable statutory and regulatory provisions related thereto, and (i) Developer expressly waives any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to the Property or the Project (other than the MOB Parcel or the Medical Office/Surgical Facility if Developer sells the MOB Parcel to Eisenhower); and (ii) Developer shall cause Eisenhower to expressly waive any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to the MOB Parcel or the Medical Office/Surgical Facility. Developer shall, indemnify, defend, and hold Agency harmless, including litigation costs and reasonable attorneys' fees, from and against any and all claims pertaining to the payment of wages for the Property or Project; provided, however, that upon the sale of the MOB Parcel, Eisenhower shall be required to indemnify, defend, and hold Agency harmless, including litigation costs and reasonable attorneys' fees, from and against any and all claims pertaining to the payment of 182 015610-0085 _3_ 135527 04 a10 13'06 m wages for the MOB Parcel or the Medical Office/Surgical Facility and upon Eisenhower's agreement to the foregoing indemnification, Developer shall thereafter be released from the indemnity obligation described in this paragraph to the extent that such indemnity arises from the MOB Parcel or the development of the Medical Office/Surgical Facility to be located thereon. Agency acknowledges that Eisenhower's obligations under the DDA shall be limited to those obligations contained in the DDA which arise from the MOB Parcel or the development of the Medical Office/Surgical Facility thereon, and Eisenhower shall not be liable for or obligated to perform any of Developer's obligations under the DDA to the extent that such obligations affect any portion of the Property except the MOB Parcel. 5. Developer represents and warrants that Developer will not seek any further modifications or agreements from the Agency or from the City of La Quinta that involve Agency or City financial assistance and/or incentives to complete and operate the Project pursuant to the terms of the DDA. 6. Developer shall reimburse Agency for all of the costs Agency incurs or has incurred to negotiate, prepare and process this Amendment No. 4. 7. Except as otherwise expressly provided in this Amendment No. 4, all of the terms and conditions of the DDA shall remain in full force and effect. 8. In the event of any action between or amongst the parties hereto seeking enforcement of any of the terms and conditions to this Amendment No. 4, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 9. This Amendment No. 4 shall be construed according to its fair meaning and as if prepared by all of the parties hereto. 10. This Amendment No. 4 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 4. Service of process on Agency shall be made in accordance with California law. Service of process on Developer and Eisenhower shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 11, Time is of the essence of this Amendment No. 4 and of each and every term and provision hereof. 12. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by Agency and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 882 015610-0085 _4_ 735527 04 a10.1306 13. This Amendment No. 4 may be executed in counterparts, each of which, when this Amendment No. 4 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 14. The person(s) executing this Amendment No. 4 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No. 4 on behalf of said party, (iii) by so executing this Amendment No. 4 such party is formally bound to the provisions of this Amendment No. 4, and (iv) the entering into this Amendment No. 4 does not violate any provision of any other agreement to which such party is bound. [signature page follows] 882'015610-0085 735527 04 a[0,13,06 IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read this Amendment No.4, understands it, and hereby executes this Amendment No.4 to be effective as of the day and year first written above. Date: bL,-rbVesgz F, 2006 Date: 19 2006 AT)W46T: _. Agency Secretary U1M&Afd'!;yW APPROVED AS TO FORM: RUTAN & TUCKER, LLP M. Katherine Jenson, Agency Counsel "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: C. Richard Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager ��) /�- a�� By: _ J Richard Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, co orate and By: Executive Director SM015610oo85 IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read this Amendment No.4, understands it, and hereby executes this Amendment No.4 to be effective as of the day and year first written above. K11. Date: 2006 "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: Richard Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic 2006 By: Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency 882 015610-0085 _6. 715527 04 a 10 13 06 EXHIBIT "A" LEGAL DESCRIPTION OF MOB PARCEL PARCEL "A" OF LOT LINE ADJUSTMENT NO.2006-452, MORE PARTICULARLY DEFINED AS FOLLOWS: IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCEL 6 TOGETHER WITH THAT PORTION OF PARCEL 7 OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS, BEING IN THE, SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE, PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST EASTERLY CORNER OF SAID PARCEL 7; THENCE ALONG THE SOUTHEASTERLY, SOUTHWESTERLY AND NORTHWESTERLY BOUNDARY LINES OF SAID PARCEL 7 THROUGH THE FOLLOWING FIVE (5) COURSES: (1) SOUTH 43°56'44" WEST, A DISTANCE OF 357.95 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 4,565.17 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 42°59'27" EAST; (2) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 02057'46", AN ARC DISTANCE OF 236.07 FEET TO A POINT, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 40001'41" EAST; (3) THENCE NON -TANGENT TO SAID CURVE SOUTH 00°17'35" EAST, A DISTANCE OF 11.03 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 2,500.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 36057'27" EAST; (4) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 05043'47", AN ARC DISTANCE OF 250.01 FEET TO A POINT, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 31013'40" EAST; (5) THENCE NON -TANGENT TO SAID CURVE NORTH 28°29'24" EAST, A DISTANCE OF 153.02 FEET TO AN ANGLE POINT IN THE SOUTHEASTERLY BOUNDARY LINE OF SAID PARCEL 6 OF PARCEL MAP NO. 31116; THENCE LEAVING THE BOUNDARY LINES OF SAID PARCEL. 7 AND ALONG THE SOUTHWESTERLY, WESTERLY, NORTHERLY AND EASTERLY LINES OF SAID PARCEL 6 THROUGH THE FOLLOWING FIFTEEN (15) COURSES: 882 015610-0085 135527 04 a10 13'06 (11) THENCE NORTHEASTERLY ALONG THE ARC OF LAST SAID CURVE, TIIROUGH A CENTRAI. ANGLE, OF 31°10'05", AN ARC DISTANCE OF 440.63 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHERLY, HAVING A RADIUS OF 840.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 07035'02" EAST; (12) THENCE, EASTERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 13034'42", AN ARC DISTANCE OF 199.07 FEET; (13) THENCE NON -TANGENT TO LAST SAID CURVE, SOUTH 16°39'14" EAST, A DISTANCE OF 55.87 FEET TO THE BEGINNING OF A TANGENT CURVE„ CONCAVE WESTERLY, RAVING A RADIUS OF 250.00 FEET; (14) THENCE; SOUTHERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 20041'22", AN ARC DISTANCE OF 90.27 FEET; (15) THENCE TANGENT TO SAID CURVE SOUTH 04°02'08" WEST A DISTANCE OF 333,46 FEET TO THE NORTHWESTERLY PROLONGATION OF THE NORTHEASTERLY LINE OF SAID PARCEL 7; THENCE LEAVING SAID BOUNDARY LINES OF PARCEI. 6 AND ALONG SAID PROLONGATION AND SAID NORTHEASTERLY LINE OF PARCEL 7 SOUTH 50°10' 13" EAST, A DISTANCE OF 592.88 FEET TO THE POINT OF BEGINNING. SUBJECT TO EXISTING EASEMENTS, COVENANTS, RIGHTS AND RIGHTS -OF -WAY OF RECORD. CONTAINING 588,702 SQUARE FEET OR 13.515 ACRES, MORE OR LESS. 882 015610-0085 715527 04 a10 13.06 EXHIBIT "B" AMENDED AND RESTATED OPTION AGREEMENT [See following pages] 682'015610-0085 735527 04 a10, 13'06 THIRD AMENDMENT TO PURCHASE AND SALE CONTRACT THIS THIRD AMENDMENT TO PURCHASE AND SALE CONTRACT (this "Third Amendment to Contract") is made as of the _—day of October, 2006, by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company (hereinafter referred to as "Seller"), having a principal place of business at 77-564 Country Club Drive, Suite 100, Palm Desert, California 92211, and EISENHOWER MEDICAL CENTER a California nonprofit public benefit corporation (hereinafter referred to as "Buyer"), having its principal place of business at 39000 Bob Hope Drive, Rancho Mirage, California 92270, with reference to the following facts and circumstances: RECITALS: A. Seller and Buyer entered into that certain Purchase and Sale Contract, dated as of December 28, 2005, pursuant to which Seller agreed to sell to Buyer, and Buyer agreed to acquire from Seller the Property (as defined therein) (the "Original Purchase Contract'); B. The Original Purchase Contract was amended by that certain Restatement and Amendment to Purchase and Sale Contract, dated as of February 24, 2006, by and between Seller and Buyer (the "First Amendment to Contract") (the Original Purchase Agreement as amended by the First Amendment to Contract shall be referred to herein as the "Amended Contract'); C. The Original Purchase Contract was further amended by that certain Second Amendment to Purchase and Sale Contract, dated as of September , 2006, by and between Seller and Buyer (the "Second Amendment to Contract") (the Original Purchase Agreement as amended by the First Amendment to Contract shall be referred to herein as the "Amended Contract'); D. Seller and Buyer desire to amend the Amended Contract as set forth herein; NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Buyer and Seller hereby agree as follows: 1. Definitions. All initially capitalized terms not defined herein shall have the meanings given to such terms in the Amended Contract. From and after the date hereof, all references in the Amended Contract and herein to the "Contract' shall be and be deemed to be references to the Amended Contract as amended by this Third Amendment to Contract. 2. Amendment to Closine Date. The parties agree that the first sentence of Article 4(a) of the Original Contract, as previously amended is hereby deleted in its entirety and the following is substituted in its place: "The closing of the transactions contemplated hereunder (the "Closing") shall take place by delivery of documents by the same day or overnight courier into a closing escrow established by the Escrow Holder not later than 10:00 a.m. (California time) on October 19, 2006" 3, Eisenhower Retention. Buyer requested as a condition of its completing the transaction described herein, that certain modifications be made to the Disposition and Development Agreement between Seller and the La Quinta Redevelopment Agency ("DDA"). Said modifications provided, among other things, for a revision of the schedule of completion of construction of a medical office/surgical facility on the Property and a modification of the Agency's remedies thereunder in the event of a default by Seller or its successors in interest in the Property. As a condition of making such changes to the DDA, the Agency has required that upon Buyer's acquisition of the Property, One Million Dollars be held in an escrow account ("Eisenhower Retention") until the earlier of (i) the date Buyer completes construction of the first building of the Medical Office/Surgical Facility, with such building containing at least forty thousand square feet (40,000 sf.) of space (the "First MOB Building"), as evidenced by City's issuance of a certificate of occupancy therefor; or (ii) the date construction on the First MOB Building has commenced, provided that completion bonds naming the Agency as a beneficiary with the right to enforce are in place that guarantee completion of the same ("Medical Office/Surgical Facility Release Date"). In the event that prior to the Medical Office/Surgical Facility Release Date, Agency exercises its option to purchase the MOB Parcel as provided in the "Amended and Restated Option Agreement" (as that term is defined in Section 2.1 of the DDA, as amended), then the DDA provides that the Escrow Agent shall release such remaining portion of the Eisenhower Retention then held in the Escrow to Agency to partially fund Agency's repurchase of the MOB Parcel from Eisenhower. An issue has now arisen between Buyer and Seller as to which party shall fund the Eisenhower Retention. To resolve said issue, at the Closing, the Eisenhower Remention will be initially funded by holding $1 million of Seller's proceeds in escrow. Buyer and Seller agree however to cooperate and use their best efforts in seeking an agreement from the Agency and the City to forego the Eisenhower Retention and thereby release the Eisenhower Retention then held in escrow to Seller. Such an agreement may provide, if required by the Agency or the City, that in lieu of the Eisenhower Retention, the Agency's option to repurchase the Property under the Restated Option shall be for a price that is reduced by One Million Dollars. 4. Buver's Agreement to Build. In the event that Seller is required to fund the Eisenhower Retention, the Buyer agrees that it shall build the First MOB Building in accordance with the terms, conditions and schedules set forth in the DDA, as amended. In the event that Buyer defaults under the DDA such that the Agency exercises its rights under the Restated Option or Reverter, then Seller shall have the right to recover from Buyer the amount of the Eisenhower Retention. 5. Release of Eisenhower Retention. Upon the Medical Office/Surgical Facility Release Date, the parties agree that the Eisenhower Retention, plus any and all interest earned thereon during the escrowed period, shall be released proportionately to the parties depositing same, with interest paid to Seller to the extent such interest was earned during Seller's deposit of the Eisenhower Retention, and interest paid to Buyer to the extent such interest was earned during Buyer's deposit of the Eisenhower Retention. 6. i an &aM ftuirements. Buyer acknowledges that from and after the closing Buyer shall be responsible for maintenance of the landscape parkway abutting the Property along Washington Street and Seeley Drive. 7. CountgrMs. This Third Amendment to Contract may be executed in multiple counterparts via facsimile or pdf, each of which shall constitute an original, but all of which together shall constitute but one instrument. 7. No Further Modifications. Except as set for* in this Third Amendment to Contract, the Amended Contract remains in full force and effect, without modification or impairment. IN WITNESS WHEREOF, the parties have executed this Third Amendment to Agreement as of the date first written above. SELLER: CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By, 0"O P Q- F�L Name: Richard Oliphant 'Title: Managing Member Hereunto duly authorized :ni. : rt _ ._... duly authorized ASSIGNMENT AND ASSUMPTION AGREEMENT This ASSIGNMENT AND ASSUMPTION AGREEMENT C`Assigumenn is entered into this l day of 2006 by and between CP DEVF,LOPMENT LA QUINTA, LLC, a California limited liability company ("Assignor") and EISENHOWER MEDICAL CENTER, a California non-profit public benefit corporation ("Assignee") with reference to the following: A. WHEREAS, Assignor is the owner in fee simple of certain property located at the southeast comer of Miles Avenue and Washington Street in the City of La Quinta, California (the "Property"), which Property is more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference. B. WHEREAS, Assignor acquired the Property from the La Quinta Redevelopment Agency, a public body, corporate and politic C Agency") pursuant to the terms of that certain Disposition and Development Agreement dated on or about December 18, 2003 ("Original DDA"), as amended on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005 and on or about September .' � 2006 (collectively the "DDA Amendments"). (The Original DDA, as modified by the DDA Amendments shall hereinafter be referred to as the "DDA".) C. WHEREAS, concurrently with the execution of the Original DDA, the City of La Quinta, a California municipal corporation C`City"), and Assignor entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside on January 5, 2004 as Instrument No. 2004-0005256, and amended by that certain Amendment No. 1 to Development Agreement executed on or about October 29, 2004 and recorded in the Official Records of the County Recorder for the County of Riverside on November 8, 2004 as Instrument No. 2004-0985063 (hereinafter collectively referred to as the "Development Agrecroetin. D. WHEREAS, pursuant to the terms of the DDA and the Development Agreement, the Property was to be used for the development of a mixed use development project (the "Projecn, one component of which is a medical office/surgical facility containing three buildings with not less than 40,000 square feet each ("MOH Facility"). E. WHEREAS, pursuant to the terms of the DDA, Agency and Assignor entered into that certain Option Agreement on December 7, 2004, which was recorded on December 9, 2004, as Instrument No. 2004-0979138, in the Official Records of the County of Riverside, as amended by that certain Amended and Restated Option Agreement entered into and recorded in the Official Records of the County of Riverside concurrently herewith (collectively the "Option Agreement"). The Option Agreement grants to Agency an option to repurchase the Property, or a portion thereof, from Assignor, if (i) Assignor fails to continuously proceed with, or complete construction of the Project or portion thereof within certain specified time frames, or (ii) Assignor transfers the Property, or portion thereof, in violation of the terms of the DDA, all as further described therein. 9324156104025 -1- 743876 03 e6921!06 F. WHEREAS, Assignor has previously subdivided the Property via Parcel Map 31116 as shown by map on file in Book 212, pages 60 through 66, inclusive of parcel maps, Riverside County Records, being in the south one-half of Section 19, Township 5 South, Range 7 East, San Bernardino Base and Meridian ("PM31116'1. G. WHEREAS, subsequent to the recording of PM31116, Assignor processed and the City of La Quinta ("City') approved Lot Line Adjustment No. 200"52 whereby "Parcel 6" and a portion of'Ramcl 7" of PM31116 wire merged to create a single parcel upon which the MOB Facility was to be built ("MOB Parcel"), which MOB Parcel is more particularly described on Exhibit "B" attached hereto and incorporated herein by this reference. H. WHEREAS, Assignor and Assignee have previously entered into that certain agreement for purchase and sale whereby Assignor agreed to sell and Assignee agreed to purchase the MOB Parcel ("Purchase AgreementI. I. WHEREAS, under the terms of the Purchase Agreement, upon the conveyance of the MOB Parcel to Assignee, Assignor agreed to assign to Assignee all of its rights and responsibilities under the terms of the DDA, the Development Agreement and the Option Agreement but only to the extent that such rights and responsibilities arise from the ownership of the MOB Parcel. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Assignor hereby assigns to Assignee all of Assignor's rights and responsibilities under the terms of the DDA, the Development Agreement and the Option Agreement, but in the case of responsibilities, only to the extent that they arise from the ownership of the MOB Parcel from and after the Effective Date of this Assignment ("Assigned Rights and Obligations".) 2. Assignee hereby accepts the foregoing assignment of the Assigned Rights and Obligations, and agrees to be bound by the terms of the DDA and the Development Agreement to the extent that such terms affect or are affected by ownership of the MOB Parcel and then only to the extent of the Assigned Rights and Obligations. 3. The parties hereto acknowledge and agree that Assignee shall not be responsible for any of the obligations of the DDA, the Development Agreement or the Option Agreement which arise from ownership of any portion of the Property which arise prior to the Effective Date hereof, or which arise from any portion of the Property other than the MOB Parcel after the Effective Date hereof. As such, a default by Assignor under either the DDA, the Development Agreement and/or the Option Agreement prior to the Effective Date hereof, or with respect to any portion of the Property other than the MOB Parcel after the Effective Date hereof ("Assignor's Defauh'7 shall not be deemed a default by Assignee, and Assignor shall 6r2,9156104095 -2- 74517603 09f11M indemnify, defend and hold harmless Assignee from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignor's Default. A default by Assignee under either the DDA, the Development Agreement and/or the Option Agreement with respect to the MOB Patel after the Effective Date hereof ("Assignee's Default") shall not be deemed a default by Assignor or otherwise have any effect on any property covered by the DDA, the Development Agreement or the Option Agreement other than the MOB Parcel, and Assignee shall indemnify, defend and hold harmless Assignor from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignee's Default. 4. This Assignment shall be deemed effective upon the last of the following events to occur.. (a) conveyance of the MOB Parcel to Assignee as evidenced by the recording of the grant deed therefore in the official records of the County Recorder for the County of Riverside, California, or (b) the written consent to this Assignment by the City with respect to the Assigned Obligations arising under the Development Agreement, and by the Agency with respect to the Assigned Obligations arising under the DDA and/or the Option Agreement (herein referred to as the "Effective Date"). 5. Nothing herein or in the DDA constitutes a representation or warranty by the Agency that the construction of the MOB Facility is not subject to California Health and Safety Code Sections 33423 through 33426, or Chapter 1 of Part 7 of the California Labor Code (commencing with section 1720), and all applicable statutory and regulatory provisions related thereto, and Assignee expressly waives any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to the MOB Panel or the MOB Facility. Assignee shall, indemnify, defend, and hold the Agency harmless, including litigation costs and reasonable attorneys' fees, from and against any and all claims pertaining to the payment of wages for the MOB Parcel, or the MOB Facility. 6. Assignee hereby further warrants and represents that it shall not seek financial assistance from the City or the Agency to fund the construction of the MOB Facility to be built on the MOB Parcel. 7. The City and the Agency shall be deemed to be third parry beneficiaries of the waiver and indemnity set forth in Section 5 and the warranty and representation set forth in the Section 6. 8. Except as otherwise described in paragraph 4 above, the parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented. 8620IM104093 _3_ 7497603 a094 I106 9. The terms of this Assignment shall not be amended and this Assignment shall not be terminated except by written instrument executed by both of the parties hereto, and only upon the prior written consent of the City and Agency. 10. This Assignment shall be governed by the laws of the State of California. [Balance of page intentionally left blank.] ISM561"085 -4 765976.03 0941" above. WHEREFORE, the parties hereto have executed this Assignment on the date first written CP Development La Qninta, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: rf Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager Br Richard R. Oliphant Its: President Eisenhower Medical Center, a non-profit public benefit corporation B Its: d0296010A0d3 _5_ 743376.03 a092146 CONSENT By execution below, the City and Agency hereby consent to the foregoing assignment. APPROVED AS TO FORM: RUTAN & TUCKER, LLP City Attorney CITY OF LA QUINTA, a public body, corporate and politic By: Its: City Manager LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic 'I / Its: ATTF,�S%C: , 'J" // — — Agency Secretar APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the I.a Quinta Redevelopment Agency Executive Director s32 015610-0085 _6_ 145876 03 a09 21 06 C N�sErrr By execution below, the City and Agency hereby consent to the foregoing assignment. ATTEST: City Clerk APPROVED AS TO FORM: RUTAN & TUCKER, LLP City Attorney ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quints. Redevelopment Agency CITY OF LA QUINTA, a public body, corporate and politic By: Its: City Manager LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: 88L01 104085 .6- 141376.03 .09/21,06 Executive Director EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCELS I THRU 5, INCLUSIVE, OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212 OF PARCEL MAPS, AT PAGES 60-66, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS, AND PARCELS "A" AND "B" OF LOT LINE ADJUSTMENT NO. 2006-452 APPROVED BY THE CITY OF LA QLITNTA AND RECORDED APRIL 19, 2006 AS INSTRUMENT NO. 0290726. OR, BEING ADJUSTED PARCELS 6, 7 AND 8 OF PARCEL MAP NO. 31116 AS SHOWN BY MAP ON FILE IN BOOK 212 OF PARCEL MAPS, AT PAGES 60-66, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS, ALL BEING IN SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M. EXHIBIT "A" 882/015610.0083 Page I of 1 745976 03 400/1106 EXHIBIT "B" LEGAL DESCRIPTION OF MOB PARCEL PARCEL "A" OF LOT LINE ADJUSTMENT NO.2006-452, MORE PARTICULARLY DEFINED AS FOLLOWS: IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE. STATE OF CALIFORNIA. PARCEL 6 TOGETHER WITH THAT PORTION OF PARCEL 7 OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS, BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST EASTERLY CORNER OF SAID PARCEL 7; THENCE ALONG THE SOUTHEASTERLY, SOUTHWESTERLY AND NORTHWESTERLY BOUNDARY LINES OF SAID PARCEL 7 THROUGH THE FOLLOWING FIVE (5) COURSES: (1) SOUTH 43°56'44" WEST, A DISTANCE OF 357.95 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 4,565.17 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 42°59'27" EAST; (2) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 02°57'46", AN ARC DISTANCE OF 236.07 FEET TO A POINT, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 40°0i'41" EAST; (3) THENCE NON -TANGENT TO SAID CURVE SOUTH 00°17'35" EAST, A DISTANCE OF 11.03 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 2,500.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 36°57'27" EAST; (4) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 05043'4T', AN ARC DISTANCE OF 250.01 FEET TO A POINT, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 31013'40" EAST; OF 153 02 FEET TO AN ANGLE POINT IN THE SOUTHEASTERLY BOUNDARY NENCE NON -TANGENT TO SAID CURVE NORTH 29-29'24" EAST, A E OF SAID PARCEL 6 OF PARCEL MAP NO.31116; THENCE LEAVING THE BOUNDARY LINES OF SAID PARCEL 7 AND ALONG THE SOUTHWESTERLY, WESTERLY, NORTHERLY AND EASTERLY LINES OF SAID PARCEL 6 THROUGH THE FOLLOWING FIFTEEN (15) COURSES: (1) THENCE NORTH 6190'36" WEST, A DISTANCE OF 150.00 FEET; EXHIBIT'B" U2,015610.0085 Page 1 of 3 745876 03 009121M (2) THENCE SOUTH 2M9'24" WEST A DISTANCE OF 150.35 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 2,500.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 27047'20" EAST; (3) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 09043' 18", AN ARC DISTANCE OF 424.19 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE WESTERLY, HAVING A P. ADIUS OF 2,095.00 FEET, A RADIAL LINE PASSING THROUGH S.4ID POINT BEARS NORTH 75025'34" EAST; (4) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 02°56154", AN ARC DISTANCE OF 107.80 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE EASTERLY, HAVING A RADIUS OF 18.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 72°28'40" WEST; (5) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 2r42125", AN ARC DISTANCE OF 8.70 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE WESTERLY, HAVING A RADIUS OF 82.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 79°48'55" EAST; (6) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 29001'21", AN ARC DISTANCE OF 41.54 FEET TO THE BEGINNING OF A COMPOUND CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 2,107.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 71"09'44" EAST; (7) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 03016'31", AN ARC DISTANCE OF 120.45 FEET; (8) THENCE NON -TANGENT TO LAST SAID CURVE NORTH 22°46'41" EAST, A DISTANCE OF 5.77 FEET; (9) THENCE NORTH 67"06'56" EAST, A DISTANCE OF 52.05 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 540.00 FEET; (10) THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 15052'03", AN ARC DISTANCE OF 149.55 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 810.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 38°45'OT' WEST; (11) THENCE NORTHEASTERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 31010'05", AN ARC DISTANCE OF 440.63 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTIERLY, HAVING EXHIBIT "B" 2"13610. 085 Page 2 of 3 745276.03 49Qi N6 8 A RADIUS OF 840.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 07135'02" EAST; (12) THENCE EASTERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 13034'42", AN ARC DISTANCE OF 199.07 FEET; (13) THENCE NON -TANGENT TO LAST SAID CURVE SOUTH 16-39.14" EAST, A DISTANCE OF 55.87 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY, HAVING A RAT7IU9 OF 250.M FEET; (14) THENCE SOUTHERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 20°41'22", AN ARC DISTANCE OF 90.27 FEET; (15) THENCE TANGENT TO SAID CURVE SOUTH 04-02'08" WEST A DISTANCE OF 333.46 FEET TO THE NORTHWESTERLY PROLONGATION OF THE NORTHEASTERLY LINE OF SAID PARCEL 7; THENCE LEAVING SAID BOUNDARY LINES OF PARCEL 6 AND ALONG SAID PROLONGATION AND SAID NORTHEASTERLY LINE OF PARCEL 7 SOUTH 50010' 13" EAST, A DISTANCE OF 592.88 FEET TO THE POINT OF BEGINNING. SUBJECT TO EXISTING EASEMENTS, COVENANTS, RIGHTS AND RIGHTS -OF -WAY OF RECORD. CONTAINING 588,702 SQUARE FEET OR I3.515 ACRES, MORE OR LESS. EXHIBIT "B" '"1561040" Page 3 of 3 115976 03 a0 /21 N6 M EISENHOWER MEDICAL CENTER i i9 r September 27, 2006 Mayor Don Adolph City of La Quinta P.O. Box 1504 La Quinta, CA 92247 t .ke: Amendment No. 4 to Disposition and Development Agreement, between La Quinta Redevelopment Agency and CP Development La Quinta, LLC ("Amendment No. 4") Dear Mayor Adolph: 'This is to confirm that the undersigned, Eisenhower Medical Center, a California Non-profit public benefit corporation ("Eisenhower") is aware of the following provision in Amendment No. 4, which is binding on CP Development La Quinta, LLC: "Developer represents and warrants that Developer will not seek any further modifications or agreements from the Agency or from the City of La Quinta that involve Agency or City financial assistance and/or incentives to complete and operate the Project pursuant to the terms of the DDA." Eisenhower further confirms that when it acquires the MOB Parcel, Eisenhower will not seek further modifications or agreements from the Agency or from the City of La Quinta that involve Agency or City Financial assistance and/or incentives to complete and operate the MOB Parcel pursuant to the terms of the DDA. Capitalized terms used in this letter not otherwise defined in this letter shall have the meanings given those terms in Amendment No. 4. Sincerely, cc: T. Genovese K.Jenson Eisenhower Medical Center, a California Non-p public be rpora G. Aubrey er, q g Its: President/CRY 39000 Bob Hope Drive / Rancho Mirage, California 92270 / 760 340-3911 � J � ECORDING REQUESTED BY: 1RST AMERICAN TITLE COMPANY VHEN RECORDED MAIL TO: ,A QUINTA REDEVELOPMENT AGENCY 8-495 CALLE TAMPICO ,A QUINTA, CA 92253 LTTN: EXECUTIVE DIRECTOR m DOC # 2006-0780202 10/24/2006 08:00A Fee:NC Page 1 of 24 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder I IIIIII IIIIII) (III (IIII IIIIII (III IIIIII III IIIII IIII III) S R. U PAGE SIZE DA MISC LONG RFD COPY r M A L 465 426 PCOR NCOR SMF NCHG EXAM AMENDED AND RESTATED OPTION AGREEMENT THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION ($3.00 Additional Recording Fee Applies) STGSCSD 996. (Rey 8/97) i J2 r� FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director (SPACE ABOVE THIS LINE FOR RECORDING USE) (EXEMPT FROM RECORDING FEE PER GOV. CODE, § 27383) AMENDED AND RESTATED OPTION AGREEMENT NOTICE: THIS AMENDED AND RESTATED OPTION AGREEMENT CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS AMENDED AND RESTATED OPTION AGREEMENT ("Amended and Restated Option Agreement") is made this day of ° , 2006 (the "Effective Date"), by CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency",►. RECITALS A. Developer is the fee owner of certain real property located southeast of the Miles Avenue and Washington Street intersection, in the City of La Quinta, County of Riverside, State of California (the "Site"). The Site is legally described in Exhibit "A" attached hereto and incorporated herein. B. On or about December 18, 2003, the Agency and Developer entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which Agency sold to Developer the Site and Developer agreed to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to Eligible Buyers at an Affordable Housing Cost (collectively, the "Original Project"). C. Agency and Developer have previously amended the Original DDA on four (4) occasions, on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, and on or about , 2006 (the "Prior DDA Amendments"). The Original DDA, as amended by the Prior DDA Amendments, is hereinafter referred to as the "DDA." D. Pursuant to the DDA, Agency and Developer entered into that certain Option Agreement on December 7, 2004, which was recorded on December 9, 2004, as Instrument No. 882/015610-0085 735889.02 al0/17/06 2004-0979138, in the Official Records of the County of Riverside (the "Option Agreement"). The Option Agreement grants to Agency an option to repurchase the Site, or a portion thereof, from Developer, if (i) Developer fails to commence, continuously proceed with, or complete construction of the Project or portion thereof within certain specified time frames, or (ii) Developer transfers the Site, or portion thereof, in violation of the terms of the DDA, all as further described herein. E. On or about April 4, 2005, Parcel Map No. 31116, in the City of La Quinta, was filed in the Off cial Records of the County of Riverside in Book 212 of Parcel Maps at pages 60- 66, inclusive (the "Parcel Map"). The Parcel Map created legal parcels within the Site that differ from the lots depicted on the Site Map attached to the DDA and on the Site Map attached to the Option Agreement. In particular: (i) the Parcel Map created one legal parcel for development thereon of the Casitas Development (identified thereon as "Parcel 2"), where the Site Map had depicted the Casitas Development on three lots; (ii) the Parcel Map created one legal parcel for development thereon of the Sanctuary Villas (identified thereon as "Parcel 7"), where the Site Map had depicted the Sanctuary Villas on two lots; and (iii) the Parcel Map created one legal parcel for development thereon of the Medical Office/Surgical Facility (identified thereon as "Parcel 6"), where the Site Map had depicted the Medical Office/Surgical Facility on four lots. The Parcel Map also created "Parcel 1" and "Parcel 5" for development thereon of the two restaurants to be constructed as part of the Project, "Parcel 3" and "Parcel 8" for the development thereon of two resi6ential developments to be constructed as part of the Project, and "Parcel 4" for the development thereon of the Suites Hotel. All subsequent references herein to a "Parcel" shall mean a parcel that has been created on the Parcel Map or a lot or parcel that has been created by a lot line adjustment processed and recorded subsequent to the recordation of the Parcel Map. F. Pursuant to the Prior DDA Amendments, Agency agreed to permit Developer to expand the Casitas Development onto Parcel3, and to expand the Medical Office/Surgical Facility onto Parcel 7. In April, 2006, Developer processed Lot Line Adjustment No. 2006-452 whereby "Parcel 6" and a portion of "Parcel 7" were merged into a single parcel (the "MOB Parcel"), which MOB Parcel is more particularly described on Exhibit "B" attached hereto and incorporated herein by this reference. G. Pursuant to that certain Amendment No.4 to Disposition and Development Agreement entered into on or about 2006 by and between Agency and Developer ("Amendment No. 4 to DDA"), Agency agreed to modify certain provisions of the Option Agreement. H. The parties hereto now wish to replace, in its entirety, the Option Agreement with this Amended and Restated Option Agreement. 1. Except as otherwise expressly provided herein, the terms used herein shall have the meanings ascribed in the DDA. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals and all of the terms and conditions contained in the DDA, Developer and Agency hereby agree as follows: 882/015610-0085 _ 735889.02 at0117/06 -2 1. Replace:ment of Option Agreement The Option Agreement is hereby replaced, in its entirety, with this Amended and Restated Option Agreement. 2. Repurchase Option I - Failure to Commence Construction Pursuant to the terms of the Option Agreement, Developer granted to Agency an exclusive option to repurchase the Site, or any Parcel thereof, if Developer failed to commence construction of the Project or Parcel within the times set forth in the Commencement and Completion Schedule attached to the Option Agreement (collectively, "Repurchase Option I"). For the purposes of the Option Agreement, (a) the term "commence construction" was defined to mean Developer's completion of mass grading for the entire Site. Developer completed mass grading of the entire Site on or about , 2006, and therefore Agency hereby acknowledges and agrees that Repurchase Option I as described in the Option Agreement has now terminated and is of no further effect. 3. Repurchase Option II - Failure to Continuously Proceed With or Complete Construction(Excgpt MOB Parcel) Developer hereby grants to Agency an exclusive option to repurchase any individual Parcel then -comprising the Site ("Option II Parcel(s)") if, after commencement of construction of the Phase of Development to be constructed on the Option II Parcel(s), Developer fails to continuously proceed with, and complete, construction of such Phase of Development on the Option I1 Parcel(s) (collectively, "Repurchase Option II"). For purposes of this Option Agreement, "continuously proceed with construction" shall be defined as construction that is interrupted, if at all, for periods of no longer than thirty (30) days; and "completion of construction of the Phase of Development" shall be defined as City's final inspection of the Phase of Development by the date set forth in the Completion Schedule attached hereto and incorporated herein as Exhibit "C", subject to Section 6(f) below ("Completion Deadline"). In the event of Developer's failure to continuously proceed with construction, or to complete construction of any Phase of Development by the Completion Deadline, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the applicable Completion Deadline (after expiration of the cure period described in Sections 6(b) and 6(c) hereof) ("Repurchase Option II Period"). Agency acknowledges that concurrently with the recordation hereof, Developer has conveyed fee title to the MOB Parcel to Eisenhower Medical Center, a California nonprofit public benefit corporation ("EMC"), for a purchase price of Ten Million Eight Hundred Thousand Dollars ($10,800,000) ("EMC Purchase Price"). Notwithstanding anything in this Section 3 to the contrary, Agency's Repurchase Option I1 rights with respect to the MOB Parcel shall be as set forth in Section 4 below. (a) Exercise of Option Agency shall exercise the Repurchase Option II by giving written notice to Developer, in accordance with Section 7 of this Option Agreement, prior to the expiration of the Repurchase Option I1 Period. Failure of Agency to exercise the Repurchase Option I1 with respect to a particular Phase of Development shall constitute a waiver by Agency of Developer's breach of 882/015610-0085 _3 735889.02 at0/17/06 its obligation to continuously proceed with and complete construction of that Phase of Development within the time set forth in the Completion Schedule. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of Developer's obligation to continuously proceed with and complete construction of any other Phase of Development within the time set forth in the Completion Schedule, or of any other Developer breach of the terms or conditions of the DDA.. (b) Determination of Repurchase Price - Repurchase Option II (Except MOB Parcel Agency's repurchase price for the Option II Parcel(s) ("Repurchase Option II Repurchase Price"), shall be the sum of Developer's Purchase Price for the Option 11 Parcel(s) plus thirty-three and three -tenths percent (33.3%) of "Developer's Construction Costs." For purposes of this Option Agreement, the term "Developer's Construction Costs" shall mean, with respect to development of the Phase of Development to be constructed on the Option lI Parcel(s), the lesser of (i) construction costs actually incurred by Developer for development of said Phase of Development from the DDA Date to the date Agency's exercises this Repurchase Option II (the "Construction Period"), and (ii) the constructions costs for the Construction Period set forth in Developer's Preliminary Budget, as approved by Agency as part of Agency's approval of Developer's financing, in accordance with Section 311 of the DDA, which costs may include (i) the amount paid by Developer to the contractor or contractors performing the works of improvement; (ii) reasonable inspection and testing costs paid by Developer to independent third party engineers or consultants in conjunction with said works of improvement (but not including costs, fees, charges, or profits allocated to Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer; (iii) costs and fees paid by Developer to independent third party engineers or consultants with respect to the planning, design, and engineering of the works of improvement (but not including costs, fees, charges, or profits allocated to the Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer); and (iv) the costs and fees incurred by Developer, if any, to obtain financing for the construction of the works of improvement. 4. Repurc:hase Option II — Failure to Continuously Proceed With or Complete Construction (MOB Parcel) Agency shall be entitled to exercise Repurchase Option II with respect to the MOB Parcel if, after acquiring the Site, EMC fails to continuously proceed with, and complete, construction of at least a 40,000 square foot Medical Office/Surgical Facility building (the "First MOB Building"). For purposes of this Section 4, "continuously proceed with construction" shall have the meaning ascribed in Section 3; and "completion of construction of the First MOB Building" shall be defined as City's final inspection of said building on or before the applicable Completion Deadline. In the event of EMC's failure to continuously proceed with construction, or to complete construction of the First MOB Building by the Completion Deadline, Agency shall be entitled to exercise, but is not obligated to exercise, applicable Repurchase Option II with respect to the MOB Parcel for a period of ninety (90) days following the applicable Completion Deadline: (after expiration of the cure period described in Sections 6(b) and 6(c) hereof). 882/015610-0085 -4- 735889.02 a10/17/06 (a) Exercise of Option Agency shall exercise the Repurchase Option II with respect to the MOB Parcel in the manner described in paragraph 3(a) above. (b) Determination of Repurchase Price — Repurchase Option II (MOB Parcel) The Agency's Repurchase Option H Price for the MOB Parcel shall be equal to Ten Million Eight Hundred Thousand Dollars ($10,800,000) plus thirty-three and three -tenths percent (33.3%) of "EMC's Construction Costs." For purposes of this Amended and Restated Option Agreement, the term "EMC's Construction Costs" shall mean the lesser of (i) construction costs actually incurred by EMC for development of the MOB Parcel to the date Agency exercises Repurchase Option II with respect to the MOB Parcel (the "EMC Construction Period"), and (ii) the construction costs for the EMC Construction Period set forth in EMC's Preliminary Budget, which costs may include (A) the amount paid by EMC to the contractor or contractors performing the works of improvement; (B) reasonable inspection and testing costs paid by EMC to independent third party engineers or consultants in conjunction with said works of improvement (but not including costs, fees, charges, or profits allocated to EMC 's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with EMC; (C) costs and fees paid by EMC to independent third party engineers or consultants with respect to the planning, design, and engineering of the works of improvement (but not including costs, fees, charges, or profits allocated to the EMC's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with EMC); and (D) the costs and fees incurred by EMC, if any, to obtain financing for the construction of the works of improvement. 5. Repurchase Option III - Transfer of the Site Developer hereby grants to Agency an exclusive option to repurchase (i) the Site if, prior to the time Agency issues a Release of Construction Covenants for any Phase of Development to be constructed thereon, Developer transfers or suffers an involuntary transfer of the Site in violation of the terms of the DDA; or (ii) any of the individual Parcels then -comprising the Site (the "Option III Pareell(s)") if, prior to the time Agency issues a Release of Construction Covenants for the Phase of Development to be constructed on the Option III Parcel(s), Developer transfers or suffers an involuntary transfer of the Option III Parcel(s) (collectively, "Repurchase Option III"). In the event of Developer's transfer of the Site or any individual Parcels then - comprising the Site in violation of the DDA, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the transfer that gives rise to Agency's option under this Section ("Repurchase Option III Period"). Notwithstanding the foregoing, Agency shall not have a Repurchase Option III to repurchase (i) the Site, or any portion thereof, as a result of Developer's transfer to EMC of the MOB Parcel; or (ii) the MOB Parcel for any transfer by Developer of any portion of the Site or Project. Any subsequent transfer of the MOB Parcel by EMC in violation of the DDA shall entitle Agency to exercise Repurchase Option III with respect to the MOB Parcel. (a) Exercise of Option Agency shall exercise the Repurchase Option III by giving written notice to Developer ("Agency's Notice of Option III Exercise"), in accordance with Section 7 of this Option 882/015610-0085 735889.02 a10/17/06 Agreement, prior to the expiration of the Repurchase Option III Period. Notwithstanding anything herein to the contrary, (i) failure of Agency to exercise the Repurchase Option III with respect to Developer's transfer or sufferance of an involuntary transfer of the Site shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Site, and (ii) failure of Agency to exercise the Repurchase Option III with respect to Developer's transfer or sufferance of an involuntary transfer of a Parcel shall not constitute a waiver by Agency of any remedies it may have under the terms of the DDA or of any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Parcel, and shall not constitute a waiver by Agency of its exercise of this Repurchase Option III with respect to any other Parcel then -comprising the Site. Any Agency waiver as described in the preceding sentence shall not be deemed a waiver of any other Developer breach of the terms or conditions of the DDA. (b) Repurchase Price - Repurchase Option III. Agency's repurchase price for the Site or for the Option III Parcel(s) ("Repurchase Option III Repurchase Price") shall be equal to the Repurchase Option Il Repurchase Price, as set forth in Section 3(b) or 4(b) (as applicable) of this Option Agreement. 6. Additional Terms Applicable to the Repurchase Options The following additional terms shall apply to Repurchase Option II and Repurchase Option III. All rights and defenses of Developer under this Section 6 shall be rights and defenses of EMC with respect to the MOB Parcel: (a) Successors and Assigns. Repurchase Option II and Repurchase Option III created hereby shall be irrevocable by Developer and, subject to any subordination by Agency in accordance with paragraph (e) below, shall be binding upon the successors and assigns of Developer. (b) Developer's Right to Cure Certain Defaults. Notwithstanding anything herein to the contrary, Agency shall not be entitled to exercise Repurchase Option II until Agency has provided a written notice to Developer regarding Developer's failure to continuously proceed with or complete construction of the Project or any Phase of Development (with any of the above failures referred to hereinafter as an "Option Triggering Event"), and Developer has not, within sixty (60) days after receipt of such notice, cured, corrected, or remedied such Option Triggering Event, or, for those Option Triggering Events that cannot reasonably be cured, corrected, or remedied within sixty (60) days, commenced to cure, correct or remedy such Option Triggering Event within said sixty (60) day period, and diligently prosecute the same to completion. (c) Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by Developer whenever the Agency may deliver any notice or demand to Developer with respect to an Option Triggering Event, the Agency shall at the same time deliver a copy of such notice or demand to each holder 882/015610-0085 735889.02 a10/17/06 of record of any mortgage or deed of trust which has previously requested such notice in writing, including but not limited to 1 st Centennial Bank, which is providing to Developer an acquisition and development loan (the "A&D Loan"). Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Property (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. (d) No Agency Obligation. Notwithstanding any covenant, term, or provision in this Section 6 to the contrary, Agency shall not be obligated to exercise Repurchase Option II or Repurchase Option III. (e) Termination of Option Agreement. In the event Developer commences and completes construction of any particular Phase of Development and Agency has not exercised Repurchase Option II or Repurchase Option III, Agency shall execute and record a termination of this Option Agreement with respect to the underlying Parcel of said Phase of Development within fifteen (15) business days after the final and permanent Certificate of Occupancy far the Phase of Development is issued by the City. Notwithstanding anything herein to the contrary, upon the "Medical Office/Surgical Facility Release Date," which, as used herein, shall mean the earlier of (i) the date Developer completes construction of the First MOB Building, as evidenced by City's issuance of a certificate of occupancy therefor; and (ii) the date construction on the First MOB Building has commenced, provided that completion bonds naming the Agency as a beneficiary with the right to enforce are in place that guarantee completion of the same, this Option Agreement shall be deemed terminated with respect to the MOB Parcel, and Agency shall execute and record a partial termination hereof with respect to said Parcel. (f) Enforced Delay. Notwithstanding anything to the contrary herein, in addition to specific provisions of this Option Agreement, performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public or governmental agency or entity (except that acts or the failure to act of Agency shall not excuse performance by Agency unless the act or failure is caused by the acts or omissions of Developer); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall 882/015610-0085 735889.02 al0/17/06 continue to exercise commercially reasonable efforts to minimize the period of the delay. An extension of time for ;any such cause shall be limited to the period of the Enforced Delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other parry within thirty (30) days following the commencement of the cause. The following shall not be considered as events or causes beyond the control of Developer, and shall not entitle Developer to an extension of time to perform: (i) Developer's failure to obtain financing for the Project or for any Phase of Development, (ii) Developer's failure to negotiate agreements with prospective tenants or users for the Project or for any Phase of Development, (iii) interest rates or (iv) economic or market conditions. Times of performance under this Option Agreement may also be extended by mutual written agreement by Agency and Developer. Agency's Executive Director shall also have the authority on behalf of Agency to administratively approve extensions of time not to exceed a cumulative total of one (1) year. (g) .Subordination. The Agency agrees to subordinate this Option Agreement to the A&D Loan, to Developer's construction loan(s) for each Phase of Development and to the deed of trust securing Developer's investor's loan for Developer's construction of the Suites Hotel on the Suites Hotel Parcel and the Casitas Development on Parcel 2 and on Parcel 3 and to execute a subordination agreement evidencing same, to be recorded in the official records of the County Recorder for the County of Riverside, provided all of the following conditions are met: ii) Loan Amount. (1) for the Medical Office/Surgical Facility, the Restaurant to be developed on Parcel 1, and the Restaurant to be developed on Parcel 5, the maximum cumulative principal amount of the construction loan for the applicable Phase of Development shall not exceed ninety, percent (90%) of the lender's appraised value of the Parcel on which said Phase of Development shall be constructed, upon completion of the Phase of Development, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction, and (2) for the Suites Hotel and the Casitas Development, the maximum cumulative principal amount, collectively, of Developer's construction loan plus Developer's investor's Ioan, shall not exceed ninety percent (90%) of the lender's appraised value of the Parcel(s) on which the applicable Phase of Development shall be constructed, upon completion of the Phase of Development, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction; ;ii) Use of Loan Proceeds. The loan(s) shall obligate Developer to expend loan proceeds for no other purpose than the applicable Phase of Development; and :iii) Notice and Agency's Opportunity to Cure. The loan(s) shall provide that any notice of a Developer breach or default shall also be sent to the Agency at the address listed in Section 7 and that upon receipt of such notice, Agency shall have the right to (A) cure the noticed breach or default, (B) negotiate with the lender regarding the noticed breach or default, and (C) purchase the Site from Developer subject to the construction lender's deed of 882/015610-0085 735889.02 a]0/17/06 -8- trust, without the consent of Developer or the holder of the construction lender's deed of trust, and that Agency's exercise of the foregoing rights shall not, in and of itself, give rise to any right on the part of the lender to accelerate the amounts due under the loan. (h) Agency's Investigation of Site. Agency shall have forty-five (45) days after the occurrence of an event that triggers Agency's ability to exercise either of Repurchase Option II or Repurchase Option III to enter upon the Site (or applicable portion thereof) to conduct any tests, inspections, investigations, or studies of the condition of the Site (or applicable portion thereof). Developer shall permit Agency access to the Site (or applicable portion thereof) for such purposes. Agency's obligation to close "Escrow" (as defined below) shall be subject to Agency's approval of any environmental and other site testing conducted by Agency in Agency's discretion. Agency shall indemnify, defend, and hold harmless Developer and its officers, directors, shareholders, employees, agents, and representatives from and against all claims, liabilities, or damages, and including expert witness fees and reasonable attorney's fees and costs, arising out of any such testing, inspection, or investigatory activity on the Site (or applicable portion thereof). (i) Escrow Provisions. i) 'Within five (5) business days after Agency has exercised Repurchase Option I, ;Repurchase Option II, or Repurchase Option III (as applicable), or as soon thereafter as reasonably practicable, an escrow shall be opened ("Escrow") with an escrow company selected by Agency for the reconveyance of the Site (or applicable portion thereof) to Agency ("Escrow bolder"). Escrow shall be deemed opened on the date that a fully executed copy of this Option .Agreement and a notice of exercise of option prepared by Agency are delivered to Escrow Holder ("Opening of Escrow"). Escrow Holder shall notify Developer and Agency in writing of the date of the Opening of Escrow promptly following the opening of the Escrow. ii) Escrow shall close on or before the date that is ninety (90) days after the Opening of Escrow ("Close of Escrow" or "Closing Date"). The terms "Close of Escrow" and "Closing; Date" shall mean the date the grant deed conveying fee title to Agency ("Agency Grant Deed") is recorded in the Office of the County Recorder of the County of Riverside, State of California. Possession of the Site, or portion thereof, shall be delivered to Agency at the Close of Escrow. iii) This Option Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of Developer and Agency to Escrow Holder as well as an agreement between Developer and Agency. In the event of any conflict between the provisions of this Option Agreement and Escrow Holder's standard instructions, this Option Agreement shall prevail. iv) The Escrow shall be subject to Agency's approval of a then -current preliminary title report. Any monetary lien(s) or encumbrance(s) shown on such preliminary title report that is (are;) created concurrent with or after the close of escrow that conveyed the Site from Agency to Developer shall be removed by Developer at its sole expense prior to the Close of Escrow pursuant to this Section 4(i) unless such exception(s) is (are) accepted by Agency in 882/015610-0085 735889.02 a10/17/06 -9- its sole discretion; provided, however, that Agency shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title existing on the date of recordation of the Grant Deed to the Site (in the form of Attachment No. 4 to the DDA); and (iii) matters shown as printed exceptions in the standard form ALTA policy of title insurance. In the event the Site is encumbered by a mortgage or deed of trust, Agency shall be permitted to unilaterally instruct Escrow Holder to satisfy the indebtedness secured thereby out of the proceeds payable to Developer through the foregoing Escrow. Any additional amount necessary to satisfy such indebtedness shall be paid by Developer. v) On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Agency shall deposit in Escrow (i) the applicable of the Repurchase Option II Repurchase Price or the Repurchase Option III Repurchase Price; (ii) one-half (1 /2) of the escrow fees; (iii) the portion of the title insurance premium attributable to any extra or extended coverages, or any additional charge resulting from Agency's request that the amount of insurance be higher than the applicable of the Repurchase Option 1I Repurchase Price or the Repurchase Option III Repurchase Price; and (iv) any and all additional instruments or other documents required from Agency (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Developer shall deposit in Escrow (i) the Agency Grant Deed, executed and acknowledged; (ii) one-half (1/2) of the escrow fees; and (iii) any and all additional instruments or other documents required from Developer (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. Developer shall also be required to pay for documentary tax stamps, recording fees, and for an ALTA standard form owner's policy of title insurance in the amount of the Repurchase Option I1 Repurchase Price or the Repurchase Option III Repurchase Price (as applicable), showing title vested in Agency free and clear of all liens and encumbrances except those permitted by paragraph (iv) above (the "Title Policy"). Agency's receipt of the Title Policy shall be a condition to the Close of Escrow. Any other costs and expenses shall be allocated between the parties in the manner customary for a commercial property conveyance in Riverside County. vi) If, on or before the Closing Date, Escrow Holder has received all of the documents and funds listed in paragraph (v) above, and Escrow Holder is in a position to cause the Title Policy to be issued to Agency, and provided Agency has approved of the condition of the Site, or applicable portion thereof, Escrow Holder shall close the Escrow by taking the following actions: (i) recording the Agency Grant Deed in the office of the County Recorder of the Country of Riverside, California, and delivering the recorded Agency Grant Deed to Agency; (ii) causing the Title Policy to be issued to Agency; and (iii) delivering the applicable Repurchase Price to Developer. (j) Agency's Right to Acquire the Site. Notwithstanding anything herein to the contrary, upon Agency's exercise of Repurchase Option II or Repurchase Option III, Developer's commencement to cure the default that led to Agency's exercise shall not affect Agency's right to close the Escrow and acquire the Site (or applicable portion thereof). 882/015610-0085 —1 �_ 735889.02 a10/17/06 (k) Agency's Repurchase of Uncompleted Portions of the Property. Notwithstanding anything herein to the contrary, in the event that as a result of Agency exercising Repurchase Option II or Repurchase Option III Agency acquires Parcel 8, if Developer has obtained a Certificate of Completion from the City for one or more of the lots that comprise said Parcel, (i) the provisions of this Option Agreement shall apply only to that portion of Parcel 8 for which Certificates of Completion have not been issued ("Uncompleted Portion of the Repurchase Property") and any calculations for determining the Repurchase Option II Repurchase Price or the Repurchase Option III Repurchase Price (as applicable) shall be based solely upon the Uncompleted Portion of the Repurchase Property, and (ii) Developer agrees to cooperate with Agency to effect the subdivision of the Uncompleted Portion of the Repurchase Property from the completed portions of Parcel 8 (those portions of the Repurchase Property for which Certificates of Completion have been issued). 7. Notices. Demands and Communications Between the Parties Formal notices, demands, and communications between Agency and Developer shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to: To Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. To Developer: CP Development La Quinta, LLC 77-564 Country Club Drive, Suite 100 Palm Desert, CA 92211 Attn: Richard Oliphant With copies to: Ealy, Hemphill, Blasdell & Oleson, LLP 777 Tahquitz Canyon Way, Suite 328 Palm Springs, CA 92262 Attn: Emily Perri Hemphill and Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed in the manner provided above shall be deemed effective on the second business day following deposit in the United States mail. Such written notices, 882/015610-0085 -11- 735889.02 a10/17/06 demands, and communications shall be sent in the same manner to such other addresses as either party may from time to time designate by mail. 8. Agency's Option to Acquire Plans If Agency exercises Repurchase Option II or Repurchase Option III in accordance with this Agreement, at the option of the Agency, which may be exercised in the Agency's sole and absolute discretion, the Developer shall deliver to the Agency an executed assignment in a form reasonably acceptable to the Agency of the Developer's right to use all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to (i) the construction of the Project on the Site or (ii) if Agency acquires less than all of the Site, the construction of the Phases(s) of Development applicable to the Parcels which the Agency is acquiring (the "Plans"), together with copies of all of the Plans, as have been prepared for the development of the Site or applicable portion thereof to date of the termination. Notwithstanding the foregoing, however, Developer does not covenant to convey to the Agency the copyright or other ownership rights of third parties. Agency understands and agrees that the assignment to Agency under this Section 6 is subject and subordinate to any assignment which Developer may make to a lender providing financing for the Project or applicable Phase of Development, and Agency agrees to execute any documents required by such lender acknowledging and effectuating such subordination of Agency's rights in and to the assignment. Agency's acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall assume all risks in the use of the Plans. 9. Applic;ible Law and Forum; AttoMe 'ss Fees The Superior Court of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Option Agreement. This Option Agreement shall be governed by, and construed under, the internal laws of the State of California without regard to conflict of law principles. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Option Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Option Agreement. The rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Service of process on Agency shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. If either party to this Option Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Option Agreement, the party prevailing in the final judgment in such action or proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable attorney's fees. Attorney's fees shall include reasonable costs for investigating such action, conducting discovery, retaining expert witnesses, and all other necessary costs the court allows which are incurred in such litigation. 982/015610-0085 -12- 735889.02 a]0/17/06 10. Nonliabili1y of Agency Officials and Employees No officer, official, employee, agent, or representative of Agency shall be personally liable to Developer or any successor in interest, in the event of any default or breach by Agency, or for any amount which may become due to Developer or its successor, or for breach of any obligation of the terms of this Option Agreement. 11. Nondiscrimination Developer covenants for itself, under or through thern, that there shall race, color, creed, religion, sex, marital Option Agreement or use of the Site. 12. Inte retation its heirs, executors, assigns, and all persons claiming be no discrimination against any person on account of status, national origin, or ancestry with respect to this The terms of this Option Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Option Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Option Agreement. 13. Entire Agreement This Option Agreement integrates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Option Agreement must be in writing and signed by the appropriate authorities of the party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of Agency and Developer. 14. Counter -parts This Option Agreement may be executed in counterparts, each of which, after all the parties hereto have signed this Option Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 15. Severabili In the event any section or portion of this Option Agreement shall be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect, and the parties hereto shall take further actions as may be reasonably necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this Option Agreement. [END - SIGNATURES ON NEXT PAGE] 892/015610-0085 - 13- 735889.02 a10/17/06 IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first above written.. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: _ Richard R. Oliphant" Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: ; Richard R. Oliphant Its: President "AGENCY" LA QUINTA REDEVELOPMENT AGENCY a public body, corporate and politic By: Its: Executive Director APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency 882/015610-0085 14- 735889.02 a10/17/06 IN WITNESS WHEREOF, the part, -'es have executed this Option Agreement as of the date first above written. "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member 10 Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "AGENCY" LA QUINTA REDEVELOPMENT AGENCY a public body, corporate and politic By: Its: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopmen': Agency Executive Director 882/015610-0085 -14- 735889.03 a09/21/06 STATE OF CALIFORNIA COUNTY OF On personally appeared ) ss before me, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. C. EE< ANIX-M Commission #01521142 Fliversiclle Cca inly MVComm. E:xpAre,�s C?c t22, 2MB ssian�vsns►vr+ln [SEAL] STATE OF CALIFORNIA COUNTY OF On personally appeared Notary Public ) ss before roe, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the persons) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. AbA6 A. C. M MIDOW _ Ccnr+rnrr h%Won ,fie 1521142 Nottay Pub9c •• C NEcxrr l i Riwemkie COW* My Comm. EXON s Clr:t 22, 2WB s�r�anras*��� [SEAL] Notary Public 882/015610-0085 ^1 5- 735889.02 a]0/17/06 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LA QUINTA ) On October 20, 2006 , before me, Regenia Hensley, Notary Public, personally appeared THOMAS; P. GENOVESE, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal REGENIA HENSLEY Notary Public Commission # 152'1423 Expiration: October 23, 2008 (Seal) EXHIBIT "A" LEGAL DESCRIPTION OF THE SITE IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCELS 1 THRU 5, INCLUSIVE, OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212 OF PARCEL MAPS, AT PAGES 60-66, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS, AND PARCELS "A" AND "B" OF LOT LINE ADJUSTMENT NO. 2006-452 APPROVED BY THE CITY OF LA QUINTA AND RECORDED APRIL 19, 2006 AS INSTRUMENT NO. 0280726, OR, BEING ADJUSTED PARCELS 6, 7 AND 8 OF PARCEL MAP NO. 31116 AS SHOWN BY MAP ON FILE IN BOOK 212 OF PARCEL MAPS, AT PAGES 60-66, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS, ALL BEING IN SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M. 882/015610-0085 735889.03 a09/21/06 EXHIBIT "B" ]LEGAL DESCRIPTION OF MOB PARCEL PARCEL "A" OF LOT LINE ADJUSTMENT NO.2006-452, MORE PARTICULARLY DESCRIBED AS FOLLOWS: IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCEL 6 TOGETHER WITH THAT PORTION OF PARCEL 7 OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS, BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST EASTERLY CORNER OF SAID PARCEL 7; THENCE ALONG THE SOUTHEASTERLY, SOUTHWESTERLY AND NORTHWESTERLY BOUNDARY LINES OF SAID PARCEL 7 THROUGH THE FOLLOWING FIVE (5) COURSES: (1) SOUTH 43°56'44" WEST, A DISTANCE OF 357.95 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 4,565.17 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 42°59'27" EAST; (2) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE; OF 02057'46", AN ARC DISTANCE OF 236.07 FEET TO A POINT, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 40001'41" EAST; (3) THENCE NON -TANGENT TO SAID CURVE SOUTH 00°17'35" EAST, A DISTANCE OF 11.03 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 2,500.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 36057'27" EAST; (4) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 05043'47", AN ARC DISTANCE OF 250.01 FEET TO A POINT, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 31013'40" EAST; (5) THENCE NON -TANGENT TO SAID CURVE NORTH 28029'24" EAST, A DISTANCE OF 153.02 FEET TO AN ANGLE POINT IN THE SOUTHEASTERLY BOUNDARY LINE OF SAID PARCEL 6 OF PARCEL MAP NO.31116; THENCE LEAVING THE BOUNDARY LINES OF SAID PARCEL 7 AND ALONG THE SOUTHWESTERLY, WESTERLY, NORTHERLY AND EASTERLY LINES OF SAID PARCEL 6 THROUGH THE FOLLOWING FIFTEEN (15) COURSES: (1) THENCE NORTH 61030'36" WEST, A DISTANCE OF 150.00 FEET; 882/015610-0085 735889.02 a10/17/06 (2) THENCE SOUTH: 28°29'24" WEST A DISTANCE OF 150.35 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 2,500.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 27047'20" EAST; (3) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 09.43' 18", AN ARC DISTANCE OF 424.19 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 2,095.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 75025'34" EAST; (4) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE; OF 02056'54", AN ARC DISTANCE OF 107.80 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE EASTERLY, HAVING A RADIUS OF 18.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 72°28'40" WEST; (5) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 27°42'25", AN ARC DISTANCE OF 8.70 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE WESTERLY, HAVING A RADIUS OF 82.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 79°48'55" EAST; (6) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 29001'21", AN ARC DISTANCE OF 41.54 FEET TO THE BEGINNING OF A COMPOUND CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 2,107.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 71°09'44" EAST; (7) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 03016'31", AN ARC DISTANCE OF 120.45 FEET; (8) THENCE NON -TANGENT TO LAST SAID CURVE NORTH 22°46'41" EAST, A DISTANCE OF 5.77 FEET; (9) THENCE NORTH 67°0656" EAST, A DISTANCE OF 52.05 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 540.00 FEET; (10) THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 15052'03", AN ARC DISTANCE OF 149.55 FEET TO THE BEGINNING OF A BY -VERSE CURVE CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 810.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 38045'07" WEST; (11) THENCE NORTHEASTERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 31°10'05", AN ARC DISTANCE OF 440.63 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHERLY, HAVING 882/015610-0085 _2 735889.02 a10/17/06 A RADIUS OF 840.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 07035'02" EAST; (12) THENCE EASTERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE, OF 13034'42", AN ARC DISTANCE OF 199.07 FEET; (13) THENCE NON -TANGENT TO LAST SAID CURVE SOUTH 16.39' 14" EAST, A DISTANCE OF 55.87 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 250.00 FEET; (14) THENCE SOUTHERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE; OF 20°41'22", AN ARC DISTANCE OF 90.27 FEET; (15) THENCE TANGENT TO SAID CURVE SOUTH 04°02'08" WEST A DISTANCE OF 333.46 FEET TO THE NORTHWESTERLY PROLONGATION OF THE NORTHEASTERLY LINE OF SAID PARCEL 7; THENCE LEAVING SAID BOUNDARY LINES OF PARCEL 6 AND ALONG SAID PROLONGATION AND SAID NORTHEASTERLY LINE OF PARCEL 7 SOUTH 500110 13" EAST, A DISTANCE OF 592.88 FEET TO THE POINT OF BEGINNING. SUBJECT TO EXISTING EASEMENTS, COVENANTS, RIGHTS AND RIGHTS -OF -WAY OF RECORD. CONTAINING 588,702 SQUARE FEET OR 13.515 ACRES, MORE OR LESS. 882/015610-0085 735889.02 a10/17/06 -3- Phase of Development Restaurant to be developed on Parcel I Casitas Development (Parcel 2) Casitas Development (Parcel 3) Suites Hotel (Parcel 4) Restaurant to be developed on Parcel 5 First MOB Building (MOB Parcel) Residential Development (Parcel 8) Seeley Drive EXHIBIT "C" COMPLETION SCHEDULE Time for Completion of Construction (measured from date City issues final building permits for applicable Phase of Development) 36 months 36 months 36 months 23 months 36 months 36 months 18 months 180 days after Developer's completion of Suites Hotel 882/015610-0085 735889.02 a10/17/06 EXHIBIT "D" PURCHASE PRICE Parcel 1 (Restaurant) Casitas Parcel 2 Casitas Parcel 3 Parcel 4 (Suites Hotel) Parcel 5 (Restaurant) Parcel B of Lot Line Adjustment No. 2006-452 (Residential Development) Landscape Parcel C Landscape Parcel E Landscape Parcel H Landscape Parcel I Seeley Drive Parcel Well Site Parcel 206,924.58 $1,938,793.41 135,694.34 753,475.39 251,908.18 557,028.39 0 0 0 Q Q 116,957.37 8821015610-0085 735889.02 a10/17/06 AMENDMENT NO.5 TO DISPOSITION AND DEVELOPMENT AGREEMENT THIS AMENDMENT NO. 5 TO DISPOSITION AND DEVELOPMENT AGREEMENT ("Amendment No. 5") is made and entered into as of August 23, 2007 (the "Effective Date") by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"). RECITALS: A. On or about December 18, 2003, the Agency and Developer entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which Agency sold to Developer that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Property") and Developer agreed to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to Eligible Buyers at an Affordable Housing Cost (collectively, the "Original Project"). B. Agency and Developer have previously amended the Original DDA on four (4) occasions, on or about October 28, 2004, on or about December 7,'2004, on or about November 2, 2005, and on or about October 20, 2006 (the "Prior DDA Amendments"). The Original DDA, as amended by the Prior DDA Amendments, is hereinafter referred to as the "DDA" and the Original Project, as amended by the Prior DDA Amendments, is hereinafter referred to as the "Project." C. Concurrently with the execution of the Original DDA, the City of La Quinta, a California municipal corporation ("City"), and Developer entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside on January 5, 2004 as Instrument No. 2004-0005256 (the "Original DA"). Agency and Developer have amended the Original DA on two prior occasions, pursuant to that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004 and recorded in the Official Records of the County Recorder for the County of Riverside on November 8, 2004 as Instrument No. 2004-0885063, and pursuant to that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005 and recorded in the Official Records of the County Recorder for the County of Riverside on December 19, 2005, as Instrument No. 2005-1045418 (the "Prior DA Amendments") The Original DA, as amended by the Prior DA Amendments, is hereinafter referred to as the "DA." D. Pursuant to the Prior DDA Amendments and the Prior DA Amendments, Developer was permitted to, and did, (1) sell to Lennar Homes of California ("Lennar") that portion of the Property described as Parcel 2 of Parcel Map 31116 ("Parcel 2"); (ii) grant to Lennar an option to purchase that portion of the Property described as Parcel 3 of Parcel Map 31116 ("Parcel 3"); and (iii) assign its rights and obligations under the DDA and DA with respect to Parcel 2 and Parcel 3 (collectively, the "Casitas Property") and the Casitas 8821015610-0085 829721 02 a08/16/07 4 _ Development to Lennar. Lennar has developed or is developing one hundred thirty two (132) condominium/casitas units on Parcel 2. Lennar elected not to exercise its option to purchase Parcel 3, and Developer has therefore requested that the Agency and City permit Lennar to transfer to Developer or an entity owned and controlled by Developer all of Lennar's rights and obligations under the DDA and DA with respect to Parcel 3 and the portion of the Casitas Development to be constructed on Parcel 3 and all associated public and private improvements and amenities to be developed as part of said portion (collectively, the "Parcel 3 Casitas Obligations"). E. Pursuant to the Prior DDA Amendments and Prior DA Amendments, Agency authorized Developer to transfer the MOB Parcel and Developer's rights and obligations with respect to the MOB Parcel under the DDA and DA to Eisenhower Medical Center, a California non-profit public benefit corporation. In connection with said transfer, Developer was obligated to deposit with the Escrow Agent handling the transaction the Eisenhower Sales Proceeds, and the Escrow Agent was instructed to retain One Million Dollars ($1,000,000) of the Eisenhower Sales Proceeds (the "Remaining Sales Proceeds") until the Medical Office/Surgical Facility Release Date. Developer has requested that the Agency (a) approve a revision to the Second Permitted Phase of Construction that increases the permitted size of the First MOB Building by 10,655 square feet; and (b) instruct the Escrow Agent to release to Developer (i) fifty percent (50%) of the Remaining Sales Proceeds to Developer at the time the Suites Hotel is completed, as evidenced by City's issuance of a final certificate of occupancy, and opened to members of the public, and (ii) the final fifty percent (50%) of the Remaining Sales Proceeds to Developer at the time the City completes its final inspection for the foundation of the First MOB Building. F. Developer had requested that the Agency and City (a) permit Developer to assign to Apple Properties, LLC, a North Dakota limited liability company ("Apple Properties") all of its rights and obligations under the DDA and DA with respect to Parcel 5 and the Restaurant to be constructed on Parcel 5 (the "Parcel 5 Restaurant), (b) delete the requirement that the Parcel 5 Restaurant serve breakfast, and (c) approve a new schedule for the development of the Parcel 5 Restaurant. G. Developer and Agency now wish to modify the DDA in the manner specified in Recitals D, E, and F above, pursuant to the terms and conditions of this Amendment No. 5. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. The DDA is hereby amended as follows: 1.1 Lennar shall be permitted to assign to Developer or to an entity owned and controlled by Developer, and Developer or such entity owned and controlled by Developer shall be permitted to assume from Lennar all of Lennar's rights and obligations under the DDA and DA with respect to Parcel 3 and the Parcel 3 Casitas Obligations. Notwithstanding the 882/015610-0085 829721.02 a08A6/07 -2- foregoing, any such assignment, even a permitted assignment, shall not be effective until such time as Lennar and Developer (or an entity owned and controlled by Developer) have executed and delivered to the Agency an assignment and assumption agreement in the form attached hereto and incorporated herein as Attachment No. 1, pursuant to which Lennar assigns to Developer and Developer assumes and agrees to be bound by all of the terms and conditions in the DDA and DA with respect to Parcel 3 and the Parcel 3 Casitas Obligations. 1.2 Developer shall be permitted to assign to Apple Properties, and Apple Properties shall be permitted to assume from Developer, all of Developer's rights and obligations under the DDA and DA with respect to Parcel 5 and the Parcel 5 Restaurant. Notwithstanding the foregoing, any such assignment, even a permitted assignment, shall not be effective until such time as Developer and Apple Properties have executed and delivered to the Agency an assignment and assumption agreement in the form attached hereto and incorporated herein as Attachment No. 2, pursuant to which Developer assigns to Apple Properties and Apple Properties assumes and agrees to be bound by all of the terms and conditions in the DDA and DA applicable to Parcel 5 and the Parcel 5 Restaurant. 1.3 The Schedule of Performance applicable to the Parcel 5 Restaurant is hereby modified in its entirety to be the schedule attached hereto and incorporated herein as Attachment No. 3. 1.4 The Scope of Development shall be revised to delete the requirement in Paragraph III) that the second Restaurant serve breakfast. 1.5 Agency hereby instructs the Escrow Agent to release to Developer (a) fifty percent (50%) of the Remaining Sales Proceeds at the time the Suites Hotel is completed, as evidenced by City's issuance of a final certificate of occupancy, and opened to members of the public, and (b) the final fifty percent (50%) of the Remaining Sales Proceeds at the time the City completes its final inspection for the foundation of the First MOB Building. 1.6 The Second Permitted Phase of Construction, as described in Section 201.1(b) of the DDA, shall be revised to replace the reference to the maximum square footage of the First MOB Building in clause (a), which is currently "75,000 square feet" with "85,655 square feet." 2. Developer shall reimburse Agency for all of the costs Agency incurs or has incurred to negotiate, prepare and process this Amendment No. 5. 3. Except as otherwise expressly provided in this Amendment No. 5, all of the terms and conditions of the DDA shall remain in full force and effect. Unless defined herein to the contrary, all capitalized terns in this Amendment No. 5 shall have the meanings ascribed thereto in the DDA. 4. In the event of any action between or amongst the parties hereto seeking enforcement of any of the terms and conditions to this Amendment No. 5, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 882/015610-0085 829721.02 a08/16107 -3- 5. This Amendment No. 5 shall be construed according to its fair meaning and as if prepared by all of the parties hereto. 6. This Amendment No. 5 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 5. Service of process on Agency shall be made in accordance with California law. Service of process on Developer and Eisenhower shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 7. Time is of the essence of this Amendment No. 5 and of each and every term and provision hereof. 8. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by Agency and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 9. This Amendment No. 5 may be executed in counterparts, each of which, when this Amendment No. 5 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 10. The person(s) executing this Amendment No. 5 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No. 5 on behalf of said party, (iii) by so executing this Amendment No. 5 such party is formally bound to the provisions of this Amendment No. 5, and (iv) the entering into this Amendment No. 5 does not violate any provision of any other agreement to which such party is bound. [signature page follows] 882/015610-0085 829721 02 a08/16/07 -4- IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read this Amendment No. 5, understands it, and hereby executes this Amendment No. 5 to be effective as of the day and year first written above. "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member Date:_ 2007 By:_P. (; Richard Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager Date:_ , 2007 By: Qb %)- ^� Richard Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Executi4birector APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency 982/015610-0085 829721 02 a08/16/07 -j- IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read this Amendment No. 5, understands it, and hereby executes this Amendment No. 5 to be effective as of the day and year first written above. Date: 12007 "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: Richard Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager Date: 2007 By: Richard Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Date: 2007 By: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKE LLP Attorheys fof the La Quint?'Redevelopment Agency Executive Director 882/015610-0085 829721,02 a08/16/07 -5- State of California CALIFORNIA ALL-PURPOSE Countyof Vw,. S-dI SS' CERTIFICATE OF ACKNOWLEDGMENT On 1-aQU,C a\,o'AUJ4- beforeme, UAMIU)�L—Bmmna Date Printed Name of Notary Public personally appeared Y'AUVAim `" I Vpersonally known to me - or - ❑ proved to me on the basis of satisfactory evidence: ❑ form(s) of identification ❑ credible wltness(es) to be the person( whose name( is/are subscribed to the within instrument and acknowledged to me that he/she*vey executed the same in his/laeFAIiieir authorized capacity(ill and that by his/Iner44eir signature(,} on the instrument the perscil or the entity upon behalf of which the persons} acted, executed the instrument. WITNESS my hand and official seal. CANDICE R. BORCENA Commlaalo1 # 1893376 ti Notary PubIlc • Calllom10 RNerakie County It — 1 nnycomm.Jun sv,zooq Signature of Notary Public (Seal) OPTIONAL INFORMATION Although the information rn this section is not required by law, it could prevent fraudulent removal and reattachment of this acknowledgment to an unauthorized document and may prove useful to persons relying on the attached document. Description of Attached Document The preceding Certificate of Acknowledgment Is attached to a document titled/for the purpose of containing Ik 'pages, and dated The signer(s) capacity or authority is/are as ndmdual(s) ❑ Attorney -in -Fact ❑ Corporate Officer(s) Title(s) ❑ Guardian/Conservator ❑ Partner - Limited/General ❑ Trustee(s) ❑ Other representing: Name(,) of Persons) or Entity(es) Signer is Representing ❑ Additional Signer(s) ❑ Signer(s)Thumbpnnt(s) ❑ Other ®Copyright 2004 Notary Rotary, Inc 925 29th St, Des Moines, IA 503123612 Form ACK02 02/04 To re-orderr call roll -tree 1- SIR -349-6588 or visit us on time Internet at Run//www tnenotarysnop mm ATTACHMENT NO. 1 PARTIAL ASSIGNMENT AND ASSUMPTION AGREEMENT [Casitas Property] [See following pages] 882/015610-0085 829721.02 a08/16/07 ATTACHMENT NO. 1 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: CP DEVELOPMENT LA QUINTA, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant PARTIAL ASSIGNMENT AND ASSUMPTION AGREEMENT This PARTIAL ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment") is entered into this _ day of 2007 (the "Effective Date") by and between LENNAR HOMES OF CALIFORNIA, INC., a California corporation ("Assignor") and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Assignee") with reference to the following: A. WHEREAS, Assignor is the owner in fee simple of certain property located at 45- 245 and 45-165 Seeley Drive, in the City of La Quinta, California, which is more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference (the "Casitas Property"). B. WHEREAS, pursuant to the terms of that certain Disposition and Development Agreement entered into by and between the Assignee and the La Quinta Redevelopment Agency, a public body, corporate and politic ("Agency") on or about December 18, 2003, as amended on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, and on or about the same date hereof (as amended, the "DDA"), the Agency conveyed the Casitas Property and certain other adjacent real property to the Assignee. C. WHEREAS, subsequent to its acquisition of the Casitas Property, Assignee conveyed the Casitas Property and assigned all of its rights and obligations with respect to the Casitas Property to Assignor. D. WHEREAS, concurrently with the execution of the DDA, the City of La Quinta ("City") and Assignee entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside on January 5, 2004 as Instrument No. 2004-0005256, and amended by that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004 and recorded in the Official Records of the County Recorder for the County of Riverside on November 8, 2004 as Instrument No. 2004- 0885063, and that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005 and recorded in the Official Records of the County Recorder for the County of Riverside on December 19, 2005, as Instrument No. 2005-1045418 (as amended, the "DA"). 882/01561"085 ATTACHMENT NO. 1 82972102 a08116i07 Page 1 of 6 E. WHEREAS, pursuant to the terms of the DDA and DA, the Casitas Property is to be used for the development of one hundred sixty-four (164) casitas/condominium units (the "Casitas Development"). F. WHEREAS, Assignor has developed or intends to develop on Parcel 2 of the Casitas Property ("Parcel 2") one hundred thirty-two (132) casitas/condominium units with associated public and private improvements and amenities, and now wishes to transfer and assign to Assignee all of its rights and obligations under the DDA and DA with respect to Parcel 3 of the Casitas Property ("Parcel 3") and the portion of the Casitas Development to be constructed on Parcel 3 and all associated public and private improvements and amenities to be developed as part of said portion (collectively, the "Parcel 3 Casitas Obligations"). NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Assignor hereby assigns to Assignee all of Assignor's rights and responsibilities under the terms of the DDA and DA with respect to Parcel 3 and the Parcel 3 Casitas Obligations (collectively, the "Assigned Rights and Obligations"). 2. Assignee hereby accepts the foregoing assignment of the Assigned Rights and Obligations, and agrees to be bound by the terms of the DDA and DA to the extent that such terms affect or are affected by ownership of the Parcel 3 and then only to the extent of the Assigned Rights and Obligations. 3. The parties hereto acknowledge and agree that Assignee shall not be responsible for any of the obligations of the DDA or DA which arise from ownership of Parcel 3 which arise prior to the Effective Date hereof. As such, a default by Assignor under the DDA or DA with respect to Parcel 3 or the Parcel 3 Casitas Obligations prior to the Effective Date hereof ("Assignor's Default") shall not be deemed a default by Assignee, and Assignor shall indemnify, defend and hold harmless Assignee from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignor's Default. A default by Assignee under the DDA or DA with respect to Parcel 3 or the Parcel 3 Casitas Obligations after the Effective Date hereof ("Assignee's Default") shall not be deemed a default by Assignor, and Assignee shall indemnify, defend and hold harmless Assignor from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignee's Default. 4. Nothing herein or in the DDA or DA constitutes a representation or warranty by the Agency that the construction of the Parcel 3 Casitas Obligations is not subject to California Health and Safety Code Sections 33423 through 33426, or Chapter 1 of Part 7 of the California Labor Code (commencing with section 1720), and all applicable statutory and regulatory provisions related thereto, and Assignee expressly waives any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to the Casitas Property or the Casitas Development. Assignee shall indemnify, defend, and hold the Agency harmless, including litigation 882/015610-0085 ATTACHMENT NO. 1 829721 02 a08/16/07 Page 2 of 6 costs and reasonable attorneys' fees, from and against any and all claims pertaining to the payment of wages for the Casitas Property or the Casitas Development. 5. The City and the Agency shall be deemed to be third party beneficiaries of the waiver and indmenity set forth in Section 4 and the warranty and representation set forth in Section 6. 6. The parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented. 7. The terms of this Assignment shall not be amended and this Assignment shall not be terminated except by written instrument executed by both of the parties hereto, and only upon the prior written consent of the City and Agency. 8. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles. 9. Any defined terms used but not defined herein shall have the same meaning as in the DDA. [Balance of page intentionally left blank.] 882/015610-0085 ATTACHMENT NO. 1 $29721 02 a08/16/07 Page 3 of 6 above. WHEREFORE, the parties hereto have executed this Assignment on the date first written "Assignor" Lennar Homes of California Inc., a California corporation By: Its: "Assignee" CP Development La Quinta, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President 882/015610-0085 ATTACHMENT NO. 1 829721 02 a08/16/07 Page 4 of 6 CONSENT By execution below, the City and Agency hereby consent to the foregoing assignment. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Executive Director CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State of California By: Its: City Manager ATTEST: City Clerk APPROVED AS TO FORM: RUTAN & TUCKER, LLP City Attorney 8821015610-0085 ATTACHMENT NO. ] 829721.02 a08/16/09 Page 5 of 6 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY PARCELS 2 AND 3 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, AS PER MAP RECORDED IN BOOK 212 OF PARCEL MAPS, PAGES 60 TO 66, RECORDS OF SAID COUNTY. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM THE LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 9, 2004 AS INSTRUMENT NO. 2004-0979137 OFFICIAL RECORDS. 882/015610-0095 ATTACHMENT NO. 1 829721 02 a08/16/07 Page 6 of 6 ATTACHMENT NO.2 PARTIAL ASSIGNMENT AND ASSUMPTION AGREEMENT [Restaurant Parcel 5] [See following pages] 982/015610-0085 829721 02.08/16/07 ATTACHMENT NO. 2 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: CP DEVELOPMENT LA QUINTA, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant PARTIAL ASSIGNMENT AND ASSUMPTION AGREEMENT This PARTIAL ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment') is entered into this _ day of , 2007 (the "Effective Date") by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Assignor") and Apple Properties, LLC, a North Dakota limited liability company ("Assignee") with reference to the following: A. WHEREAS, Assignor is the owner in fee simple of certain property located at 45- 305 Seeley Drive, in the City of La Quinta, California, which is more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference ("Parcel 5"). B. WHEREAS, pursuant to the terms of that certain Disposition and Development Agreement entered into by and between the Assignee and the La Quinta Redevelopment Agency, a public body, corporate and politic ("Agency") on or about December 18, 2003, as amended on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, and on or about the same date hereof (as amended, the "DDA"), the Agency conveyed Parcel 5 and certain other adjacent real property to the Assignor. C. WHEREAS, concurrently with the execution of the DDA, the City of La Quinta ("City") and Assignor entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside on January 5, 2004 as Instrument No. 2004-0005256, and amended by that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004 and recorded in the Official Records of the County Recorder for the County of Riverside on November 8, 2004 as Instrument No. 2004- 0885063, and that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005 and recorded in the Official Records of the County Recorder for the County of Riverside on December 19, 2005, as Instrument No. 2005-1045418 (as amended, the "DA"). D. WHEREAS, pursuant to the terms of the DDA and DA, Parcel 5 is to be used for the development of a full -service, sit-down style restaurant offering, at a minimum, lunch (the "Parcel 5 Restaurant'). E. WHEREAS, Assignor now wishes to transfer and assign to Assignee all of its rights and obligations under the DDA and DA with respect to Parcel 5 and the Parcel 5 Restaurant. 882/015610-0085 ATTACHMENT NO. 2 829721 02 a08/16/07 Page 1 of 6 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Assignor hereby assigns to Assignee all of Assignor's rights and responsibilities under the terms of the DDA and DA with respect to Parcel 5 and the Parcel 5 Restaurant (the "Assigned Rights and Obligations"). 2. Assignee hereby accepts the foregoing assignment of the Assigned Rights and Obligations, and agrees to be bound by the terms of the DDA and DA to the extent that such terms affect or are affected by ownership of Parcel 5 and then only to the extent of the Assigned Rights and Obligations. 3. The parties hereto acknowledge and agree that Assignee shall not be responsible for any of the obligations of the DDA or DA which arise from ownership of any portion of Parcel 5 which arise prior to the Effective Date hereof. As such, a default by Assignor under the DDA or DA with respect to Parcel 5 or the Parcel 5 Restaurant prior to the Effective Date hereof ("Assignor's Default") shall not be deemed a default by Assignee, and Assignor shall indemnify, defend and hold harmless Assignee from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignor's Default. A default by Assignee under the DDA or DA with respect to Parcel 5 or the Parcel 5 Restaurant after the Effective Date hereof ("Assignee's Default") shall not be deemed a default by Assignor, and Assignee shall indemnify, defend and hold harmless Assignor from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignee's Default. 4. Nothing herein or in the DDA or DA constitutes a representation or warranty by the Agency that the construction of the Parcel 5 Restaurant is not subject to California Health and Safety Code Sections 33423 through 33426, or Chapter 1 of Part 7 of the California Labor Code (commencing with section 1720), and all applicable statutory and regulatory provisions related thereto, and Assignee expressly waives any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to Parcel 5 or the Parcel 5 Restaurant. Assignee shall, indemnify, defend, and hold the Agency harmless, including litigation costs and reasonable attorneys' fees, from and against any and all claims pertaining to the payment of wages for Parcel 5 or the Parcel 5 Restaurant. 5. The City and the Agency shall be deemed to be third party beneficiaries of the waiver and indemnity set forth in Section 4 and the warranty and representation set forth in Section 6. 6. The parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented. 882/015610-0085 ATTACHMENT NO. 2 829721 02 a08/16/07 Page 2 of 6 7. The terms of this Assignment shall not be amended and this Assignment shall not be terminated except by written instrument executed by both of the parties hereto, and only upon the prior written consent of the City and Agency. 8. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles. 9. Any defined terns used but not defined herein shall have the same meaning as in the DDA. [Balance of page intentionally left blank.] 882/015610-0085 ATTACHMENT NO. 2 829721 02 ao8n6i07 Page 3 of 6 above. WHEREFORE, the parties hereto have executed this Assignment on the date first written "Assignor" CP Development La Quinta, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager C Richard R. Oliphant Its: President "Assignee" "Apple Properties, LLC, a North Dakota limited liability company By: Myron Thompson Its: President 882/015610-0085 ATTACHMENT NO. 2 829721 02 a08/16/07 Page 4 of 6 CONSENT By execution below, the City and Agency hereby consent to the foregoing assignment. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Executive Director CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State of California By: Its: City Manager ATTEST: City Clerk APPROVED AS TO FORM: RUTAN & TUCKER, LLP City Attorney 1 82ro15610-0085 ATTACHMENT NO. 2 829721 02 eoenem7 Page 5 of 6 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY PARCEL A: PARCEL 5 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, AS PER MAP RECORDED IN BOOK 212 OF PARCEL MAPS, PAGES 60 TO 66, RECORDS OF SAID COUNTY. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM THE LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 9, 2004 AS INSTRUMENT NO. 2004-0979137 OFFICIAL RECORDS. PARCEL B: AN EASEMENT FOR INGRESS AND EGRESS OVER AND ACROSS LOT D (SEELEY DRIVE) OF PARCEL MAP 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, AS PER MAP RECORDED IN BOOK 212 OF PARCEL MAPS, PAGES 60 TO 66, RECORDS OF SAID COUNTY. 882/015610-0085 ATTACHMENT NO. 2 829721 02 s08n6/07 Page 6 of 6 ATTACHMENT NO.3 SCHEDULE OF PERFORMANCE FOR RESTAURANT PARCEL 5 Item of Performance Time for Completion 1 Developer's submission of complete Site On or before June 1, 2007. Development Permit Application for Restaurant Parcel 5 ("Parcel 5 SDPA"), which will include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping 2 Review of Parcel 5 SDPA by all applicable City Agency will review within 21 days departments. after Developer's submittal of Parcel 5 SDPA. 3 Agency response to Developer as to City Within 7 days after Agency's receipt of comments on Parcel 5 SDPA. City's final comments on application, but no later than 28 days after Developer's submission of Parcel 5 SDPA. 4 Developer comments to Agency Response. Within 7 days after receipt of Agency's comments to Parcel 5 SDPA. 5 Developer and City Responses. Developer will respond to any Agency or City request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 days. 6 Agency publishes Notice of Public Hearing for Within 7 days after City responds to the Parcel 5 SDPA before the Planning Developer's comments regarding the Commission. Parcel 5 SDPA. 7 Planning Commission's Public Hearing and Approximately 10 days after first consideration of Parcel 5 SDPA publication of notice of the same. 8 City's issuance of Parcel 5 SPDA and final Within 7 days after approval of Parcel 5 conditions. SPDA by Planning Commission. 9 Developer's preparation of final grading plan With 45 days after City issues Parcel 5 and Design Development Drawings for SDPA and conditions. Restaurant Parcel 5. 10 Developer's submission of evidence of Concurrently with Developer's financing necessary to complete Parcel 5 completion of Design Development Restaurant. Drawing for the Parcel 5 Restaurant. 11 Developer's submission of grading and building Within 7 days after completion of final permit applications for Restaurant Parcel 5. 1 gradingplan and Desi Development 882/015610-0085 ATTACHMENT NO. 3 82972102 s08/16/07 Page 1 of 2 Drawings for Restaurant Parcel 5. 12 City's issuance of grading permit for Restaurant Within 42 days after City's receipt of Parcel grading permit application for or Restaurant Parcel 5 13 City's issuance of building permit for Parcel 5 Within 50 days after receipt of building Restaurant permit application for Restaurant Parcel 5. 14 Developer commences construction of Parcel 5 Within thirty (30) days after City's Restaurant. issuance of building permits for Parcel 5 Restaurant. 15 Completion of Parcel 5 Restaurant. Within nine (9) months after City's issuance of building permits for the Parcel 5 Restaurant. *Nothing herein shall be construed to limit the City's legislative authority, which City may exercise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. 882/015610-0085 ATTACHMENT NO. 3 829721.02 a08/16/07 Page 2 of 2 Recording requ0sted by LandAmerica DeveknW Services Subdivision Department PLEASE COMPLETE THIS INFORMATION RECORDING REQUESTED BY: VERONICA J. MONTECINO City Clerk / Agency Secretary AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency Attn: Veronica J. Montecino P. 0. Box 1504 La Quinta, CA 92247-1504 DOC # 2007-0535552 08/20/2007 08:00A Fee:NC Page t of 7 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder 111111111111 IIII1111111111111111111111III1111111111111 77771 S R U I PAGE I SIZE I DA I MISC I LONG I RFD r COPY M A L 465 1 426 1 PCORI NCOR SMF GCri j F SPACE ABC NG }AG CC_ T: I CTY I UNI I a PARTIAL TERMINATION OF RIGHT OF REVERTER, POWER OF TERMINATION, AND AMENDED AND RESTATED OPTION AGREEMENT CP Development La Quinta, LLC Title of Document THIS AREA FOR RECORDER'S USE ONLY THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION REQUESTED BY ANI) WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, CA 92247-1504 Attn: From Recording Fee Pursuant to Government Goae g z /sss PARTIAL TERMINATION OF RIGHT OF REVERTER POWER OF TERMINATION, AND AMENDED AND RESTATED OPTION AGREEMENT This PARTIAL TERMINATION OF RIGHT OF REVERTER, POWER OF TERMINATION, AND AMENDED AND RESTATE�N AGREEMENT ("Partial Termination") is made and entered into this � day of _, 2007 ("Effective Date"), by and between CP DEVELOPMENT LA QUINTA, L C, a California limited liability company ("Developer"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"). RECITALS: A. Developer is the owner of that certain real property located at 45-200 Washington Street, in the City of La Quinta, County of Riverside, State of California, which real property is more particularly described in Exhibit "A" hereto (the "Hotel Property"). B. Pursuant to that certain Disposition and Development Agreement entered into by and between Developer on or about December 18, 2003, as subsequently amended (the "DDA"), and the Grant Deed by which Agency conveyed the Hotel Property to Developer, which was recorded in the Official Records of the County of Riverside, as Instrument No. 2004-0979137 (the "Grant Deed"), Agency has a right of reverter and power of termination with respect to the Hotel Property. C. On or about October 20, 2006, the Developer and Agency executed that certain Amended and Restated Option Agreement, which was recorded against the Hotel Property and against certain adjacent real property, on October 24, 2006, in the Official Records of the County of Riverside, as Instrument No. 2006-0780202. D. Developer and Agency now mutually desire to terminate, with respect to the Hotel Property only, (i) Agency's right of reverter and power of termination pursuant to the DDA and Grant Deed, and (ii) the Amended and Restated Option Agreement. TERMINATION: In consideration of the foregoing Recitals, which are incorporated herein and made a part hereof, and the covenants and promises hereinafter contained, and for good and valuable 882/015610-0085 829826 02 47M/06 consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereby agree as follows: 1. The Agency's right of reverter and power of termination pursuant to Section 607 of the DDA and pursuant to Section 7 of the Grant Deed is hereby terminated and is of no further force and effect with respect to the Hotel Property. 2. The Amended and Restated Option Agreement recorded in the Official Records of the County of Riverside, as Instrument No. 2006-0780202, is hereby terminated and is of no further force and effect with respect to the Hotel Property. 3. Notwithstanding the foregoing, nothing herein is intended to or does terminate (a) Agency's right of reverter or power of termination with respect to any real property other than the Hotel Property that is subject to the DDA or which was conveyed to Developer pursuant to the Grant Deed, or (b) the Amended and Restated Option Agreement with respect to any real property other than the Hotel Property that is encumbered by the Amended and Restated Option Agreement, all of which shall survive the recordation of this Partial Termination. 4. This Partial Termination may be executed in counterparts, each of which, after all the parties hereto have signed this Partial Termination, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. [End — Signature page follows] 882/015610-0085 _ 829826 02 a07/27/06 -2' IN WITNESS WHEREOF, the parties have executed this Partial Termination as of the date first above written. Date:: �I l5 I a-CD7 2007 ATTEST: Agency cretary APPROVED AS TO FORM: R�U7'AN & TUCKER,LLP Attorne or the La Quinta Redevelopment Agency Date: �5 2007 Date: Qu� 15 2007 "AGENCY" LA QUINTA REDEVELOPMENT AGENCY ("Agency") By: >/X Executive Director "DEVELOPER" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company 882/015610-0085 829826 02 a07/27/06 -3- BY: LANDAR,INC. Its: Member By: ennis D. Fren Its: CEO BY* Equity Directions,Inc. Its: Manjenni r Manage s D.French Its:sident STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On .20,0 before me, ti &e2l Notary Public, personally appea d /g/'r' f /X1 /eP personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/gve subscribed to the within instrument and acknowledged to me that he/96eAh y executed the same in his/weir authorized capacity(ies), and that by his/heawieir signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. otary Public [SE.AL] STATE OF CALIFORNIA ss. COUNTY OF RIVERSIDE -Mj�� -: M�_ Notary Public, personally appd'ared BUJ° ns u * /-l'enm > personally known to me ( ) to be the persons whose nameW is/are subscribed to the within instrument and acknowledged to me that he/shefthey executed the same in his/ke"ltkeir authorized capacity{3es}, and that by his/herkheir signatureko on the instrument the personko or the entity upon behalf of which the personv acted, executed the instrument. Witness my hand and official seal. 11 Notary [SEAL] 882/015610-0085 _ 82982:6.02 a0727/06 —4 GOVERNMENT CODE SECTION 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT TO WHICH THIS STATEMENT IS ATTACHED READS AS FOLLOWS: NAME OF NOTARY: Regenia Hensley NAME OF COUNTY: DATE COMMISSION EXPIRES: 10/23/2008 COMMISSION NUMBER: 1521423 SIGNATURE: DATE VERIFIED: LOCATION VERIFIED: COUNTY: Riverside STATE: California 1W41II LEGAL DESCRIPTION OF PROPERTY All of that certain real property located in the City of La Quinta, County of Riverside, State of California, and further identified as: PARCEL 4 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, AS SHOWN BY MAP ON FILE IN BOOK 212 PAGES 60 TO 66 INCLUSIVE OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY CALIFORNIA. EXCEPTING THEREFROM OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF ]EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM THE LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 9, 2004 AS INSTRUMENT NO.2004- 979137 OFFICIAL RECORDS. APN: 604-040-067-9 and 604-040-070-1 and 604-040-074-5 EXHIBIT "A" 882/015610-0085 829826.02 a07/27/06 Page 1 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: CP DEVELOPMENT LA QUINTA, LLC 77-900 Avenue of the States Palm Desert, CA 92211 Attn: Richard Oliphant PARTIAL ASSIGNMENT AND ASSUMPTION AGREEMENT This PARTIAL ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment") is entered into this 23`d day of August, 2007 (the "Effective Date") by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Assignor") and Apple Properties, LLC, a North Dakota limited liability company ("Assignee") with reference to the following: A. WHEREAS, Assignor is the owner in fee simple of certain property located at 45- 305 Seeley Drive, in the City of La Quinta, California, which is more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference ("Parcel 5"). B. WHEREAS, pursuant to the terms of that certain Disposition and Development Agreement entered into by and between the Assignee and the La Quinta Redevelopment Agency, a public body, corporate and politic ("Agency") on or about December 18, 2003, as amended on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, and on or about the same date hereof (as amended, the "DDA"), the Agency conveyed Parcel 5 and certain other adjacent real property to the Assignor. C. WHEREAS, concurrently with the execution of the DDA, the City of La Quinta ("City") and Assignor entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside on January 5, 2004 as Instrument No. 2004-0005256, and amended by that certain Amendment No. I to Development Agreement executed on or about October 28, 2004 and recorded in the Official Records of the County Recorder for the County of Riverside on November 8, 2004 as Instrument No. 2004- 0885063 and that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005 and recorded in the Official Records of the County Recorder for the County of Riverside on December 19, 2005, as Instrument No. 2005-1045418 (as amended, the "DX). D. WHEREAS, pursuant to the terms of the DDA and DA, Parcel 5 is to be used for the development of a full -service, sit-down style restaurant offering, at a minimum, lunch (the "Parcel 5 Restaurant"). E. WHEREAS, Assignor now wishes to transfer and assign to Assignee all of its rights and obligations under the DDA and DA with respect to Parcel 5 and the Parcel 5 Restaurant. 882/015610-0085 838332.01 a08/16/07 -1- NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Assignor hereby assigns to Assignee all of Assignor's rights and responsibilities under the terms of the DDA and DA with respect to Parcel 5 and the Parcel 5 Restaurant (the "Assigned Rights and Obligations'). 2. Assignee hereby accepts the foregoing assignment of the Assigned Rights and Obligations, and agrees to be bound by the terms of the DDA and DA to the extent that such terms affect or are affected by ownership of Parcel 5 and then only to the extent of the Assigned Rights and Obligations. 3. The parties hereto acknowledge and agree that Assignee shall not be responsible for any of the obligations of the DDA or DA which arise from ownership of any portion of Parcel 5 which arise prior to the Effective Date hereof. As such, a default by Assignor under the DDA or DA with respect to Parcel 5 or the Parcel 5 Restaurant prior to the Effective Date hereof ("Assignor's Default") shall not be deemed a default by Assignee, and Assignor shall indemnify, defend and hold harmless Assignee from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignor's Default, A default by Assignee under the DDA or DA with respect to Parcel 5 or the Parcel 5 Restaurant after the Effective Date hereof ("Assignee's Default") shall not be deemed a default by Assignor, and Assignee shall indemnify, defend and hold harmless Assignor from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignee's Default. 4. Nothing herein or in the DDA or DA constitutes a representation or warranty by the Agency that the construction of the Parcel 5 Restaurant is not subject to California Health and Safety Code Sections 33423 through 33426, or Chapter 1 of Part 7 of the California Labor Code (commencing with section 1720), and all applicable statutory and regulatory provisions related thereto, and Assignee expressly waives any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to Parcel 5 or the Parcel 5 Restaurant. Assignee shall, indemnify, defend, and hold the Agency harmless, including litigation costs and reasonable attorneys' fees, from and against any and all claims pertaining to the payment of wages for Parcel 5 or the Parcel 5 Restaurant. 5. The City and the Agency shall be deemed to be third party beneficiaries of the waiver and indemnity set forth in Section 4 and the warranty and representation set forth in Section 6. 6. The parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented. 8SM15610-0085 838332.01 a08/16/07 -2- 7. The terms of this Assignment shall not be amended and this Assignment shall not be terminated except by written instrument executed by both of the parties hereto, and only upon the prior written consent of the City and Agency. 8. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles. 9. Any defined terns used but not defined herein shall have the same meaning as in the DDA. [Balance of page intentionally left blank.] 8821015610.0085 838332.01 a08/16/07 -3- above. WHEREFORE, the parties hereto have executed this Assignment on the date first written "Assignor" CP Development La Quinta, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: , o Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "Assignee" "Apple Properties, LLC, a North Dakota limited liability company By: Myron Thompson Its: President 8821015610.0085 838332.01 209/16/07 -4- State of California CALIFORNIA ALL-PURPOSE County of, ss' CERTIFICATE OF ACKNOWLEDGMENT On A j%1' * a.� t o`��� before me, lam. 6 \(` P, " 1, (OFP2 Date Printed Name of Notary Public personally appeared Vpersonally known tome -or - ❑ proved to me on the basis of satisfactory evidence: ❑ form(s) of identification ❑ credible witnesses) to be the person, vrwhose narriis/afe•subscribed to the within instrument and acknowledged to me that he/s4eAhey executed the same in hisA&ftheir authorized capacity(ies} and that by his/heW41ilteir signatures} on the instrument the person(s}, or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. CANo10E R. BORCENA CornmWlon r/ 1593376 0Notary Public • CoolorNa RN01i County - r+NCamm•Exptreahn29, Signature of Notary Public (seal) OPTIONAL INFORMATION Although the information in this section is not required bylaw, it could prevent fraudulent removal and reattachment of this acknowledgment to an unauthorized document and may prove useful to persons relying on the attached document. Description of Attached Document The preceding Certificate of �"j Acknowledgment is attached to a document % titled/for the purpose of W PU11�mlmk_ containing _(9—pages, and dated capacity or authority is/are as: ❑ Attorney -in -fact ❑ Corporate Officers) ❑ Guardian/Conservator ❑ Partner-Limited/General ❑ Trustee(s) ❑ Other: representing: Names) of Person(s) or Enhtyhes) Signer is Representing 0 Copyright 2004 Notary Rotary, Inc 925 29th St, Des Moines, IA 50312-3612 Form ACK02 02/04 To re -order, call toll -free 1-871-349-6588 or visit us on the Internet at mtpnwwwrnenotarysnop com above. WHEREFORE, the parties hereto have executed this Assignment on the date first written "Assignor" CP Development La Quinta, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President "Assignee" "Apple Properties, LLC, a North Dakota limited liability company, By: My3 n Thom on Its: Pre dent 882/015610-0085 838332.01 a08/16/07 -4- ACKNOWLEDGMENT STATE OF NORTH DAKOTA ) ) ss: COUNTY OF WARD ) On Au q st z o 2007, before me, Leah g e � 1c %- c, , a Notary Public personally appeared ►� y o neson personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. LEAH BJERKLIE d�0. oily pHp_ Noiary Pabk Not Public I'M y Gant�ab �N = 4, � Notary By execution below, the City and Agency hereby consent to the foregoing assignment. LA QUINTA REDEVELOPMENT AGENCY, a public boZfw-)ed�ly� rate and politic By: — Its: Executivobirector RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State of California --) APPROVED,AS TO FORM: RUTAN & TUCKER, LLP City Attorney 882/015610-0085 938332.01 a08n6/0Y -5- CONSENT By execution below, the City and Agency hereby consent to the foregoing assignment. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: RUT N & TUCKS 7P Attmeys for a La Quinta kedevelopment Agency CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State of California By: Its: City Manager ATTEST: City Clerk APPROVED AS TO FORM: RUT & TUCI , LLP ty Attorn y 882/015610-0085 838330.01 a08116/07 -5- EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY PARCEL A: PARCEL 5 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, AS PER MAP RECORDED IN BOOK 212 OF PARCEL MAPS, PAGES 60 TO 66, RECORDS OF SAID COUNTY. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM THE LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 9, 2004 AS INSTRUMENT NO. 2004-0979137 OFFICIAL RECORDS. PARCEL B: AN EASEMENT FOR INGRESS AND EGRESS OVER AND ACROSS LOT D (SEELEY DRIVE) OF PARCEL MAP 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, AS PER MAP RECORDED IN BOOK 212 OF PARCEL MAPS, PAGES 60 TO 66, RECORDS OF SAID COUNTY. 882/0156IM085 839332 01 a08/16/07 EXHIBIT "A" St ANP, p,C 4 @ 9y First American Title Insurance Company National Commercial Services 3281 E Guasti Road, Suite 440, Ontario, CA 91761 (909)510-6208 - Fax (909)510-6226 AMENDMENTTO ESCROW INSTRUCTIONS and/or PURCHASE CONTRACT To: First American Title Insurance Company 09/07/2007 National Commercial Services File No: NCS-206561-ONT3 (LK) Re: Parcels 6 & 7 on PM No. 31116, La Quinta, CA The above referenced escrow is hereby modified in the following particulars only: RELEASE OF PORTION EISENHOWER RETENTION FUNDS: The within parties herein advise that the completion/opening of the Hotel has occurred and all parties herein acknowledge and approve the release of $500,000.00 from the Eisenhower Retention Funds Hold account to CP Development La Quinta, LLC to be wired as follows: 1stCentennial Bank 77-900 Fred Waring Drive., # 100 Palm Desert, CA 92211 ABA 122241954 Account Name: CP Development La Quinta, LLC Account Address: 77-564 Country club Drive, Suite 100, Palm Desert, CA 92211 Account Number: 0412000121 The balance of the funds shall be retained in the Eisenhower Retention Fund Hold account pending further written disbursement instructions from all the within parties. ALL OTHER TERMS AND CONDITIONS OF THIS ESCROW WILL REMAIN THE SAME. Page 1 of 2 First American Title Insurance Company National Commercial File No.: NCS-206561-ONTI (LK) Services Eisenhower Medical Center, a California non- profit public benefit corppr on By:., Title: ?ca�Sty%L (,C— CP Development La Quinta, LLC, a California limited liability company By: Oliphant Enterprises, Inc., a California corporation, Its Manager •'D8!P Q'!� By: Richard Oliphant, President La Quinta Redevelopment Agency, a � bo ,, corporate arid'pol' i By: , /U Thomas P. Genovese, Executive Director Page 2 of 2 Date:09/07/2007 Recording requested by LpndAmerica Developer Services Subdivision Department DOC # 2008-0101703 02/29/2008 08:00R Fee:47.00 Page 1 of 12 Recorded in Official Records County of Riverside Larry W. Ward Clerk & Recorder essorI IIIlsllll11 IIIIII�111111III1III111111111111 S R I U I PAGE I SIZE I DA I MISC I LONG I RFD I COPY La Quinta Redevelopment Agency 78-495 Calle Tampico A I L 1 465 1 42s La Quinta, CA 92253 Attn: City Manager Exempt From Recording Fee Pursuant to Gove. T/C) �IASSIGNMENT AND ASSUMPTION AGREEMENT SMF NCH( CTY UNI i,uuc y Ir�Iy'iaa� 049 Recording requested by UmxiAmedca Developer Services Subdivision Department La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Citv Manager Exempt From Recording Fee Pursuant to ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement ("Assignment') is entered into this IZb- a 4 day of 2008 by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Assignor") and L.Q. HOSPITALITY, LLC, a California limited liability company ("Assignee") with reference to the following: A. WHEREAS, Assignor is the owner in fee simple of certain property located at the sdatheast comer of Miles Avenue and Washington Street in the City of La Quinta, California (the "Property"), which Property is more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference. B. WHEREAS, Assignor acquired the Property from the La Quinta Redevelopment Agency, a public body, corporate and politic ("Agency") pursuant to the terns of that certain Disposition and Development Agreement dated on or about December 18, 2003 ("Original DDA"), as amended on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, and on or about August 23, 2007 (collectively the "DDA Amendments"). (The Original DDA, as modified by the DDA Amendments shall hereinafter be referred to as the "DDA".) C. WHEREAS, Concurrently with the execution of the Original DDA, the Agency and Assignor entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside on January 5, 2004 as Instrument No. 2004-0005256, and amended by that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004 and recorded in the Official Records of the County Recorder for the County of Riverside on November 8, 2004 as Instrument No. 2004-0885063, and by that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005 and recorded in the Official Records of the County Recorder for the County of Riverside on December 19, 2005 as Instrument No. 2005-1045418 (hereinafter collectively referred to as the "Development Agreement.") D. WHEREAS, pursuant to the terms of the DDA and the Development Agreement, the Property was to be used for a mixed use development project (the "Project'), including a hotel ("Hotel") to be built on that portion of the Property described on Exhibit `B" attached hereto and incorporated herein by this reference ("Hotel Property"). E. WHEREAS, Assignor has completed the construction of the Hotel on the Hotel Property, and now desires to obtain permanent financing for the Hotel portion of the Project. F. WHEREAS, to obtain said permanent financing, Assignor is required by the lender to convey the Hotel Property to a single purpose entity. G. WHEREAS, Assignee is such a single purpose entity, Assignor now desires to transfer the Hotel Property to Assignee, and concurrently therewith, to transfer to Assignee all of Assignor's rights and responsibilities under the DDA and the Development Agreement to the extent that such rights and responsibilities relate to the Hotel Property. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Assignor hereby assigns to Assignee all of Assignor's rights and responsibilities under the terms of the DDA and the Development Agreement, but only to the extent that such rights and responsibilities arise from the ownership of the Hotel and/or Hotel Property from and after the "Effective Date" (as that term is defined in Section 4 below) of this Assignment (collectively, the "Assigned Rights and Obligations".) 2. Assignee hereby accepts the foregoing assignment of the Assigned Rights and Obligations, and agrees to be bound by the terms of the DDA and the Development Agreement to the extent that such terms affect or are affected by ownership of the Hotel Property. 3. The parties hereto acknowledge and agree that Assignee shall not be responsible for any of the obligations of the DDA or the Development Agreement which arise from ownership of any portion of the Property which arise prior to the Effective Date hereof, or which arise from any portion of the Property other than the Hotel Property after the Effective Date hereof. As such, a default by Assignor under either the DDA or the Development Agreement prior to the Effective Date hereof, or with respect to any portion of the Property other than the Hotel Property after the Effective Date hereof ("Assignor's Default") shall not be deemed a default by Assignee, and Assignor shall indemnify, defend and hold harmless Assignee from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignor's Default. A default by Assignee under either the DDA or the Development Agreement with respect to the Hotel Property after the Effective Date hereof ("Assignee's Default") shall not be deemed a default by Assignor, and Assignee shall indemnify, defend and hold harmless Assignor from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignee's Default. 4. This Assignment shall be deemed effective upon the last of the following events to occur: (a) conveyance of the Hotel Property to Assignee as evidenced by the recording of the grant deed therefor in the Official Records of the County Recorder for the County of Riverside, California, and (b) the written consent to this Assignment by the City with respect to the Assigned Obligations arising under the Development Agreement, and by the Agency with respect to the Assigned Obligations arising under the DDA (herein referred to as the "Effective Date"). 5. Except as otherwise described in paragraph 4 above, the parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented. 6. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles. [End — Signature page follows] WHEREFOR, the parties hereto have executed this Assignment on the date first written above. CP Development La Quinta, LLC A California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: i) ( LV— Richard R. Oliphant Its: President L.Q. Hospitality, LLC A California limited liability company By: Oliphant Enterprises, Inc. a Californi corporation By. _ n � Richard R. Oliphant President Its: Manager By: Equity Directions, Inc. A California corporation By: [ 2== " Dennis French President Its: Manager State of California ) County of Kiyexside ) On 1'-60-ZO08 before me, Notary Public, (here insert name and title of the officer) personally appeared -R i ct Q� R O 1 i Dhe Tr' U S+ems who proved to me on the basis of satisfactory Evidence to be the persogKwhose name(io is/eve subscribed to the within instrument, and acknowledged to me that he/shelther executed the same in his/4eMheir authorized capacity(ies), and that by his/4mrhfieir signature(s) on the instrument the person(s), or the entity upon behalf of which the person( acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS m d ?ano iflelal Seal. 6lADV5 PEREZ� ComGLADY M 1790979 L Notary Public - California Riverside County Signature' trgCMMBOe MCF12.2011 (seal) State of California ) County of (ZNa sue) On I '-30 -20OR before me, Qedvs i E-�7 Notary Public, n ggre in"sert__n��ppe and title of the officer) personally appeared K I Gi 1G1� �. l i pV and , Il i derA who proved to me on the basis of satisfactory evidence to be the persory(o whose name;(dj is4�.subscribed to the within instrument, and acknowledged to me that he/shekhey executed the same in his/hff4dwir authorized capacity(ies�r, and that by hisfherftheir signature.(4- on the instrument the persouK, or the entity upon behalf of which the persoXacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. (seal) ACKNOWLEDGMENTCALIFORNIA ALL-PURPOSE State of California County of WNC-ASAb On before me, ate ((�� personally appeared �1J �.7�(�l� �C r' C Here Insert Name ontl i me of the . micer C �enL�h -- MQi A e� Nam (e) of Signer(e) s who proved to me on the basis of satisfactory evidence to be the personX whose name(sl isl5 w subscribed to the within instrument and acknowledged to me that he/sheAhey executed the same in his/hef Their authorized capacity0ee} and that by his/herkheir signatureol on the instrument the person), or the entity upon behalf of CAND— R. f10RCENA which the person) acted, executed the instrument. Commisslon # 1593376 ryt'ubllcCaafonI @1MVComrrLExpke$Jun29.2w4 certify under PENALTY OF PERJURY under the laws Rlverslde County of the State of California that the foregoing paragraph is true and correct. WITNESS my hha"ndd a�n�d iiciiaallsseal. �offff Signature O X N lUA'�uC li l F 1p Place Notary Seal Above Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: AS6cQrnm�d.n 1 - and ksuyy+inn Playtill Document Date: Number of Signer(s) Other Than Named Above: 1Pages: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Individual ❑ Individual ❑ Corporate Officer—Title(s): — ❑ Partner —❑ Limited ❑ General ❑ Attorney In Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: ❑ Corporate Officer—Title(s): ❑ Partner —❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing RIGHTTHUMBPRINT OF SIGNER in 02007 National Notary Assomahon• 9360 De Soto Ave, P.O Bmi2402•Cbats Mt,CA 91313-2402•w .NatlonalNotaryorg Item#69W Pounder Call Toll -Free 1-800-876-6827 CONSENT By execution below, the Agency and City hereby consent to the foregoing assignment. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and polit/icy / ' By: / / Its: Executive Director APPROVED AS TO FORM: RUTAN & TUCKER, LLP Agency Counsel CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State of California �/�� By7% -e- e Its: City Manager Clerk APPROVED AS TO FORM: RUTAN & TUCKER, LLP City Attorney CONSFN'f By execution below, the Agency and City hereby consent to the foregoing assignment. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: AYITST: Agency Secretary Executive Director APPROVED AS TO, FORM: K*ti & � JC Ansel CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State of California By: Its: ATTEST: City Clerk APPROVED AS TO FORM: RUTAN & TCJCWj City Manager STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LA QUINTA 1 On February 28, 2008 , before me, Regenia Hensley, Notary Public, personally appeared THOMAS P. GENOVESE, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal E IA HENSLEY Notary Public Commission # 1521423 Expiration: October 23, 2008 (Seal) EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY PARCELS 1, 3 AND 4 OF PARCEL MAP NO. 31116 IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 212 AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS AS INSTRUMENT NO.2005-0262238. PARCEL B OF LOT LINE ADJUSTMENT 2006-452 BEING PARCEL 8 AND A PORTION OF PARCEL 7 OF PARCEL MAP NO. 31116 AS SHOWN BY MAP ON FILE IN BOOK 212 AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS RECORDED ON APRIL 19, 2006 AS INSTRUMENT NO. 0280726. EXHIBIT `B„ LEGAL DESCRIPTION OF HOTEL PROPERTY PARCEL 4 OF PARCEL MAP NO.31116 IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 212 AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS AS INSTRUMENT NO.2005-0262238 AMENDMENT NO.6 TO DISPOSITION AND DEVELOPMENT AGREEMENT THIS AMENDMENT NO. 6 TO DISPOSITION AND DEVELOPMENT AGREEMENT ("Amendment No. 6") is made and entered into as of AWr,,1A d , 2008 by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and L.Q. HOSPITALITY, LLC, a California limited liability company ("Developer"). RECITALS: A. On or about December 18, 2003, the Agency and CP Development, LLC, a California limited liability company ("CP") entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which Agency sold to CP that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Property") and CP agreed to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to Eligible Buyers at an Affordable Housing Cost (collectively, the "Original Project"). B. Agency and CP have previously amended the Original DDA on five (5) occasions, on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2008 and on or about August 23, 2007 (the "Prior DDA Amendments"). The Original DDA, as amended by the Prior DDA Amendments, is hereinafter referred to as the "DDA" and the Original Project, as amended by the Prior DDA Amendments, is hereinafter referred to as the "Project." C. On or about August 15, 2007, Agency and CP entered into that certain Partial Termination of Right of Reverter, Power of Termination, and Amended and Restated Option Agreement ("Partial Termination"), pursuant to which Agency terminated, with respect to the Hotel Property, (i) Agency's right of reverter and power of termination pursuant to the Original DDA and the Grant Deed, which was recorded in the Official Records as Instrument No. 2004- 0979137, and (ii) the Amended and Restated Option Agreement, which was recorded against the Hotel Property on October 24, 2006 in the Official Records as Instrument No. 2006-0780202. The Partial Termination was recorded in the Official Records on August 20, 2007 as hnstrument No. 2007-0535552. D. On or about January 29, 2008, CP completed construction of the mid -price suites hotel portion of the Project ("Hotel") on that portion of the Property described on Exhibit "A" attached hereto and incorporated herein by this reference (hereinafter the "Hotel Property".) E. After completing construction of the Hotel on the Hotel Property, CP conveyed the Hotel Property to Developer. 882/015610-0085 882679.02 a02/06/08 4 - E. Developer has identified permanent financing for the Hotel, however, as a condition to making the loan for such permanent financing, the lender thereunder has required certain modifications to the DDA as it relates to the Hotel Property. F. In order to facilitate permanent financing for the Hotel, Developer and the Agency now wish to modify certain terms set forth in the DDA as provided herein. Unless defined herein to the contrary, all capitalized terms in this Amendment No. 6 shall have the meanings ascribed in the DDA. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parries hereto agree as follows: The DDA is hereby amended as follows: 1. The transfer restrictions set forth in section 703 of the DDA shall not be applicable to any of the following transfers: (a) a transfer of the Hotel Property to the encumbrancer under the deed of trust securing the permanent financing for the Hotel, whether the transfer occurs as the result of a foreclosure or a deed in lieu of foreclosure, (b) a transfer of the Hotel Property to any purchaser at the trustee's sale in the event of foreclosure, or (c) a transfer of the Hotel Property to any successors in interest who acquire title to the Hotel Property from any party identified in subparagraphs (a) and (b) above. 2. Developer shall reimburse Agency for all of the costs Agency incurs or has incurred to negotiate, prepare and process this Amendment No. 6. 3. Except as otherwise expressly provided in this Amendment No. 6, all of the terms and conditions of the DDA shall remain in full force and effect. 4. In the event of any action between or amongst the parties hereto seeking enforcement of any of the terms and conditions to this Amendment No. 6, the prevailing party in such action shall be awarded its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 5. This Amendment No. 6 shall be construed according to its fair meaning and as if prepared by all of the parties hereto. 6. This Amendment No. 6 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 6. Service of process on Agency shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 882/015610-0085 882679.02.02/06/08 -2- 7. Time is of the essence of this Amendment No. 6 and of each and every term and provision hereof. 8. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by Agency and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 9. This Amendment No. 6 may be executed in counterparts, each of which, when this Amendment No. 6 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 10. The person(s) executing this Amendment No. 6 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No. 6 on behalf of said party, (iii) by so executing this Amendment No. 6 such party is formally bound to the provisions of this Amendment No. 6, and (iv) the entering into this Amendment No. 6 does not violate any provision of any other agreement to which such party is bound. [signature page follows] 882/015610-0085 882679.02 .02/06/08 -3- IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read this Amendment No. 6, understands it, and hereby executes this Amendment No. 6 to be effective as of the day and year first written above. Date: lmmt IP 12008 Date: Aar(� 19� 2008 Date: 1511 11 APPROVED AS TO FORM: 11: Secretary RUTAN & TUC P By: .`Katherine Jens n Agency Counsel "Developer" L.Q. HOSPITALITY, LLC, a California limited liability company By: Equity Directions, Inc. Its: Member By: De s ren Its: President By: Oliphant Enterprises, Inc. Its: Manager By: pt�e Richard Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Executive Director 882/015610-0085 882679.02 a02/06/08 -4- EXHIBIT "A" LEGAL DESCRIPTION OF HOTEL PROPERTY 882/015610-0085 882679 02 a02/06/08 -1- EXHIBIT "A" LEGAL DESCRIPTION OF HOTEL PROPERTY PARCELS 4 OF PARCEL MAP NO.31116 IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 212 AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS AS INSTRUMENT NO.2005-0262238 PLEASE COMPLETE THIS INFORMATION RECORDING REQUESTED BY: VERONICA J. MONTECINO City Clerk / Agency Secretary AND WHEN RECORDED MAIL TO: Veronica J. Montecino CITY OF LA QUINTA P. O. Box 1504 La Quinta, CA 92247-1504 DOC # 2008-0303530 06/04/2008 08:00p Fee:NC Page t of 8 Recorded in Official Records County of Riverside Larry U. Ward Assessor, County Clerk & Recorder 111111111111111111111111111111111111111111111111111111111 S R U PAGE SIZE DA MISC I LONG I RFD I COPY M A L 465 426 PCOR NCOR SMF NCH EMM 'I, W4 cc CTY UNI AMENDMENT NO. 3 TO DEVELOPMENT AGREEMENT 119-1 L.O. HOSPITALITY, LLC Amendment to Development Agreement By and Between CP Development & City of La Quinta Title of Document 11 1 11, 1.loin THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attn: City Clerk Space Above This Line for Recorder's Use (Exempt from Recording Fee per Gov't Code § 6103) AMENDMENT NO.3 TO DEVELOPMENT AGREEMENT THIS AMENDMENT NO. 3 TO DEVELOPMENT AGREEMENT ("Amendment No. 3") is made and entered into as of , 2008 by and between THE CITY OF LA QUINTA, a California municipal core ration and charter city organized and existing under the laws of the State of California ("City"), and L.Q. HOSPITALITY, LLC, a California limited liability company ("Owner"). RECITALS: A. On or about December 18, 2003, the La Quinta Redevelopment Agency ("Agency") and CP Development, LLC, a California limited liability company ("CP") entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which the Agency sold to CP that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Property") and CP agreed to construct, complete, and operate thereon a mixed use project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to Eligible Buyers at an Affordable Housing Cost (collectively, the "Original Project"). B. Concurrently with the execution of the Original DDA, CP and the City entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside on January 5, 2004 as Instrument No. 2004- 0005256, and amended by that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004 and recorded in the Official Records of the County Recorder for the County of Riverside on November 8, 2004 as Instrument No. 2004-0885063, and by that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005 and recorded in the Official Records of the County Recorder for the County of Riverside on December 19, 2005, as Instrument No. 2005-1045418 (hereinafter collectively referred to as the "DA" C. On or about August 15, 2007, Agency and CP entered into that certain Partial Termination of Right of Reverter, Power of Termination, and Amended and Restated Option Agreement ("Partial Termination"), pursuant to which Agency terminated, with respect to the 182/015610-0085 882678 02 a04/01 /08 -� - Hotel Property, (i) Agency's right of reverter and power of termination pursuant to the Original DDA and the Grant Deed, which was recorded in the Official Records as Instrument No. 2004- 0979137, and (ii) the Amended and Restated Option Agreement, which was recorded against the Hotel Property on October 24, 2006 in the Official Records as Instrument No. 2006-0780202. The Partial Termination was recorded in the Official Records on August 20, 2007 as Instrument No. 2007-0535552. D. On or about January 29, 2008, CP completed construction of the mid -price suites hotel portion of the Project ("Hotel") on that portion of the Property described on Exhibit "A" attached hereto and incorporated herein by this reference (hereinafter the "Hotel Property".) E. After completing construction of the Hotel on the Hotel Property, CP conveyed the Hotel Property to Owner. F. Owner has identified permanent financing for the Hotel, however, as a condition to making the loan for such permanent financing, the lender thereunder has required certain modifications to the DA as it relates to the Hotel Property. G. In order to facilitate permanent financing for the Hotel, Owner and the City now wish to modify certain terms set forth in the DA as provided herein. Unless defined herein to the contrary, all capitalized terms in this Amendment No. 3 shall have the meanings ascribed in the DA. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: The DA is hereby amended as follows: 1. Section 6.3 of the DA is hereby modified, as it relates to the Hotel Property to provide that if any mortgagee acquires title to the Hotel Property, whether via foreclosure or deed in lieu of foreclosure, said mortgagee shall have the right to continue to operate the Hotel on the Hotel Property. Any subsequent purchaser of the Hotel Property, whether such purchase be before, at or after a foreclosure shall similarly have the right to continue to operate the Hotel on the Hotel Property. Such operation of the Hotel by a mortgagee or a subsequent purchaser shall be in conformity with all provisions of the DA, and all applicable laws of the City and any other jurisdiction having authority over the Hotel and/or the Hotel Property, and the mortgagee or subsequent purchaser shall be deemed to have assumed all of Owner's obligations under the DA. 2. The transfer restrictions set forth in section 7.2 of the DA shall not be applicable to any of the following transfers: (a) a transfer of the Hotel Property to the encumbrancer under the deed of trust securing the permanent financing for the Hotel, whether the transfer occurs as the result of a foreclosure or a deed in lieu of foreclosure, (b) a transfer of the Hotel Property to any purchaser at the trustee's sale in the event of foreclosure, or (c) a transfer of the Hotel Property to 882/015610-0085 882678 02 a04/01 /08 -2- any successors in interest who acquire title to the Hotel Property from any party identified in subparagraphs (a) and (b) above. 3. Owner shall reimburse City for all of the costs City incurs or has incurred to negotiate, prepare and process this Amendment No. 3. 4. Except as otherwise expressly provided in this Amendment No. 3, all of the terms and conditions of the DA shall remain in full force and effect. 5. In the event of any action between or amongst the parties hereto seeking enforcement of any of the terms and conditions to this Amendment No. 3, the prevailing party in such action shall be awarded its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 6. This Amendment No. 3 shall be construed according to its fair meaning and as if prepared by all of the parties hereto. 7. This Amendment No. 3 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 3. Service of process on City shall be made in accordance with California law. Service of process on Owner shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 8. Time is of the essence of this Amendment No. 3 and of each and every term and provision hereof. 9. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by City and Owner. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 10. This Amendment No. 3 may be executed in counterparts, each of which, when this Amendment No. 3 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 11. The person(s) executing this Amendment No. 3 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No.' 3 on behalf of said party, (iii) by so executing this Amendment No. 3 such party is formally bound to the provisions of this Amendment No. 3, and (iv) the entering into this Amendment No. 3 does not violate any provision of any other agreement to which such party is bound. 12. Except as modified herein, the DA remains in full force and effect as written. In the event of a conflict between the terms of the DA and the terms of the Amendment No. 3, this Amendment No. 3 shall control. 182/015610-0085 882678 02 a04/01/08 -3- IN WITNESS WHEREOF, City and Owner each hereby represents that it has read this Amendment No. 3, understands it, and hereby executes this Amendment No. 3 to be effective as of the day and year first written above. Date: 2008 Date: — Ca — 2008 Date: :-.-,2008 Veronic44tecino, Age p y Secretary APPROVED AS TO FORM: RUTAN &WCKER✓%LP C %/MM M Jenson, City "Owner" L.Q. HOSPITALITY, LLC, a California limited liability company By: Equity Directions, Inc. Its: Manager By: Dennis French Its: President By: Oliphant Enterprises, Inc. Its: Manale� By: Richard Oliphant Its: President "City" CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State / �O,GIZ� Thomas P. Genovese, City Manager 882/015610-0085 882678 02 a04/01/08 -4- STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ► ss. CITY OF LA QUINTA ) On April 26, 2008 , before me, Regenia Hensley, Notary Public, personally appeared THOMAS P. GENOVESE, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal EG' IA HENSLE Not ry Public Commission # 1521423 Expiration: October 23, 2008 (Seal) STATE OF CALIFORNIA ► CITY OF LA QUINTA ► COUNTY OF RIVERSIDE ► On`{1tu 6,2D0$ , 2008, before me, ta;mCf., Q ebotmllA Notary P lu cbl , personally appeared, RICHARD R. OLIPHANT who proved to me on the basis of satisfactory evidence to be the person(g) whose name(8) is/aFe subscribed to the within instrument, and acknowledged to me that he/&4@40,ey executed the same in his/hoi:44eir authorized capacity4"), and that by his/14er,411 it signatures) on the instrument the personal, or the entity upon behalf of which the person(o% acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) CANDICE R. BORCENA Commission # 1593376 Q Notary Public-. Colifomla Riverside County NlyComm. fthnJun 29. 20 STATE OF CALIFORNIA ) CITY OF LA QUINTA 1 COUNTY OF RIVERSIDE ) On �MQM b.uoK , 2008, before me, UAnfilmj, Q.lom@r�c-i Notary Public, personally appeared, DENNIS D. FRENCH who proved to me on the basis of satisfactory evidence to be the personA whose name{) is/aca subscribed to the within instrument, and acknowledged to me that he/she4h y executed the same in his/4eFA4-+eir authorized capacity4aew, and that by his/her-k19eir signaturejO on the instrument the personjO, or the entity upon behalf of which the person�*t acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) Commission # 1593376 Notary Public NotoryPublic - Caluomta Rlversitle County -. MyComm. EX;*Gs Jun 29. 2009 EXHIBIT "A" LEGAL DESCRIPTION OF HOTEL PROPERTY PARCEL 4 OF PARCEL MAP NO. 31116 IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 212 AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS AS INSTRUMENT NO. 2005-0262238 '82/011610-0085 882678 02 a04/01 /08 - ] - A AGREEMENT FOR DEPOSIT OF FUNDS This AGREEMENT FOR DEPOSIT OF FUNDS ("Agreement") is made and entered into as of May 22, 2008 (the "Effective Date") by and among LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), CITY OF LA QUINTA, a California municipal corporation and charter city, organized and existing under the Constitution of the State of California ("City"), Lennar Homes of California ("Lennar"), and DOLPHIN LA QUINTA, LLC, a California limited liability company ("Dolphin"). Agency, City, Lennar and Dolphin are sometimes individually referred to herein as a "Party" and collectively referred to herein as the "Parties." RECITALS: A. On or about December 18, 2003, the Agency and CP Development La Quinta, LLC ("CP") entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which Agency sold to CP that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Property") and CP agreed to construct, complete, and operate thereon a commercial project containing, among other components, a mid -price suites hotel (the "Suites Hotel") and a resort - style condominium/casitas development (the "Casitas Development'). B. The Original DDA has been amended on six (6) occasions, on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, on or about August 23, 2007, and on or about March 23, 2008 (collectively, the "Prior DDA Amendments"). The Original DDA, as amended by the Prior Amendments, is hereinafter referred to as the "DDA." C. Concurrently with the execution of the Original DDA, the City and CP entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside (the "Official Records") on January 5, 2004, as Instrument No. 2004-0005256 (the "Original DA"). Agency and CP have amended the Original DA on three (3) prior occasions, pursuant to that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004, and recorded in the Official Records on November 8, 2004, as Instrument No. 2004-0885063, that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005, and recorded in the Official Records on December 19, 2005, as Instrument No. 2005-1045418, and that certain Amendment No. 3 to Development Agreement executed on or about May 6, 2008 and recorded in the Official Records on June 4, 2008 as Instrument No. 2008-0303530 (collectively, the "Prior DA Amendments") The Original DA, as amended by the Prior DA Amendments, is hereinafter referred to as the "DA." D. Pursuant to the Prior DDA Amendments and Prior DA Amendments CP was permitted to, and did, (1) sell to Lennar that portion of the Property described as Parcel 2 of Parcel Map 31116 ("Parcel 2") and (ii) assign its rights and obligations under the DDA and DA with respect to Parcel 2 and the portion of the Casitas Development to be constructed on Parcel 2 882/015610-0107 902956 05 AW 12/08 (the "Parcel 2 Casitas Development") to Lennar. Parcel 2 is more particularly described in Exhibit "A", which is attached hereto and incorporated herein by this reference. E. Lennar has developed forty (40) condominium/casitas units on Parcel 2 (the "Completed Casitas Units"). Lennar has also developed four (4) additional condominium/casitas units that do not yet have approved certificates of occupancy. Pursuant to the DDA, the DA, and the entitlements previously issued by the City in connection with the Parcel 2 Casitas Development, Lennar is required to develop a total of one hundred thirty-two (132) condominium/casitas units on Parcel 2. Lennar has failed to complete the entire Parcel 2 Casitas Development by December 31, 2007, as required by the DDA. F. Lennar has entered into a purchase and sale agreement with Dolphin, pursuant to which Lennar has agreed to sell to Dolphin Parcel 2 (the "Parcel 2 Purchase Agreement"). Lennar has indicated that it will only close escrow on the sale of Parcel 2 to Dolphin if the City and Agency agree to waive their right to condition their approval of such sale upon payment by Lennar to the City and/or Agency of half of Lennar's net sales proceeds, as permitted by Section 703.2 of the DDA and Section 7.2 of the DA (collectively, the "Sales Proceeds Provisions") - G. Dolphin has indicated its intent to prepare and process through the City new designs and plans for Parcel 2, in accordance with the schedule attached hereto and incorporated herein as Exhibit B" (the "Dolphin Performance Schedule"). H. Agency, City and Dolphin mutually interpret Sections 3.4.10 of the DA and 309.2 of the DDA restricting changes in the assessed value of any of the Property to apply only after completion of development of the Property or a "Phase of Development" (as that term is defined in the DDA). As of the Effective Date, the Casitas Development has not been wholly completed, such that neither the DA nor the DDA prevent the reassessment of Parcel 2 upon Lennar's sale of Parcel 2 to Dolphin I. Agency, City, Lennar, and Dolphin now wish to set forth the terms and conditions pursuant to which Agency and City will (i) consent to Lennar's sale and transfer to Dolphin of all of Lennar's rights and obligations under the DDA and DA with respect to Parcel 2, the Parcel 2 Casitas Development, and all associated public and private improvements and amenities to be developed as part of the Parcel 2 Casitas Development (collectively, the "Parcel 2 Casitas Obligations"); and (ii) waive their rights under the Sales Proceeds Provisions. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by all of the Parties, the Parties hereto agree as follows: 1. Within three (3) days after the Effective Date, Dolphin and Agency shall open an escrow account (the "Escrow") with the escrow agent (the "Escrow Agent") handling the closing under the Parcel 2 Purchase Agreement (the "Parcel 2 Closing"). Concurrently with the Parcel Closing, Dolphin shall deposit into the Escrow Four Hundred Thousand Dollars $82/015610-0107 902956 05 a05/16/08 ($400,000.00) (the "Performance Deposit"). The Escrow Agent shall deposit the Performance Deposit in an interest bearing account. The Performance Deposit shall be disbursed to Dolphin or retained by City pursuant to the following: a. The Escrow Agent shall disburse the Performance Deposit to Dolphin upon the occurrence of any one of the following, by the time stated therefor: i) Prior to September 30, 2008, the Completed Casitas Units are owned by CP or an entity in which CP or Dick Oliphant retains a minimum of fifty-one percent (51 %) of the ownership or beneficial interest and retains management and control. ii) Prior to September 30, 2008, Dolphin and CP close escrow on a land "swap" pursuant to which Dolphin conveys to CP certain real property that is adjacent to CP's restaurant parcel fronting on Washington Street in exchange for CP conveying to Dolphin certain real property located at the corner of Miles Avenue and Seeley Drive. b. The Escrow Agent shall disburse fifty percent (50%) of the Performance Deposit to Dolphin upon City's approval of a Site Development Permit Application for the remainder of the Parcel 2 Casitas Development or some alternative development, provided such approval is obtained by the earlier of (i) prior to April 1, 2010; or (ii) within eleven (11) months after meaningful negotiations have broken down between Dolphin and CP with respect to the transactions described in paragraphs a(i) and a(ii) of this Section 1. Dolphin shall provide written updates to City concerning the status of such negotiations at least once every two (2) weeks, and, upon City's request therefore, Dolphin shall provide City with documentary evidence that such negotiations are still proceeding. In the event that following such a request for documentary evidence by City Dolphin fails to provide satisfactory evidence, in the reasonable discretion of the City Manager, that the negotiations are still proceeding, the eleven (11) month period described in clause (ii) of this paragraph shall commence. The date such eleven (11) month period commences shall be referred to hereinafter as the "SDPA Commencement Date". C. The Escrow Agent shall disburse fifty percent (50%) of the Performance Deposit to Dolphin upon City's issuance of building permits for the remainder of the Parcel 2 Casitas Development or some alternative development, provided such issuance occurs within eighteen (18) months after the SDPA Commencement Date. In the event that at the close of the eighteen (18) month period described in lc above Dolphin has not satisfied any of la(i), la(ii), lb, or lc within the applicable time stated above, the Escrow Agent shall disburse the Performance Deposit to the Agency unless before such time this Agreement has been modified by the Parties hereto. 2. Dolphin and Agency shall prepare and provide to Escrow Agent escrow instructions mutually acceptable to both Dolphin and Agency which incorporate and address all of the provisions in Section 1 above. 3. Concurrently with the Parcel 2 Closing, Lennar and Dolphin shall provide Agency and City with an assignment and assumption agreement in the form attached hereto and 882/015610-0107 902956 05 a05/16/08 -3- incorporated herein as Exhibit "C" that has been executed by Lennar and Dolphin, pursuant to which Lennar assigns to Dolphin and Dolphin assumes and agrees to be bound by all of the terms and conditions in the DDA and DA applicable to Parcel and the Parcel Casitas Obligations 4. Agency and City hereby waive their rights under the Sale Proceeds Provisions with respect to the sale of Parcel 2 by Lennar to Dolphin pursuant to the Parcel 2 Purchase Agreement. The City and Agency retain all rights with respect to any other transaction. 5. Dolphin shall complete all obligations set forth in the Dolphin Performance Schedule within the times set forth therein. 6. Nothing herein or in the DDA or DA constitutes a representation or warranty by Agency or City that the construction of the Parcel 2 Casitas Development or any portion thereof is not subject to California Health and Safety Code Sections 33423 through 33426, or Chapter 1 of Part 7 of the California Labor Code (commencing with section 1720), and all applicable statutory and regulatory provisions related thereto, and Dolphin expressly waives any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to Parcel 2 or the Parcel 2 Casitas Development. Dolphin shall, indemnify, defend, and hold Agency and City harmless, including litigation costs and reasonable attorneys' fees, from and against any and all claims pertaining to the payment of wages for Parcel 2 or the Parcel 2 Casitas Development. 7. Except as expressly provided in Section 4 above, nothing in this Agreement is intended to modify any provision in the DDA or DA. 8. In the event of any action between or amongst the Parties hereto seeking enforcement of any of the terms and conditions to this Agreement, the prevailing Party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 9. This Agreement shall be construed according to its fair meaning and as if prepared by all of the Parties hereto. 10. This Agreement shall be governed by the internal laws of the State of California without regard to conflict of law principles and any question arising hereunder shall be construed or determined according to such law. The Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the Parties concerning this Agreement. Service of process on Agency or City shall be made in accordance with California law. Service of process on Lennar or Dolphin shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 11. Time is of the essence of this Agreement and of each and every term and provision hereof. 882/015610-0107 902956.05 a05/16/08 -4- 12. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by the Party granting the waiver. No waiver of any breach or default by any Party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 13. This Agreement may be executed in counterparts, each of which, when this Agreement has been signed by all the Parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 14. The person(s) executing this Agreement on behalf of each of the Parties hereto represent and warrant that (i) such Party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said Party, (iii) by so executing this Agreement such Party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other agreement to which such Party is bound. [End -- signature page follows] 882/015610-0107 _ 902956.05 a05/16/08 -5 IN WITNESS WHEREOF, Agency, City, CP, and Dolphin each hereby represents that it has read this Agreement, understands it, and hereby executes this Agreement to be effective as of the day and year first written above. "Dolphin" DOLPHIN LA QUINTA, a California limited liaViliq Date: 2008 By: Its: PA^N P By: Its: "Lennar" LENNAR HOMES OF CALIFORNIA INC., a California corporation Date: 2008 By: Date: 2008 APPROVED AS TO FORM: RUT N & T]JC R, Ll o ys for the L uinta Redevelopment Agency Its: "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, c ororaa and politic Executive Director [Signatures continued on next page] 882/015610-0107 _ 902956 05 a05/16/08 _6 IN WITNESS WHEREOF, Agency, City, CP, and Dolphin each hereby represents that it has read this Agreement, understands it, and hereby executes this Agreement to be effective as of the day and year first written above. Date: "Dolphin" DOLPHIN LA QUINTA, LLC, a California limited liability company 2008 By: Date: d 16 2008 Its: By: Its: "Lennar" LENNAR HOMES OF CALIFORNIA INC., a California corporation By: ,,,,-� Its: Nppro••a.l. Vr� p6taotcZ4 "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Date: 12008 By: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Executive Director [Signatures continued on next page] 882/015610-0107 _6_ 902956.05 a05/16/08 Date: 2008 APPROVED AS TO FORM: RUT & TUCI R, LIVP, ty ttrue "City" CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State of California B,. Its: City Manager 882/015610-0107 902956 05 a05/16/08 -7- EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY PARCEL 2 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, AS PER MAP RECORDED IN BOOK 212 OF PARCEL MAPS, PAGES 60 TO 66, RECORDS OF SAID COUNTY. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM THE LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 9, 2004 AS INSTRUMENT NO. 2004-0979137 OFFICIAL RECORDS. 881/0156 10-0 107 902956 05 n06/12/08 Exhibit "A" EXHIBIT `B" DOLPHIN PERFORMANCE SCHEDULE [See attached pages] 882/015610-00107 Exhibit `B 902956.05.05/16/08 THE DOLPHIN PARTNERS SCHEDULE OF PERFORMANCE FOR EXISTING 40 CASITAS UNITS AND REMAINING CONDO -HOTEL UNITS Item of Performance Time for Completion** 1 City approval of Agreement and execution of Not later than May 21, 2008. same. 2 Dolphin closes escrow with Lennar and acquires Not later than June 30, 2008, per the Third fee title to Parcel 2. Amendment to the Purchase & Sale Agreement between Dolphin and Lennar. 3 Developer and Agency execution of amendments Within three (3) months after the commencement o to DA and DDA. the eighteen (18) period described inSectionlb of the Agreement (as such eighteen (18) month period may commence as a result of the failure of Dolphin to provide satisfactory evidence to City that negotiations with CP are proceeding). 4 Developer submission of complete Site Within 180 days after Effective Date of DDA Development Permit Application "SDPA", which amendment. will include: Detailed Site Plan; Floor Plans and Layout; Elevations; Conceptual Landscaping; Master Grading Plan; and Tract Map. 5 Review of SDPA by all applicable City Agency will use reasonable efforts to cause such departments. review within 21 days after Developer's submittal o SDPA. 6 Agency response to Developer as to City Within 7 days after Agency's receipt of City's final comments on SDPA. comments, but no later than 30 days after Developer's submission of SDPA. 7 Developer and City Responses. Developer will respond to any request within 7 days and Agency will use reasonable efforts to cause City to respond to any submission within 7 days. 8 City publishes Notice of Public Hearing before the Within 20 days after City responds to Developer's Planning Commission. comments in the preceding section. 9 Planning Commission Public Hearing and Approximately 10 days after City responds to consideration of SDPA and Tract Map. Developer's comments in the preceding section. 10 City Council consideration of SDPA and Tract Approximately 21 days after Planning Commission Map. approval. 11 City's issuance of SDPA, Tract Map and Within sixty (60) days from City's receipt o conditions. Developer's SDPA. 12 Developer's submission of (i) evidence of financing necessary to complete units, and (ii) Within 30 days after Developer's completion of Precise Grading and Building Permit Precise Grading Plans and Construction Drawings Applications. for the Parcel 1 Restaurant. THE DOLPHIN PARTNERS SCHEDULE OF PERFORMANCE FOR EXISTING 40 CASITAS UNITS AND REMAINING CONDO -HOTEL UNITS 13 Developer's submission of building permit Within 120 days of Agency's approval of SDPA. applications for rental unit development. 14 City's issuance of building permits for the Within 60-90 days from submission of complete set development of the rental units. of construction documents including grading plans. 15 Developer commences construction of the rental Within 60 days after Developer's receipt of building unit development. permits for the rental unit development. 16 Completion of the rental unit development. Within eighteen (18) months of City's formal approval of SDPA. *Nothing herein shall be construed to limit the City's legislative authority, which City may exercise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. Re: Dolphin Schedule rage 1 ui .) Deborah Powell From: John Kingsley [Jkingsley@dolphin-partners.com) Sent: Tuesday, June 03, 2008 4:20 PM To: Deborah Powell Subject: FW: Dolphin Schedule Debbie — Please see Geoff s confirmation below. Do you need anything from me on this matter? Will your office be re -sending a corrected version of the Timelines? Thanks as always. JCK John C. Kingsley Senior Vice President DOLPHIN PARTNERS, INC. 18818 Teller Avenue, Suite 200 Irvine, CA 92612 949-852-9230 From: Geoffrey Willis[mailto:GWillis@sheppardmullin.comj Sent: Tuesday, June 03, 2008 3:00 PM To: John Kingsley Cc: David Collins Subject: Re: Dolphin Schedule The change is fine. „z, tlF4if5,}u .., R.a.. . u sP r50 Town Center Drive 4th Floor Coeta Mesa CA 92626-1993 714 513 5100 office 714..513.5130 tax www, sheppardm u flin. com Geoffrey Willis 714 424 2894 direct 1 114 428 5922 direef fax GA'itbsu sheppard'evilrn com 100 Circular 230 Notice: In accordance with Treasury Regulations we notify you that any tax advice given herein (or in any attachments) is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of (i) avoiding tax penalties or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein (or in any attachments). Attention: This message is sent by a law firm and may contain information that is.privileged or confidential. If you received this transmission in error, please notify the sender by reply e-mail and delete the message and any attachments. From: John Kingsley Ukingsley@dolphin-partners.com> To: Geoffrey Willis Cc: David Collins 6/4/2008 Re: Dolphin Schedule rage z of .3 Sent: Tue Jun 03 14:15:41 2008 Subject: FW: Dolphin Schedule Geoff — Looks like a minor confirmation is needed from you. See below and give me and others the thumbs up quickly. Any comments or concerns, please let me know. Thanks as always. JCK John C. Kingsley Senior Vice President DOLPHIN PARTNERS, INC. 18818 Teller Avenue, Suite 200 Irvine, CA 92612 949-852-9230 From: Deborah Powell [mailto:drowell@la-_quinta.org] Sent: Tuesday, June 03, 2008 2:17 PM To: John Kingsley Cc: Doug Evans; LeMoine-Bui, Allison Subject: FW: Dolphin Schedule John, Please see the email below from our attorney, Allison LeMoine-Bui, to Geoff Willis. We've not heard back from Mr. Willis. We just need an email confirmation that the below -listed change is acceptable to Dolphin. Once we have that, I can mail out the executed agreements. Thank you very much. Sincerely, Debbie Powell, Management Analyst City Manager's Office, Development Services City of La Quinta dpowell@la-quinta.org (760)777-7073 C10i111Z1 . Re: Dolphin Schedule rase � VL (760) 777-7101fax From: LeMoine-Bui, Allison [mait0 _aLemQ rig-Bui@ratan Qom] Sent: Tuesday, May 27, 2008 12:30 PM To: gwillis@sheppardmullin.com Cc: Jenson, Kathy; Deborah Powell Subject: Dolphin Schedule Geoff, we've discovered a typo in the schedule of performance which is attached to the Deposit Agreement. Item 12 references the "Parcel 1 Restaurant", which is a carryover from a prior schedule in the DDA. All other references to the actual proposed development reference a "rental unit development" or the "rental units." Please confirm your understanding and acknowledgement that the reference to the Parcel 1 Restaurant should be to the "rental unit development." Any other interpretation would not make sense and/or would be detrimental to Dolphin, as the Parcel 1 Restaurant is likely to be developed on a much tighter timeline than the Dolphin development. Allison LeMoine-Bui Rutan & Tucker, LLP 611 Anton Boulevard, 14th Floor Costa Mesa, CA 92626 714-662-4658 Direct 714-546-9035 Fax alemoine-Bui@rutan.com www.rutan.com <htW-Hwww.rutan.com/> Any tax advice contained in the body of this e-mail (and any attachments thereto) was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. Privileged And Confidential Communication. This electronic transmission, and any documents attached hereto, (a) are protected by the Electronic Communications Privacy Act (18 USC §§ 2510-2521), (b) may contain confidential and/or legally privileged information, and (c) are for the sole use of the intended recipient named above. If you have received this electronic message in error, please notify the sender and delete the electronic message. Any disclosure, copying, distribution, or use of the contents of the information received in error is strictly prohibited. P Please consider the environment before printing this e-mail. 6/4/2008 EXHIBIT "C" ASSIGNMENT AND ASSUMPTION AGREEMENT [See following pages] 882/015610-0107 Exhibit "C 902956 05 a05/16/08 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: LENNAR HOMES OF CALIFORNIA, INC. Attn: ASSIGNMENT AND ASSUMPTION AGREEMENT This ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment") is entered into this day of , 2008 (the "Effective Date") by and between LENNAR HOMES OF CALIFORNIA, INC., a California corporation ("Assignor") and DOLPHIN LA QUINTA, LLC, a California limited liability company ("Assignee") with reference to the following: A. WHEREAS, Assignor is the owner in fee simple of certain property located at 45-245 Seeley Drive, in the City of La Quinta, California ("Parcel 2"). Parcel is more particularly described on Exhibit "A", which is attached hereto and incorporated herein by this reference. B. WHEREAS, pursuant to the terms of that certain Disposition and Development Agreement entered into by and between the Assignee and the La Quinta Redevelopment Agency, a public body, corporate and politic ("Agency") on or about December 18, 2003, as amended on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, on or about August 23, 2007, and on or about March 23, 2008 (as amended, the "DDA"), the Agency conveyed Parcel 2 and certain adjacent real property to CP Development La Quinta, LLC, a California limited liability company ("CP"). C. WHEREAS, subsequent to its acquisition of Parcel 2, CP conveyed Parcel 2 and assigned all of its rights and obligations with respect to Parcel 2, to Assignor. D. WHEREAS, concurrently with the execution of the DDA, the City of La Quinta ("City") and CP entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside (the "Official Records") on January 5, 2004, as Instrument No. 2004-0005256, as amended by that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004, and recorded in the Official Records on November 8, 2004, as Instrument No. 2004-0885063, that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005, and recorded in the Official Records on December 19, 2005, as Instrument No. 2005-1045418, and that certain Amendment No. 3 to Development Agreement executed on or about , 2008, and recorded in the Official Records on , 2008, as Instrument No. (as amended, the "DA" ). 882/015610-0107 _ 902956 05 a06/12/08 -1 E. WHEREAS, pursuant to the terms of the DDA and DA and all entitlements issued in connection therewith, Assignor is required to develop on Parcel 2 one hundred thirty-two (132) condominium/casitas units and associated public and private improvements and amenities (collectively, the "Parcel 2 Casitas Development"). F. WHEREAS, Assignor has developed forty (40) condominium/casitas units on Parcel 2, and now wishes to transfer and assign to Assignee all of its rights and obligations under the DDA and DA with respect to Parcel 2 and the Parcel 2 Casitas Development (collectively, the "Parcel 2 Casitas Obligations"). NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Assignor hereby assigns to Assignee all of Assignor's rights and responsibilities under the DDA and DA with respect to Parcel 2 and the Parcel 2 Casitas Obligations from and after the Effective Date. 2. Assignee hereby accepts the foregoing assignment of all of Assignor's rights and responsibilities under the DDA and DA with respect to Parcel 2 and the Parcel 2 Casitas Obligations, and agrees to be bound by the terms of the DDA and DA with respect to all of such rights and responsibilities from and after the Effective Date. 3. The parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented. 4. The terms of this Assignment shall not be amended and this Assignment shall not be terminated except by written instrument executed by both of the parties hereto, and only upon the prior written consent of the City and Agency. 5. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles. 6. Any defined terms used but not defined herein shall have the same meaning as in the DDA. 7. By execution below, the City and Agency hereby: (i) consent to the foregoing assignment; (ii) release Assignor from any further obligations under the DA or DDA; and (iii) waive their right to condition their approval of the foregoing assignment and sale by Assignor to Assignee of Parcel 2 upon payment by Assignor to the City and/or Agency of half of Assignor's net sales proceeds, as permitted by Section 703.2 of the DDA and Section 7.2 of the DA. [End — signatures on next page] 882/015610-0107 _ 902956 05 a06/12/08 _2 WHEREFORE, the parties hereto have executed this Assignment on the date first written above. "Assignor" LENNAR HOMES OF CALIFORNIA INC., a California corporation By: Its: "Assignee" DOLPHIN LA QUINTA, LLC, a California limited liability company IN Its: 882/0I56[0-0107 _3 902956 05 a06/12/08 State of California ) County of ) On before me, , Notary Public, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (seal) State of California ) County of ) On before me, , Notary Public, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) 88?/01561U-0107 902956 05 .06/ 12/08 CONSENT By execution below, the City and Agency hereby: (i) consent to the foregoing assignment; (ii) release Assignor from any further obligations under the DA or DDA; and (iii) waive their right to condition their approval of the foregoing assignment and sale by Assignor to Assignee of Parcel 2 upon payment by Assignor to the City and/or Agency of half of Assignor's net sales proceeds, as permitted by Section 703.2 of the DDA and Section 7.2 of the DA. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: Its: Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State of California By: Its: ATTEST: City Clerk APPROVED AS TO FORM: RUTAN & TUCKER, LLP City Attorney 882/015610-0107 90295605 a06/ 12/08 -5 City Manager State of California ) County of ) On , before me, (here insert name and title of the officer) Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. State of California ) County of ) On , before me, (seal) Notary Public, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) I82/015610-0107 902956 05 a06/12M EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY PARCEL 2 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, AS PER MAP RECORDED IN BOOK 212 OF PARCEL MAPS, PAGES 60 TO 66, RECORDS OF SAID COUNTY. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM THE LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 9, 2004 AS INSTRUMENT NO. 2004-0979137 OFFICIAL RECORDS. 882/015610-0107 Exhibit "A" 902956 05 a06/12/08 E. WHEREAS, pursuant to the terms of the DDA and DA and all entitlements issued in connection therewith, Assignor is required to develop on Parcel 2 one hundred thirty-two (132) condominium/casitas units and associated public and private improvements and amenities (collectively, the "Parcel 2 Casitas Development"). F. WHEREAS, Assignor has developed forty (40) condominium/casitas units on Parcel 2, and now wishes to transfer and assign to Assignee all of its rights and obligations under the DDA and DA with respect to Parcel 2 and the Parcel 2 Casitas Development (collectively, the "Parcel 2 Casitas Obligations"). NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: Assignor hereby assigns to Assignee all of Assignor's rights and responsibilities under the DDA and DA with respect to Parcel 2 and the Parcel 2 Casitas Obligations from and after the Effective Date. 2. Assignee hereby accepts the foregoing assignment of all of Assignor's rights and responsibilities under the DDA and DA with respect to Parcel 2 and the Parcel 2 Casitas Obligations, and agrees to be bound by the terms of the DDA and DA with respect to all of such rights and responsibilities from and after the Effective Date. 3. The parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented. 4. The terms of this Assignment shall not be amended and this Assignment shall not be terminated except by written instrument executed by both of the parties hereto, and only upon the prior written consent of the City and Agency. 5. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles. 6. Any defined terms used but not defined herein shall have the same meaning as in the DDA. By execution below, the City and Agency hereby: (i) consent to the foregoing assignment; (ii) release Assignor from any further obligations under the DA or DDA; and (iii) waive their right to condition their approval of the foregoing assignment and sale by Assignor to Assignee of Parcel 2 upon payment by Assignor to the City and/or Agency of half of Assignor's net sales proceeds, as permitted by Section 703.2 of the DDA and Section 7.2 of the DA. [End — signatures on next page] 882/015610-0107 902956 05 a05116/08 above. WHEREFORE, the parties hereto have executed this Assignment on the date first written "Assignor" LENNAR HOMES OF CALIFORNIA INC., a California corporation By: Its: "Assignee" DOLPHI a Cali By: Its: TWC LLC, 882/015610-0107 _3_ 902956 05 a05/16/08 State of California ) County of On before me, Notary Public, here i sert name and tiU of the officer) personally appeared Oa n ./ who proved to me on the basis of satisfactory evidence to be the person whose nameKis/afe subscribed to the within instrument, and acknowledged to me that he/sho4hiay-executed the same in him authorized capacity(i , and that by hisaietwaak signatur�S on the instrument the person(a'f, or the entity upon behalf of which the persono acted, executed the instrument. I certtfy under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature ��' N9& V'� /& State of California County of w - N I�umr c elou comnwNlon er 17ee017 naaa n*ao - OWuaeua OrWgo carver Ie►rt;OMSOUDeCOX2MI (seal) On , before me, , Notary Public, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (seal) 882/015610-0107 _4- 902956 05 a05/16/08 WHEREFORE, the parties hereto have executed this Assignment on the date first written above. "Assignor" LENNAR HOMES OF CALIFORNIA INC., a California corporation � By: %�, v , f�f:`1,� U `" Its: tQ-%,bnL "Assignee" DOLPHIN LA QUINTA, LLC, a California limited liability company UA Its: 882/015610-0107 902956 05 a05/16/08 State of California _� ) County of 1 AA �p On 1"\0`� 110 1 �� , before me, �SCIbd P— E�SCaAAtJ ((A Notary Public, (h n ere insert name and title of the officer) personally appeared� GY�- a--� NkC i U Fr , who proved to me on the basis of satisfactory evidence to be the person(oj whose named) is/are' subscribed to the within instrument, and acknowledgA to me that heLshe/tJloy—executed the same in�hePlt ' authorized capacity(ipwrand that b}t ket/lKiir signatureKon the instrument the person(s), or the entity upon behalf of which the person(Wacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. IfmmMsi SIA EECAM iii CommlwbV6 n 117�16 Not Pubbe - CdltaMo 11 WWO CouMV Canna YeNuN 2 Signature (seal) State of California ) County of ) On before me, (here insert name and personally appeared who proved to me on the basis of satisfactory subscribed to the within instrument, and ackn( in his/her/their authorized capacity(ies), and th, person(s), or the entity upon behalf of whi�i I certify under PENALTY OF foregoing paragraph is true ann WITNESS my hand seal. Notary Public, officer) vidence a the person(s) whose name(s) is/are le d to me that he/she/they executed the same y his/her/their signature(s) on the instrument the person(s) acted, executed the instrument. Y under the laws of the State of California that the (seal) 882/015610-0107 902956 05 a05/16/08 CONSENT By execution below, the City and Agency hereby: (i) consent to the foregoing assignment; (ii) release Assignor from any further obligations under the DA or DDA; and (iii) waive their right to condition their approval of the foregoing assignment and sale by Assignor to Assignee of Parcel 2 upon payment by Assignor to the City and/or Agency of half of Assignor's net sales proceeds, as permitted by Section 703.2 of the DDA and Section 7.2 of the DA. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and polit c By� ��� Its: Executive Director APPROVED AS TO FORM: RUT A TUCKER LLP At orneys for the La Q a Redevelopment Agency CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State of CaPI) R is By: / � Its: City Manager APPROVED AS TO FORM: RUTAN & TUCKER, LLP i!J 1 C' torney 882/015610-0107 _5_ 902956 05 a05/16/08 State of CaA mia ) County of i✓ i On before me, Notary Public, personally appeared r • tLel2O ves e who proved to me on the basis of satisfactory evidence to be the person(s� whose name(JO is/ve subscribed to the within instrument, and acknowledged to me that he/*e/they executed the same in his/IIWtoir authorized capacity(ie), and that by his/tW/tl*x signature* on the instrument the person(*, or the entity upon behalf of which the person*) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. REGENIA HRMY CornnvW0n A 1521423 Notary Eru )k Cditmla le'Rlve(WQ CaootY Signature sOAfD'�' � 2 (seal) State of California ) County of ) On , before me, Notary Public, (here insert name and title of the officer) personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) 982/015610-0107 _ 902956 05 a05/16/08 _6 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY PARCEL 2 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, AS PER MAP RECORDED IN BOOK 212 OF PARCEL MAPS, PAGES 60 TO 66, RECORDS OF SAID COUNTY. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM THE LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 9, 2004 AS INSTRUMENT NO. 2004-0979137 OFFICIAL RECORDS. 882/015610-0107 Exhibit "A" 902956.05 a05/16/08 PLEASE COMPLETE THIS INFORMATION RECORDING REQUESTED BY: VERONICA J. MONTECINO City Clerk / Agency Secretary AND WHEN RECORDED MAIL TO: Veronica J. Montecino, CMC, City Clerk CITY OF LA QUINTA P. O. Box 1504 La Qwnta, California 92247-1504 OOC a 2008-0411463 07/28/2008 Customer Copy Label The paper to which is label is affixed has not been compared with the recorded document Larry U Ward County of Riverside Assessor, County Clerk & Recorder F9 LCN �L:PPI � YK:i:I XKeli �] �:�Y�iY�iL I Y/ ASSIGNMENT AND ASSUMPTION AGREEMENT Lennar Homes of California, Inc., and Dolphin La Quinta, LLC ICP Development) Title of Document 1 R i USE ONLY THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Veronica J. Montecino, CMC, City Clerk CITY OF LA QUINTA P. O. Box 1504 La Quinta, CA 92247-1504 ASSIGNMENT AND ASSUMPTION AGREEMENT This ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment") is entered into this 22Id day of May, 2008 (the "Effective Date") by and between LENNAR HOMES OF CALIFORNIA, INC., a California corporation ("Assignor") and DOLPHIN LA QUINTA, LLC, a California limited liability company ("Assignee") with reference to the following: A. WHEREAS, Assignor is the owner in fee simple of certain property located at 45-245 Seeley Drive, in the City of La Quinta, California ("Parcel 2"). Parcel is more particularly described on Exhibit "A", which is attached hereto and incorporated herein by this reference. B. WHEREAS, pursuant to the terms of that certain Disposition and Development Agreement entered into by and between the Assignee and the La Quinta Redevelopment Agency, a public body, corporate and politic ("Agency") on or about December 18, 2003, as amended on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, on or about August 23, 2007, and on or about March 23, 2008 (as amended, the "DDA"), the Agency conveyed Parcel 2 and certain adjacent real property to CP Development La Quinta, LLC, a California limited liability company ("CP"). C. WHEREAS, subsequent to its acquisition of Parcel 2, CP conveyed Parcel 2 and assigned all of its rights and obligations with respect to Parcel 2, to Assignor. D. WHEREAS, concurrently with the execution of the DDA, the City of La Quinta ("City") and CP entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside (the "Official Records") on January 5, 2004, as Instrument No. 2004-0005256, as amended by that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004, and recorded in the Official Records on November 8, 2004, as Instrument No. 2004-0885063, that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005, and recorded in the Official Records on December 19, 2005, as Instrument No. 2005-1045418, and that certain Amendment No. 3 to Development Agreement executed on or about May 6, 2008, and recorded in the Official Records on June 4, 2008, as Instrument No. 2008-0303530 (as amended, the "DA " 882/015610-0107 902956 05 a05/16/08 E. WHEREAS, pursuant to the terms of the DDA and DA and all entitlements issued in connection therewith, Assignor is required to develop on Parcel 2 one hundred thirty-two (132) condominium/casitas units and associated public and private improvements and amenities (collectively, the "Parcel 2 Casitas Development"). F. WHEREAS, Assignor has developed forty (40) condominium/casitas units on Parcel 2, and now wishes to transfer and assign to Assignee all of its rights and obligations under the DDA and DA with respect to Parcel 2 and the Parcel 2 Casitas Development (collectively, the "Parcel 2 Casitas Obligations"). NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: Assignor hereby assigns to Assignee all of Assignor's rights and responsibilities under the DDA and DA with respect to Parcel 2 and the Parcel 2 Casitas Obligations from and after the Effective Date. 2. Assignee hereby accepts the foregoing assignment of all of Assignor's rights and responsibilities under the DDA and DA with respect to Parcel 2 and the Parcel 2 Casitas Obligations, and agrees to be bound by the terms of the DDA and DA with respect to all of such rights and responsibilities from and after the Effective Date. 3. The parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented. 4. The terms of this Assignment shall not be amended and this Assignment shall not be terminated except by written instrument executed by both of the parties hereto, and only upon the prior written consent of the City and Agency. 5. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles. 6. Any defined terms used but not defined herein shall have the same meaning as in the DDA. By execution below, the City and Agency hereby: (i) consent to the foregoing assignment; (ii) release Assignor from any further obligations under the DA or DDA; and (iii) waive their right to condition their approval of the foregoing assignment and sale by Assignor to Assignee of Parcel 2 upon payment by Assignor to the City and/or Agency of half of Assignor's net sales proceeds, as permitted by Section 703.2 of the DDA and Section 7.2 of the DA. [End — signatures on next page] 882/015610-0107 902956 05.05/16/08 -'2" above. WHEREFORE, the parties hereto have executed this Assignment on the date first written "Assignor" LENNAR HOMES OF CALIFORNIA INC., a California corporation By: A,4,W41 Its: U�fA,,-44 "Assignee" DOLPHIN LA QUINTA, LLC, a California limited liability company I� Its: 8821015610-0107 _ 902956 05 a05116l08 _3 State of California _ ) county of td T On 1"�a 1b, Wag, before me, �-`Sa1- ( `e wcaMl IkNotaryPublic, \�� �e� insert name and title of the officer) l V personally appeared _ Y a �'_" who proved to me on the basis o satisfactory evidence to be the persoq(*ywhose name,(e:') ts/aw- subscribed to the within instrument, and acknowlefto to me that he(skefthey a xecuted the same in tt tethheit authorized capacity(igaj and that b /slMr signatumKon the instrument the person(s), or the entity upon behalf of which the person(Wacted, executed the instrument I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. State of California County of ) =1 before me, personally appeared who proved to me on the basis of satisfactory subscribed to the within instrument, and acknt in his/her/their authorized capacity(ies), and th" person(s), or the entity upon behalf of whi*di I certify under PENALTY OF foregoing paragraph is true ant WITNESS my hand seal. Commmon • 170")6 Notary POW • CaWonMa RlvorNtlr! Coumv Notary Public, insert name and titicarthe officer) vidence the person(s) whose name(s) is/are ile4g4 to me that he/she/they executed the same y his/her/their signature(s) on the instrument the person(s) acted, executed the instrument. under the laws of the State of California that the (seal) 98210I5610-0107 _4_ 90295605 a05/16108 WHEREFORE, the parties hereto have executed this Assignment on the date first written above. "Assignor" LENNAR HOMES OF CALIFORNIA INC., a California corporation 0 Its: "Assignee" DOLPH A A, LL , a Califo ' limi d ' bility mpany Its: AAmp,ca 882/015610-0107 902956 05 a05/16/08 -3- State of Califpmia ) County of / ) On b before me, Notary Public, (here i sert name and titl f the officer) personally appeared I� who proved to me on the basis of satisfactory evidence to be the personWwhose namef4 is/art— subscribed to the within instrument, and acknowledged to me that he/sheAhey executed the same in his/herAheir-authorized capacity(ies}; and that by hislher4heir signatureWon the instrument the person , or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature "-rj_(��1.�i State of California County of On before me, (here insert name and title of the officer) California that the 170 017 1 - c d"Mia count, _ (seal) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) 882/015610-0107 902956 03 a05/15108 -4- CONSENT By execution below, the City and Agency hereby: (i) consent to the foregoing assignment; (ii) release Assignor from any further obligations under the DA or DDA; and (iii) waive their right to condition their approval of the foregoing assignment and sale by Assignor to Assignee of Parcel 2 upon payment by Assignor to the City and/or Agency of half of Assignor's net sales proceeds, as permitted by Section 703.2 of the DDA and Section 7.2 of the DA. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate Ze litic Bi Its: Executive Director APPROVED AS TO FORM: RUTAN & T C R,// LP C /'j Attorneys for e La Quinta &development Agency CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State of (a Its: i FAPMORN 11 APPROVED AS TO FORM: RUTAN & TUC W � l ivy Attor6y City Manager "j ry 182/015610-0107 _ 902956 05 a05/16/09 "5 of State Cal^;fe;m County of 2Qd On IZ% aDOP, before me, le 1( Notary Public, '(! ere rt name and title of the officer) personally appeared �.a..� d ✓e,5t_ , who proved to me on the basis of satisfactory evidence to be the person(* whose name(R) is1W subscribed to the within instrument, and acknowledged to me that he/*/tb6y executed the same in his/M/tb&r authorized capacity(ig), and that by his/l;d/tb& signature(so on the instrument the person(p), or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. REGENtA MEMEY Cornmbsion t 1521423 n Notary-Pi1buc. � ednomla Riverside Cotmty Signature 7�oJ��.. �� MYC.E oct232009 (sea]) State of California ) County of ) On , before me, Notary Public, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) 982/015610-0109 902956 05 a05/16/08 -6- EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY PARCEL 2 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, AS PER MAP RECORDED IN BOOK 212 OF PARCEL MAPS, PAGES 60 TO 66, RECORDS OF SAID COUNTY. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM THE LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 9, 2004 AS INSTRUMENT NO. 2004-0979137 OFFICIAL RECORDS. 182/015610-0107 Exhibit "A" 902956 05 a05/16/08 Recording Requested By And When Recorded Mail To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attention: Executive Director DOC # 2008-0437386 08/08/2008 08:00R Fee:NC Reeordedpage In 1 of 4 Official Records County of Riverside Larry W. Ward Assessor, C"ItY Clark & 1111111111111111111111111111111111111111order IIIIIIIIIIII MO=WI" ====M= E��■IMM s!MWNPRPM� Exempt from Recordation Fee per Gov. Code § 27383 DOCUMENTARY TRANSFER TAX IS S —19- — _ Computed on the consideration or value of property conveyed, OR Computed on the consideration or value less liens 006 or encumbrances remaining at time of sale. QUITCLAIM DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company, do(es) hereby remise, release and forever quitclaim to LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, the real property in the City of La Quinta, County of Riverside, State of California, described in Exhibit "A" attached hereto and incorporated herein by reference. Date: hG ip 2008 Date: �UsG �O 2008 CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member _ - - By: Ric and Oliphant Its: Trustee By: Oliphant Ent rises, Inc. Its: Manager By: L) ( Richard Oliphant Its: President 882/017944-0006 668796 02 a07/30/08 State of California ) County off On t1 I �Q _, before me,l�iN AIL.- `6u g n a , Notary Public, (� (hyyp�e {'nsert name and Srtle of the officer) personally appeared Qs (-yy(- d Q-- U \ \ f X0 C4'li who proved to me on the basis of satisfactory evide cn a to be the person whose namefa) is/ace subscribed to the within instrument, and acknowledged to me that he/Aw4hey executed the same in his/he644oif authorized capacity(ies), and that by his/herFtheir signature(s4 on the instrument the person(*), or the entity upon behalf of which the person(9j acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. 4z1 Signature CANDICE R. BORCENA Commisslon # 1593376 01MVC0MM-ExPhssJun29,20j09 Notary Public - Calltomla Riverside County (seal) 882/017944-0006 668796 02 .07/30/08 -2- EXHIBIT "A" TO QUITCLAIM DEED LEGAL DESCRIPTION OF PROPERTY ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF RIVERSIDE, CITY OF LA QUINTA, DESCRIBED AS FOLLOWS: PARCELS E, F, G, H, AND I OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, AS PER MAP RECORDED IN BOOK 212 OF PARCEL MAPS, PAGES 60 TO 66, RECORDS OF SAID COUNTY 882/017944-0006 668796 02 a07/30/08 -3- S CERTIFICATE OF ACCEPTANCE LA QUINTA REDEVELOPMENT AGENCY THIS IS TO CERTIFY that the interest in real property conveyed by the foregoing Quitclaim Deed dated 7 1O 2008, from CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company, to the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), is hereby accepted by the undersigned Executive Director of the Agency on behalf of the Agency, pursuant to authority conferred by Resolution No. 2002-12 adopted by the Agency's Board of Directors on June 18, 2002, and the Agency consents to recordation thereof by its duly authorized officer. Date: 6 2008. LA QUINTA REDEVELOPMENT AGENCY Thomas P. Genovese Executive Director 882/017944-0006 668796 02 a07/30/08 -4- 60- b� PLEASE COMPLETE THIS INFORMATION RECORDING REQUESTED BY: VERONICA J. MONTECINO City Clerk / Agency Secretary AND WHEN RECORDED MAIL TO: Veronica J. Montecino, CMC, City Clerk CITY OF LA QUINTA P. 0. Box 1504 La Quinta, California 92247-1504 Doc 4 2008-0477067 08/28/2 A09e013:00RI of5Fee:NC Recorded in Off ieiai Records County of Riverside Larry 14' Ward R s s ellllll III IIIII IIIII IIII IIIIIIII III IIIII IIIIIIII IIIIIIII S R U I PAGE I SIZE I DA I MISC LONG RFD I COPY 15 M A L 1 465 1 426 1 PCOR NCOR SlyNCH /)EXAM T: CTY UNI U3o ASSIGNMENT AND ASSUMPTION AGREEMENT CP Development La Quinta, LLC by and between Huy Vu my (Southeast corner of Miles Avenue & Washington Street) 030 Title of Document WIFmil ij� ii7ii iiii f elm G711. Mier C. n USE ONLY THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Citv Manager From Recording Fee Pursuant to Government Code § 27383 ASSIGNMENT AND ASSUMPTION AGREEMENT This�ssignment and Assumption Agreement ("Assignment") is entered into this o'3_ day?sf ZOb'b�6y and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Assignor") and Huy Vu, an individual (referred to hereinafter as "Assignee") with reference to the following: A. WHEREAS, Assignor is the owner in fee simple of certain property located at the southeast corner of Miles Avenue and Washington Street in the City of La Quinta, California (the "Property"), which Property is more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference. B. WHEREAS, Assignor acquired the Property from the La Quinta Redevelopment Agency, a public body, corporate and politic ("Agency") pursuant to the terms of that certain, Disposition and Development Agreement dated on or about December 18, 2003 ("Original DDA"), as amended on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, on or about August 23, 2007, and on or about March 19, 2008 (collectively the "DDA Amendments"). (The Original DDA, as modified by the DDA Amendments shall hereinafter be referred to as the "DDA".) C. WHEREAS, Concurrently with the execution of the Original DDA, the Agency and Assignor entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside on January 5, 2004 as Instrument No. 2004-0005256, and amended by that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004 and recorded in the Official Records of the County Recorder for the County of Riverside on November 8, 2004 as Instrument No. 2004-0885063, and by that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005 and recorded in the Official Records of the County Recorder for the County of Riverside on December 19, 2005 as Instrument No. 2005-1045418, and by that certain Amendment No. 3 to the Development Agreement executed on or about May 6, 2008 and recorded in the Official Records of the County Recorder for the County of Riverside prior to or concurrent herewith (hereinafter collectively referred to as the "Development Agreement.") D. WHEREAS, pursuant to the terms of the DDA and the Development Agreement, the Property was to be used for a mixed use development project (the "Project"), including a restaurant ("Restaurant") to be built on that portion of the Property described on Exhibit "B" attached hereto and incorporated herein by this reference ("Restaurant Property"). E. WHEREAS, Assignor now desires to transfer the Restaurant Property to Assignee, and concurrently therewith, to transfer to Assignee all of Assignor's rights and responsibilities under the DDA and the Development Agreement to the extent that such rights and responsibilities relate to the Restaurant and Restaurant Property. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. As of the "Effective Date" (as that term is defined in Section 4 below) of this Assignment, Assignor hereby assigns to Assignee all of Assignor's rights and responsibilities under the terms of the DDA and the Development Agreement, but only to the extent that such rights and responsibilities relate to the Restaurant and/or Restaurant Property (collectively, the "Assigned Rights and Obligations".) 2. Assignee hereby accepts the foregoing assignment of the Assigned Rights and Obligations, and agrees to be bound by the terms of the DDA and the Development Agreement to the extent that such terms relate to the Restaurant and/or the Restaurant Property. 3. The parties hereto acknowledge and agree that Assignee shall not be responsible for any of the obligations of the DDA or the Development Agreement which arise from ownership of any portion of the Property prior to the Effective Date hereof, or which arise from any portion of the Property other than the Restaurant Property after the Effective Date hereof As such, a default by Assignor under either the DDA or the Development Agreement prior to the Effective Date hereof, or with respect to any portion of the Property other than the Restaurant Property after the Effective Date hereof ("Assignor's Defauh") shall not be deemed a default by Assignee, and Assignor shall indemnify, defend and hold harmless Assignee from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignor's Default. A default by Assignee under either the DDA or the Development Agreement with respect to the Restaurant and/or Restaurant Property after the Effective Date hereof ("Assignee's Default") shall not be deemed a default by Assignor, and Assignee shall indemnify, defend and hold harmless Assignor from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignee's Default. 4. Nothing herein or in the DDA or DA constitutes a representation or warranty by the Agency that the construction of the Restaurant on the Restaurant Property is not subject to California Health and Safety Code Sections 33423 through 33426, or Chapter 1 of Part 7 of the California Labor Code (commencing with section 1720), and all applicable statutory and regulatory provisions related thereto, and Assignee expressly waives any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to the Restaurant or the Restaurant Property. Assignee shall, indemnify, defend, and hold the Agency harmless, including litigation costs and reasonable attorneys' fees, from and against any and all claims pertaining to the payment of wages for the Restaurant and/or the Restaurant Property. 5. The City and the Agency shall be deemed to be third party beneficiaries of the waiver and indemnity set forth in Section 4 and the warranty and representation set forth in Section 7. 6. This Assignment shall be deemed effective upon the last of the following events to occur: (a) conveyance of the Restaurant Property to Assignee as evidenced by the recording of the grant deed therefor in the Official Records of the County Recorder for the County of Riverside, California, and (b) the written consent to this Assignment by the City with respect to the Assigned Rights and Obligations arising under the Development Agreement, and by the Agency with respect to the Assigned Rights and Obligations arising under the DDA (herein referred to as the "Effective Date"). 7. The parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented. 8. The terms of this Assignment shall not be amended and this Assignment shall not be terminated except by written instrument executed by both of the parties hereto, and only upon the prior written consent of the City and Agency. 9. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles. [End — Signature page follows] WHEREFOR, the parties hereto have executed this Assignment on the date first written above. ASSIGNOR: CP Development La Quinta, LLC A California limited liability company By: Oliphant Family Trust Its: Member By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: 0'.. Q , ( Richard R. Oliphant Its: President CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of ,7 If lr(l Y DA (A Y ) � On Jr_ �o( -LSP� before me, MR / ( fi e �U Date r a Here Insert N e and Tine of the OHi personally appeared who proved to me on the basis of satisfactory evidence to be the person(Awhose nameK is/ah subscribed to the within instrument and acknowledged to me that he/b&* executed the same in hisi`1*0ftk authorized capacity(iiX, and that by hisA*rtt* signatureXon the instrument the personal, or the entity upon behalf of which the personb4acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official Place Notary Seal Above OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer—Title(s): — ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHTTHUMBPRINT OF SIGNER Number of Pages: Signer's Net ❑ Individual ❑ Corporate Officer—Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: 02007Nabonal Notary Assocebm- 9350 De Soto Ave, P.O.B 2402•Chatsworth,CA 91313-2402-w NawnalNotaryorg Item 45907 Reorder Call Toll -Free 1-800-876-6627 Name of Notary: Commission #: Place of Execution: 1 i 0. 4 �e- PGC� I (.D-ltsq-8 Date Commission Expires: M 0-W eA 7, �9-D / Q Date: %/,9—? / O 9 Signature: Print Name: ACR 186P-AS4RE0 (Rev. 07/2005) ACKNOWLEDGMENT State of California County of Riverside ) On May 21, 2008 before me, Julie L. Cox, Notary Public (insert name and title of the officer) personally appeared Richard R. Oliphant who proved to me on the basis of satisfactory evidence to be the person(orwhose nameW is/afe— subscribed to the within instrument and acknowledged to me that he/sheAhay executed the same in his/hea4heir authorized capacity(iss); and that by his/her/their signature(s�,on the instrument the person(<or the entity upon behalf of which the person(p'acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. �+-+++e++� JULIE L. COX Commlealon ♦ 1730893 WITNESS my hand and official seal. Nw Riverside Couuntyr nia ] DivivConmeclesMarI2.20111 L Signature '4— 6�t (Seal) LARRY W. WARD COUNTY OF RIVERSIDE ASSESSOR -COUNTY CLERK -RECORDER NOTARY CLARITY rteoorda P.O. Bm 751 Riverside, CA 92502-0751 (951) 486-7000 v Avmdc wm Under the provisions of Government Code 27361.7, 1 certify under the penalty of perjury that the notary seal on the document to which this statement is attached reads as follows: Name of Notary: ((< CO X Commission M N13 U k % 3 Place of Execution: Date Commission Expires: Date: Signature: Print Name: a6-),or M,10(h ia, 20/1 ACR 186P-AS4RE0 (Rev. 072005) ACKNOWLEDGMENT State of California County of Riverside On May 21, 2008 before me, Julie L. Cox, Notary Public v (insert name and title of the officer) personally appeared Richard R. Oliphant who proved to me on the basis of satisfactory evidence to be the person(,s'rwhose namew isiare- subscribed to the within instrument and acknowledged to me that he/she/M4ey executed the same in his/he44k& authorized capacity(ies), and that by his/harAheir signature(.aj'on the instrument the person(s�, or the entity upon behalf of which the person(p f acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. JULIE L. COX Commiulon N 17306" WITNESS my hand and official seal. Notary Public • Colitomla Rlvergde County _ Signature 0-� 6/` (Seal) p Rft rder LARRY W. WARD P.O. Box P.O. oz 751 COUNTY OF RIVERSIDE Riverside. CA 92502-0751 ASSESSOR -COUNTY CLERK -RECORDER (951)486-7000 w .nver idea aon NOTARY CLARITY Under the provisions of Government Code 27361.7, 1 certify under the penalty of perjury that the notary seal on the document to which this statement is attached reads as follows: Name of Notary: Commission #: 173 o k -93 Place of Execution: 1)'74/OD CUIAUL Cjil aim 0f��o Date Commission Expires: M" /- / 2 , a Oi l Date: Signature: 7,) Print Name: � , C k • C Ox ACR 186P.AS4RE0(Rev. 07/2005) CONSENT By execution below, the Agency and City hereby consent to the foregoing assignment. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic By: IZ Its: Executive Director APPROVED AS TO FORM: RU AN & T�I?, LAPA � � vy gency tounsel CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the to o Californiao Its: City Manager APPROVED AS TO FORM: RU & T C R, LLP 66 Attorney STATE OF CALIFORNIA 1 CITY OF LA QUINTA 1 COUNTY OF RIVERSIDE ) On June 2, 2008 , before me, Regenia Hensley, Notary Public, personally appeared, THOMAS P. GENOVESE who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same in his authorized capacities, and that by his signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal REG A HENSLEY, Notary Publi Commission # 1521423 Expiration: October 23, 2008 (Seal) REGENIA HENSLEV +:r Comn!Wo—n N 1621423 NQto(Y-PtGbhc - GoUtwilo , M�emlde Co( _,.=AAj�omro.ExplresOct23.2005 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY PARCELS 1 AND 3 OF PARCEL MAP NO.31116 IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 212 AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS AS INSTRUMENT NO.2005-0262238, /:\0I7 PARCEL B OF LOT LINE ADJUSTMENT 2006-452 BEING PARCEL 8 AND A PORTION OF PARCEL 7 OF PARCEL MAP NO.31116 AS SHOWN BY MAP ON FILE IN BOOK 212 AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS RECORDED ON APRIL 19, 2006 AS INSTRUMENT NO.0280726. EXHIBIT "B" LEGAL DESCRIPTION OF RESTAURANT PROPERTY PARCEL 1 OF PARCEL MAP NO.31116, FILED ON APRIL 4, 2005, IN BOOK 212 OF PARCEL MAPS, AT PAGES 60-66, AS INSTRUMENT NO.2005-0262238. Recorded at the request of LandAmedea Developer Services Subdivision Department REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78495 Calle Tampico La Quinta, CA 92253 Attn: Citv Manaeer 4W(,447-55 E bCojT Fr,74eu)YA� (� F-ef- Pu fsUu(If A D ASSIGNMENT G,lf (nrn(m 4- Cc1e §a73 B r- DOC # 2008-030�1154 1 06/04/2008 08:00R Fee:48.00 Page 1 of 11 Recorded in Official Records^r,� County of Riverside Larry W. Ward Assessor, County Clerk & Recorder 11111III111111III11111111I1111III11111IF���� S R U PAGE SIZE DA I MISC LONG RFD COPY M A I L 1 466 1 426 1 PCORI NCORI SMF I NCHGFAXjN- UlhJf/_\/ F-7-77 UNI I AND ASSUMPTION AGREEMENT , /d This Assignment and Assumption Agreement ("Assignment") is entered into this ,'-), ?ray`of 2008 by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Assignor") and Huy Vu, an individual (referred to hereinafter as "Assignee") with reference to the following: A. WHEREAS, Assignor is the owner in fee simple of certain property located at the southeast corner of Miles Avenue and Washington Street in the City of La Quinta, California (the "Property"), which Property is more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference. B. WHEREAS, Assignor acquired the Property from the La Quinta Redevelopment Agency, a public body, corporate and politic ("Agency) pursuant to the terms of that certain Disposition and Development Agreement dated on or about December 18, 2003 ("Original DDA"), as amended on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, on or about August 23, 2007, and on or about March 19, 2008 (collectively the "DDA Amendments"). (The Original DDA, as modified by the DDA Amendments shall hereinafter be referred to as the "DDA".) C. WHEREAS, Concurrently with the execution of the Original DDA, the Agency and Assignor entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside on January 5, 2004 as Instrument No. 2004-0005256, and amended by that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004 and recorded in the Official Records of the County Recorder for the County of Riverside on November 8, 2004 as Instrument No. 2004-0885063, and by that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005 and recorded in the Official Records of the County Recorder for the County of Riverside on December 19, 2005 as instrument No. 2005-1045418, and by that certain Amendment No. 3 to the Development Agreement executed on or about May 6, 2008 and recorded in the Official Records of the County Recorder for the County of Riverside prior to or concurrent herewith (hereinafter collectively referred to as the "Development Agreement.") D. WHEREAS, pursuant to the terms of the DDA and the Development Agreement, the Property was to be used for a mixed use development project (the "Project"), including a restaurant ("Restaurant") to be built on that portion of the Property described on Exhibit "B" attached hereto and incorporated herein by this reference ("Restaurant Property"). E. WHEREAS, Assignor now desires to transfer the Restaurant Property to Assignee, and concurrently therewith, to transfer to Assignee all of Assignor's rights and responsibilities under the DDA and the Development Agreement to the extent that such rights and responsibilities relate to the Restaurant and Restaurant Property. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. As of the "Effective Date" (as that term is defined in Section 4 below) of this Assignment, Assignor hereby assigns to Assignee all of Assignor's rights and responsibilities under the terms of the DDA and the Development Agreement, but only to the extent that such rights and responsibilities relate to the Restaurant and/or Restaurant Property (collectively, the "Assigned Rights and Obligations".) 2. Assignee hereby accepts the foregoing assignment of the Assigned Rights and Obligations, and agrees to be bound by the terms of the DDA and the Development Agreement to the extent that such terms relate to the Restaurant and/or the Restaurant Property. 3. The parties hereto acknowledge and agree that Assignee shall not be responsible for any of the obligations of the DDA or the Development Agreement which arise from ownership of any portion of the Property prior to the Effective Date hereof, or which arise from any portion of the Property other than the Restaurant Property after the Effective Date hereof. As such, a default by Assignor under either the DDA or the Development Agreement prior to the Effective Date hereof, or with respect to any portion of the Property other than the Restaurant Property after the Effective Date hereof ("Assignor's Default") shall not be deemed a default by Assignee, and Assignor shall indemnify, defend and hold harmless Assignee from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignor's Default. A default by Assignee under either the DDA or the Development Agreement with respect to the Restaurant and/or Restaurant Property after the Effective Date hereof ("Assignee's Default") shall not be deemed a default by Assignor, and Assignee shall indemnify, defend and hold harmless Assignor from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignee's Default. 4. Nothing herein or in the DDA or DA constitutes a representation or warranty by the Agency that the construction of the Restaurant on the Restaurant Property is not subject to California Health and Safety Code Sections 33423 through 33426, or Chapter 1 of Part 7 of the California, Labor Code (commencing with section 1720), and all applicable statutory and regulatory provisions related thereto, and Assignee expressly waives any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to the Restaurant or the Restaurant Property. Assignee shall, indemnify, defend, and hold the Agency harmless, including litigation costs and reasonable attorneys' fees, from and against any and all claims pertaining to the payment of wages for the Restaurant and/or the Restaurant Property. 5. The City and the Agency shall be deemed to be third parry beneficiaries of the waiver and indemnity set forth in Section 4 and the warranty and representation set forth in Section 7. 6. This Assignment shall be deemed effective upon the last of the following events to occur: (a) conveyance of the Restaurant Property to Assignee as evidenced by the recording of the grant deed therefor in the Official Records of the County Recorder for the County of Riverside, California, and (b) the written consent to this Assignment by the City with respect to the Assigned Rights and Obligations arising under the Development Agreement, and by the Agency with respect to the Assigned Rights and Obligations arising under the DDA (herein referred to as the "Effective Date"). 7. The parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the parry represented. 8. The terms of this Assignment shall not be amended and this Assignment shall not be terminated except by written instrument executed by both of the parties hereto, and only upon the prior written consent of the City and Agency. 9. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles. (End — Signature page follows] WHEREFOR, the parties hereto have executed -this Assignment on the date first written above. ASSIGNOR: CP Development La Quinta, LLC A California limited liability company By: Oliphant Family Trust Its: Member By: 1st t `C - L�fitf�� Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager c By: _& 0 (1 Richard R. Oliphant Its: President State of Cali ornia . ) County of jaW4 On mf� a It aLlg before me, ._/ It �i � L �`� Notary Public, personally appeared who proved to me on the basis of satisfactory evi Were- subscribed to the within instrument, and executed the same in his/herAheir authorized insert name and title of the officer) dence to be the persoi Jks)-whose narnq(o - acknowledged to me that he"@AhW capacity f &i)i, and that by hisF wAkeir signature(W on the instrument the person(s'j, or the entity upon behalf of which the person(gTacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. ------------- WITNESS my hand and official seal. ARM L. cox CommWlon • 1760696 No" Pue• CONNnla Si ature 0e Rtieeta� Cou* gn �' i � *CM ► ISM 1 11 (seal) State of Califqrnia ) County of /n� OnL ( 2), .2 V before me, �Yu h 1 L ezy- Notary Public, //� ere in amg and title o the officer) personally anneared i U"I6t d (y [� bhA h4 who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)- is/arc subscribed to the within instrument, and acknowledged to me that he/ske4hcy executed the same in his/her/their authorized capacity4es), and that by his/heri4heir- signature(*) on the instrument the person(,§), or the entity upon behalf of which the person(*) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. XSignature 4G JUU6 L. Cox tem CommbW*n/1730693 1Wib 400 "O s a Countonra mm Ie�Mor1Z 2011 (seal) CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of Caa 1 County of CVO �cLl> Ji On 5-,:��2 — r,q before me, l� f Date H� e Insert Name nd Title of the Officer personally appeared�1� V ��— M1HWl►V ti0� can.narbn s 1s70649 caurair MM Camr. 6pYss Mlgr 27.201 who proved to me on the basis of satisfactory evidence to be the personj whose namg4 is/e4e subscribed to the within instrument and acknowledged to me that he/ * executed the same in hi her authorized capacity(A), ), and that by his it signature* on the instrument the person, or the entity upon behalf of which the personoacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS Smmyyhhand and official seal. Signatufe Ag fJ Place Notary Seal Above Signature of Notary Pc OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(lies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer —Title(s): — 1-1 Partner —❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHTTHUMBPRINT OF SIGNER Number of Pages: Signer's Net ❑ Individual ❑ Corporate Officer—Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: — RIGHT THUMBPRINT OF SIGNER 02007National NotaryAssoaahon•9350 De Soto Ave,PO.Boz2402•ChaoworN,CA 91313-2402•wilm NationalNotaryorg Item»5907 Reorder.Call Toll-Free1-804876-6827 CONSENT By execution below, the Agency and City hereby consent to the foregoing assignment. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Its: Executive Director La C��;n-l-a 2ed�eu� Ic�mer�-f� jul� 1g93 CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State of Californi�a//J By Its: City Manager Ck lc� �Ulriqc�' ggyY © F . STATE OF CALIFORNIA 1 CITY OF LA QUINTA ) COUNTY OF RIVERSIDE ) On June 2, 2008 , before me, Regenia Hensley, Notary Public, personally appeared, THOMAS P. GENOVESE who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same in his authorized capacities, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) RE IA HENSLEY, Notary Public Commission # 1521423 Expiration: October 23, 2008 Age,` T . - • 11: EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY PARCELS 1 AND 3 OF PARCEL MAP NO.31116 IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 212 AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS AS INSTRUMENT NO.2005-0262238. WE PARCEL B OF LOT LINE ADJUSTMENT 2006-452 BEING PARCEL 8 AND A PORTION OF PARCEL 7 OF PARCEL MAP NO.31116 AS SHOWN BY MAP ON FILE IN BOOK 212 AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS RECORDED ON APRIL 19, 2006 AS INSTRUMENT NO.0280726. EXHIBIT `B" LEGAL DESCRIPTION OF RESTAURANT PROPERTY PARCEL 1 OF PARCEL MAP NO.31116, FILED ON APRIL 4, 2005, IN BOOK 212 OF PARCEL MAPS, AT PAGES 60-66, AS INSTRUMENT NO.2005-0262238. GOVERNMENT CODE 27U 1.7 I certify under penalty of perjury that the notary seal on the document to which this statement is attached reads as follows: Blame of Notary Notary Identification Number Vender Identification Number County Where Bond Is Filed Date Commission Exp Place of Execution DATE:/ :,: SPt Inc. as agent /i---- Signature GOVtRNIIII N1f rain 2issa.7 I certify under penalty of perjury that the notary seal on the document to which this statement is attached reads as follows: Name of Notary Notary Identification Number Vender Identification Number County Where Bond Is Filed Date Commission Exp Place of Execution DATE: o1q, SPL, Inc. as agent Signature Revised 9/6/06 R I DR 002 2 r Notere Scil Dedmauon RI[I],doe RECORDING REQUESTED BY: NORTH AMERICAN TITLE CO. REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 DOC # 2008-0527098 09/26/2008 08:00A Fee:96.00 Page 1 of 27 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder p\ 11111111111111111111111111111111111111111111111111111111111111 V", R I U I PAGE SIZE I DA I MISC I LONG RFD 465 I 426 IPCORINCORI SMF IT: I CTY I UNI I67-Z Pursuant to Government Code § 27383 97 ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement ( "Assignment") is entered into this 1A I day of September, 2008 by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("CP") and DOLPHIN LA QUINTA, LLC, a California limited liability company ("Dolphin") with reference to the following: A. WHEREAS, Dolphin is the owner in fee simple of certain real property located at the southeast corner of Miles Avenue and Washington Street in the City of La Quinta, California, as more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference (the "Dolphin Proper ri" ). B. WHEREAS, CP is the owner in fee simple of certain real property located adjacent to the Dolphin Property, as more particularly described on Exhibit "B" attached hereto and incorporated herein by this reference (the "CP Properri"). For reference purposes, a diagram from Parcel Map Number 31116 referred to in Exhibits A and B which delineates the boundaries of the Dolphin Property and the CP Property is attached hereto and incorporated herein as Exhibit "C" (identified thereon as Parcel "2" and Parcel "3" respectively). C. WHEREAS, CP acquired the CP Property, the Dolphin Property (presently owned by Dolphin), and certain other adjacent real property from the La Quinta Redevelopment Agency, a public body, corporate and politic ("Agency") pursuant to the terms of that certain Disposition and Development Agreement dated on or about December 18, 2003, and as further amended over time through a series of six amendments on or about the following dates: October 28, 2004; December 7, 2004; November 2, 2005; October 20, 2006; August 23, 2007; March 19, 2008 (hereinafter collectively referred to as the "DDA"). D. WHEREAS, on December 18, 2003, the City of La Quinta ("City") and CP entered into that certain Development Agreement which was recorded in the Official Records of the County Recorder for the County of Riverside on January 5, 2004 as Instrument No. 2004-0005256, and amended by that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004 and recorded in the Official Records of the County Recorder for the County of Riverside on November 8, 2004 as Instrument No. 2004-0885063, by that certain Amendment No. 2 to 882/015610-0107 945032 04 e09/05/08 -1- Development Agreement executed on or about November 17, 2005 and recorded in the Official Records of the County Recorder for the County of Riverside on December 19, 2005 as Instrument No. 2005-1045418, and by that certain Amendment No. 3 to Development Agreement executed on or about May 6, 2008 and recorded in the Official Records of the County Recorder for the County of Riverside on June 4, 2008 as Instrument No. 2008-0303530 (hereinafter collectively referred to as the "DA"). E. WHEREAS, subsequent to CP's purchase from the Agency of the Dolphin Property, CP sold the Dolphin Property to Lennar Homes of California ("Lennar") pursuant to an assignment and assumption agreement consented to by the Agency and the City. Pursuant to the DDA, the DA, and the entitlements previously issued by the City, a total of one hundred thirty-two (132) condominium/casitas units are required to be developed on the Dolphin Property (the "Dolphin Property Casitas Development"). As of the Effective Date, on the Dolphin Property forty (40) condominium/casitas units have been constructed by Lennar and have received certificates of occupancy by the City, and another four (4) condominium/casitas units have been partially constructed by Lennar. F. WHEREAS, subsequent to Lennar's purchase from CP of the Dolphin Property, Lennar sold the Dolphin Property to Dolphin and transferred all of Lennar's rights and obligations with respect to the Dolphin Property and the Dolphin Property Casitas Development to Dolphin pursuant to an assignment and assumption agreement consented to by the Agency and the City. In connection with Dolphin's acquisition of the Dolphin Property from Lennar, Dolphin deposited Four Hundred Thousand Dollars ($400,000.00) ("Performance Deposit") into an escrow pursuant to an Agreement for Deposit of Funds dated May 22, 2008, by and among the Agency, the City, Lennar, and Dolphin (the "Deposit Agreement"). Under the Deposit Agreement at paragraph La.ii, the Performance Deposit shall be disbursed to Dolphin if prior to September 30, 2008, CP and Dolphin close an escrow providing for the conveyance to CP of the "Transfer Parcel" (as defined in Recital H below) and CP conveying to Dolphin the CP Property. G. WHEREAS, pursuant to the DDA, and DA, and the entitlements previously issued by the City, a total of thirty-two (32) condominium/casitas units are required to be developed on the CP Property (the "CP Property Casitas Development'). As of the Effective Date, no condominium/casitas units have been developed on the CP Property. H. WHEREAS, Dolphin and CP have entered into mutual exchange agreements both originally dated as of June 23, 2008, and both subsequently amended on July 28, 2008, and August 7, 2008 (collectively the "Exchange Agreement") pursuant to which Dolphin would transfer to CP a portion of the Dolphin Property (the "Transfer Parcel"), and CP would transfer to Dolphin the entire CP Property. As a closing condition to the Exchange Agreement, Dolphin is processing through the City, Lot Line Adjustment No. 2008-495 (the "Lot Line Adjustment") the boundaries of which are more fully detailed on the proposed certificate for the Lot Line Adjustment attached hereto and incorporated herein as Exhibit "D". The Lot Line Adjustment would have the effect of combining all portions of the Dolphin Property (other than the Transfer Parcel) 182/015610-0107 145032 04 09/05/08 -2- with the CP Property as a single parcel (identified on Exhibit D as Parcel "B") and establishing the Transfer Parcel as a new parcel (identified on Exhibit D as Parcel "A"). Following the City's approval of the Lot Line Adjustment, legal descriptions for the Transfer Parcel (i.e., Parcel "A" on Exhibit D) and the combined Dolphin Property (excepting the Transfer Parcel) with the CP Property (i.e., Parcel "B" on Exhibit D) shall be substantially in the form reflected on attached and incorporated Exhibit "E", respectively. I. WHEREAS, the portion of the Dolphin Property Casitas Development required to be constructed on the Transfer Parcel (the "Transfer Parcel Casitas Development") includes the required construction of: (i) sixteen (16) condominium/casitas units, (ii) parking, and (iii) associated amenities. As of the Effective Date, on the Transfer Parcel four (4) condominium/casitas units have been almost completely constructed by Lennar but none of such units have been issued certificates of occupancy, and construction of the required parking and associated amenities has not yet commenced. J. WHEREAS, upon the closing under the Exchange Agreement (i) Dolphin desires to transfer and assign to CP the Transfer Parcel, and concurrently therewith, to transfer and assign to CP all of Dolphin's rights and responsibilities under the DDA and the DA with respect to the Transfer Parcel and the Transfer Parcel Casitas Development; and (ii) CP desires to transfer and assign to Dolphin the CP Property, and concurrently therewith, to transfer and assign to Dolphin all of CP's rights and responsibilities under the DDA and the DA with respect to the CP Property and the CP Property Casitas Development. K. WHEREAS, the Agency and the City require Dolphin and CP execute this Assignment to memorialize acknowledgement of the rights and development obligations I f the Dolphin Property and the CP Property as further detailed in the DDA and DA and to provide for the assumption of such obligations. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Dolphin Transfer to CP. a. Dolphin hereby assigns to CP all of Dolphin's rights and responsibilities under the terms of the DDA and the DA with respect to the Transfer Parcel and the Transfer Parcel Casitas Development from and after the "Effective Date" (as that term is defined in Section 4 below) of this Assignment. b. CP hereby accepts the foregoing assignment and agrees to be bound by the terms of the DDA and the DA with respect to the Transfer Parcel and the Transfer Parcel Casitas Development from and after the Effective Date. 882/015610-0107 945032 04 a09/05/08 -3- c. The parties hereto acknowledge and agree that CP shall not be responsible for any of the obligations of the DDA or the DA which arise from ownership of the Transfer Parcel existing prior to the Effective Date hereof. As such, a default by Dolphin under either the DDA or the DA with respect to the Transfer Parcel prior to the Effective Date hereof shall not be deemed a default by CP, and Dolphin shall indemnify, defend and hold harmless CP from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from any such default by Dolphin. A default by CP under either the DDA or the DA with respect to the Transfer Parcel after the Effective Date hereof shall not be deemed a default by Dolphin, and CP shall indemnify, defend and hold harmless Dolphin from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from any such default by CP. 2. CP Transfer to Dolphin. a. CP hereby assigns to Dolphin all of CP's rights and responsibilities under the terms of the DDA and the DA with respect to the CP Property and the CP Property Casitas Development from and after the Effective Date of this Assignment. b. Dolphin hereby accepts the foregoing assignment and agrees to be bound by the terms of the DDA and the DA with respect to the CP Property and the CP Property Casitas Development from and after the Effective Date. c. The parties hereto acknowledge and agree that Dolphin shall not be responsible for any of the obligations of the DDA or the DA which arise from ownership of the CP Property existing prior to the Effective Date hereof. As such, a default by CP under either the DDA or the DA with respect to the CP Property prior to the Effective Date hereof shall not be deemed a default by Dolphin, and CP shall indemnify, defend and hold harmless Dolphin from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from any such default by CP. A default by Dolphin under either the DDA or the DA with respect to the CP Property after the Effective Date hereof shall not be deemed a default by CP, and Dolphin shall indemnify, defend and hold harmless CP from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from any such default by Dolphin. 3. Requirement for Amendments to DDA DA and Center Point Specific Plan. CP acknowledges and agrees that prior to CP commencing any development on the Transfer Parcel CP shall be required to process through the City amendments to the DDA, DA, and Center Point Specific Plan (SP2001-055) that permit the development contemplated on the Transfer Parcel by CP. Dolphin acknowledges 882/01561M107 945032 04.09/05/08 _ e 4- and agrees that prior to Dolphin commencing any development on the CP Property Dolphin shall be required to process through the City amendments to the DDA, DA, and Center Point Specific Plan (SP2001-055) that permit the development contemplated on the CP Property by Dolphin. 4. Effective Date. This Assignment shall be deemed effective (the "Effective Date") upon the last of the following events to occur: (a) the written consent to this Assignment by the City with respect to the assigned rights and obligations arising under the DA, (b) the written consent to this Assignment by the Agency with respect to the assigned rights and obligations arising under the DDA, (c) conveyance of the CP Property to Dolphin and the Transfer Parcel to CP at the closing under the Exchange Agreement, as evidenced by the recording of the grant deeds therefor in the Official Records of the County Recorder for the County of Riverside, California and (d) the recordation of the Lot Line Adjustment in the Official Records of the County of Riverside. 5. Recording of Documents. This Assignment and four (4) other documents are to be recorded in the Official Records of the County Recorder for the County of Riverside, California at the closing as further detailed in the Exchange Agreement. The order and description of documents to be recorded pursuant to the Exchange Agreement are: (a) first, a grant deed from CP to Dolphin conveying the CP Property; (b) second, the Lot Line Adjustment; (c) third, a grant deed (e.g., `perfecting' deed) from Dolphin to Dolphin for the entire property covered by the Lot Line Adjustment (inserting the new lot boundaries into the chain of title); (d) fourth, a grant deed from Dolphin to CP conveying the Transfer Parcel; and (e) fifth, this Assignment. Upon completion of steps one through four [(a)-(d)] herein, escrow will be in a position to disburse the Performance Deposit to Dolphin. Notwithstanding the foregoing, in the event that the fully executed and notarized deeds described herein (collectively "Deeds") are tendered to escrow prior to September 30, 2008, to be held in trust for recording pursuant to the Exchange Agreement, but escrow is not in a position to close prior to September 30, 2008 due to either (i) a cause that is not the fault of Dolphin and is beyond Dolphin's control (such as a backlog or other conditions experienced by escrow or the County Recorder, but not including Dolphin's or CP's inability or unwillingness to proceed with the closing), or (ii) the City has delayed the finalization of the Lot Line Adjustment due to no fault of Dolphin, then escrow shall be permitted to disburse the Performance Deposit to Dolphin following recording of the Deeds. 6. Corporate Authority. Except as otherwise described in paragraph 3 above, the parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented. 892/015610-0107 _ 945032.04 a09/05/08 _5 Governine Law. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles. 8. Counterparts. This Assignment may be executed in counterparts, and counterpart signature pages may be combined into one or more fully executed original for recording purposes. [Signature pages follow] 882/015610-0107 945032 04 a09/05/08 _6. WHEREFOR, the parties hereto have executed this Assignment on the date first written above. "CP„ CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member DOCUMENT SIGNED IN COUNTERPARTS By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager M Its "Dolphin" Richard R. Oliphant President DOLPHIN LA QUINTA, L a California limited li bil' By: Dolphin Part s, Inc corporation Its: Manager By: Kevin S. tts Its: Presi t 1821015610-0107 _ 145032 04 a09/05/08 _7 State of California ) County of ) On before me, Notary Public, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) State of California ) County of ) On 9D , before me, ICnA Notary Public, ` (here insert name and title of the officer) personally appeared 67� yam I i w9n who proved to me on the basis of satisfactory evidence to be the personpa whose name is/are--subscribed to the within instrument, and acknowledged to me that he%heLthey executed the same in his4wx4heir authorized capacity(ie* and that by his/wn4heic_ signatureo� on the instrument the person or the entity upon behalf of which the person# acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. INLM MANY QPAIRM WITNESS my hand and official seal. Coewnbnon • 117 Signature /�J`� t� f�.�d)Yli �Dae7A3011 (seal) 882/015610-0107 _ 945032 04 a09/05/08 _g WHEREFOR, the parties hereto have executed this Assignment on the date first written above. «CP>, CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: iphant Family Its: Me er go Trustee Oliphant By: Oliphant Enterprises, Inc. Its: Manager f By: ""m �- Richard R. Oliphant Its: President "Dolphin" DOLPHIN LA QUINTA, LLC, a California limited liability company By: Dolphin Partners, Inc., a California corporation Its: Manager us DOCUMENT SIGNED IN COUNTERPARTS Kevin S. Pitts Its: President 88VOI5610-0107 945032 04 a09/05/08 State of California County of -JP/s% 2 On BSc pf- 1, a009' , before me, JO; E L• Cox Notary Public, (here insert n e and title of the officer) personally appeared 'R• C{I a ral � a/ e �s=- who proved to me on the basis of satisfactory evidence to be the person*whose nameK is/,m& subscribed to the within instrument, and acknowledged to me that helshoAhey executed the same in his/4efAheir authorized capacity(ies), and that by his/kermleir signature(s)• on the instrument the person*, or the entity upon behalf of which the person(a)•acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. JULIE 1. cox WITNESS my hand and official seal. commlwion • 1730893 WON Public • CallrorMo Rivenlufe County COtitR hbl 2D11 Signature (seal) State of California ) County of ) On before me, Notary Public, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) 882/015610-0107 945032 04 a09/05/08 CONSENT By execution below, the Agency and City hereby (i) consent to the foregoing Assignment; (ii) release CP from any further obligations under the DA or DDA with respect to the CP Property and the CP Casitas Development; and (iii) release Dolphin from any further obligations under the DA or DDA with respect to the Transfer Parcel and the Transfer Parcel Casitas Development. Further, upon recordation in the Official Records of the County of Orange of (a) the Deeds, and (b) the Lot Line Adjustment, the City and Agency hereby authorize the disbursement of the Performance Deposit to Dolphin., Notwithstanding the foregoing, in the event that the fully executed and notarized Deeds are tendered to escrow prior to September 30, 2008, to be held in trust for recording pursuant to the Exchange Agreement, but escrow is not in a position to close prior to September 30, 2008 due to either (1) a cause that is not the fault of Dolphin and is beyond Dolphin's control (such as a backlog or other conditions experienced by escrow or the County Recorder, but not including Dolphin's or CP's inability or unwillingness to proceed with the closing), or (2) the City has delayed the finalization of the Lot Line Adjustment due to no fault of Dolphin, then escrow shall be permitted to disburse the Performance Deposit to Dolphin following recording of the Deeds, even if such recording takes place on or after September 30, 2008. Agency and City agree to provide any additional authorizations or instructions that may be necessary to facilitate such disbursement. LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and BYliti�`� Executive Director APPROVED AS TO FORM: RnN & C R, LLP Agency Counsel a I/ 182/015610-0107 14503204 a09/05/08 CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the Stat;e �o.Calilomha Its: City Manager T: City C;Icrke��7 APPROVED AS TO FORM: RUT N & T C gR, �P T�g WitAtto ey U2/015610-0107 945032 04 a09/05/08 T( -4 A•l r�v EXHIBIT "A" LEGAL DESCRIPTION OF THE DOLPHIN PROPERTY THE LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF RIVERSIDE, DESCRIBED AS FOLLOWS: PARCEL 2 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN ON THE PARCEL MAP FILED ON APRIL 4, 2005, IN BOOK 212 OF PARCEL MAPS, AT PAGES 60-66, AS INSTRUMENT NO. 2005-0262238, IN THE OFFICE OF THE COUNTY RECORDER OF RIVERSIDE COUNTY. 882/015610-0107 -11- 945032 04 a09/05/08 EXHIBIT `B" LEGAL DESCRIPTION OF CP PROPERTY THE LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF RIVERSIDE, DESCRIBED AS FOLLOWS: PARCEL 3 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN ON THE PARCEL MAP FILED ON APRIL 4, 2005, IN BOOK 212 OF PARCEL MAPS, AT PAGES 60-66, AS INSTRUMENT NO. 2005-0262238, IN THE OFFICE OF THE COUNTY RECORDER OF RIVERSIDE COUNTY. 882/015610-0109 -12- 945032,04 a09/05/O8 EXHIBIT "C" BOUNDARY DIAGRAM FROM PARCEL MAP NO.31116 (PAGE 63 OF PARCEL MAP. NO. 31116) [See following Page] 882/015610-0107 -13- 945032 04 a09/05/O8 w wA � 1 Under the provisions of Government Code 27361.7, 1 certify under the penalty of perjury that the following is a true copy of illegible wording found in the attached document: See aCIA Riverside Place of Execution : SPL, Inc. as agent Sig a e Date: l 1 016 l6 6 Revised 9/6/06 R.1 DR012 Penal[ Pe RI ) E \ �g� /| ! w tCL/¥ §�|;r |�|\ |�\ | d Z; l �§ •� . !� § A a \§ |! ( \ Ll LLI )(|q e . . §■ . .� ■ 9| , ,*AM , •; ..• ... .... .. ...... (�mm�wpm• mrmmm:q�w #O@qƒ g)N � ; U G,1 wmm� (m//m mmm � • \ � — @ '.� ^ ✓ f_�_aar.DOC__5,262238 Page 7of_Only O_:_exa_;_ EXHIBIT "D" EXHIBIT `B'- CERTIFICATE OF LOT LINE ADJUSTMENT NO. 2008-495 CITY OF LA QUINTA, COUNTY OF RIVERSIDE, CALIFORNIA [See following pages] 88e/015e1am07 15- 945032 04.09/05/08 882/015610-0107 -16- 945032 04 09105/08 |q�;��=�m�■.#,-#mr;- `®;a; ~ ~ � ,...,,,. ,���-• k ((k)[§((�§�/(( EXHIBIT "E" LEGAL DESCRIPTIONS FOR NEW PARCELS "A" AND `B" (EXHIBIT `A' - LOT LINE ADJUSTMENT NO. 2008-495) CITY OF LA QUINTA, COUNTY OF RIVERSIDE, CALIFORNIA [See following pages] 882/015610-0107 - I g- 945032 04.09/05/08 EXHIBIT "A % LOT LINE ADJUSTMENT NO. 2008 - 495 PARCEL "A": IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF PARCEL 2 OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, OFFICIAL RECORDS OF SAID RIVERSIDE COUNTY, ALSO BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF SAID PARCEL 2; THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 2 THE FOLLOWING THREE (3) COURSES: (1) THENCE NORTH 88-08'53" EAST A DISTANCE OF 203.25 FEET; (2) THENCE NORTH 89'31'23" EAST A DISTANCE OF 124.81 FEET; (3) THENCE NORTH 89-33'22" EAST A DISTANCE OF 220.92 FEET; THENCE LEAVING SAID NORTHERLY LINE SOUTH 19'25'33" EAST A DISTANCE OF 64.30 FEET; THENCE SOUTH 14'33'39" WEST A DISTANCE OF 67.86 FEET; THENCE NORTH 75'26'21" WEST A DISTANCE OF 24.01 FEET; THENCE SOUTH 14'33'39" WEST A DISTANCE OF 42.63 FEET TO AN ANGLE POINT ON THE WESTERLY LINE OF SAID PARCEL 2, ALSO BEING THE NORTHEAST CORNER OF PARCEL 4 OF SAID PARCEL MAP NO.31116; THENCE ALONG SAID WESTERLY LINE OF PARCEL 2 THE FOLLOWING SIX (6) COURSES: (1) THENCE NORTH 78'2V24" WEST A DISTANCE OF 179.86 FEET; (2) THENCE SOUTH 71-26'37" WEST A DISTANCE OF 51.11 FEET; (3) THENCE SOUTH 57'38'20" WEST A DISTANCE OF 203.09 FEET; (4) THENCE SOUTH 53-12'25" WEST A DISTANCE OF 88.76 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 2,114.98 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 53044'23" EAST; PAGE 1 OF 5 882/015610-0107 -19- 945032 04 a09/05/08 EXHIBIT "A" LOT LINE ADJUSTMENT NO. 2008 - 495 (5) THENCE ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 02014'19", AN ARC DISTANCE OF 82.64 FEET; (6) THENCE NON -TANGENT TO SAID CURVE NORTH 00"26'38" WEST A DISTANCE OF 228.66 FEET TO THE POINT OF BEGINNING. SUBJECT TO EXISTING EASEMENTS, COVENANTS, RIGHTS AND RIGHTS - OF -WAY OF RECORD. CONTAINING 102,610 SQUARE FEET P��A OR 2.353 ACRES, MORE OR LESS. �pN„�` g, r %e.p eoi8010e I Z�OF CAS& PAGE 2 OF 5 882/015610-0107 -20_ 945032 04 a09/05/08 EXHIBIT "A" LOT LINE ADJUSTMENT NO. 2008 - 495 PARCEL "B": IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF PARCEL 2 TOGETHER WITH PARCEL 3 OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, OFFICIAL RECORDS OF SAID RIVERSIDE COUNTY, ALSO BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS A WHOLE AS FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID PARCEL 2; THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 2 THE FOLLOWING THREE (3) COURSES: (1) THENCE NORTH 88"08'53" EAST A DISTANCE OF 203.25 FEET; (2) THENCE NORTH 89-31'23- EAST A DISTANCE OF 124.81 FEET; (3)THENCE NORTH 89"33'22" EAST A DISTANCE OF 220.92 FEET TO THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID NORTHERLY LINE SOUTH 19*25133" EAST A DISTANCE OF 64.30 FEET; THENCE SOUTH 14"33'39" WEST A DISTANCE OF 67.86 FEET; THENCE NORTH 75"26'21" WEST A DISTANCE OF 24.01 FEET; THENCE SOUTH 14"33'39" WEST A DISTANCE OF 42.63 FEET TO AN ANGLE POINT ON THE WESTERLY LINE OF SAID PARCEL 2, ALSO BEING THE NORTHEAST CORNER OF PARCEL 4 OF SAID PARCEL MAP NO. 31116; THENCE ALONG SAID WESTERLY LINE OF PARCEL 2 THE FOLLOWING SIX (6) COURSES: (1) THENCE SOUTH 11°33'36" WEST A DISTANCE OF 149.37 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 139.50 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 20"15'25" WEST; (2) THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 64"48'59", AN ARC DISTANCE OF 157.81 FEET; PAGE 3 OF 5 982/015610-0107 -2I - 945032 04 "09105108 EXHIBIT "A" LOT LINE ADJUSTMENT NO. 2008.495 (3) THENCE SOUTH 27"44'50" WEST A DISTANCE OF 60.73 FEET; (4) THENCE SOUTH 62-15-10' EAST A DISTANCE OF 107.46 FEET; (5) THENCE NORTH 60°31'08" EAST A DISTANCE OF 43.96 FEET; (6) THENCE SOUTH 29"40'27" EAST A DISTANCE OF 36.75 FEET TO THE SOUTHERLY LINE OF SAID PARCEL 2 AND THE BEGINNING OF A NON - TANGENT CURVE, CONCAVE SOUTHERLY, HAVING A RADIUS OF 890.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 26035'27" WEST; THENCE LEAVING SAID WESTERLY LINE AND ALONG THE SOUTHERLY AND SOUTHEASTERLY LINES OF SAID PARCELS 2 AND 3 THE FOLLOWING FOUR (4) COURSES: (1) THENCE EASTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 19"00'25", AN ARC DISTANCE OF 295.24 FEET TO THE BEGINNING OF A REVERSE CURVE, CONCAVE NORTHERLY, HAVING A RADIUS OF 760.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 07035'02" EAST; (2) THENCE EASTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 17'36'50", AN ARC DISTANCE OF 233.64 FEET TO THE BEGINNING OF A COMPOUND CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 360.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 25°11'52" EAST; (3) THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 65`14'46", AN ARC DISTANCE OF 409.95 FEET; (4) THENCE NORTH 00"26'38" WEST A DISTANCE OF 90.92 FEET TO A POINT IN THE NORTHERLY LINE OF SAID PARCEL 3; THENCE LEAVING SAID SOUTHEASTERLY LINE NORTH 45"26'38" WEST ALONG SAID NORTHERLY LINE A DISTANCE OF 4.24 FEET; THENCE CONTINUING ALONG SAID NORTHERLY LINES OF PARCEL 3 AND PARCEL 2 SOUTH 89°33'22" WEST A DISTANCE OF 733.35 FEET TO THE TRUE POINT OF BEGINNING. PAGE 4 OF 5 882/015610-0107 -22- 945032 04 "09/05/08 EXHIBIT "A" LOT LINE ADJUSTMENT NO. 2008 - 495 SUBJECT TO EXISTING EASEMENTS, COVENANTS, RIGHTS AND RIGHTS - OF -WAY OF RECORD. CONTAINING 367,958 SQUARE FEET oNP� LAAO OR 8.447 ACRES, MORE OR LESS. �� R :% • , n PAGE 5 OF 5 882/015610-0107 945032 04 a09/05/08 -23- RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 DOC # 2008-0577490 20/30/2008 08:00R Fee:NC Page 1 of 10 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk d Recorder 11111111111111III1111111111111111IIIIIIIII11111III 1111 S R U PAGE SIZE I DA I MISC ILONGAMO M A L 465 426 PCOR NCOR SMF T. CTY Space Above This Line for Recorder's Use (Exempt from Recording Fee per Gov't Code § 27383) AMENDMENT No.1 TO AMENDED AND RESTATED OPTION AGREEMENT THIS AMENDMENT NO. 1 TO AMENDED AND RESTAT D OPTION AGREEMENT ("Amendment No. 1") is made and entered into as of Ac 2008 ("Effective Date") by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer"). RECITALS: A. Developer owns fee title to that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Property"). The Property is legally described in Exhibit "A", which is attached hereto and incorporated herein by this reference. B. On or about December 18, 2003, the Agency and Developer entered into that certain Disposition and Development Agreement ("Original DDA") pursuant to which Agency sold to Developer the Property and certain adjacent real property (the "Adjacent Property"), and Developer agreed to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid - price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to qualified buyers at an affordable sales price (the "Project"). The Adjacent Property is legally described in Exhibit `B", which is attached hereto and incorporated herein by this reference. C. The Original DDA has been amended over time through a series of six (6) amendments on or about the following dates: October 28, 2004; December 7, 2004; November 2, 2005; October 20, 2006; August 23, 2007; March 19, 2008 (hereinafter collectively referred to as the "DDA Amendments"). The Original DDA, as amended by the DDA Amendments, is referred to hereinafter as the "DDA." D. Pursuant to the DDA, on or about October 20, 2006, Agency and Developer entered into that certain Amended and Restated Option Agreement which was recorded on October 24, 2006, as Instrument No. 2006-0780202, in the Official Records of the County of Riverside (the "Option Agreement"). oil 882/015610-0085 95261301 a10/21/08 E. The Option Agreement grants to Agency an option to repurchase the Property or Adjacent Property, or portion thereof, from Developer or Developer's successors -in -interest, if (i) Developer fails to commence, continuously proceed with, or complete construction of the Project or portion thereof within certain specified time frames, or (ii) Developer transfers the Property or Adjacent Property, or portion thereof, in violation of the terms of the DDA, all as further described therein. Developer has sold or transferred the Adjacent Property to other developer entities, with the consent of the Agency. F. The Option Agreement requires the Developer to complete the "Residential Development" (as that term is defined in the DDA) within eighteen (18) months after the City's issuance of final building permits for the Residential Development, and under the DDA, such final building permits were required to have been obtained by February 3, 2007. The Completion Deadline for the Residential Development pursuant to the Option Agreement is thus August 3, 2008. G. Pursuant to the Option Agreement, the Agency may exercise Repurchase Option II with respect to the real property on which the Residential Development is required to be constructed (the "Residential Parcel") for a period of ninety (90) days commencing on August 3, 2008. The Residential Parcel is legally described in Exhibit "C", which is attached hereto and incorporated herein by this reference. H. Developer and Agency now wish to extend the Completion Deadline in the Option Agreement to enable Developer to explore development options for the Residential Parcel that differ from the requirements of the DDA, including the possibility of developing thereon an assisted living facility. Unless specifically defined herein, all terms used herein shall have the meanings ascribed thereto in the Option Agreement. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. With respect to the Property, the Option Agreement is hereby amended to revise the Completion Deadline for the Residential Development to August 3, 2009. 2. Except as otherwise expressly provided in this Amendment No. 1, all of the terms and conditions of the Option Agreement shall remain in full force and effect. 3. In the event of any action between Agency and Developer seeking enforcement of any of the terms and conditions to this Amendment No. 1, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 4. This Amendment No. 1 shall be construed according to its fair meaning and as if prepared by both parties hereto. 882/015610-0085 95261S.OIe10/21/OB IIIIIII IIIIIII III ME111111111111111111111111111111 IN10/30/20020000R 2008-0577499 5. This Amendment No. 1 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 1. Service of process on Agency shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 6. Time is of the essence of this Amendment No. 1 and of each and every term and provision hereof 7. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by both Agency and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 8. This Amendment No. 1 may be executed in counterparts, each of which, when this Amendment No. 1 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. [Signatures on next page] I IIIIII IIIIII III IIIIII IIIII IIIII IIIIII III IIIII IIII IIII 10 3008 00£7080900R 982/015610-0085 952615 01 .10/21/08 IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read this Amendment No. 1, understands it, and hereby executes this Amendment No. I to be effective as of the day and year first written above. Date: 0g-rcw-.E;2 a3 2008 Date: 7-:3, , 2008 /O /a 8 .2008 J. APPROVED AS TO FORM: RUA.a Ane R, P By: nson,Zc2y Counsel "Developer" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By:� Richar Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager %� By:�. �< J v _ (14—� Richard Oliphant Its: President "Agency" LA QUINTA REDEVELOPMENT AGENCY, appu bo y, corporate d a tltic By:,�rr� c,N' Executive Director 11111111111111111111111111111111111111111111111111111111a200a 0f ie90eA 882/015610-0095 4_ 952615.01 a10/21/O8 State of California ) County of---) I? � On o C r a3, 2oog' before me, �` L'� L' �D X Notary Public, (here insert name and title of the officer) personally appeared _ �' c%a. cf ® /' -f who proved to me on the basis of satisfactory evidence to be the person(q whose name(sfi is/a" subscribed to the within instrument, and acknowledged to me that he/she&ey executed the same in his/herhheir authorized capacity(ies), and that by his/her/their signatureA on the instrument the person(s), or the entity upon behalf of which the person(61 acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS y hand an lcial seal. lutle L. co�x � Signature Commission • 1730893 [ Seal Notary Public • Cona ( ) forni Riverside County State of California ) County of On t o�a�t � oog before me, 1�I" N Notary Public, (here insert name and title of the officer) personally appeared—, -Dke+u-ar P akk--� who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS and official seal. Signature (seal) lMgt17 Y Canrnlrbn 11697796 H0 Abre _ C o"" OMdde County Mycomm.80MOCtI6,201 111111111111111111111111111111111111111111111111111111 16 30asa f8as 10900R 882/015610-0085 -5_ 952615.01 a10/21/08 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY PARCEL A OF LOT LINE ADJUSTMENT 2008-495 ... AND PARCEL 4 OF PARCEL MAP 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60-66, INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF RIVERSIDE COUNTY, AS INSTRUMENT NO.2005-0262238. AND PARCEL B OF LOT LINE ADJUSTMENT 2006-452 BEING PARCEL 8 AND A PORTION OF PARCEL 7 OF THE FOREGOING DESCRIBED PARCEL MAP 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS RECORDED IN THE OFFICE OF THE COUNTY RECORDER OF RIVERSIDE COUNTY ON APRIL 19, 2006, AS INSTRUMENT NO.0280726. 882/015610-0085 _ 952615.01 .10/21108 -1 I IIIIII IIIIIII III IIIIII IIIII IIIII IIIIII III IIIII IIII IIII 10f 00 60B£ 10900R EXHIBIT "B" LEGAL DESCRIPTION OF THE ADJACENT PROPERTY PARCEL B OF LLA 2008-495, WE PARCELS I AND 5 OF PARCEL MAP 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60-66, INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF RIVERSIDE COUNTY, AS INSTRUMENT NO. 2005-0262238. AND PARCEL "A" OF LOT LINE ADJUSTMENT NO.2006-452, MORE PARTICULARLY DESCRIBED AS FOLLOWS: IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCEL 6 TOGETHER WITH THAT PORTION OF PARCEL 7 OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS, BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST EASTERLY CORNER OF SAID PARCEL 7; THENCE ALONG THE SOUTHEASTERLY, SOUTHWESTERLY AND NORTHWESTERLY BOUNDARY LINES OF SAID PARCEL 7 THROUGH THE FOLLOWING FIVE (5) COURSES: (1) SOUTH 43°56'44" WEST, A DISTANCE OF 357.95 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 4,565.17 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 42°59'27" EAST; (2) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 02057'46", AN ARC DISTANCE OF 236.07 FEET TO A POINT, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 40001'41" EAST; (3) THENCE NON -TANGENT TO SAID CURVE SOUTH 00°17'35" EAST, A DISTANCE OF 11.03 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 2,500.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 36057'27" EAST; 9szb s of aloavos I IIIIII IIIIIII III IIIIII IIIII IIIII IIIIII III Hill IIII IIII 16 230/7 of 22b s 1996OA (4) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 05°43'47", AN ARC DISTANCE OF 250.01 FEET TO A POINT, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 31013'40" EAST; (5) THENCE NON -TANGENT TO SAID CURVE NORTH 28°29'24" EAST, A DISTANCE OF 153.02 FEET TO AN ANGLE POINT IN THE SOUTHEASTERLY BOUNDARY LINE OF SAID PARCEL 6 OF PARCEL MAP NO.31116; THENCE LEAVING THE BOUNDARY LINES OF SAID PARCEL 7 AND ALONG THE SOUTHWESTERLY, WESTERLY, NORTHERLY AND EASTERLY LINES OF SAID PARCEL 6 THROUGH THE FOLLOWING FIFTEEN (15) COURSES: (1) THENCE NORTH 61°30'36" WEST, A DISTANCE OF 150.00 FEET; (2) THENCE SOUTH 28°29'24" WEST A DISTANCE OF 150.35 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 2,500.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 27047'20" EAST; (3) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 09043' 18", AN ARC DISTANCE OF 424.19 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 2,095.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 75025'34" EAST; (4) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 02056'54", an arc distance of 107.80 feet to the beginning of a reverse curve concave easterly, having a radius of 18.00 feet, a radial line passing through said point bears south 72p28'40" west; (5) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 27042'25", AN ARC DISTANCE OF 8.70 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE WESTERLY, HAVING A RADIUS OF 82.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 79°48'55" EAST; (6) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 29001'21 ", AN ARC DISTANCE OF 41.54 FEET TO THE BEGINNING OF A COMPOUND CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 2,107.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 71°09'44" EAST; (7) THENCE NORTHERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 03016'31", AN ARC DISTANCE OF 120.45 FEET; (8) THENCE NON -TANGENT TO LAST SAID CURVE NORTH 22°46'41" EAST, A DISTANCE OF 5.77 FEET; 882/015610-0085 952615.01 a10/21108 -3- IIIIII IIIIIII III IIIIII IIIII IIIII IIIIII III IIIII IIII IIII 200 80 f 10 10 00R (9) THENCE NORTH 67°06'56" EAST, A DISTANCE OF 52.05 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 540.00 FEET; (10) THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 15052'03", AN ARC DISTANCE OF 149.55 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 810.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS NORTH 38045'07" WEST; (11) THENCE NORTHEASTERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 31-10'05", AN ARC DISTANCE OF 440.63 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE NORTHERLY, HAVING A RADIUS OF 840.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 07035'02" EAST; (12) THENCE EASTERLY ALONG THE ARC OF LAST SAID CURVE, THROUGH A CENTRAL ANGLE OF 13034'42", AN ARC DISTANCE OF 199.07 FEET; (13) THENCE NON -TANGENT TO LAST SAID CURVE SOUTH 16°39' 14" EAST, A DISTANCE OF 55.87 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 250.00 FEET; (14) THENCE SOUTHERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 20°41'22", AN ARC DISTANCE OF 90.27 FEET; (15) THENCE TANGENT TO SAID CURVE SOUTH 04°02'08" WEST A DISTANCE OF 333.46 FEET TO THE NORTHWESTERLY PROLONGATION OF THE NORTHEASTERLY LINE OF SAID PARCEL 7; THENCE LEAVING SAID BOUNDARY LINES OF PARCEL 6 AND ALONG SAID PROLONGATION AND SAID NORTHEASTERLY LINE OF PARCEL 7 SOUTH 50010,13" EAST, A DISTANCE OF 592.88 FEET TO THE POINT OF BEGINNING. SUBJECT TO EXISTING EASEMENTS, COVENANTS, RIGHTS AND RIGHTS -OF -WAY OF RECORD. CONTAINING 588,702 SQUARE FEET OR 13.515 ACRES, MORE OR LESS. 111111111 II II II 111110 9of 10900E 882/015610-0085 95261501 .10/21/08 -4'- EXHIBIT "C" LEGAL DESCRIPTION OF THE RESIDENTIAL PARCEL PARCEL B OF LOT LINE ADJUSTMENT 2006A52, RECORDED IN THE OFFICE OF THE COUNTY RECORDER OF RIVERSIDE COUNTY ON APRIL 19, 2006, AS INSTRUMENT NO. 0280726, BEING PARCEL 8 AND A PORTION OF PARCEL 7 OF PARCEL MAP 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60-66, INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF RIVERSIDE COUNTY, AS INSTRUMENT NO.2005-0262238. I��II II IIII11111111111111111111111111111111111111111 10 30ea 0of 1000R 982/015610.0095 952615 01 a10/21/08 'S' Recording Requested By And When Recorded Mail To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Agency Secretary (SPACE ABOVE THIS LINE FOR RECORDER'S USE) (EXEMPT FROM RECORDATION FEE PER GOVERNMENT CODE § 27383) EASEMENT AGREEMENT e THIS EASEMENT AGREEMENT ("Agreement") is made this �A day of /Yo✓r inbtl , 2004 (the "Effective Date") by and among CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Grantee"), the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency") and CITY OF LA QUINTA, a California municipal corporation ("City"). RECITALS: A. Grantee has entered into a Disposition and Development Agreement ("DDA") dated December 18, 2003, and amended on October 28, 2004, with the Agency, pursuant to which Agency conveyed to Grantee that certain real property located southeast of the Miles Avenue and Washington Street intersections in the City of La Quinta, County of Riverside, State of California (the "Grantee Property") for Grantee's development thereon of a mixed use commercial and residential development project (the "Project"), as further described in the DDA. A legal description of the Grantee Property is attached hereto and incorporated herein as Exhibit "A„ B. Agency owns certain real property (collectively, the Agency -Owned Property") identified as Lot C, Lot E, Lot H and Lot I on the site map, which is attached hereto and incorporated herein as Exhibit `B" (the "Site Map"). The Agency -Owned Property is legally described in Exhibit "C". C. City owns certain public rights -of -way located in the City of La Quinta, County of Riverside, State of California, commonly known as Washington Street and Miles Avenue, portions of each of which are adjacent to certain portions of the: Grantee Property (the "City Right of Way"). The portions of the City Right of Way that lie between the Agency -Owned Property and the curb located closest to the Grantee Property are hereinafter referred to as the "City -Owned Property." The City -Owned Property is depicted on the (the "Site Map'). D. City has applied for various grants (the "Landscaping Grants") to partially fund the cost of certain landscaping improvements the City desires to make to the City -Owned Property and the Agency-Owned'Property (collectively; the "City Landscaping Improvments"). 882/015610-0061 556533.02 a11/09/04 1' t'. E. City now desires to grant to Grantee an easement over the City -Owned Property, and Agency desires to grant to Grantee an easement over the Agency -Owned Property, for purposes of (i) Grantee installing, and thereafter maintaining, certain landscaping improvements, within the City -Owned Property and the Agency -Owned Property, if City does not receive approval for the Landscaping Grants on or before March 1, 2004. Additionally, City, Agency, and Grantee desire to set forth the terms and conditions for Grantee's maintenance of said landscaping improvements. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals, City, Agency, and Grantee agree as follows: Grant of Landscaping Installation Easements. (a) City, on behalf of itself and its heirs, successors, and assigns to all or any part of the City -Owned Property, hereby grants to Grantee and Grantee's heirs, successors, and assigns to Grantee's interest in the Grantee Property, and for the benefit of the City -Owned Property, a non-exclusive easement (the "City -Owned Property Landscaping Installation Easement") for ingress and egress into, upon, over, and across any and all portions of the City -Owned Property for purposes of installing within the City -Owned Property (i) landscaping, in accordance with the standards set forth in the Landscaping Plan that was approved as part of the various Site Development Permits for the Project, and (ii) any and all irrigation equipment necessary for appropriate maintenance of such landscaping (collectively, the "City -Owned Property Developer Landscaping Improvements"). (b) Agency, on behalf of itself and its heirs, successors, and assigns to all or any part of the Agency -Owned Property, hereby grants to Grantee and Grantee's heirs, successors, and assigns to Grantee's interest in the Grantee Property, and for the benefit of the Agency -Owned Property, a non-exclusive easement (the "Agency -Owned Property Landscaping Installation Easement") for ingress and egress into, upon, over, and across any and all portions of the Agency -Owned Property for purposes of installing within the Agency -Owned Property (i) landscaping, in accordance with the standards set forth in the Landscaping Plan that was approved as part of the various Site Development Permits for the Project, and (ii) any and all irrigation equipment necessary for appropriate maintenance of such landscaping (collectively, the "Agency -Owned Property Developer Landscaping Improvements"). (c) City agrees that Grantee is permitted to enter the City -Owned Property to install the City -Owned Property Developer Landscaping Improvements, and Agency agrees that Grantee is permitted to enter the Agency -Owned Property to install the Agency -Owned Property Developer Landscaping Improvements, between the hours of 7 a.m. to 7 p.m., Monday through Saturday; provided, however, that not less than twenty-four (24) hours prior to Grantee's initial entry onto the City -Owned Property or the Agency -Owned :Property, Grantee or its agents shall notify City or Agency, respectively, of its intent to do the same. (d) The casements granted pursuant to this Section I hereby are intended to be appurtenant easements for the benefit of City and Agency, and their respective successors, and assigns, subject to the provisions set forth herein. 8821015610-0061 556533.02 at 1/09/04 -2- (e) City and Agency warrant to Grantee that they have the requisite power and authority to grant the easements described in this Section 1. (f) Upon Grantee's completion of installation of the City -Owned Property Developer Landscaping Improvements and the Agency -Owned Property Developer Landscaping Improvements, as determined by City, the easements described in this Section 1 shall automatically terminate and be of no further force and effect. Said termination shall not affect any of the other provisions in this Agreement, all of which shall survive such termination. (g) In the event City obtains approval for the landscaping Grants on or before March 1, 2004, the easements described in this Section 1 shall automatically terminate and be of no further force and effect. Said termination shall not affect any of the other provisions in this Agreement, all of which shall survive said termination. 2. Grant of Landscaping Maintenance Easements. (a) City, on behalf of itself and its heirs, successors, and assigns to all or any part of the City -Owned Property, hereby grants to Grantee and Grantee's heirs, successors, and assigns to Grantee's interest in the Grantee Property, and for the benefit of the City -Owned Property, a non-exclusive easement (the "City -Owned Property Maintenance Easement") for ingress and egress into, upon, over, and across any and all portions of the City -Owned Property for purposes of maintaining the City -Owned Property Developer Landscaping Improvements or, if the City obtains approval for the Landscaping Grants on or before March 1, 2004, the portion of the City Landscaping Improvements installed within the City -Owned Property. (b) Agency, on behalf of itself and its heirs, successors, and assigns to all or any part of the Agency -Owned Property, hereby grants to Grantee and Grantee's heirs, successors, and assigns to Grantee's interest in the Grantee Property and for the benefit of the Agency -Owned Property, a non-exclusive easement (the "Agency -Owned Property Maintenance Easement") for ingress and egress into, upon, over, and across any and all portions of the Agency -Owned Property for purposes of maintaining the Agency -Owned Property Developer Landscaping Improvements or, if the City obtains approval for the Landscaping Grants on or before March 1, 2004, the portion of the City Landscaping Improvements installed within the Agency -Owned Property. (c) City agrees that Grantee is permitted to enter the City -Owned Property to maintain the City -Owned Property Developer Landscaping Improvements or, if the City obtains approval for the Landscaping Grants on or before March 1, 2004, the portion of the City Landscaping Improvements installed within the City -Owned Property, between the hours of 7 a.m. to 7 p.m., Monday through Saturday. (d) Agency agrees that Grantee is permitted to enter the Agency -Owned Property to maintain the Agency -Owned Property Developer Landscaping Improvements or, if the City obtains approval for the Landscaping Grants on or before March 1, 2004, the portion of the City Landscaping Improvements installed within the Agency -Owned Property, between the hours of 7 a.m. to 7 p.m., Monday through Saturday. 882/015610-0061 556533.02 at 1/09/04 -3- (e) The easements granted pursuant to this Section 2 are intended to be an appurtenant easement for the benefit of City and Agency, and their respective successors, and assigns, subject to the provisions set forth herein. (f) City and Agency warrant to Grantee that they have the requisite power and authority to grant the easements described in this Section 2. 3. Grantee's Maintenance Obligations. Grantee agrees, at Grantee's sole cost and expense, to maintain, in a good condition and repair and in compliance with all of City's requirements, (i) the City -Owned Property Developer Landscaping Improvements and the Agency -Owned Property Developer Landscaping Improvements, if City does not obtain approval for the Landscaping Grants on or before March 1, 2004 and Grantee is obligated pursuant to the DDA to install landscaping within the City - Owned Property and the Agency -Owned Property, or (ii) the City Landscaping Improvements, if City obtains approval for the Landscaping Grants on or before March 1, 2004 ("Grantee's Maintenance Obligations"). Under clause (i) above, Grantee's Maintenance Obligations as to any portion of the City -Owned Property Developer Landscaping Improvements and the Agency - Owned Property Developer Landscaping Improvements shall commence on the date Grantee completes installation of such portion of the landscaping improvements. Under clause (ii) above, Grantee's Maintenance Obligations shall commence on the date City notifies Grantee that City has completed installation of the City Landscaping Improvements. Grantor's Maintenance Obligations shall survive termination of the easements granted pursuant to Section 1 and continue throughout the life of the Redevelopment Plan for the La Quinta Redevelopment Project No. 2. 4. City's Use of City -Owned Property, Agency Use of Agency -Owned Property. Nothing herein is intended to limit City's use of the City -Owned Property or Agency's use of the Agency -Owned Property; provided, however, that neither City nor Agency shall make any improvements to the City -Owned Property or the Agency -Owned Property, or take any actions, that would affect Grantee's unimpeded use of the easements granted pursuant to Sections 1 and 2 hereof or damage the City -Owned Property Developer Landscaping Improvements or the Agency -Owned Property Developer Landscaping Improvements, or, if the City obtains approval for the Landscaping Grants on or before March 1, 2004, the City Landscaping Improvements. 5. Indemnification. Grantee shall indemnify, defend, and hold harmless City and Agency from and against any and all claims, obligations, demands, causes of action, damages, losses, liabilities, or expenses incurred in connection with or arising out of the use of the Easement as provided herein by Grantee and/or invitees, contractors, or agents of Grantee performing work on behalf of Grantee. 882/015610-0061 556533.02 al1/09/04 -4- 6. Covenants Run with the Land; Appurtenant Easements. All of the covenants, easements, agreements, conditions and restrictions contained herein, whether affirmative or negative: (a) are made for the direct benefit of the City -Owned Property and the Agency -Owned Property; (b) are covenants running with the land; (c) are appurtenant to and shall not be conveyed or otherwise transferred separately from the City -Owned Property, the Agency -Owned Property, or the Grantee Property; and (d) bind and inure to the burden or benefit, as the case may be, of the respective heirs, personal representatives, successors and assigns of the parties hereto, including, without limitation, successive owners of all or any portion of, respectively, the City -Owned Property, the Agency -Owned Property, and the Grantee Property. 7. General Provisions. (a) Applicable Law The Municipal and Superior Courts of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Agreement. This Agreement shall be governed by, and construed under, the laws of the State of California. In addition to any other rights or remedies, any party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement. The rights and remedies of the parties are cumulative and the exercise by any party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other right or remedies for the same default or any other default by the other party(ies). Service of process shall be made in any manner permitted by law and shall be effective whether served within or outside of California. (b) Attorney's Fees If any party to this Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Agreement, the party prevailing in the final judgment in such action or proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable attorney's fees. Attorney's fees shall include reasonable costs for investigating such action, conducting discovery, retaining expert witnesses, and all other necessary costs the court allows which are incurred in such litigation. (c) Notices Unless otherwise provided herein, all notices required to be delivered under this Agreement or under applicable law shall be (i) personally delivered, or (ii) delivered by United States mail, postage prepaid, certified, return receipt requested, or (iii) delivered by reputable document delivery service that provides a receipt showing date and time of delivery. Notices personally delivered or delivered by a document delivery service shall be effective upon receipt. Notices delivered by mail shall be effective at noon on the second business day following deposit with the United States Postal Service. A party hereto may at any time, by giving ten (10) days' written notice to the other parties hereto, designate any other address in substitution of the '82/015610-0061 556533.02 al 1/09/04 -5- address to which such notice or communication shall be given. Such notices or communications shall be delivered to the following addresses: To Grantor: CP Development La Quinta, LLC 77-900 Avenue of the States Pahn Desert, CA 92211 Attn: Richard Oliphant With copies to: Selzer, Ealy, Hemphill & Blasdel, LLP 777 Tahquitz Canyon Way, Suite 528 Palm Springs, CA 92262 Attn: Emily Perri Hemphill, Esq. Genesis Hotel Development LLC 76890 Sandpiper Drive Indian Wells, CA 92210 Attn: Francis A. Wong To City/Agency: City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attention: City Manager With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: M. Katherine Jenson, Esq. (d) Interpretation: Severability The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against any party hereto by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Agreement. Each provision of this Agreement shall be severable from the whole. If any provision of this Agreement shall be found contrary to law, the remainder of this Agreement shall continue in full force. (e) Integration; Amendment It is understood that there are no oral agreements between the parties hereto affecting this Agreement, and this Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements, and understandings, if any, between the parties with respect to the subject matter hereof, and none shall be used to interpret this Agreement. This Agreement may be amended at any time by the mutual consent of the parties by an instrument in writing which is recorded in the official records of Riverside County. 882/015610-0061 556533.02 all/09/04 -6- 8. Inaction Not a Waiver of Default. Any failures or delays by any party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive any such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 9. Non -Liability of Officials and Employees of City or Ate. No member, official or employee of City or Agency shall be personally liable to the Grantee, or any successor in interest, in the event of any default or breach by the City or Agency or for any amount which may become due to the Grantee or its successors, or on any obligations under the terms of this Agreement. 10 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon the Grantee and its permitted successors and assigns. Whenever the term "Grantee" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. 11. Relationship Between Grantee, City and Agency. It is hereby acknowledged that the relationship between the Grantee and City is not that of a partnership or joint venture and that the Grantee and the City shall not be deemed or construed for any purpose to be the agent of the other. It is hereby acknowledged that the relationship between the Grantee and Agency is not that of a partnership or joint venture and that the Grantee and the Agency shall not be deemed or construed for any purpose to be the agent of the other. 12. Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. 13. No Waiver. A waiver by any party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by any other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 14. Conflicts of Interest. No member, official, representative, or employee of City or Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, representative, official or employee participate in any decision relating to the Agreement which 882/015610-0061 556533.02 at 1/09/04 -7- affects his personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first above written. ATTEST: Oit�Clerk "Grantor" CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member By: i1�3J`' 2 ./- Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manage By: Richard R. Oliphant Its: President "City" CITY OF LA QUINTA, a Ca mi:ymunicipal corpatio f' By: Its: "Agency" LA QUINTA REDEVELOPMENT AGENCY, a publ* bodZ, corporate and politic By: Its: 4! JC E G t�� [SIGNATURES CONTINUED ON NEXT PAGE] 882/015610A061 556533.02 al 1/09/04 . AjepVSecretary APPROVED AS TO FORM: RUTAN & TUC - /-\� By: Ka hei ne Jenson Attorneys for City of La Quinta [END OF SIGNATURES] 882/015610-0061 556533.02 al 1/09/04 -9 STATE OF CALIFORNIA ) ) ss. COUNTY OF Riverside ) On November 10, 2004 before me, a notary public, personally appeared THOMAS P. GENOVESE personally known to me to be the person whose name is. subscribed to the within instrument and acknowledged to me that he/§lIK executed the same in his/MWauthorized capacity, and that by his/6m signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. C'"w" n i 1521423 1 By Notary Pubic - CaHomb RK,elside County STATE OF CALIFORNIA ) ss. COUNTY OF Riverside ) On 11 /1 o 1 before me, a notary public, personally appeared RTMARn R_ 01-TPNANT personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. C 113*08 WITNESS my hand and official seal. Nowt' Pubic . cditn4a RNerslde County By. -- E>�I esOcf 162b06 [SEAL] 882/015610-0061 556533.02 al1/09/04 -10- STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, a notary public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. [SEAL] STATE OF CALIFORNIA ) ) ss. COUNTY OF ) On before me, a notary public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. .WITNESS my hand and official seal. LM [SEAL] 882/015610-0061 556533.02 al1/09/04 -11- EXHIBIT "A" LEGAL DESCRIPTION OF GRANTEE PROPERTY The following described property in the City of La Quinta, County of Riverside, State of California: IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO. 23971-1, ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 00027'38" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026'40" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 89033'22" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 00026'40" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41042'33", AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044'32" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 :FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45027'41 ", AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 108979, O.R. 882/015610-0061 - 556533.02 all/09/04 THENCE SOUTH 00012'13" EAST ALONG SAID EASTERLY LINE, A DISTANCE OF 790.73 FEET TO AN ANGLE POINT THEREIN; THENCE SOUTH 43056'42' WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42°59'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 02°57'46", AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C" AND IT,S NORTHWESTERLY PROLONGATION NORTH 64021'03" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO. 255528, O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 86011'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11°05'41", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 7:5033'02" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17°33'23" EAST; THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00032'28", AN ARC DISTANCE OF 23.61 FEET TO A POINT HEREINAFTER 882/015610-0061 556533.02 a11/09/04 -2- REFERRED TO AS POINT B, SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06", AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006'56" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013'18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02°12'44", AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 6'7006'56" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001'12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19°58'08", AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028'37" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES .AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36°57'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18051'35", AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (1,850,000 SQUARE FEET), MORE OR LESS. 882/015610-0061 556533.02 al1/09/04 -3 EXHIBIT `B" SITE MAP [See Following Page] 882/015610-0061 556533.02 at 1/09/04 EXHIBIT "C" LEGAL DESCRIPTION OF AGENCY -OWNED PROPERTY [To be inserted prior to recordation] 882/015610-0061 556533.02 all/09/04 N DOC * 2011-0293772 07/02/2011 03:22P Fee:63.00 Page 1 of 12 Recorded in Official Records I-..- -• _ - RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: TExecutive Director NC�j 742,4S EX01 ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement ( "Assignment") is entered into this day of June, 2011 by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("CP") and LA QUINTA RETIREMENT RESIDENCE LIMITED PARTNERSHIP, a Washington Limited partnership ("LQRR") with reference to the following: A. WHEREAS, CP is the owner in fee simple of certain real property located at the southeast comer of Miles Avenue and Washington Street in the City of La Quinta, California, as more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference (the "Subject Property"). B. . WHEREAS, CP acquired the Subject Property and certain other adjacent real property from the La Quinta Redevelopment Agency, a public body, corporate and politic ("Agency") pursuant to the terms of that certain Disposition and Development Agreement dated on or about December 18, 2003, and as further amended over time through a series of six amendments on or about the following dates: October 28, 2004; December 7, 2004; November 2, 2005; October 20, 2006; August 23, 2007; and March 19, 2008 (hereinafter collectively referred to as the "DDA"). C. WHEREAS, concurrently with the execution of the DDA, the City of La Quinta ("gff") and CP entered into that certain Development Agreement, which was recorded in the Official Records of the County Recorder for the County of Riverside (the "Official Records") on January 5, 2004, as Instrument No. 2004-0005256, and amended by that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004, and recorded in the Official Records on November 8, 2004, as Instrument No. 2004-0885063, by that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005, and recorded in the Official Records on December 19, 2005, as Instrument No. 2005-1045418, and by that certain Amendment No. 3 to Development Agreement executed on or about May 6, 2008, and recorded in the Official Records on June 4, 2008, as Instrument No. 2008-0303530 (hereinafter collectively referred to as the "DA"). D. WHEREAS, LQRR and CP have entered into that certain Offer and Contract to Purchase Real Property dated January 18, 2011, as amended by that certain W02-WEST:3DPCIW040080343 9&Q .A -1- First Amendment to Offer and Contract to Purchase Real Estate dated June 9, 2011, wherein LQRR Agreed to purchase and CP agreed to sell the Subject Property, and CP agreed, concurrently with such sale, to transfer and assign to LQRR all of CP's rights and responsibilities under the DDA and the DA with respect to the Subject Property, E. WHEREAS, prior to CP effecting any such sale or assignment, the Agency and the City require that LQRR and CP execute this Assignment to memorialize the acknowledgement by LQRR of the rights and development obligations of the Subject Property as further detailed in the DDA and DA and to provide for the assumption of such obligations. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. CP Transfer to LORR. a. CP hereby assigns to LQRR all of CP's rights and responsibilities under the terms of the DDA and the DA with respect to the Subject Property from and after the Effective Date of this Assignment. b. LQRR hereby accepts the foregoing assignment and agrees to be bound by the terms of the DDA and the DA with respect to the Subject Property from and after the Effective Date. c. The parties hereto acknowledge and agree that LQRR shall not be responsible for any of the obligations of the DDA or the DA which arise from ownership of the Subject Property existing prior to the Effective Date hereof. As such, a default by CP under either the DDA or the DA with respect to the Subject Property prior to the Effective Date hereof shall not be deemed a default by LQRR. A default by LQRR under either the DDA or the DA with respect to the Subject Property on or after the Effective Date hereof shall not be deemed a default by CP, and LQRR shall indemnify, defend and hold harmless CP from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from any such default by LQRR. 2. Requirement for Amendments to DDA, DA, and Center Point Specific Plan. LQRR intends to construct on the Subject Property a senior congregate care residential facility including both independent living and assisted living units. LQRR acknowledges and agrees that (i) prior to LQRR commencing such development on the Subject Property, LQRR shall be required to process through the City amendments to the DDA, DA, and Center Point Specific Plan (SP2001- 055) that permit the development contemplated on the Subject Property by LQRR (collectively, the "Proposed Amendments"); (ii) the Agency, City, and Planning Commission (as applicable) will review and consider all of the Proposed Amendments in their sole and absolute discretion; and (iii) the Agency's and W02-WESTMPCIW&WG8 53-2}Qj1�4 -2- City's consent to this Assignment does not constitute any approval or precommitment to approve of any of the Proposed Amendments. 3. Effective Date. This Assignment shall be deemed effective (the "Effective Date") upon the last of the following events to occur: (a) the written consent to this Assignment by the City with respect to the assigned rights and obligations arising under the DA, (b) the written consent to this Assignment by the Agency with respect to the assigned rights and obligations arising under the DDA, (c) or conveyance of the Subject Property to LQRR, as evidenced by the recording of the grant deed therefor in the Official Records. 4. Recording of Documents. This Assignment is to be recorded in the Official Records. 5. Corporate Authority. The parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented. 6. Governing Law. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles. 7. Counterparts. This Assignment may be executed in counterparts, and counterpart signature pages may be combined into one or more fully executed original for recording purposes. [Signature pages follow] wo2-WEST:3DPC1\404QM�E9 -3- WHEREFOR, the parties hereto have executed this Assignment on the date first written above. "CP„ CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member n By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager By: Richard R. Oliphant Its: President „LQI,> LA QUNITA RETIREMENT RESIDENCE LIMITED PARTNERSHIP, a Washington Limited Partnership By: La Quinta GP LLC, A Washington limited liability company Its: General partner By: Hawthorn Management Services Corp., A Washington corporation Its: Manager SIGNED IN COUNTERPART By: Barton G. Colson, President W02-WEST:3DPC1-4- WHEREFOR, the parties hereto have executed this Assignment on the date first written above. "CP„ CP DEVELOPMENT LA QUINTA, LLC a California limited liability company By: Oliphant Family Trust Its: Member SIGNED IN COUNTERPART By: Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager SIGNED IN COUNTERPART By: Richard R. Oliphant Its: President LA QUNITA RETIREMENT RESIDENCE LIMITED PARTNERSHIP, a Washington Limited Partnership By: La Quinta GP LLC, A Washington limited liability company Its: General partner By: Hawthorn Management Services Corp., A Washington corporation Its: ManMV4 By: Barton G. Colson, President W02-WEST:3DPCI -4- State of California ) County of - On Jane �. �t�2 , before me, c,- Notary Public, -„ -, p ,�, (here insert namgand title of the officer) personally appeared _ l / flGf /4 &- d'&f / who proved to me on the basis of satisfactory evid is/are subscribed to the within instrument, and executed the same in his/her/their authorized c signature(a) on the instrument the person(:), or persono acted, executed the instrument. ;nee to be the person( whose name acknowledged to me that he/she/they tpacity(i*, and that by his/OcAbdr the entity upon behalf of which the I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. _ _ _ _ _ SUSAN M. MALEK Commission # 1024669 Signatur` at•/LQ / Notary Public - California is Riverside County State of California ) County of ✓ . � OnaV`ne q- ,�2611 , before Al - / I k Notary Public, p (here insert name and q'tle of the officer) personally appeared/� I/}d 12T/� who proved to me on the basis of satisfactory evidence to be the person(4 whose name( g) is/are subscribed to the within instrument, and- acknowledged to me that he/she/the executed the same in his/her/their authorized capacity(jes), and that by his?/tl Ir signature(A) on the instrument the person(a�), or the entity upon behalf of which the persons) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. IJI . : WA �� �� W02-WEST:3DPC1WW0803 4jUM= -5- MAN M. MALEK Commission # 1924669 Notuy Public - California Riverside County M Comm. Wires Mar 2.2015+ 5 State of California ) County of ) On before me, Notary Public, (here insert name and title of the officer) personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature Wad. 4-0'n(& (seal) State of�ali€e County of C44x%k 4 On Aut e 101 ao I t before me, I�nbir,b �. Aii� S Notary Public, ksf WaS(tin, 1 _ (here insert name and title of the officer) personally appeared �OU/� pry C� IAlVoln who proved to me on the basis of satisfactory evidence to be the personf<whose name,(er is/sire subscribed to the within instrument, and acknowledged to me that he/skeAkey executed the same in his/kep4heir authorized capacity(ies), and that by his/keB*1eir signatureX on the instrument the persoi*% or the entity upon behalf of which the personKacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my and and official seal. NOTARY PUBLIC STATE OF WASHINGTON ROBIN R. GOINS Signature Commission Expires September 26, 2011 (seal) W02-WEST:3DPC1\401W9M-2401005053.3 -5- State of California ) County of C its 06 ) On Jut -I& 29., 2011 before me, SUSAIJ MAYSELS _, Notary Public, (here Insert name end title of the officer) personally appeared '�IIOWI/>S G�N6Jr:S� who proved to me on the basis of satisfactory evidence to be the person(g) whose name(®) is/aaw subscribed to the within instrument, and acknowledged to me that he/a executed the same in his/ authorized capacity(riete), and that by hiskmAksk signature(#) on the instrument the person(B), or the entity upon behalf of which the person(p) acted, executed the instrument, I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. SUSAN NIAYSELS WITNESS my hand and official seal, "` COMM.91844479 >< ie NOTARY PUBLIC • WORNIARNERZi Signature s� Cmmi�nE� �1 1013 State of� Wabl1, ) (seal) County`` of Cgct%, I rt ) On _1wi.� IQ It before me,--gh,, (2.Notary Public, -Foy (here Insert name and title of the officer) personally appeared ISatX1'- 'n C-�. LDIS r who proved to me on the basis of satisfactory evi iaA= subscribed to the within instrument, an d I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my and and official Seal. NOTARY PUBLIC STATE OF WASHINGTON ROBIN R. GOINS Signature Commission Expires September 26.2011 ......... ...... _... ._.. __.. _._... ...._....(seal) W02-WEST;3DPCIW9ODSC9QAW29anaca -5- CONSENT By execution below, the Agency and City hereby (i) consent to the foregoing Assignment; and (ii) release CP from any further obligations under the DA or DDA with respect to the Subject Property. APPROVEVAS TO FORM: RUTAN & TUCKER, LLP SMED IN COUN I trig Agency Counsel LA QUINTA REDEVELOPMENT AGENCY, a public body, corpora and L Br.XVvZ<?/ Its: Executive Director CITY OF LA QUINTA, a California municipal corporation and charter city . organized and existing under the la of to CaliforniaA By/- Its` City Manager ST: City Clerk APPROVED AS TO FORM: RUTAN & TUCKE LLP SQNED W NTERPARr City Attorney W02•WEST3DPCIW0IW0805&2JQL20= CONSENT By execution below, the Agency and City hereby (i) consent to the foregoing Assignment; and (ii) release CP from any further obligations under the DA or DDA with respect to the Subject Property, LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic SIGNED IN COUNTERPART By: Its: ATTEST: SIGNED IN COUNTERPART Agency Secretary AS TO FORM: Executive Director CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the laws of the State of California SIGNED IN COUNTERPAH i By: Its: ATTEST: SIGNED IN COUNTERPART City Clerk W02•WE57:3DPCI146lB08A - City Manager EXHIBIT A Subject Property Legal Description Real property in the City of La Quinta, County of Riverside, State of California, described as follows: PARCEL B AS SHOWN ON LOT LINE ADIUSTMENT NO.2006-452 AS EVIDENCED BY DOCUMENT RECORDED APRIL 19, 2006 AS INSTRUMENT NO.2006-0280726 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCEL 8 TOGETHER WITH THAT PORTION OF PARCEL 7 OF PARCEL MAP NO, 31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS, BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID PARCEL 8; THENCE ALONG THE SOUTHEASTERLY, EASTERLY AND NORTHERLY BOUNDARY LINES OF SAID PARCEL 8 THROUGH THE FOLLOWING FIVE (5) COURSES: (1) NORTH 43° 56' 44" EAST, A DISTANCE OF 152.65 FEET; (2) THENCE NORTH 00° IT 13" WEST, A DISTANCE OF 790.73 FEET; (3) THENCE SOUTH 89" 47' 47" WEST, A DISTANCE OF 239.56 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY, HAVING A RADIUS OF 80.00 FEET; (4) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 45" 27' 41 ", AN ARC DISTANCE OF 63.48 FEET; (5) THENCE TANGENT TO SAID CURVE NORTH 44" 44' 32" WEST, A DISTANCE OF 91.61 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 440.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 490 06' 37" EAST; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID NORTHERLY LINE OF PARCEL 8 AND ALONG THE NORTHERLY LINE OF SAID PARCEL 7, THROUGH A CENTRAL ANGLE OF 230 54' 45", AN ARC DISTANCE OF 183.63 FEET TO THE BEGINNING OF A COMPOUND CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 840.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 25" 11' 52" EAST; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID NORTHERLY LINE OF PARCEL 7, THROUGH A CENTRAL ANGLE OF 04° 02' 08", AN ARC DISTANCE OF 59.16 FEET TO THE MOST NORTHERLY NORTHWEST CORNER OF SAID PARCEL 7; THENCE ALONG THE WESTERLY LINES OF SAID PARCEL 7 THROUGH THE FOLLOWING THREE (3) COURSES: -(.1)-SOU--ThI-16° 39-14'--'-EAST-AND NON -TANGENT �O-L--AST-SAID GURVE;-AS-DIST-ANCE OF-55�89-FEET -- -- - - TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 250.00 FEET; DM US 27829661-10.046314.0074 (2) THENCE SOUTHERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 200 41' 22", AN ARC DISTANCE OF 90.27 FEET; (3) THENCE TANGENT TO SAID CURVE SOUTH 04- 02' OS" WEST, A DISTANCE OF 333.46 FEET TO THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF SAID PARCEL S; THENCE LEAVING SAID WESTERLY LINES OF PARCEL 7 AND ALONG SAID PROLONGATION AND SAID SOUTHWESTERLY LINE OF PARCEL 8, SOUTH 50" 10' 13" EAST, A DISTANCE OF 592.88 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM AGENCY EXCEPTS AND RESERVES FROM THE CONVEYANCE I•IEREM DESCRIBED ALL INTEREST OF THE AGENCY IN OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF 011L, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 09, 2004 AS INSTRUMENT NO.04-979137 OF OFFICIAL RECORDS. APN: 604-630-027-6 DM US 27829661.10.046314.0074 AMENDMENT NO 7 TO DISPOSITION AND DEVELOPMENT AGREEMENT This AMENDMENT NO. 7 TO DISPOSITION AND DEVELOPMENT AGREEMENT ("Amendment No. 7") is made and entered into as of OCTGBER, Iq , 2012 by and between CITY AS SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Successor Agency"), and LA QUINTA RETIREMENT RESIDENCE LIMITED PARTNERSHIP, a Washington limited partnership ("Developer"). RECITALS: A. On or about December 18, 2003, the former La Quinta Redevelopment Agency ("Agency") and CP Development La Quinta, LLC (the "Original Developer") entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which the Agency sold to the Original Developer that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Property") and the Original Developer agreed to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to income -eligible buyers at a restricted sales price (collectively, the "Original Project"). B. The Original DDA has been amended on six (6) occasions, on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, on or about August 23, 2007, and on or about March 19, 2008 (collectively, the "Prior DDA Amendments"). The Original DDA, as amended by the Prior DDA Amendments, is hereinafter referred to as the "DDA", and the Original Project, as amended by the Prior DDA Amendments, is hereinafter referred to as the "Project." C. The Original Developer previously processed through the City Lot Line Adjustment No. 2006-452, which reconfigured the parcels previously designated as "Parcel 6," "Parcel 7," and "Parcel 8" of Parcel Map 31116, in Book 212, at Pages 60-66, inclusive, of Parcel Maps, Riverside County Records, into "Parcel A" and "Parcel B". Parcel A has since been sold to Eisenhower Medical Center and medical facilities have since been constructed thereon. D. On or about July 1, 2011, the Original Developer sold Parcel B to Developer for the purpose of Developer's construction thereon of (i) a one hundred thirty-two (132) suite retirement community, (ii) four (4) single -story duplex cottages, (iii) a seventy-two (72) suite assisted living community, and (iv) a thirty-two (32) bed memory care facility (collectively, the "Senior Living Facility)." Parcel B is legally described in Exhibit "A", which is attached hereto and incorporated herein by this reference. E. On June 28, 2011, the Governor signed Assembly Bill 26 ("ABxl 26") and Assembly Bill 27 ("ABxl 27") from the 2011-12 First Extraordinary Session of the California Legislature. ABxl 26 immediately suspended all redevelopment agency activities, except 9821015610-0061 _ 3052035.3.0921/12 _j continued performance of "enforceable obligations," and set forth a process to dissolve redevelopment agencies and end redevelopment in California. ABxl 27 provided a "voluntary alternative redevelopment program," which would have allowed redevelopment agencies to remain in existence and continue redevelopment, if remittance payments were made to cover the State of California's budget shortfall for fiscal year 2011-12 and were made in subsequent fiscal years to cover State costs. A lawsuit was filed, challenging the constitutionality of both ABxl 26 and 27. The California Supreme Court upheld the constitutionality of ABxl 26, revising the effective dates of certain provisions, and struck down as unconstitutional ABxl 27. (California Redevelopment Assn. v. Matosantos (2011) 53 CalAth 231 ("CRA Case"). ABxI 26 is chapter 5, Statutes 2011, First Extraordinary Session, which added Part 1.8 (suspension provisions) and Part 1.85 (dissolution provisions) of Division 24 of the Health and Safety Code. Under the CRA Case, all redevelopment agencies dissolved February 1, 2012. Pursuant to Health and Safety Code section 341710), added by Part 1.85 of Division 24, and City Council Resolution No. 2012-002, the City of La Quinta ("City") is the "successor agency" to the former Agency. F. On June 27, 2012, the Governor signed Assembly Bill 1484 from the 2011-2012 Regular Session of the California Legislature ("AB 1484"), which established that successor agencies are separate legal entities from the entities that provide for their governance. As a result of AB 1484, the successor agency to the former Agency is now formally the "City as Successor Agency to the La Quinta Redevelopment Agency". G. Pursuant to the terms and conditions of this Amendment No. 7, Developer and Successor Agency now wish to modify certain terms set forth in the DDA with respect to Parcel B. Unless defined herein to the contrary, all capitalized terms in this Amendment No. 7 shall have the meanings ascribed thereto in the DDA. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: The DDA is hereby amended as follows: 1. Section 100 entitled "Definitions" is modified to delete the following definitions, in their entirety: Affordable Homes, Affordable Homes Mix, Affordable Housing Component, Affordable Housing Cost, Agency Loan Amount, Buyer Affordable Housing Documents, Declaration, Deed of Trust, Disbursement Schedule, Eligible Buyer, Parcel 7 Residential Development, Residential Development, Residential Development Site Map, Promissory Note, and Unrestricted Homes. 2. Section 100 entitled "Definitions" is modified add the following as new definitions: 882/015610-0061 30520353 a09/21/12 -2- "Senior Living Facility" means (i) a one hundred thirty-two (132) suite retirement community located in five (5) single -story duplex cottages, (ii) a seventy-two (72) suite assisted living community, and (iii) a thirty-two (32) bed memory care facility. "Parcel B" means Parcel B of Lot Line Adjustment No. 2006-452 in the City of La Quinta, California. 3. Section 100 entitled "Definitions" is modified to revise the following definitions: 3.1 To revise the definition of "Phase of Development" by adding as a new Phase of Development to be developed on Parcel B the "Senior Living Facility." 3.2 To revise the definition of "Project" by adding as a new Project component the development of the Senior Living Facility. 4. Sections 400-404 entitled `Agency Loan; Homebuyer Assistance" are hereby deleted in their entirety. 5. The following attachments are hereby deleted, in their entirety: Attachment No. 5, entitled "Disbursement Schedule and Procedures," Attachment No. 6, entitled "Affordable Homes Mix," Attachment No. 7, entitled "Parcel 7 Residential Development Site Map," Attachment No. 9, entitled "Promissory Note," and Attachment No. 15, entitled "Declaration." 6. Attachment No. 8 entitled "Scope of Development" is hereby modified to replace paragraph ILE thereof with the following: "Senior Living Facility: The Project will contain a senior living facility (the "Senior Living Facility"). The Senior Living Facility will include (i) a one hundred thirty-two (132) suite retirement community, (ii) four (4) single -story duplex cottages, (iii) a seventy-two (72) suite assisted living community, and (iv) a thirty-two (32) bed memory care facility. The Senior Living Facility will be developed in a series of one (1), two (2) and three (3) story structures to be built on Parcel B. 7. The effectiveness of this Amendment No. 7 is conditioned on the execution by Developer and the Original Developer of an assignment and assumption agreement, in a form approved by counsel to the Successor Agency, pursuant to which the Original Developer assigns to the Developer and the Developer assumes from the Original Developer all of the Original Developer's rights and obligations under the DDA with respect to Parcel B and the Senior Living Facility. 8. Developer shall reimburse Successor Agency for all of the costs Successor Agency incurs or has incurred to negotiate, prepare and process this Amendment No. 7. 9. The Successor Agency has the authority to issue this Notice pursuant to ABxl 26 and the City's election to be the successor agency to the Agency. The Successor Agency's liability shall be limited, pursuant to Health and Safety Code section 34173(e), to the sum of 8821015610-0061 _ 3052035.3 a0921/12 -3 property tax revenue it receives pursuant to Part 1.85 of Division 24 of the Health and Safety Code and the value of assets transferred to it as the successor agency to the Agency. In no manner whatsoever does the Successor Agency's actions impose any obligation or liability on any funds or revenues in the City of La Quinta General Fund or other City of La Quinta fund or account that is not specifically for and in the name of the Successor Agency. 10. Except as otherwise expressly provided in this Amendment No. 7, all of the terms and conditions of the DDA shall remain in full force and effect. 11. In the event of any action between or amongst the parties hereto seeking enforcement of any of the terms and conditions to this Amendment No. 7, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 12. This Amendment No. 7 shall be construed according to its fair meaning and as if prepared by all of the parties hereto. 13. This Amendment No. 7 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 7. Service of process on the Successor Agency shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 14. Time is of the essence of this Amendment No. 7 and of each and every term and provision hereof. 15. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by Successor Agency and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 16. This Amendment No. 7 may be executed in counterparts, each of which, when this Amendment No. 7 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 17. The person(s) executing this Amendment No. 7 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No. 7 on behalf of said party, (iii) by so executing this Amendment No. 7 such party is formally bound to the provisions of this Amendment No. 7, and (iv) the entering into this Amendment No. 7 does not violate any provision of any other agreement to which such party is bound. 882/01561M061 3052035 3 .09/21/12 -4- IN WITNESS WHEREOF, Successor Agency and Developer each hereby represents that it has read this Amendment No. 7, understands it, and hereby executes this Amendment No. 7 to be effective as of the day and year first written above. Date: 06,41dA I-S" 2012 Date:l ' 1^i DtTA Lq 2012 "Developer" LA QUINTA RETIREMENT RESIDENCE LIMITED PARTNERSHIP, a Washington limited partnership By: La Quinta GP LLC, a Washington limited liability company Its: General Partner By: Hawthorn Management Services Corp., a Washington co oration Its: Mane By: Barton G. Colson Its: President "Successor Agency" CITY AS SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic A Executive Director ATTEST: Susan Maysels Successor Agency Secretary APPROVED AS TO FORM: RUTAN UCK R By: K therine Jenson Successor Agency Co sel 882/015610A061 3052035.3 a09/21/12 -5- EXHIBIT "A" LEGAL DESCRIPTION Real property in the City of La Qulnta, County of Riverside, State of California, described as follows: PARCEL B AS SHOWN ON LOT LINE ADJUSTMENT NO. 2006-452 AS EVIDENCED BY DbCUMENT RECORDED APRIL 19, 2006 AS INSTRUMENT NO.2006-0280726 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: IN THE CITY OF LA QUINTA,, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCEL 8 TOGETHER WITH THAT PORTION OF PARCEL 7 OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS, BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID PARCEL 8; THENCE ALONG THE SOUTHEASTERLY, EASTERLY AND NORTHERLY BOUNDARY LINES OF SAID PARCEL 8 THROUGH THE FOLLOWING FIVE (5) COURSES: (1) NORTH 43° 56 44" EAST, A DISTANCE OF 152.65 FEET; (2) THENCE NORTH DO° 12- 13" WEST, A DISTANCE OF 790.73 FEET; (3) THENCE SOUTH 89° 47- 47" WEST, A DISTANCE OF 239.% FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY, HAVING.A RADIUS OF 80,00 FEET; (4) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 450 2741", AN ARC DISTANCE OF 63.48 FEET; (5) THENCE TANGENT TO SAID CURVE NORTH 44- 44' 32" WEST, A DISTANCE OF 91.61 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 440.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 490 OF 37" EAST; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID NORTHERLY LINE OF PARCEL 8 AND ALONG THE NORTHERLY LINE OF SAID PARCEL 7, THROUGH A CENTRAL ANGLE OF 230 SW 45", AN ARC DISTANCE OF 183,63 FEET TO THE BEGINNING OF A COMPOUND CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 840.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 250 11' 52" EAST; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID NORTHERLY LINE OF PARCEL 7, THROUGH A CENTRAL ANGLE OF 040 02' 08", AN ARC DISTANCE OF 59.16 FEET TO THE MOST NORTHERLY NORTHWEST CORNER OF SAID PARCEL 7, 882/01561M061 30520353 .09/21/12 -6- THENCE ALONG THE WESTERLY LINES OF SAID PARCEL 7 THROUGH THE FOLLOWING THREE (3) COURSES' (1) SOUTH 160 39' 14" EAST AND NON -TANGENT TO LAST SAID CURVE, AS DISTANCE OF 55.87 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 250.00 FEET; (2) THENCE SOUTHERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 200 41' 22", AN ARC DISTANCE OF 90.27 FEET; (3) THENCE TANGENT TO SAID CURVE SOUTH 040 02' 08" WEST, A DISTANCE OF 333.46 FEET TO THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF SAID PARCEL 8; THENCE LEAVING SAID WESTERLY LINES OF PARCEL 7 AND ALONG SAID PROLONGATION AND SAID SOUTHWESTERLY LINE OF PARCEL 8, SOUTH 500 10' 13" EAST, A DISTANCE OF 592,88 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM AGENCY EXCEPTS AND RESERVES FROM THE CONVEYANCE. HEREIN DESCRIBED ALL INTEREST OF THE AGENCY IN OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEROF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEROF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 09, 2004 AS INSTRUMENT N0. 04.979137 OF OFFICIAL RECORDS. APN. 604-630-027.6 882/015610-0061 3052035.3 a09/21/12 -� SEE SHEET 2 FOR _ ANNOTATION TABLES AND NOTES w o0 R2 DETAIL 'A•�nc A, NnhcE� =, L R4/ LOT 7E' C/L Bo, Atpk ACCESS ON PARCEL•A' 13.515 AC. PARCEL S MILES I AVENUE PARCEL 3.111 'f—C/L 77- ACCESS LOT LINE TO BE DELETED PARCEL 'B• 9.451 AC. (PARCEL S NEW ADJUSTED LOT LINE A/ J-\ LLOT LINE TO BE LOT DELETED Tj, A (PARCEL 7 SEE DETAIL •A• RT 4 AT UPPER LEF7 �6 R2 y1 SCALE: 1" = 200' WILY LINE OR 64/54694 .� d II--MSACONSumm, INC. L, EN bLmx a SbmH & ASSOCt47M INC. EXISTING LOT LINE TO BE DELETED tr.AxNam • Cro lllc • L. Smvx EXISTING LOT LINE TO REMAIN 34200 BOB Hors DA • RxR m MmAW x CA 92270 NEW ADJUSTED LOT LINE 1ffiHnmxe (760) 320.968 • FAx (760) 323.7on . RESTRICTED ACCESS 882/015610-0061 3052035.3 a09/21/12 -8- RESOLUTION NO. SA 2012 - 012 A RESOLUTION OF THE CITY AS SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY APPROVING A SEVENTH AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE FORMER LA QUINTA REDEVELOPMENT AGENCY AND CP DEVELOPMENT LA QUINTA, LLC FOR THE PROPERTY LOCATED AT THE SOUTHEAST CORNER OF WASHINGTON STREET AND MILES AVENUE WHEREAS, pursuant to authority under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) ("CRL"), on or about December 18, 2003, the former La Quinta Redevelopment Agency ("Agency") entered into a Disposition and Development Agreement ("Original Agreement") with CP Development La Quinta, LLC, a California limited liability company ("Developer"), pursuant to which the Agency conveyed to the Developer certain real property located within the Agency's Project Area No. 2 (the "Property") for the Developer's development thereon of a commercial project containing a medical office/clinic, a boutique hotel, a mid -price suites hotel, a resort -style condom inium/casitas development, two sit-down ,restaurants, . and two, single-family residential developments, with forty of: -the single-family homes restricted for sale to moderate - income buyers at an affordable housing cost, all as more particularly described in the Original Agreement (collectively, the "Original Project"); and WHEREAS, the Agency and Developer have amended the Original Agreement on six prior occasions, for purposes of revising, among other things, timelines for and various components of the Original Project (as amended, the "Agreement" or the "Project", as applicable); and WHEREAS, the Developer has sold the portion of the Property designated pursuant to the Agreement to be developed with 40 affordable single-family homes (the "Subject Property") to La Quinta Retirement Residence Limited Partnership, a Washington limited partnership ("LQRRLP"); and WHEREAS, LQRRLP has processed through the City and has obtained the approvals and entitlements necessary to develop on the Subject Property a senior living facility that will .include, (i) a 132 suite retirement community, (ii) four single -story duplex cottages, (iii) a 72 suite assisted living community, and (iv) a 32 bed memory care facility; and WHEREAS, as part of the 201 1-1.2 State budget bill, the California Legislature enacted and the Governor signed, ABx1 26, requiring that each redevelopment agency be dissolved; and Resolution No. SA 2012-012 CP Development La Quinta, LLC Disposition & Development Agreement - Amendment 7 Adopted: October 16, 2012 WHEREAS, an action challenging the constitutionality of ABx1 26 and companion bill ABx1 27 was filed in the California Supreme Court by the California Redevelopment Association, the League of California Cities, and two individual cities; and WHEREAS, on December 29, 2011, the Court upheld ABx1 26 and struck down as unconstitutional ABx1 27; and WHEREAS, pursuant to (i) Health and Safety Code section 34171(j), added by ABx1 26 and amended by'Assembly Bill 1484, enacted by the California Legislature and signed by the Governor on June 27, 2012, and (ii) City Council Resolution No. 2012-002, the City of La Quinta ("City") is the "successor agency" to the former Agency, and in such capacity acts as the "City as Successor Agency to the La Quinta Redevelopment Agency"; and WHEREAS, pursuant to Health and Safety Code section 34177(i), added by ABx1 26, successor agencies are required to oversee development of properties until the contracted work has been completed; and WHEREAS, the Successor A)gency�has+negotiated.w/ith •the LQRRLP a seventh amendment.to the Agreement to�addresslthe modifications desired by LQRRLP with respect to the Subject Property ("Amendment No. 7"); and WHEREAS, Amendment No. 7 is of benefit to the City of La Quinta; and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, BE IT RESOLVED by the City as Successor Agency to the La Quinta Redevelopment Agency does resolve as follows: SECTION 1. That the above recitals are true and correct and incorporated herein. SECTION 2. That Amendment No. 7 is in the best interests of the citizens of the City of La Quinta. SECTION 3. That Amendment No. 7, a copy of which is on file with the Successor Agency Secretary, is hereby approved, subject to (i) the adoption by the City Council of the City of La Quinta of an Ordinance approving an amendment to that certain Development Agreement entered into by and between the City and the Developer on or about December 18, 2003 (the "DA") that makes conforming changes to the DA. Resolution No. SA 2012-012 CP Development La ouinta, LLC Disposition & Development Agreement - Amendment 7 Adopted: October 16, 2012 SECTION 4. The Successor Agency Executive Director and Successor Agency Counsel are hereby authorized and directed to (i) make final modifications to Amendment No. 7 that are consistent with the substantive terms of Amendment No. 7 approved hereby, and to thereafter sign Amendment No. 7 on behalf of the Successor Agency, and (ii) take such other and further actions, and sign such other and further documents that require the Successor Agency's signature, as may be necessary and proper to carry out the terms of Amendment No. 7. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City as Successor Agency to the La Quinta Redevelopment Agency held this 16th day of October, 2012, by the following vote: AYES: Agency Members Evans, Franklin, Henderson, Osborne, Chair Adolph NOES: None ABSENT: None ABSTAIN: None A0 . �C DON ADO H, Chair erson Successor Agency to the La Quinta Redevelopment Agency ATTEST: 5V4(/ti SUSAN MAYSELS, Sbcretary Successor Agency to the La Quinta Redevelopment Agency APPROVED AS TO FORM: THERINE JE N, Counsel uccessor Agency the La Quinta Redevelopment Agency RECORDING REQUESTED BY First Arnetican Tide Insurance Company National CmVnerciai Services AND WHEN RECORDED MAIL DOCUMENT TO: La Qum Retirement Residence LP 2264 MoGlftst St. SE, Sulfa 210 Salem, OR 97302 DOC # 2011-0293771 07/01/2011 03e22P Fee:43.00 Page 1 of 7 Doe T Tax Paid Recorded In official Records County of Riverside Larry Y. Ward 1111111111111111 ilia 111111111111111111 10MMYIMNW M= moo s . rW GRA qT DEED A.P.N.: 609-630.027-6 T.R.A. No.020-M File No.: NCS-474245-M (RP). The Wdeslgrzd GIMIM(s)DedarB(8). DOCUM MARYTRANSAMTAx $4,180.8N CnYTRARsrMTAX$' X mmpWedmgre mnslde2tlm Orfutl vahie ofWOPertY wed oR [ 7 [m�utmmtne m,mde�adanor fuA wWe less wlue or tere anrkarertelNnp attlme or�IG lxI aty Orin pwat&and FOR A VALUABLE CONSIDERATION, receipt of which is hereby admowledged, CP Development La Quinta, LLC, a California Bruited liability company herby GRANTS to La Quanta ReHrement Residence Limited Part,rership, a Washlegton limited partnership the following described property In the CR.y of La Quinta, County of Riverside, State of California: See Exhibit W altacFied hereto and made a part hereof. AP.N.: 604.630-027-6 Dated: _ f/Z7/2011 File No.: NCS-474245-ORI (RR) CP Detrebprnent la Quints, LLC, a Califbmb lmlted tlablGty company By. Oliphant Enterprises, Inc., a California corporation, Manager By: Richard R. Oiiphant, President By. Equity Directions, Inc., a CaGfomia corporation, Manager By: Dennis French, President Date: 06/27/2011 -*- siiried. iin �our4- wpar+. CP Development La Qulnta, LLC, a California limited liability company By: Oliphant Enterprises, Inc., a California corporation, Manager By: Pochard R. Oliphant, President By: Equity Directions, Inc., a California corporation, Manager on lily By: Ddnnis French, President Wu51+oG 5-6-• e✓ Nit Date: 06/27/2011 '"Ov, icdc wr 6t�n°�7/L 7,011 ..... ., . DRAKE (A ; {• Notary Pv;tl • Me of Nevada r APDnbbianlP4WftbbWadnerDU* t f:V Na:08.70782•Fi�6ea,ge,e 2620123 d[. ..M1...... (r-� Node Grant Deed - CoWnued •a� I �IA/�1LY/�Q Date: 06/27/2011 who proved to me on the oasis of satiaktory evidwoe to be the person(s) whose names) Ware subscribed to the within lnsdument and a&nowiedgad to me that heldw/d" waited the same in his/her/their authorized capadk3es), and that by hWherffitdr signatures) on the hisbutrent the person(s), or the entity upon behaff of which the person(s) acted, executed the ant I mrWY tattier PENALTY OF PERJURY under the laws of the State of Caarnia that the foregoing paragraph is true and correct. WITNESS my hand and offktal seat. •.757.11 SOM -TAW ar M AN M MALEK sion N 1924689 ublic - California swo cow" E es Nor t This area Porofilw Mtark1 sw Notary Phone:7i- %v /- County of Principal Place of 0uslness: ie `. e- ACKNOWLEDGMENT STATE OF Nevda COUNTY OF Washoe THIS INSTRUMENT WAS ACKNOWLEDGED BEFORE ME ON 3uY1t; Zq� Z l BY !!&nri(S 1;rncL AS WrA OGY/Aiaow v OF ._w E ppq� Notary Sgnature + s Notary Publc- Sate of Nevada &2;„.,84ANb*2120121 Grant Deed - oonfinued Date: 06/27/2011 PARCEL 8 AS SHOWN ON LOT LINE ADJUSTMENT NO.2006.452 AS EVIDkNCED BY DOCUMENT RECORDED APRIL 19, 2006 AS INSTRUMENT NO.2006-0280726 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCEL 8 TOGETHER WITH THAT PORTION OF PARCEL 7 OF PARCEL MAP NO.31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS, BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS. BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID PARCEL 8; THENCE ALONG THE SOUTHEASTERLY, EASTERLY AND NORTHERLY BOUNDARY LINES OF SAID PARCEL 8 THROUGH THE FOLLOWING FIVE (5) COURSES: (1) NORTH 430 56' 44- EAST, A DISTANCE OF 152.65 FEET; (2) THENCE NORTH 000 12' 130 WEST, A DISTANCE OF 790.73 FEET; (3) THENCE SOUTH 890 47' 470 WEST, A DISTANCE OF 239.56 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY, HAVING A RADIUS OF 80.00 FEET, (4) THENCE NORTHWESIERLYALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 450 27' 410, AN ARC DISTANCE OF 63.48 FEET; (5) THENCE TANGENT TO SAID CURVE NORTH 440 "' 320 WEST, A DISTANCE OF 91.61 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 440.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 496 O6' 37- EAST) THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID NORTHERLY LINE OF PARCEL 8 AND ALONG THE NORTHERLY LINE OF SAID PARCEL 7, THROUGH A CENTRAL ANGLE OF 230 54' 45", AN ARC DISTANCE OF 183.63 FEETTO THE BEGINNING OFA COMPOUND CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 840.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 250 11' Sr EAST; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID NORTHERLY LINE OF PARCEL 7, THROUGH A CENTRAL ANGLE OF 046 02' Or, AN ARC DISTANCE OF 59.16 FEET TO THE MOST NORTHERLY NORTHWEST CORNER OF SAID PARCEL 7, THENCE ALONG THE WESTERLY LINES OF SAID PARCEL 7 THROUGH THE FOLLOWING THREE (3) COURSES: (I) SOUTH 160 39' 140 EAST AND NON -TANGENT TO LAST SAID CURVE, AS DISTANCE OF 55.87 FEET TO THE BEGINNING OF TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 250.00 FEET; (2) THENCE SOUTHERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 200 41' 220, AN ARC DISTANCE OF 90.27 FEET, (3) THENCE TANGENT TO SAID CURVE SOUTH 040 02' 080 WEST, A DISTANCE OF 33340 Grant Deed - conf need Date., 06/27/2011 FEET TO THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF SAID PARCELS, THENCE UAVMG SAID WESTERLY LINES OF PARCEL 7 AND ALONG SAID PROLONGATION AND SAID SOUTHWESTERLY LINE OF PARCEL B, SOUTH 500 IW 13° EAST, A DISTANCE OF 592.88 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM AGENCY EXCEPTS AND RESERVES FROM THE CONVEYANCE HEREIN DESCRIBED ALL INTEREST OF THE AGENCY IN OIL, We HYDROCARBON SUBSTANCES AND MINERALS OF EVERY RIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (SOD) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEROF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTIONTHEROF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR @DOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM LA t2UINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 09, 2004 AS INSTRUMENT NO. 04- 97M7 OF OFFICIAL RECORDS. AMENDMENT NO. 7 TO DISPOSITION AND DEVELOPMENT AGREEMENT This AMENDMENT NO. 7 TO DISPOSITION AND DEVELOPMENT AGREEMENT ("Amendment No. 7") is made and entered into as of OG768rM !q , 2012 by and between CITY AS SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Successor Agency"), and LA QUINTA RETIREMENT RESIDENCE LIMITED PARTNERSHIP, a Washington limited partnership ("Developer"). RECITALS: A. On or about December 18, 2003, the former La Quinta Redevelopment Agency ("Agency") and CP Development La Quinta, LLC (the "Original Developer") entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which the Agency sold to the Original Developer that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Property") and the Original Developer agreed to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to income -eligible buyers at a restricted sales price (collectively, the "Original Project"). B. The Original DDA has been amended on six (6) occasions, on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, on or about August 23, 2007, and on or about March 19, 2008 (collectively, the "Prior DDA Amendments"). The Original DDA, as amended by the Prior DDA Amendments, is hereinafter referred to as the "DDA", and the Original Project, as amended by the Prior DDA Amendments, is hereinafter referred to as the "Project." C. The Original Developer previously processed through the City Lot Line Adjustment No. 2006-452, which reconfigured the parcels previously designated as "Parcel 6," "Parcel 7," and "Parcel 8" of Parcel Map 31116, in Book 212, at Pages 60-66, inclusive, of Parcel Maps, Riverside County Records, into "Parcel A" and "Parcel B". Parcel A has since been sold to Eisenhower Medical Center and medical facilities have since been constructed thereon. D. On or about July 1, 2011, the Original Developer sold Parcel B to Developer for the purpose of Developer's construction thereon of (i) a one hundred thirty-two (132) suite retirement community, (ii) four (4) single -story duplex cottages, (iii) a seventy-two (72) suite assisted living community, and (iv) a thirty-two (32) bed memory care facility (collectively, the "Senior Living Facility)." Parcel B is legally described in Exhibit "A", which is attached hereto and incorporated herein by this reference. E. On June 28, 2011, the Governor signed Assembly Bill 26 ("ABxl 26") and Assembly Bill 27 ("ABxl 27") from the 2011-12 First Extraordinary Session of the California Legislature. ABxl 26 immediately suspended all redevelopment agency activities, except 882M 15610-0061 _ 3052035.3 a09R1/12 -t continued performance of "enforceable obligations," and set forth a process to dissolve redevelopment agencies and end redevelopment in California. ABxl 27 provided a "voluntary alternative redevelopment program," which would have allowed redevelopment agencies to remain in existence and continue redevelopment, if remittance payments were made to cover the State of California's budget shortfall for fiscal year 2011-12 and were made in subsequent fiscal years to cover State costs. A lawsuit was filed, challenging the constitutionality of both ABx1 26 and 27. The California Supreme Court upheld the constitutionality of ABxl 26, revising the effective dates of certain provisions, and struck down as unconstitutional ABxl 27. (California Redevelopment Assn. v. Matosantos (2011) 53 Cal.4`h 231 ("CRA Case"). ABx1 26 is chapter 5, Statutes 2011, First Extraordinary Session, which added Part 1.8 (suspension provisions) and Part 1.85 (dissolution provisions) of Division 24 of the Health and Safety Code. Under the CRA Case, all redevelopment agencies dissolved February 1, 2012. Pursuant to Health and Safety Code section 341710), added by Part 1.85 of Division 24, and City Council Resolution No. 2012-002, the City of La Quinta ("City") is the "successor agency" to the former Agency. F. On June 27, 2012, the Governor signed Assembly Bill 1484 from the 2011-2012 Regular Session of the California Legislature ("AB 1484"), which established that successor agencies are separate legal entities from the entities that provide for their governance. As a result of AB 1484, the successor agency to the former Agency is now formally the "City as Successor Agency to the La Quinta Redevelopment Agency". G. Pursuant to the terms and conditions of this Amendment No. 7, Developer and Successor Agency now wish to modify certain terms set forth in the DDA with respect to Parcel B. Unless defined herein to the contrary, all capitalized terms in this Amendment No. 7 shall have the meanings ascribed thereto in the DDA. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: The DDA is hereby amended as follows: 1. Section 100 entitled "Definitions" is modified to delete the following definitions, in their entirety: Affordable Homes, Affordable Homes Mix, Affordable Housing Component, Affordable Housing Cost, Agency Loan Amount, Buyer Affordable Housing Documents, Declaration, Deed of Trust, Disbursement Schedule, Eligible Buyer, Parcel 7 Residential Development, Residential Development, Residential Development Site Map, Promissory Note, and Unrestricted Homes. 2. Section 100 entitled "Definitions" is modified add the following as new definitions: 882/015610-0061 3052035.3 09/21/12 -2- "Senior Living Facility" means (i) a one hundred thirty-two (132) suite retirement community located in five (5) single -story duplex cottages, (ii) a seventy-two (72) suite assisted living community, and (iii) a thirty-two (32) bed memory care facility. "Parcel B" means Parcel B of Lot Line Adjustment No. 2006-452 in the City of La Quinta, California. Section 100 entitled "Definitions" is modified to revise the following definitions: 3.1 To revise the definition of "Phase of Development" by adding as a new Phase of Development to be developed on Parcel B the "Senior Living Facility." 3.2 To revise the definition of "Project" by adding as a new Project component the development of the Senior Living Facility. 4. Sections 400-404 entitled "Agency Loan; Homebuyer Assistance" are hereby deleted in their entirety. 5. The following attachments are hereby deleted, in their entirety: Attachment No. 5, entitled "Disbursement Schedule and Procedures," Attachment No. 6, entitled "Affordable Homes Mix," Attachment No. 7, entitled "Parcel 7 Residential Development Site Map," Attachment No. 9, entitled "Promissory Note," and Attachment No. 15, entitled "Declaration." 6. Attachment No. 8 entitled "Scope of Development" is hereby modified to replace paragraph II.E thereof with the following: "Senior Living Facility: The Project will contain a senior living facility (the "Senior Living Facility"). The Senior Living Facility will include (i) a one hundred thirty-two (132) suite retirement community, (ii) four (4) single -story duplex cottages, (iii) a seventy-two (72) suite assisted living community, and (iv) a thirty-two (32) bed memory care facility. The Senior Living Facility will be developed in a series of one (1), two (2) and three (3) story structures to be built on Parcel B. 7. The effectiveness of this Amendment No. 7 is conditioned on the execution by Developer and the Original Developer of an assignment and assumption agreement, in a form approved by counsel to the Successor Agency, pursuant to which the Original Developer assigns to the Developer and the Developer assumes from the Original Developer all of the Original Developer's rights and obligations under the DDA with respect to Parcel B and the Senior Living Facility. 8. Developer shall reimburse Successor Agency for all of the costs Successor Agency incurs or has incurred to negotiate, prepare and process this Amendment No. 7. 9. The Successor Agency has the authority to issue this Notice pursuant to ABxl 26 and the City's election to be the successor agency to the Agency. The Successor Agency's liability shall be limited, pursuant to Health and Safety Code section 34173(e), to the sum of " 2/0156 [0-0061 _ 30520353 a0921/12 3 property tax revenue it receives pursuant to Part 1.85 of Division 24 of the Health and Safety Code and the value of assets transferred to it as the successor agency to the Agency. In no manner whatsoever does the Successor Agency's actions impose any obligation or liability on any funds or revenues in the City of La Quinta General Fund or other City of La Quinta fund or account that is not specifically for and in the name of the Successor Agency. 10. Except as otherwise expressly provided in this Amendment No. 7, all of the terms and conditions of the DDA shall remain in full force and effect. 11. In the event of any action between or amongst the parties hereto seeking enforcement of any of the terms and conditions to this Amendment No. 7, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 12. This Amendment No. 7 shall be construed according to its fair meaning and as if prepared by all of the parties hereto. 13. This Amendment No. 7 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 7. Service of process on the Successor Agency shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 14. Time is of the essence of this Amendment No. 7 and of each and every term and provision hereof. 15. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by Successor Agency and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 16. This Amendment No. 7 may be executed in counterparts, each of which, when this Amendment No. 7 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 17. The.person(s) executing this Amendment No. 7 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No. 7 on behalf of said party, (iii) by so executing this Amendment No. 7 such party is formally bound to the provisions of this Amendment No. 7, and (iv) the entering into this Amendment No. 7 does not violate any provision of any other agreement to which such party is bound. 882/015610-0061 3052035.3 a09/21/12 -4- IN WITNESS WHEREOF, Successor Agency and Developer each hereby represents that it has read this Amendment No. 7, understands it, and hereby executes this Amendment No. 7 to be effective as of the day and year first written above. Date: Oc,41d, iS+ , 2012 Date: j L 2012 ATTEST: i /1 Susan Maysels Successor Agency Secretary APPROVED AS TO FORM: RUTAN UCK R jr By: . K therit a Jenson Successor Agency Co set 882I01561 M061 3052035.3 a00/21M -5- "Developer" LA QUINTA RETIREMENT RESIDENCE LIMITED PARTNERSHIP, a Washington limited partnership By: La Quinta GP LLC, a Washington limited liability company Its: General Partner By: Hawthorn Management Services Corp., a Washington co oration Its: Man By: Barton G. Colson Its: President "Successor Agency" CITY AS SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY, a public body, cotporate and politic d Executive Director EXHIBIT "A" LEGAL DESCRIPTION Real property in the aty of La Qulnta, County of Riverside, State of Caiifomla, described as follows: PARCEL B AS SHOWN ON LOT LINE ADJUSTMENT NO.2006-452 AS EVIDENCED BY 136CUMENT RECORDED APRIL 19, 2006 AS INSTRUMENT NO.2006.0280726 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: IN THE CITY OF LA QUINTA,. COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCEL 8 TOGETHER WITH THAT PORTION OF PARCEL 7 OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS, BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID PARCEL 8; THENCE ALONG THE SOUTHEASTERLY, EASTERLY AND NORTHERLY BOUNDARY LINES OF SAID PARCEL 8 THROUGH THE FOLLOWING FIVE (5) COURSES: (1) NORTH 430 56 44" EAST, A DISTANCE OF 152.65 FEET; (2) THENCE NORTH 00° 12' 13" WEST, A DISTANCE OF 790.73 FEET; (3) THENCE SOUTH 89° 47 47" WEST, A DISTANCE OF 239.56 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY, HAVING.A RADIUS OF 80.00 FEET; (4) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 450 27' 41", AN ARC DISTANCE OF 63.48 FEET; (5) THENCE TANGENT TO SAID CURVE NORTH 440 44' 32" WEST, A DISTANCE OF 91.61 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 440.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 490 06 37" EAST; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID NORTHERLY LINE OF PARCEL 8 AND ALONG THE NORTHERLY LINE OF SAID PARCEL 7, THROUGH A CENTRAL ANGLE OF 230 5145", AN ARC DISTANCE OF 183.63 FEET TO THE BEGINNING OF A COMPOUND CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 840.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 250 11' 52" EAST; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID NORTHERLY LINE OF PARCEL 7, THROUGH A CENTRAL ANGLE OF 04' 02' 08", AN ARC DISTANCE OF 59.16 FEET TO THE MOST NORTHERLY NORTHWEST CORNER OF SAID PARCEL 7; 882/015610-0061 3052035.3 a09/21/12 -6- THENCE ALONG THE WESTERLY LINES OF SAID PARCEL 7 THROUGH THE FOLLOWING THREE (3) COURSES: (1) SOUTH 16° 39' 14" EAST AND NON -TANGENT TO LAST SAID CURVE, AS DISTANCE OF 55.87 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 250.00 FEET (2) THENCE SOUTHERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 200 41' 22", AN ARC DISTANCE OF 90.27 FEET; (3) THENCE TANGENT TO SAID CURVE SOUTH 040 02' 08" WEST, A DISTANCE OF 333.46 FEET TO THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF SAID PARCEL 8; THENCE LEAVING SAID WESTERLY LINES OF PARCEL 7 AND ALONG SAID PROLONGATION AND SAID SOUTHWESTERLY LINE OF PARCEL 8, SOUTH 500 10' 13" EAST, A DISTANCE O 592.88 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM AGENCY EXCEPTS AND RESERVES FROM THE CONVEYANCE, HEREIN DESCRIBED ALL INTEREST OF THE AGENCY IN OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEROF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEROF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 09, 2004 AS INSTRUMENT NO. 04.979137 . OF OFFICIAL RECORDS. APN: 604-630-027-6 882/015610-0061 3052035.3 a09/21/12 -7- SEE SHEET 2 FOR ANNOTATION TABLES AND NOTES Rl R2 DETAIL 'A' INFO L0 'IU "EV9.OKIENT DEPART meNI A-ws�hmj, DATE 4 PARCEL 2 R IT 6-1 C/L BO' ACCESSrRtAN9� EST. HEREON PARCEL 'A' 13.515 AC. PARCEL B L LOT !0' SCALE: 1." = 200' AAA MSA Co [III lam„ 342W Bob Rocs Dove 19cbsaosb (760) 321 PARCEL 3 PARCEL B C/L 70' ACCESS I I —LOT LINE TO BE �(/ D TED PARCEL 'B' 9.451 AC, PARCEL S INEW ADJUSTED LOT LINE U• S07 Q lOT LINE TO LOT DELETED • ng Rt4 PARCEL 8 SEE DETAIL 'A' AT UPPER LEFT R21•y NE'LY LINE OR 64/54694 d NSULTWO,INC. LEGEND H & ASSOCLATBS, 7NC. I EXISTING LOT LINE TO BE DELETED -0 •Lea 5baver>ra I EXISTING LOT LINE TO REMAIN s RAN= Mm s CA 92270 NEW ADJUSTED LOT LINE MU a PAX C760) 323.7993 RESTRICTED ACCESS, 882/015610-0061 3052035.3 e09/21/12 -g- RESOLUTION NO. SA 2012 - 012 A RESOLUTION OF THE CITY AS SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY APPROVING A SEVENTH AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE FORMER LA QUINTA REDEVELOPMENT AGENCY AND CP DEVELOPMENT LA QUINTA, LLC FOR THE PROPERTY LOCATED AT THE SOUTHEAST CORNER OF WASHINGTON STREET AND MILES AVENUE WHEREAS, pursuant to authority under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) ("CRL"), on or about December 18, 2003, the former La Quinta Redevelopment Agency ("Agency") entered into a Disposition and Development Agreement ("Original Agreement") with CP Development La Quinta, LLC, a California limited liability company ("Developer"), pursuant to which the Agency conveyed to the Developer certain real property located within the Agency's Project Area No. 2 (the "Property") for the ,Developer's development thereon of a commercial project containing a medical office/clinic, a boutique hotel, a mid -price suites hotel, a resort -style condominium/casitas development, two sit-down ,restaurants, and :two,: single-family residential developments, with forty of -the single-family homes restricted for sale to moderate - income buyers at an affordable housing cost, all as more particularly described in the Original Agreement (collectively, the "Original Project"); and WHEREAS, the Agency and Developer have amended the Original Agreement on six prior occasions, for purposes of revising, among other things, timelines for and various components of the Original Project (as amended, the "Agreement" or the "Project", as applicable); and WHEREAS, the Developer has sold the portion of the Property designated pursuant to the Agreement to be developed with 40 affordable single-family homes (the "Subject Property") to La Quinta Retirement Residence Limited Partnership, a Washington limited partnership ("LQRRLP"); and WHEREAS, LQRRLP has processed through the City and has obtained the approvals and entitlements necessary to develop on the Subject Property a senior living facility that will include, (i) a 132 suite retirement community, (ii) four single -story duplex cottages, (iii) a 72 suite assisted living community, and (iv) a 32 bed memory care facility; and WHEREAS, as part of the 2011-1.2 State budget bill, the California Legislature enacted and the Governor signed, ABx1 26, requiring that each redevelopment agency be dissolved; and Resolytion No. SA 2012-012 CP Development La Quints, LLC Disposition & Development Agreement - Amendment 7 Adopted: October 16, 2012 WHEREAS, an action challenging the constitutionality of ABx1 26 and companion bill ABx1 27 was filed in the California Supreme Court by the California Redevelopment Association, the League of. California Cities, and two individual cities; and WHEREAS, on December 29, 2011, the Court upheld ABx1 26 and struck down as unconstitutional ABx1 27; and WHEREAS, pursuant to (i) Health and Safety Code section 34171(j), added by ABx1 26 and amended by Assembly Bill 1484, enacted by the California Legislature and signed by the Governor on June 27, 2012, and (ii► City Council Resolution No. 2012-002, the City of La Quinta ("City") is the "successor agency" to the former Agency, and in such capacity acts as the "City as Successor Agency to the La Quinta Redevelopment Agency"; and WHEREAS, pursuant to Health and Safety Code section 34177(i), added by ABx1 26, successor agencies are required to oversee development of properties until the contracted work has been completed; and 'WHEREAS,. the Successor Agency has negotiated' With the LQRRLP a seventh amendment. to. the Agreementrto�addressithe modifications desired by LQRRLP with respect to the Subject Property ("Amendment No. 7"); and WHEREAS, Amendment No. 7 is of benefit to the City of La Quinta; and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, BE IT RESOLVED by the City as Successor Agency to the La Quinta Redevelopment Agency does resolve as follows: SECTION 1. That the above recitals are true and correct and incorporated herein. SECTION 2. That Amendment No. 7 is in the best interests of the citizens of the City of La Quinta. SECTION 3. That Amendment No. 7, a copy of which is on file with the Successor Agency Secretary, is hereby approved, subject to (i) the adoption by the City Council of the City of La Quinta of an Ordinance approving an amendment to that certain Development Agreement entered into by and between the City and the Developer on or about December 18, 2003 (the "DA") that makes conforming changes to the DA. Resolution No. SA 2012-012 CP Development La Quints, LLC Disposition & Development Agreement - Amendment 7 Adopted: October 16, 2012 SECTION 4. The Successor Agency Executive Director and Successor Agency Counsel are hereby authorized and directed to (i) make final modifications to Amendment No. 7 that are consistent with the substantive terms of Amendment No. 7 approved hereby, and to thereafter sign Amendment No. 7 on behalf of the Successor Agency, and (ii) take such other and further actions, and sign such other and further documents that require the Successor Agency's signature, as may be necessary and proper to carry out the terms of Amendment No. 7. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City as Successor Agency to the La Quinta Redevelopment Agency held this 16th day of October, 2012, by the following vote: AYES: Agency Members Evans, Franklin, Henderson, Osborne, Chair Adolph NOES: None ABSENT: None ABSTAIN: None DON ADO H, Chair erson Successor Agency to the La Quinta Redevelopment Agency ATTEST: SUSAN MAYSELS, Sbcretary Successor Agency to the La Quinta Redevelopment Agency APPROVED AS TO FORM: M - �& J-�, THERINE JE N, Counsel uccessor Agency tdthe La Quinta Redevelopment Agency RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of La Quinta P.O. Box 1504 La Quinta, CA 92247 Attn: City Manager DOC # 2012-0564809 12/21/2012 02:48P Fee:NC Page 1 of 12 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder I IIIIIIIIIIIIII (IIIIIII IIIIIII III IIIIIII III IIIIIIIII IIII S I R I U PAGE SIZE DA MISC LONG RFD COPY M A L 1 466 1 426 1 PCOR NCOR I SMF fNCHGV EXAM T: CTY (Exempt From Recording Fee per Gov't Code § 27383) ASSIGNMENT AND ASSUMPTION AGREEMENT This ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment") is entered into this jq_!t-day of 2012, by and between CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Assignor") and LA QUINTA RETIREMENT RESIDENCE LIMITED PARTNER- SHIP, a Washington limited liability company ("Assignee") with reference to the following: A. Assignee is the owner in fee simple of certain property located at the southeast corner of Miles Avenue and Washington Street in the City of La Quinta, California (Parcel B"). Parcel B is more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference. B. Assignee acquired Parcel B from Assignor, on or about July 1, 2011, for the purpose of constructing thereon (i) a one hundred thirty-two (132) suite retirement community, (ii) four (4) single -story duplex cottages, (iii) a seventy-two (72) suite assisted living community, and (iv) a thirty-two (32) bed memory care facility (collectively, the "Senior Living Facility.") C. Assignor originally acquired Parcel B, along with certain adjacent real property (collectively, the "Center Pointe Property"), from the former La Quinta Redevelopment Agency ("Agency") pursuant to the terms of that certain Disposition and Development Agreement dated on or about December 18, 2003 ("Original DDA"), as amended on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, on or about August 23, 2007, and on or about March 19, 2008 (collectively the "DDA Amendments"). The Original DDA, as modified by the DDA Amendments, is hereinafter referred to as the "DDA". D. Concurrently with the execution of the Original DDA, the Agency and Assignor entered into that certain Development Agreement, which was recorded in the Official Records of the County Recorder for the County of Riverside ("Official Records") on January 5, 2004 as Instrument No. 2004-0005256, and amended by that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004 and recorded in the Official Records on November 8, 2004 as Instrument No. 2004- 0885063, that certain Amendment No. 2 to Development Agreement executed on or about November 17, 2005 and recorded in the Official Records on December 19, 2005 as 882/015610-0061 3112529.2.0921/12 -1- Instrument No. 2005-1045418, and that certain Amendment No. 3 to Development Agreement executed on or about May 6, 2008 and recorded in the Official Records on June 4, 2008 as Instrument No. 2008-0303530 (as amended, the "Development Agreement.") E. Pursuant to the terms of the DDA and the Development Agreement, the Center Pointe Property is to be used for a mixed use development project (the "Project"), with Parcel B designated for a residential development that includes an affordable housing component (the "Original Residential Component"). F. On June 28, 2011, the Governor signed Assembly Bill 26 ("ABxI 26") and Assembly Bill 27 ("ABxI 27") from the 2011-12 First Extraordinary Session of the California Legislature. ABxI 26 immediately suspended all redevelopment agency activities, except continued performance of "enforceable obligations," and set forth a process to dissolve redevelopment agencies and end redevelopment in California. ABxI 27 provided a "voluntary alternative redevelopment program," which would have allowed redevelopment agencies to remain in existence and continue redevelopment, if remittance payments were made to cover the State of California's budget shortfall for fiscal year 2011-12 and were made in subsequent fiscal years to cover State costs. A lawsuit was filed, challenging the constitutionality of both ABxI 26 and 27. The California Supreme Court upheld the constitutionality of ABxI 26, revising the effective dates of certain provisions, and struck down as unconstitutional ABxI 27. (California Redevelopment Assn. v. Matosantos (2011) 53 Cal.4' 231 ("CPA Case"). ABxI 26 is chapter 5, Statutes 2011, First Extraordinary Session, which added Part 1.8 (suspension provisions) and Part 1.85 (dissolution provisions) of Division 24 of the Health and Safety Code. Under the CRA Case, all redevelopment agencies dissolved February 1, 2012. Pursuant to Health and Safety Code section 341710), added by Part 1.85 of Division 24, and City Council Resolution No. 2012-002, the City of La Quinta ("City") is the "successor agency" to the former La Quinta Redevelopment Agency. G. On June 27, 2012, the Governor signed Assembly Bill 1484 from the 2011-2012 Regular Session of the California Legislature ("AB 1484"), which established that successor agencies are separate legal entities from the entities that provide for their governance. As a result of AB 1484, the successor agency to the former Agency is now formally the "City as Successor Agency to the La Quinta Redevelopment Agency" (the "Successor Agency"). H. Concurrently with the execution of this Assignment, (i) the Successor Agency and Assignee are entering into that certain Amendment No. 7 to Disposition and Development Agreement ("DDA Amendment"), and (ii) the City and Assignee are entering into that certain Amendment No. 4 to Development Agreement (the "DA Amendment"). Pursuant to the DDA Amendment and DA Amendment (collectively, the "DDA/DA Amendments"), each of the DDA and Development Agreement will be modified to omit the Original Residential Component and add the Senior Living Facility. The effectiveness of the DDA/DA Amendments is conditioned on the execution and recordation of this Assignment. 982/015610-0061 31125292 a09/21/12 -2- I. Assignor now desires to transfer to Assignee all of Assignor's rights and responsibilities under the DDA and the Development Agreement to the extent that such rights and responsibilities relate to Parcel B and to the development of the Senior Living Facility. NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Assignor hereby assigns to Assignee all of Assignor's rights and responsibilities under the terms of the DDA and the Development Agreement with respect to Parcel B and the Senior Living Facility from and after the "Effective Date" (as that tern is defined in Section 4 below) of this Assignment (collectively, the "Assigned Rights and Obligations".) 2. Assignee hereby accepts the foregoing assignment of the Assigned Rights and Obligations, and agrees to be bound by the terms of the DDA and the Development Agreement with respect to Parcel B and the Senior Living Facility. 3. The parties hereto acknowledge and agree that Assignee shall not be responsible for any of the obligations of the DDA or the Development Agreement which arise from ownership of any portion of the Center Pointe Property which arise prior to the Effective Date hereof, or which arise from any portion of the Center Pointe Property other than Parcel B after the Effective Date hereof. As such, a default by Assignor under either the DDA or the Development Agreement prior to the Effective Date hereof, or with respect to any portion of the Center Pointe Property other than Parcel B after the Effective Date hereof ("Assignor's Default") shall not be deemed a default by Assignee, and Assignor shall indemnify, defend and hold harmless Assignee from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignor's Default. A default by Assignee under either the DDA or the Development Agreement with respect to Parcel B after the Effective Date hereof ("Assignee's Default") shall not be deemed a default by Assignor, and Assignee shall indemnify, defend and hold harmless Assignor from any and all losses, claims or liability, including without limitation reasonable attorneys' fees and costs, arising from an Assignee's Default. 4. This Assignment shall be deemed effective upon the written consent to this Assignment by the City and the Successor Agency (herein referred to as the "Effective Date"). 5. Except as otherwise described in paragraph 4 above, the parties hereto each warrant and represent that they have taken all necessary corporate action to authorize the execution and performance of this Assignment and that the individuals executing this document on behalf of the parties are authorized to do so, and by doing so, create binding obligations as described herein of the party represented. 882/015610-0061 3112529.2 a09/21/12 -3- 6. This Assignment shall be governed by the internal laws of the State of California, without regard to conflict of law principles. 7. This Assignment may be executed in counterparts, each of which, when this Assignment has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. [End — Signature page follows] 882/015610-0061 3112529.2 a0921/12 -4- WHEREFORE, the parties hereto have executed this Assignment on the date first written above. "Assignor" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member By: — (�—. �, Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager r By: , Richard R. Oliphant Its: President "Assignee" LA QUINTA RETIREMENT RESIDENCE LIMITED PARTNERSHIP, a Washington limited partnership By: La Quinta GP LLC, a Washington limited liability company Its: General Partner By: Hawthorn. Management Services Corp., a Washington corporation Its: 21,--0e By: Barton G. Colson Its: President 9921015610-0061 31125292 a09/21/12 'S' WHEREFORE, the parties hereto have executed this Assignment on the date first written above. "Assignor" CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company By: Oliphant Family Trust Its: Member SIGNED IN COUNTERPART um Richard R. Oliphant Its: Trustee By: Oliphant Enterprises, Inc. Its: Manager SIGNED IN COUNTERPART LN Richard R. Oliphant Its: President "Assignee" LA QUINTA RETIREMENT RESIDENCE LIMITED PARTNERSHIP, a Washington limited partnership By: La Quinta GP LLC, a Washington limited liability company Its: General Partner By: Hawthorn Management Services Corp., a Washington corporation Its: Maria er By: Barton G. Colson Its: President '82/015610,0061 31125292.09/21/12 -5- State of California ) County of AVe -SidtG) On A0 before me, (9'Ia&5 -pG12'Z Notary Public, �rere ins name and UUe of the officer) personally appeared %1 I ` f C • C11,Q170Ul who proved to me on the basis of satisfactory evidence to be the personXwhose namSW ,isfiie subscribed to the within instrument, and acknowledged to me that he/she/6=7 executed the same in his/herMteir authorized capacity(ies), and that by his/h9 Aikeir signature(s) on the instrument the persorf , or the entity upon behalf of which the perso�Kacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my ha official seal. GLADI6 PER" Commission N 1943564 Notary Public - California = Signature Riverside County M Comm. Expires Jul 9. 2015 Skfae of 44 `� (seal) County off. II_� On D!� k* 15'2012 before me, > Q bi r) Go: ti S Notary Public, / n (here insert name and title of the officer) Personallyanneared 3ca�t'�on Cam. iMh who proved to me on the basis of satisfactory evidence to be the perso4(<whose namoW is/ere subscribed to the within instrument, and acknowledged to me that he/shy- executed the same in his/herAtheir authorized capacity(ies), and that by hisAwRV*eir- signaturepf on the instrument the perscr or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal 4Signature Q d rt tp "V0166104061 311029.2 e0921/12 -6- =R. LIC GTON INSer26, 2015 (seal) State of California ) County of G 506 On oLTO UM 19 Zof L, before me, S05,LI MAY56t-S , Notary Public, personally appeared �I2An11C , . SpEVAS ' and title of the officer) who proved to me on the basis of satisfactory evidence to be the person(®) whose name(s) is aw subscribed to the within instrument, and acknowledged to me that he/vlr*AWy executed the same in his/iwr4 Wr authorized capacity(ior), and that by hisAwrAhejr signature(*) on the instrument the person(o), or the entity upon behalf of which the person(*) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal.""""""" 4 ANM. ELS COMMiAY479S NOT ��* aS Signature R C4ff*,S nEl "`fit Wig+ State of (ialw)z JQm ) (seal) County of ) On 064 k / 6�21)12 before me, PD S Notary Public, insert name and title of the officer) personally appeared i5of +UI') who proved to me on the basis of satisfactory evidence to be the is/are subscribed to the within instrument, and acknowledged erson,k<whose names to me that he/she4hoy- executed the same in his/her4heir authorized capacity(ies), and that by his/4ef4heir signaturek�on the instrument the pers09K,, or the entity upon behalf of which the person�cted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and officZ". Signature�0 882/015610-0061 3112529 2 e09/21/12 -6- NOTARY PUBLIC STATE OF `1 1ASHINGTON ROBIN R. GOINS Commission Espites September 26. 2015 (seal) CONSENT By execution below, the City hereby (i) consents to the foregoing Assignment, and (ii) releases CP from any further obligations under the DA with respect to Parcel B and the Senior Living Facility. CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing u der the laws of the State of Calif is City Manager A T: Susan Maysels, City Cler APPROVED AS TO FORM: RUT TUCKER, LP By: KA11 rive Jenso ity Attorney By execution below, the Successor Agency hereby (i) consents to the foregoing Assignment, and (ii) releases CP from any further obligations under the DDA with respect to Parcel B and the Senior Living Facility. 2012 ATTEST: Susan Maysels, Successor gency Secretary APPROVED AS TO FORM: RUTYP TU�LP By: he ine Jenson, Vcessor Agency Counsel 882/015610-0061 3112529.2 a09/21/12 CITY AS SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and J. *evat QQkA Executive Director EXHIBIT "A" LEGAL DESCRIPTION OF PARCEL B Real property In the City of La QuInta, County of Riverside, State of California, described as . follows: PARCEL B AS SHOWN ON LOT LINE ADJUSTMENT NO.2006-452 AS EVIDENCED BY DOCUMENT RECORDED APRIL 19, 2006 AS INSTRUMENT NO.200Cr0280726 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS; IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCEL 8 TOGETHER WITH THAT PORTION OF PARCEL 7 OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS, BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID PARCEL 8; THENCE ALONG THE SOUTHEASTERLY, EASTERLY AND NORTHERLY BOUNDARY LINES OF SAID PARCEL 8 THROUGH THE FOLLOWING FIVE (5) COURSES: (1) NORTH 430 56 44" EAST, A DISTANCE OF 152.65 FEET; (2) THENCE NORTH 00° 12' 13" WEST, A DISTANCE OF 790.73 FEET; (3) THENCE SOUTH 890 47' 47" WEST, A DISTANCE OF 239.56 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY, HAVING.A RADIUS OF 80.00 FEET; (4) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 45° 2741", AN ARC DISTANCE OF 63.48 FEET; (5) THENCE TANGENT TO SAID CURVE NORTH 440 44' 32" WEST, A DISTANCE OF 91.61 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 440.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 490 06' 37" EAST; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID NORTHERLY LINE OF PARCEL 8 AND ALONG THE NORTHERLY LINE OF SAID PARCEL 7, THROUGH A CENTRAL ANGLE OF 230 54' 45", AN ARC DISTANCE OF 183.63 FEET TO THE BEGINNING OF A COMPOUND CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 840.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 259 11' 52" EAST; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID NORTHERLY LINE OF PARCEL 7, THROUGH A CENTRAL ANGLE OF 040 02' 08", AN ARC DISTANCE OF 59.16 FEET TO THE MOST NORTHERLY NORTHWEST CORNER OF SAID PARCEL 7, THENCE ALONG THE WESTERLY LINES OF SAID PARCEL 7 THROUGH THE FOLLOWING THREE (3) COURSES: (1) SOUTH 16- 39' 14" EAST AND NON -TANGENT TO LAST SAID CURVE, AS DISTANCE OF 55.87 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 250.00 FEET; (2) THENCE SOUTHERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 200 41' 22", AN ARC DISTANCE OF 90.27 FEET; (3) THENCE TANGENT TO SAID CURVE SOUTH 040 02' 08" WEST, A DISTANCE OF 333.46 FEET TO THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF SAID PARCEL 8; THENCE LEAVING SAID WESTERLY LINES OF PARCEL 7 AND ALONG SAID PROLONGATION AND SAID SOUTHWESTERLY LINE OF PARCEL 8, SOUTH 500 IV 13" EAST, A DISTANCE OF 592.88 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM AGENCY EXCEPTS AND RESERVES FROM THE CONVEYANCE HEREIN DESCRIBED ALL INTEREST OF THE AGENCY IN OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEROF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEROF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 09, 2004 AS INSTRUMENT NO. 04.979137 OF OFFICIAL RECORDS. APN: 604-63D-027-6 882/015610-0061 3112529.2 aO9/21/12 -2- SEE SHEET 2 FOR ANNOTATION TABLES AND NOTES R1 R2 \ DETAIL •A• MILES I AVENUE �I PARCEL 3 BAR{', -I In _._ DATE 441i e,P RCEL 2 IBIT F. N0. '>r�4-�i57i�12 !� R72 �J C/L 77' � R10 ACCESS ACC � PARCEL S C/LSO' ACCESS LOT LINE TO BE R9 DELETED PARCEL •B• 7. RB 20' PEDESTRIAN/ �• w 9.451 AC. LANDSCAPE ESMT. R7 DEDICATED HEREON PARCEL R16 PARCEL •Aw I .NEW ADJUSTED y 5 13.515 AC. LOT LINE R PARCEIL, S R5 R4 r LOT W -LOT LINE TO BE 7J . LOT DELETED !' S •IV 1 g?� I RJ R14 PARCEL 8 �6 ♦h ti AA B e� SEE DETAIL •A• AT UPPER LEFT �\ R2 hy�9�yei' SCALE: 1" = 200' NE'LY LINE OR 64/54694 r d MSA CONSULTINO, INC. Wwm oQ SM17H k A$SOCfATFA IKc I EXISTING LOT LINE TO BE DELETED — PWt1m,o ■ Cry BwoRn m w 1. 6yaysxn+o I EXISTING LOT LINE TO REMAIN 34200 Bon if ws Dkm • PAR= 2+lm • CA 92270 NEW ADJUSTED LOT LINE Tms•satB (7" 320-98U 4 PAX (760) 323-7993 _ RESTRICTED ACCESS 882/015610-0061 3112529.2 a0921/12 -3- RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO I City of La Quinta P.O. Box 1504 La Quinta, CA 92247 Attn: City Clerk DQC # 2012-0564810 11/21/2012 02:48P Fee:NC Page 1 of 15 Recorded in Official Records County of Riverside Larry W. Ward Assessor, County Clerk & Recorder 11111111111111III111111111111III1111111IIIIIIIIIII 1111 S R U PAGE SIZE I DA I MISC I LONG I RFD COPY M A L 465 426 PCOR NCOR SMF NCH exAm UNI T: CTY (Exempt from Recording Fee per Gov't Code § 27383) AMENDMENT NO.4 TO DEVELOPMENT AGREEMENT This AMENDMENT NO.4 TO DEVELOPMENT AGREEMENT ("Amendment No.4") is made and entered into as of DEGEMMA 4P , 2012 ("Effecti*e Date") by and between the CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of California (the "City"), and LA QUINTA RETIREMENT RESIDENCE LIMITED PARTNERSHIP, a Washington limited liability company ("Developer"). RECITALS: A. On or about December 18, 2003, the former La Quinta Redevelopment Agency ("Agency") and CP Development La Quinta, LLC, a California limited liability company (the "Original Developer"), entered into that certain Disposition and Development Agreement (the "Original DDA"), pursuant to which the Agency sold to the Original Developer that certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, California 92253 (the "Site"), and the Original Developer agreed to construct, complete, and operate thereon a commercial project containing a medical office/surgical facility, a development containing sanctuary villas, a mid -price suites hotel, a resort -style condominium/casitas development, two (2) sit-down restaurants, and two (2) single-family residential developments, with forty (40) of the single-family homes restricted for sale to income -eligible buyers at restricted sales prices (collectively, the "Original Project"). B. The Original DDA has been amended on six (6) occasions, on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, on or about August 23, 2007, and on or about March 19, 2008 (collectively, the "Prior DDA Amendments"). The Original DDA, as amended by the Prior DDA Amendments, is hereinafter referred to as the "DDA," and the Original Project, as amended by the Prior DDA Amendments, is hereinafter referred to as the "Project." C. Concurrently with the execution of the Original DDA, the City and the Original Developer entered into that certain Development Agreement dated December 18, 2003, and recorded against the Site on January 5, 2004, as Instrument No. 2004-0005256, in the Official Records of the County of Riverside (the "Official Records"), for among other purposes, 8821015610-0061 3127303.1 a09/21/12 identifying the terms, conditions, and regulations for the construction of the Original Project (the "Original Development Agreement"). D. City and the Original Developer have previously amended the Original Development Agreement on three (3) occasions for purposes of modifying the Original Development Agreement consistent with the Prior DDA Amendments, as follows: (i) on or about October 28, 2004, City and the Original Developer entered into that certain Amendment No. I to Development Agreement, which was recorded in the Official Records on November 8, 2004, as Instrument No. 2004-0885063, (ii) on or about November 17, 2005, City and the Original Developer entered into that certain Amendment No. 2 to Development Agreement, which was recorded in the Official Records on December 19, 2005, as Instrument No. 2005-1045418, and (iii) on or about May 6, 2008, City and the Original Developer entered into that certain Amendment No. 3 to Development Agreement, which was recorded in the Official Records on June 4, 2008, as Instrument No. 2008-0303530 (collectively, the "Prior Development Agreement Amendments"). The Original Development Agreement, as amended by the Prior Development Agreement Amendments, is hereinafter referred to as the "Development Agreement." E. On or about April 4, 2005, Parcel Map No. 31116, in the City of La Quinta, was filed in the Official Records of the County of Riverside in Book 212 of Parcel Maps at pages 60- 66, inclusive (the "Parcel Map"), The Parcel Map created legal parcels within the Site, including but not limited to "Parcel 8," which was originally designated for development of a sixty (60) unit single family residential development, and "Parcel 6" and "Parcel 7," which were originally intended for development of medical office buildings. Pursuant to Lot Line Adjustment No. 2006-452, processed through the City by the Original Developer, said "Parcel 6," "Parcel 7," and "Parcel 8" were merged into "Parcel A" and "Parcel B." F. On or about July 1, 2011, CP sold and Developer purchased "Parcel B" for the purpose of Developer's construction thereon of (i) a one hundred thirty-two (132) suite retirement community, (ii) four (4) single story duplex cottages, (iii) a seventy-two (72) suite assisted living community, and (iv) a thirty-two (32) bed memory care facility (collectively, the "Senior Living Facility"). "Parcel B" is legally described in Exhibit "A", which is attached hereto and incorporated herein by this reference. G. On June 28, 2011, the Governor signed Assembly Bill 26 ("ABxl 26") and companion bill Assembly Bill 27 ("ABxl 27") from the 2011-12 First Extraordinary Session of the California Legislature. ABxl 26 immediately suspended all redevelopment agency activities, except continued performance of "enforceable obligations," and set forth a process to dissolve redevelopment agencies and end redevelopment in California. ABxI 27 provided a "voluntary alternative redevelopment program," which would have allowed redevelopment agencies to remain in existence and continue redevelopment, if remittance payments were made to cover the State of California's budget shortfall for fiscal year 2011-12 and were made in subsequent fiscal years to cover State costs. A lawsuit was filed, challenging the constitutionality of both ABxI 26 and ABxl 27. The California Supreme Court upheld the constitutionality of ABxl 26, revising the effective dates of certain provisions, and struck down as unconstitutional ABxl 27. (California Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 231 ("CRA Case"). ABxl 26 is chapter 5, Statutes 2011, First Extraordinary Session, which added Part 1.8 (suspension provisions) and Part 1.85 (dissolution provisions) of Division 24 of the Health and Safety Code. "21015610-0061 3127303.2 a09/21/12 Under the CRA Case, all redevelopment agencies dissolved February 1, 2012. Pursuant to Health and Safety Code section 341710), added by Part 1.85 of Division 24, and City Council Resolution No. 2012-002, the City is the "successor agency" to the former Agency. H. On June 27, 2012, the Governor signed Assembly Bill 1484 from the 2011-2012 Regular Session of the California Legislature ("AB 1484"), which established that successor agencies are separate legal entities from the entities that provide for their governance. As a result of AB 1484, the successor agency to the former Agency is now formally the "City as Successor Agency to the La Quinta Redevelopment Agency" (the "Successor Agency"). I. Concurrently herewith, Developer has submitted and the City has processed, an amendment to the Center Point Specific Plan, also known as Specific Plan No. SP2001-055, as previously amended (the "Specific Plan"), to modify the uses permitted on certain portions of the Site (the "2011 Specific Plan Amendment"), and (ii) the Developer has submitted to the Successor Agency, for approval, that certain Amendment No. 7 to Disposition and Development Agreement ("Amendment No. 7 to DDA") to modify the residential component of the Project to provide for the development of the Senior Living Facility. J. The City and Developer now desire to amend the Development Agreement to modify the description of the Project and certain obligations of the Developer set forth therein. The parties contemplate that, concurrently with the City Council's consideration of this Amendment No. 4, (i) the City Council will consider the 2011 Specific Plan Amendment, and (ii) the Successor Agency will consider Amendment No. 7 to DDA. K. The City Council has determined that this Amendment No. 4 is consistent with the City's General Plan and the Specific Plan, as amended by the 2011 Specific Plan Amendment, including the goals and objectives thereof. L. All actions taken by City have been duly taken in accordance with all applicable legal requirements, including the California Environmental Quality Act (Public Resources Code Section 21000, et seq.) ("CEQA"), and all other requirements for notice, public hearings, findings, votes and other procedural matters. M. On fjoJ. 6 , 2012, the City Council adopted its Ordinance No. 5_ 0L approving this Amendment No. 4. Unless otherwise specified herein, all capitalized terms in this Amendment No. 4 shall have the meaning ascribed in the Development Agreement. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. The Development Agreement is hereby amended as follows: 1.1 To replace Section 3.1(C) with the following: 882/015610-0061 31273032 a09/21/12 (C) a retirement living facility ("Senior Living Facility"), to be constructed on Parcel B of Lot Line Adjustment No. 2006-452 in the City of La Quinta; with (i) a 132-suite retirement community; and (ii) four single -story duplex cottages; and (iii) a 72-suite assisted living community; and (iv) a 32-bed memory care facility; 2. This Amendment No. 4 shall not be effective unless and until (i) the Successor Agency has approved Amendment No. 7 to DDA, and the Successor Agency and Developer have executed Amendment No. 7 to DDA, and (ii) Developer and the Original Developer have executed an assignment and assumption agreement, in a form approved by the City Attorney, pursuant to which the Original Developer assigns to the Developer and the Developer assumes from the Original Developer all of the Original Developer's rights and obligations under the DA with respect to Parcel B and the Senior Living Facility. 3. Except as otherwise expressly provided in this Amendment No. 4, all of the terms and conditions of the Development Agreement shall remain in full force and effect. 4. In the event of any action between City and Developer seeking enforcement of any of the terms and conditions to this Amendment No. 4, the prevailing party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 5. This Amendment No. 4 shall be construed according to its fair meaning and as if prepared by both parties hereto. 6. This Amendment No. 4 shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Amendment No. 4. Service of process on City shall be made in accordance with California law. Service of process on Developer shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. Time is of the essence of this Amendment No. 4 and of each and every term and provision hereof. 8. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by both City and Developer. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 9. Signatures of the parties transmitted by facsimile shall be deemed binding. However, each party agrees to submit their original signature to the other party within five (5) business days after execution hereof. "2/015610-0061 -4_ 31273031 ao9(21/12 10. This Amendment No. 4 may be executed in counterparts, each of which, when this Amendment No. 4 has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 11. The person(s) executing this Amendment No. 4 on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment No. 4 on behalf of said party, (iii) by so executing this Amendment No. 4 such party is formally bound to the provisions of this Amendment No. 4, and (iv) the entering into this Amendment No. 4 does not violate any provision of any other agreement to which such party is bound. [Signatures on next page] 882/01561M061 _ 3127303.2 09/21/12 _5 IN WITNESS WHEREOF, City and Developer each hereby represents that it has read this Amendment No. 4, understands it, and he effective as of the day and year first written above. Date: MOk� 1ST 2012 ATTEST: atAQ Susan Maysels, City Clerk APPROVED AS TO FORM: RU La 882/015610-0061 3127303.2 a09121/12 reby executes this Amendment No. 4 to be "Developer" LA QUINTA RETIREMENT RESIDENC LIMITED PARTNERSHIP, a Washington limited partnership By: La Quinta GP LLC, a Washington limited liability company Its: General Partner By: Hawthorn Management Services Corp., a Washington oration Its: M—"7 By: Barton G. Colson Its: President "City" CITY OF LA QUINTA, a California municipal corporation and charter city organized and existing under the Constitution of the State of Califor By: ra J. S acek, City Manager �t-r 4en State of County of 2iv»15. a C« On t/04eA ia-_X0J2 before me, W n 2' 670 wS pp��// � �+ /� (insert name and title of the officer) Notary Public, personally appeared E1�/r4w C7• COIc ; who proved to me on the basis of satisfactory evidence to be the person, 0 whose name,(] islere subscribed to the within -instrument and acknowledged to me that he4heAky executed the same in his/kerkheir authorized capacity(ies), and that by his/henkheir signatureW on the instrument the person , or the entity upon behalf of which the person�cted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official s Signature CI t t ✓J State of California County of Riverside NOTARY PUBLIC STATE OF WASHINGTON ROBIN R. GOINS Commission E* �ffi m*26,2015 On 6(.To B9 /Z tq )-0(2 , before me, EUMd MAYS,E L. S (insert name and title of the offices) Notary Public, personally appeared f r- XAM1L t%. �f�EVAC��C who proved to me on the basis of satisfactory evidence to be the person(&) whose name(&) iskaw subscribed to the within instrument and acknowledged to me that heAqh&4hV executed the same in his/kwAkoio authorized capacity(4*, and that by his/k*A*Mir signature(.&) on the instrument the person(*), or the entity upon behalf of which the person(v) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. SUSAN MAYSELS COMM.1►1844479 WITNESS my hand and official seal. @ ► OT -W �8 �� puARR132013 Signature (Seal) 882/015610-0061 _ 3127303.2 a09/21/12 �, EXHIBIT "A" LEGAL DESCRIPTION OF PARCEL B Real property in the City of La Quinta, County of Riverside, State of Califomia, described as follows: PARCEL B AS SHOWN ON LOT LINE ADJUSTMENT NO.2006-452 AS EVIDENCED BY DbCUMENT RECORDED APRIL 19, 2006 AS INSTRUMENT NO.2006-0280726 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCEL 8 TOGETHER WITH THAT PORTION OF PARCEL 7 OF PARCEL MAP NO. 31116, AS SHOWN BY MAP ON FILE IN BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY RECORDS, BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID PARCEL 8; THENCE ALONG THE SOUTHEASTERLY, EASTERLY AND NORTHERLY BOUNDARY LINES OF SAID PARCEL 8 THROUGH THE FOLLOWING FIVE (5) COURSES: (1) NORTH 430 56 44" EAST, A DISTANCE OF 152.65 FEET; (2) THENCE NORTH 00° 12' 13" WEST, A DISTANCE OF 790.73 FEET; (3) THENCE SOUTH 89° 47' 47" WEST, A DISTANCE OF 239.56 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY, HAVING.A RADIUS OF 80.00 FEET; (4) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 450 2741", AN ARC DISTANCE OF 63.48 FEET, (5) THENCE TANGENT TO SAID CURVE NORTH 440 4V 32" WEST, A DISTANCE OF 91.61 FEET TO THE BEGINNING OF A NON -TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 440.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 490 06' 37" EAST; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID NORTHERLY LINE OF PARCEL 8 AND ALONG THE NORTHERLY LINE OF SAID PARCEL 7, THROUGH A CENTRAL ANGLE OF 230 54' 45", AN ARC DISTANCE OF 183.63 FEET TO THE BEGINNING OF A COMPOUND CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 840.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 250 11' 52" EAST; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID NORTHERLY LINE OF PARCEL 7, THROUGH A CENTRAL ANGLE OF 04° 02' 08", AN ARC DISTANCE OF 59.16 FEET TO THE MOST NORTHERLY NORTHWEST CORNER OF SAID PARCEL 7; 882/015610-0061 3127303 2 a09121/12 THENCE ALONG THE WESTERLY LINES OF SAID PARCEL 7 THROUGH THE FOLLOWING THREE (3) COURSES: (1) SOUTH 160 39' 14" EAST AND NON -TANGENT TO LAST SAID CURVE, AS DISTANCE OF 55.87 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 250.00 FEET; (2) THENCE SOUTHERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 200 41' 22", AN ARC DISTANCE OF 90.27 FEET; (3) THENCE TANGENT TO SAID CURVE SOUTH 04° 02' 08" WEST, A DISTANCE OF 333.46 FEET TO THE NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF SAID PARCEL 8; THENCE LEAVING SAID WESTERLY LINES OF PARCEL 7 AND ALONG SAID PROLONGATION AND SAID SOUTHWESTERLY LINE OF PARCEL 8, SOUTH 50010' 13" EAST, A DISTANCE OF 592.88 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM AGENCY EXCEPTS AND RESERVES FROM THE CONVEYANCE, HEREIN DESCRIBED ALL INTEREST OF THE AGENCY IN OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEROF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEROF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 09, 2004 AS INSTRUMENT NO. 04.979137 . OF OFFICIAL RECORDS. APN: 604-630-027-6 882/015610-0061 3127303.2 a092 V 12 -2- SEE SHEET 2 FOR ANNOTATION TABLES AND NOTES R1 R2 DETAIL •A• hPlO12.,fil E 1 UEVELOP!.7ENT DEPART ma 7EAK�— DATE µ O PARCEL 2 PARCEL S C/L 80' Q�qp ACCESS a� R9 8 20' PEDESTRIAN/ LANDSCAPE ESLf7. ( R7 DEDICATED HEREON QA RTe PARCEL •A• Z 5 13.515 AC. R6 PARCELL S MILES ( AVENUE r��F�tcFl s PARCEL D V R72 C/L 70' ACCESS C/L 7T ACCESS I �LOT LINE TO BE OELETED -i"'.. PARCEL •B• 9.451 AC. 3 PARCEL S INEW ADJUSTED o LOT LINE z R4 J LOOT TII• � LOT LINE TO BE JJ ®T DELETED 5" S •ol• R3 R14 PARCEL E yryb SEE DETAIL •A• � / RI h� AT UPPER LEFT eh.ea R2 SCALE: 1" = 200' NE'LY LINE of J w5� OR 64/54694 MSA CONSULTING, INC. LEdEND MARMWA S1mTi k ASsoczokm lKa I EXISTING LOT LINE TO BE DELETED Ttwaaaro • C ' aoamaama B• Lim Swya EXISTING LOT LINE TO REMAIN 3420D Boa Elora tt n • Rmm bft A • CA 92270 NEW ADJUSTED LOT LINE 7IItLmwem (760) 3204SU • PAX (710) 327.71% RESTRICTED ACCESS 882/015610-0061 3127303.2.09/21112 -3- ORDINANCE NO. 504 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, APPROVING AN AMENDMENT TO A DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF LA QUINTA AND CP DEVELOPMENT LA QUINTA, LLC. CASE: DEVELOPMENT AGREEMENT 2003-006, AMENDMENT NO.4 WHEREAS, California Government Code Section 65864 et seq. (the "Development Agreement Law") authorizes cities to enter into binding development agreements with persons having a legal or equitable interest in real property for the development of such property, all for the purpose of strengthening the public planning process, encouraging private participation and comprehensive planning, and identifying the economic costs of such development; and WHEREAS, the Planning Commission of the City of La Quinta, California did, on the 25' day of September, 2012, hold a duly noticed Public Hearing to consider a recommendation on an amendment to a Development Agreement, and after hearing and considering all testimony and arguments, did adopt Planning Commission Resolution 2012-020, recommending to the City Council approval of Development Agreement 2003-006 Amendment 4; and, WHEREAS, the City Council of the City of La Quinta, California did, on the 16th day of October, 2012, hold a duly noticed Public Hearing to consider an amendment to a Development Agreement by and among the City of La Quinta and CP Development La Quinta, LLC for property located at the southeast corner of Washington Street and Miles Avenue, with said amendment to be executed by La Quinta Residence. Limited Partnership, an assignee of CP Development La Quinta, LLC; and WHEREAS, the Planning Department published a public hearing notice in The Desert Sun newspaper on October 5, 2012 as prescribed by the Municipal Code regarding this proposal. Public hearing notices were also mailed to all property owners within 500 feet of the project site; and, WHEREAS, at said City Council Public Hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons wanting to be heard, said City Council did make the following mandatory findings to justify approving an amendment to the Development Agreement: Ordinance No. 504 Development Agreement 2003-006, Amendment No:4 CP Development La Quinta, LLC / La Quints Residence Limited Partnership - Adopted: November 6, 2012 Page 2 1. The proposed Development Agreement Amendment (Exhibit A) is internally consistent with the goals, objectives, and policies of the General Plan and Specific Plan 2001-055, in that it will result in promoting residential development in a controlled and logical manner that is compatible with the neighborhood. 2. The land uses authorized and regulations prescribed for the Development Agreement Amendment are compatible with the zoning and its related regulations applicable to the property. 3. The proposed Development Agreement Amendment conforms with the` public convenience and general welfare by providing for extensive public improvements and conforms to good land use practice by encouraging a long-range comprehensive approach to development of the site. 4. Approval of this Development Agreement Amendment will not be detrimental to the health, safety and general welfare since adequate provisions have been made in previous City approvals to provide for necessary and desirable improvements which are incorporated herein. 5. Approval of this Development Agreement Amendment will not adversely affect the orderly development of the subject or surrounding properties nor preservation of area -wide property values, but rather will enhance them by encouraging planned -phased growth. 6. Consideration of this Development Agreement Amendment has been accomplished pursuant to California Government Code Section 65864 et seq. and the City of La Quinta Municipal Code Section 9.250.030, which governs Development Agreements. WHEREAS, all actions required to be taken by the City precedent to the. adoption of this Ordinance have been regularly and duly taken. NOW, THEREFORE, the City Council of the City of La Quinta, California does ordain as follows: SECTION 1. APPROVAL. The City Council hereby approves and adopts the Development Agreement Amendment in the form presented to the City Council concurrent with the, approval and adoption of this Ordinance, and authorizes and directs the City Manager to sign the Development Agreement Amendment on Ordinance No. 504 Development Agreement 2003-006, Amendment No.4 CP Development. La Quints, LLC / La Ouinta Residence Limited Partnership _ Adopted: November 6, 2012 Page 3 behalf of the City, and the City Clerk to record the Development Agreement Amendment in the Official Records of Riverside County in accordance with applicable law. SECTION 2. ENVIRONMENTAL. The La Quinta Planning Department has prepared Environmental Assessment 2011-617 for this project, in compliance with the requirements of the California Environmental Quality Act (CEQA). The Planning Director has determined that although the proposed project could have a significant effect on the environment, there will not be a significant effect in this case because revisions in the project have been made by or agreed to by the project proponent and mitigation measures have been incorporated. Therefore, the Planning Director recommended that a Mitigated Negative Declaration of environmental impact and associated Mitigation Monitoring Program be adopted and the City Council did adopt said Mitigated Negative Declaration and Mitigation Monitoring Program prior to this action; and, SECTION 3. EFFECTIVE DATE. This Ordinance shall be in full force and effect thirty (30) days after its adoption. SECTION 4. POSTING. The City Clerk shall certify to the passage and adoption of this Ordinance, and shall cause the same to be posted in at least three public places designated by resolution of the City Council, and shall cause this Ordinance and its certification, together with proof of posting, to be entered into the Book of Ordinances of this City. PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta City Council held on this 6th day of November 2012, by the following vote: AYES: Council Members Evans, Franklin, Henderson, Osborne, Mayor Adolph NOES: None ABSENT: None ABSTAIN; None Nu'�Iz DON AD PH, Wayor City of La Quinta, California Ordinance No. 604 Development Agreement 2003-006, Amendment No.4 CP Development La Quints, LLC / La Quints Residence Limited Partnership - Adopted: November 6, 2012 Page 4 ATTEST: Susan Maysels, City Werk City of La Quinta, California (City Seal) APPROVED AS TO FORM: rine Jeri o , City A may City of La Quint alifornia Ordinance No. 504 Development Agreement 2003-006, Amendment No.4 CP Development La Quinta, LLC / La Quints Residence Limited Partnership _ Adopted: November 6, 2012 Page 5 STATE OF CALIFORNIA 1 COUNTY OF RIVERSIDE ) CITY OF LA QUINTA ) I, SUSAN MAYSELS, City Clerk of the City of La Quinta, California, do hereby certify the foregoing to be a full, true, and correct copy of Ordinance No. 504 that was introduced at a regular meeting on the 16' day of October, 2012, and was adopted at a regular meeting held on the fi' day of November 2012, not being less than 5 days after the date of introduction thereof. I further certify that the foregoing Ordinance was posted in three places within the City of La Quinta as specified in City Council Resolution 2006-115. SUSAN MAYSELS, My Clerk City of La Quinta, California DECLARATION OF POSTING I, SUSAN MAYSELS, City Clerk of the City of La Quinta, California, do hereby certify that the foregoing ordinance was posted on November 8th, 2012, pursuant to City Council Resolution. S�V- W� SUSAN MAYSELS, C Clerk City of La Quinta, California a] RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: PFPV La Quinta Real Estate Holdings, LLC 4380 La Jolla Village Drive, Suite 250 San Diego, CA 92122 Attention: Brent Rivard DOC # 2016-0539985 12/05/2016 12:15 PM Fees: $0.00 Page 1 of 4 Recorded in Official Records County of Riverside Peter Adana Assessor -County Clerk -Recorder "This document was electronically submitted to the County of Riverside for recording— Receipted by: MARIA #309 [SPACE ABOVE THIS LINE FOR RECORDER'S USE] [EXEMPT FROM RECORDING FEE PER GOVERNMENT CODE SECTION 27383] PARTIAL TERMINATION OF OPTION AGREEMENT THIS TERMINATION OF OPTION AGREEMENT is made this 30tf'day of November, 2016 (the "Effective Date') by the CITY OF LA QUINTA ACTING AS SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Successor Agency"). RECITALS: A. CP DEVELOPMENT LA QUINTA, LLC, a California limited liability company ("Developer") and the former La Quinta Redevelopment Agency ("Agency") entered into that certain Amended and Restated Option Agreement dated October 20, 2006, recorded October 24, 2006 as Document No. 2006-0780202, records of Riverside County, California (the "Option"). B. PFPV LA QUINTA REAL ESTATE HOLDINGS, LLC is the successor in interest to Developer in and to that certain real property, the legal 'description of which is attached hereto as Exhibit "A" and by this reference incorporated herein (the "Hotel Parcel"). C. The Hotel Parcel has been fully developed. D. On or about February 14, 2008, the Agency and Developer executed that certain Release of Construction Covenants recorded February 29, 2008 as Document No. 2008-0101701, records of Riverside County, California. E. Pursuant to Health and Safety Code section 34173 and City Council Resolution No. 2012-002, adopted by the La Quinta City Council on January 2, 2012, the City of La Quinta is the successor agency to the Agency. F. Neither the Agency nor the Successor Agency has exercised Repurchase Option II or Repurchase Option III as described in the Option and a final and permanent certificate of occupancy for the Hotel Parcel has been issued by the City of La Quinta, California. NOW, THEREFORE, Successor Agency, pursuant to paragraph 6(e) of the Option hereby terminates any and all of its rights pursuant to the Option in and to the Hotel Parcel. The purpose of this Partial Termination of Option Agreement is to remove from the public record any right of Successor Agency to purchase the Hotel Parcel and to remove the Amended and Restated Option Agreement from the public records with respect to the Hotel Parcel. DATED this -3t::' day of November, 2016. CITY OF LA QUINTA ACTING AS SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMTdpo NT AGENCY, a public od orate litic y: n J. ne cek. Executive Director ATTEST: i -11;�A� khot� Susan Maysels, Secretary City of La Quinta Acting as Successor Agency to the La Quinta Redevelopment Agency APPROVED AS TO FORM: RUTAN & TUCKER, LLP William H. Ihrke, Counsel City of La Quinta Acting as Successor Agency to the La Quinta Redevelopment Agency Page 2 — TERMINATION OF OPTION AGREEMENT 9907\000\0 Termination of Option Agreement — La Quinta A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document, to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document State of California County of Riverside On .lOU@ ker 30 .2016 before me, TERESA THOMPSON, Notary Public, personally appeared FRANK J. SPEVACEK who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seat. TERESA THOMPSON `Commission # 2030796 z Notary Public - California z i ' �•a a : Riverside County D Signature My Comm. Expires Jun 24, 2017 (seal) DOCUMENT: PARTIAL TERMINATION OF OPTION AGREEMENT by City of La Quinta acting as Successor Agency to the La Quinta Redevelopment Agency for CP Development La Quinta, LLC and PFPV La Quinta Real Estate Holdings, LLC re: hotel parcel EXHIBIT "A" Legal Description THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LA QUINTA, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCEL A: PARCEL 4 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 212, PAGES 60 TO 66 INCLUSIVE OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. EXCEPTING THEREFROM OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE WITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS, RESERVED IN THE DEED FROM LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 9, 2004 AS INSTRUMENT NO.2004-979137 OFFICIAL RECORDS. PARCEL B: A NON-EXCLUSIVE EASEMENT FOR PARKING, MOTOR VEHICLE AND PEDESTRIAN INGRESS AND EGRESS AND FOR INSTALLATION, USE AND MAINTENANCE OF UNDERGROUND PUBLIC UTILITIES OVER ALL THOSE PORTIONS OF PARCELS 1, 2 AND 5 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA AS SHOWN BY MAP ON FILE IN BOOK 212 PAGES 60 TO 66 INCLUSIVE OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, AND PARCELS A AND B OF LOT LINE ADJUSTMENT NO, 2006-452, RECORDED ON APRIL 1,9, 2006 AS INSTRUMENT NO. 2006-0280726 OFFICIAL RECORDS, RIVERSIDE COUNTY AS SHOWN AND DELINEATED AS PAVED MOTOR VEHICLE DRIVEWAYS, PEDESTRIAN ACCESS AREAS AND PARKING . AREAS ON SAID PARCEL MAP 31116. Exhibit "A" — TERMINATION OF OPTION AGREEMENT 9907\000\0 Termination of Option Agreement — La Quinta Fidelity National Title Company 1300 Dove Street, Suite 310, Newport Beach, CA 92660 Phone: (949) 622-5000• Fax: Issuing Policies of Fidelity National Title Insurance Company Title Officer: Mike Brinkman (MA) Order No.: 005-23089693-1MB Escrow Officer: Samantha Maestas TO: Procopio, Cory, Hargreaves & Savitch LLP 525 B Street, Suite 2200 San Diego, CA 92101 ATTN:.Sarah Rosen YOUR REFERENCE: PROPERTY ADDRESS: 45200 Washington Street, La Quinta, CA PRELIMINARY REPORT In response to the application for a policy of title insurance referenced herein, Fidelity National Title Company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a policy or policies of title insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an exception herein or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations or Conditions of said policy forms. The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said policy or policies are set forth in Attachment One. The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. Limitations on Covered Risks applicable to the CLTA and ALTA Homeowner's Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liability for certain coverages are also set forth in Attachment One. Copies of the policy forms should be read. They are available from the office which issued this report. This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested. The policy(s) of title insurance to be issued hereunder will be policy(s) of Fidelity National Title Insurance Company, a California Corporation. Please read the exceptions shown or referred to herein and the exceptions and exclusions set forth in Attachment One of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects and encumbrances affecting title to the land. Countersigned by: Authorized Signature CLTA Preliminary Report Form — Modified (11/17/06) Page 1 Fidelity National Title Company 1300 Dove Street, Suite 310, Newport Beach, CA 92660 Phone: (949) 622-5000• Fax: PRELIMINARY REPORT EFFECTIVE DATE: November 2, 2016 at 7:30 a.m. ORDER NO.: 005-23089693-1MB The form of policy or policies of title insurance contemplated by this report is: CLTA Standard Coverage Policy (04-08-14) THE ESTATE OR INTEREST IN THE LAND HEREINAFTER DESCRIBED OR REFERRED TO COVERED BY THIS REPORT IS: A Fee as to Parcel(s) A Easement(s) more fully described below as to Parcel(s) B 2. TITLE TO SAID ESTATE OR INTEREST AT THE DATE HEREOF IS VESTED IN: PFPV LA QUINTA REAL ESTATE HOLDINGS, LLC, a Delaware limited liability company THE LAND REFERRED TO IN THIS REPORT IS DESCRIBED AS FOLLOWS: See Exhibit A attached hereto and made a part hereof. CLTA Preliminary Report Form — Modified (11/17/06) Page 2 PRELIMINARY REPORT Fidelity National Title Company Your Reference: Order No.: 005-23089693-1MB EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LA QUINTA, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCEL A: PARCEL 4 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 212, PAGES 60 TO 66 INCLUSIVE OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. EXCEPTING THEREFROM OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE WITHER THE SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PROPERTY, AS RESERVED IN THE DEED FROM LA QUINTA REDEVELOPMENT AGENCY, RECORDED DECEMBER 9, 2004 AS INSTRUMENT NO. 2004-979137 OFFICIAL RECORDS. PARCEL B: A NON-EXCLUSIVE EASEMENT FOR PARKING, MOTOR VEHICLE AND PEDESTRIAN INGRESS AND EGRESS AND FOR INSTALLATION, USE AND MAINTENANCE OF UNDERGROUND PUBLIC UTILITIES OVER ALL THOSE PORTIONS OF PARCELS 1, 2 AND 5 OF PARCEL MAP NO. 31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA AS SHOWN BY MAP ON FILE IN BOOK 212 PAGES 60 TO 66 INCLUSIVE OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, AND PARCELS A AND B OF LOT LINE ADJUSTMENT NO. 2006-452, RECORDED ON APRIL 19, 2006 AS INSTRUMENT NO. 2006-0280726 OFFICIAL RECORDS, RIVERSIDE COUNTY AS SHOWN AND DELINEATED AS PAVED MOTOR VEHICLE DRIVEWAYS, PEDESTRIAN ACCESS AREAS AND PARKING AREAS ON SAID PARCEL MAP 31116. APN: 604-630-014-4, 604-630-017-7, 604-630-020-9 CLTA Preliminary Report Form— Modified (11/17/06) Page 3 PRELIMINARY REPORT Fidelity National Title Company Your Reference: Order No.: 005-23089693-1MB EXCEPTIONS AT THE DATE HEREOF, ITEMS TO BE CONSIDERED AND EXCEPTIONS TO COVERAGE IN ADDITION TO THE PRINTED EXCEPTIONS AND EXCLUSIONS IN SAID POLICY FORM WOULD BE AS FOLLOWS: A. Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.: 604-630-014-4 Fiscal Year: 2016-2017 1st Installment: $39,610.07, UNPAID (Delinquent after December 10) Penalty: $3,961.00 2nd Installment: $39,610.07, UNPAID (Delinquent after April 10) Penalty and Cost: $3,999.63 Homeowners Exemption: $0.00 Code Area: 020-026 Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.: 604-630-017-7 Fiscal Year: 2016-2017 1st Installment: $35,189.17, UNPAID (Delinquent after December 10) Penalty: $3,518.91 2nd Installment: $35,189.17, UNPAID (Delinquent after April 10) Penalty and Cost: $3,557.54 Homeowners Exemption: $0.00 Code Area: 020-199 Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.: Fiscal Year: 1 st Installment: Penalty: 2nd Installment: Penalty and Cost: Homeowners Exemption: Code Area: 604-630-020-9 2016-2017 $2.06, UNPAID (Delinquent after December 10) $0.20 $2.06, UNPAID (Delinquent after April 10) $38.83 $0.00 020-199 B. The lien of supplemental or escaped assessments of property taxes, if any, made pursuant to the provisions of Chapter 3.5 (commencing with Section 75) or Part 2, Chapter 3, Articles 3 and 4, respectively, of the Revenue and Taxation Code of the State of California as a result of the transfer of title to the vestee named in Schedule A or as a result of changes in ownership or new construction occurring prior to Date of Policy. Water rights, claims or title to water, whether or not disclosed by the public records. 2. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to: the public Purpose: public highways Recording Date: April 17, 1959 Recording No: 32692 Official Records The exact location and extent of said easement is not disclosed of record. CLTA Preliminary Report Form — Modified (11/17/06) Page 4 PRELIMINARY REPORT Fidelity National Title Company Your Reference: Order No.: 005-23089693-1MB EXCEPTIONS (Continued) 3. Easement(s) for the purpose(s) shown below and rights incidental thereto, as granted in a document: Granted to: The Coachella Valley County Water District Purpose: repair of an open channel for storm water Recording Date: November 30, 1960 Recording No: 101680 Official Records The exact location and extent of said easement is not disclosed of record. 4. Matters contained in that certain document Entitled: Disposition and Development Agreement Executed by: La Quinta Redevelopment Agency, a public body, corporate and politic and CP Development La Quinta, LLC, a California limited liability company Recording Date: January 5, 2004 Recording No: 2004-0005255 Official Records Reference is hereby made to said document for full particulars. The effect of a document entitled "Release of Construction Covenants", recorded February 29, 2008 as Instrument No. 2008-0101701 Official Records. Matters contained in that certain document Entitled: Development Agreement Executed by: City of La Quinta, a California municipal corporation and CP Development La Quinta, LLC, a California limited liability company Recording Date: January 5, 2004 Recording No: 2004-0005256 Official Records Reference is hereby made to said document for full particulars. Document(s) declaring modifications thereof recorded November 8, 2004 as Instrument No. 2004-0885063, December 19, 2005 as Instrument No. 2005-1045418 and June 4, 2008 as Instrument No. 2008-0303530 all Official Records. The effect of a document entitled "Release of Construction Covenants", recorded February 29, 2008 as Instrument No. 2008-0101701 Official Records. The terms and provisions contained in the document entitled "Assignment and Assumption Agreement" recorded February 29, 2008 as Instrument No. 2008-0101703 Official Records. The terms and provisions contained in the document entitled Amended and Restated Agreement Establishing Easements, Maintenance and Cost Sharing Obligations recorded March 2, 2010 as Instrument No. 2010-0092845 Official Records. 6. An option in favor of La Quinta Redevelopment Agency as contained in or disclosed by a document recorded December 9, 2004 as Instrument No. 2004-979138 Official Records. An Amended and Restated Option Agreement recorded October 24, 2006 as Instrument No. 2006-0780202 Official Records. CLTA Preliminary Report Form — Modified (11/17/06) Page 5 PRELIMINARY REPORT Fidelity National Title Company Your Reference: Order No.: 005-23089693-1MB EXCEPTIONS (Continued) 7. Easement(s) for the purpose(s) shown below and rights incidental thereto, as delineated on or as offered for dedication on the Map as referred to in the legal description Purpose: storm drain and incidental purposes Affects: as delineated on the map 8. Easement(s) for the purpose(s) shown below and rights incidental thereto, as delineated on or as offered for dedication on the Map as referred to in the legal description Purpose: CVWD water and sewer and incidental purposes Affects: as delineated on the map 9. Matters contained in that certain document Entitled: Commercial Domestic Water and/or Sanitation Installation Agreement Recording Date: June 20, 2006 Recording No: 2006-0444691 Official Records Reference is hereby made to said document for full particulars. 10. Matters contained in that certain document Entitled: Declaration of Reciprocal Easement and Maintenance Agreement Recording Date: September 5, 2007 Recording No: 2007-0566567 Official Records Reference is hereby made to said document for full particulars. Documents) declaring modifications thereof recorded March 2, 2010 as Instrument No. 20100092845 Official Records. 11. Matters contained in that certain document Entitled: Covenant and Agreement Executed by: Dolphin La Quinta, LLC, a California limited liability company and L. Q. Hospitality, LLC, a California limited liability company Recording Date: September 15, 2008 Recording No: 2008-0504229 Official Records Reference is hereby made to said document for full particulars. 12. A deed of trust to secure an indebtedness in the amount shown below, Amount: $9,175,000.00 Dated: January 29, 2014 Trustor/Grantor PFPV La Quinta Real Estate Holdings, LLC, a Delaware limited liability company Trustee: Regents Bank, a division of Grandpoint Bank Beneficiary: Regents Bank, a division of Grandpoint Bank Recording Date: January 31, 2014 Recording No: 2014-0044643 Official Records CLTA Preliminary Report Form — Modified (11/17/06) Page 6 PRELIMINARY REPORT Your Reference: Fidelity National Title Company Order No.: 005-23089693-1MB EXCEPTIONS (Continued) 13. Assignment of Rents Assigned to: Regents Bank, a division of Grandpoint Bank Assigned by: PFPV La Quinta Real Estate Holdings, LLC, a Delaware limited liability company Recording Date: January 31, 2014 Recording No: 2014-0044644 Official Records 14. A financing statement as follows: Debtor: PFPV La Quinta Real Estate Holdings, LLC Secured Party: Regents Bank, a division of Grandpoint Bank Recording Date: January 31, 2014 Recording No: 2014-0044645 Official Records 15. Any rights of the parties in possession of a portion of, or all of, said Land, which rights are not disclosed by the public records. The Company will require, for review, a full and complete copy of any unrecorded agreement, contract, license and/or lease, together with all supplements, assignments and amendments thereto, before issuing any policy of title insurance without excepting this item from coverage. The Company reserves the right to except additional items and/or make additional requirements after reviewing said documents. 16. Any easements not disclosed by the public records as to matters affecting title to real property, whether or not said easements are visible and apparent. 17. Any rights, interests, or claims which may exist or arise by reason of the following matters disclosed by ALTA/NSPS Land Title Survey, Job No.: 16105 Dated: 11 /23/2016 Prepared by: JRN Civil Engineers Matters shown: (Below) A) An encroachment of a monument sign into the street right of way of Washington Street, to an undisclosed amount. B) Transformers, electric vaults, water vaults, a telephone vault and other utility fixtures are located over various portions of the property. PLEASE REFER TO THE "INFORMATIONAL NOTES" AND "REQUIREMENTS" SECTIONS WHICH FOLLOW FOR INFORMATION NECESSARY TO COMPLETE THIS TRANSACTION. END OF EXCEPTIONS CLTA Preliminary Report Form — Modified (11/17/06) Page 7 PRELIMINARY REPORT Fidelity National Title Company Your Reference: Order No.: 005-23089693-1 MB REQUIREMENTS SECTION 1. The Company will require the following documents for review prior to the issuance of any title insurance predicated upon a conveyance or encumbrance from the entity named below: Limited Liability Company: PFPV La Quinta Real Estate Holdings, LLC, a Delaware limited liability company a) A copy of its operating agreement, if any, and any and all amendments, supplements and/or modifications thereto, certified by the appropriate manager or member b) If a domestic Limited Liability Company, a copy of its Articles of Organization and all amendments thereto with the appropriate filing stamps c) If the Limited Liability Company is member -managed, a full and complete current list of members certified by the appropriate manager or member d) If the Limited Liability Company was formed in a foreign jurisdiction, evidence, satisfactory to the Company, that it was validly formed, is in good standing and authorized to do business in the state of origin e) If less than all members, or managers, as appropriate, will be executing the closing documents, furnish evidence of the authority of those signing. The Company reserves the right to add additional items or make further requirements after review of the requested documentation. 2. Unrecorded matters which may be disclosed by an Owner's Affidavit or Declaration. A form of the Owner's Affidavit/Declaration is attached to this Preliminary Report/Commitment. This Affidavit/Declaration is to be completed by the record owner of the land and submitted for review prior to the closing of this transaction. Your prompt attention to this requirement will help avoid delays in the closing of this transaction. Thank you. The Company reserves the right to add additional items or make further requirements after review of the requested Affidavit/Declaration. END OF REQUIREMENTS CLTA Preliminary Report Form — Modified (11/17/06) Page 8 PRELIMINARY REPORT Fidelity National Title Company Your Reference: Order No.: 005-23089693-1 MB INFORMATIONAL NOTES SECTION 1. None of the items shown in this report will cause the Company to decline to attach CLTA Endorsement Form 100 to an Extended Coverage Loan Policy, when issued. 2. The Company is not aware of any matters which would cause it to decline to attach CLTA Endorsement Form 116 indicating that there is located on said Land Commercial properties, known as 45200 Washington Street, located within the city of La Quinta, California, , to an Extended Coverage Loan Policy. 3. Note: The policy of title insurance will include an arbitration provision. The Company or the insured may demand arbitration. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, any service of the Company in connection with its issuance or the breach of a policy provision or other obligation. Please ask your escrow or title officer for a sample copy of the policy to be issued if you wish to review the arbitration provisions and any other provisions pertaining to your Title Insurance coverage. 4. Note: There are NO conveyances affecting said Land recorded within 24 months of the date of this report. END OF INFORMATIONAL NOTES Mike Brinkman (MA)/aag CLTA Preliminary Report Form — Modified (11/17/06) Page 9 FIDELITY NATIONAL FINANCIAL PRIVACY NOTICE At Fidelity National Financial, Inc. and its majority -owned subsidiary companies (collectively, "FNF", "our" or "we"), we value the privacy of our customers. This Privacy Notice explains how we collect, use, and protect your information and explains the choices you have regarding that information. A summary of our privacy practices is below. We also encourage you to read the complete Privacy Notice following the summary. Types of Information Collected. You may provide us How Information is Collected. We may collect with certain personal information, like your contact personal information directly from you from information, social security number (SSN), driver's applications, forms, or communications we receive license, other government ID numbers, and/or from you, or from other sources on your behalf, in financial information. We may also receive connection with our provision of products or services information from your Internet browser, computer to you. We may also collect browsing information and/or mobile device. from your Internet browser, computer, mobile device or similar equipment. This browsing information is generic and reveals nothing personal about the user. Use of Your Information. We may use your Security Of Your Information. We utilize a information to provide products and services to you combination of security technologies, procedures and (or someone on your behalf), to improve our products safeguards to help protect your information from and services, and to communicate with you about our unauthorized access, use and/or disclosure. We products and services. We do not give or sell your communicate to our employees about the need to personal information to parties outside of FNF for protect personal information. their use to market their products or services to you. Choices With Your Information. Your decision to When We Share Information. We may disclose your submit personal information is entirely up to you. You information to third parties providing you products can opt -out of certain disclosures or use of your and services on our behalf, law enforcement agencies information or choose to not provide any personal or governmental authorities, as required by law, and to information to us. parties with whom you authorize us to share your information. Information From Children. We do not knowingly Privacy Outside the Website. We are not responsible collect information from children under the age of 13, for the privacy practices of third parties, even if our and our websites are not intended to attract children. website links to those parties' websites. Access and Correction. If you desire to see the Do Not Track Disclosures. We do not recognize "do information collected about you and/or correct any not track" requests from Internet browsers and similar inaccuracies, please contact us in the manner specified devices. in this Privacy Notice. The California Online Privacy Protection Act. International Use. By providing us with your Certain FNF websites collect information on behalf of information, you consent to the transfer, processing mortgage loan servicers. The mortgage loan servicer is and storage of such information outside your country responsible for taking action or making changes to any of residence, as well as the fact that we will handle consumer information submitted through those such information consistent with this Privacy Notice. websites. Your Consent To This Privacy Notice. By Contact FNF. If you have questions or wish to submitting information to us and using our websites, contact us regarding this Privacy Notice, please use you are accepting and agreeing to the terms of this the contact information provided at the end of this Privacy Notice. Privacy Notice. FNF Privacy Notice Effective: April 1, 2016 FIDELITY NATIONAL FINANCIAL, INC. PRIVACY NOTICE FNF respects and is committed to protecting your privacy. We pledge to take reasonable steps to protect your Personal Information (as defined herein) and to ensure your information is used in compliance with this Privacy Notice. This Privacy Notice is only in effect for information collected and/or owned by or on behalf of FNF, including collection through any FNF website or online services offered by FNF (collectively, the "Website"), as well as any information collected offline (e.g., paper documents). The provision of this Privacy Notice to you does not create any express or implied relationship, nor create any express or implied duty or other obligation, between FNF and you. Types of Information Collected We may collect two types of information: Personal Information and Browsing Information. Personal Information. The types of personal information FNF collects may include, but are not limited to: contact information (e.g., name, address, phone number, email address); social security number (SSN), driver's license, and other government ID numbers; and financial account or loan information. Browsing Information. The types of browsing information FNF collects may include, but are not limited to: • Internet Protocol (or IP) address or device ID/UDID, protocol and sequence information; • browser language; • browser type; • domain name system requests; • browsing history; • number of clicks; • hypertext transfer protocol headers; and • application client and server banners. How Information is Collected In the course of our business, we may collect Personal Information about you from the following sources: • applications or other forms we receive from you or your authorized representative, whether electronic or paper; • communications to us from you or others; • information about your transactions with, or services performed by, us, our affiliates or others; and • information from consumer or other reporting agencies and public records that we either obtain directly from those entities, or from our affiliates or others. We may collect Browsing Information from you as follows: • Browser Log Files. Our servers automatically log, collect and record certain Browsing Information about each visitor to the Website. The Browsing Information includes only generic information and reveals nothing personal about the user. • Cookies. From time to time, FNF may send a "cookie" to your computer when you visit the Website. A cookie is a small piece of data that is sent to your Internet browser from a web server and stored on your computer's hard drive. When you visit the Website again, the cookie allows the Website to recognize your computer, with the goal of providing an optimized user experience. Cookies may store user preferences and other information. You can choose not to accept cookies by changing the settings of your Internet browser. If you choose not to accept cookies, then some functions of the Website may not work as intended. Use of Collected Information Information collected by FNF is used for three main purposes: To provide products and services to you, or to one or more third party service providers who are performing services on your behalf or in connection with a transaction involving you; To improve our products and services; and To communicate with you and to inform you about FNF's products and services. When We Share Information We may share your Personal Information (excluding information we receive from consumer or other credit reporting agencies) and Browsing Information with certain individuals and companies, as permitted by law, without first obtaining your authorization. Such disclosures may include, without limitation, the following: • to agents, representatives, or others to provide you with services or products you have requested, and to enable us to detect or prevent criminal activity, fraud, or material misrepresentation or nondisclosure; • to third -party contractors or service providers who provide services or perform other functions on our behalf, • to law enforcement or other governmental authority in connection with an investigation, or civil or criminal subpoenas or court orders; and/or • to other parties authorized to receive the information in connection with services provided to you or a transaction involving you. We may disclose Personal Information and/or Browsing Information when required by law or in the good -faith belief that such disclosure is necessary to: • comply with a legal process or applicable laws; • enforce this Privacy Notice; • investigate or respond to claims that any information provided by you violates the rights of a third party; or • protect the rights, property or personal safety of FNF, its users or the public. We make efforts to ensure third party contractors and service providers who provide services or perform functions on our behalf protect your information. We limit use of your information to the purposes for which the information was provided. We do not give or sell your information to third parties for their own direct marketing use. We reserve the right to transfer your Personal Information, Browsing Information, as well as any other information, in connection with the sale or other disposition of all or part of the FNF business and/or assets, or in the event of our bankruptcy, reorganization, insolvency, receivership or an assignment for the benefit of creditors. You expressly agree and consent to the use and/or transfer of this information in connection with any of the above -described proceedings. We cannot and will not be FNF Privacy Notice Effective: April 1, 2016 responsible for any breach of security by any third party or for any actions of any third party that receives any of the information that is disclosed to us. Choices With Your Information Whether you submit your information to FNF is entirely up to you. If you decide not to submit your information, FNF may not be able to provide certain products or services to you. You may choose to prevent FNF from using your information under certain circumstances ("opt out"). You may opt out of receiving communications from us about our products and/or services. Security And Retention Of Information FNF is committed to protecting the information you share with us and utilizes a combination of security technologies, procedures and safeguards to help protect it from unauthorized access, use and/or disclosure. FNF trains its employees on privacy practices and on FNF's privacy and information security policies. FNF works hard to retain information related to you only as long as reasonably necessary for business and/or legal purposes. Information From Children The Website is meant for adults. The Website is not intended or designed to attract children under the age of thirteen (13). We do not collect Personal Information from any person that we know to be under the age of thirteen (13) without permission from a parent or guardian. Privacy Outside the Website The Website may contain links to other websites, including links to websites of third party service providers. FNF is not and cannot be responsible for the privacy practices or the content of any of those other websites. International Users Because FNF's headquarters is located in the United States, we may transfer your Personal Information and/or Browsing Information to the United States. By using our website and providing us with your Personal Information and/or Browsing Information, you understand and consent to the transfer, processing and storage of such information outside your country of residence, as well as the fact that we will handle such information consistent with this Privacy Notice. Do Not Track Disclosures Currently, our policy is that we do not recognize "do not track" requests from Internet browsers and similar devices. The California Online Privacy Protection Act For some websites which FNF or one of its companies owns, such as the Customer CareNet ("CCN"), FNF is acting as a third party service provider to a mortgage loan servicer. In those instances, we may collect certain information on behalf of that mortgage loan servicer, including: • first and last name; • property address; • user name and password; • loan number; • social security number - masked upon entry; • email address; • security questions and answers; and • IP address. The information you submit is then transferred to your mortgage loan servicer by way of CCN. The mortgage loan servicer is responsible for taking action or making changes to any consumer information submitted through this website. For example, if you believe that your payment or user information is incorrect, you must contact your mortgage loan servicer. CCN does not share consumer information with third parties, other than those with which the mortgage loan servicer has contracted to interface with the CCN application. All sections of this Privacy Notice apply to your interaction with CCN, except for the sections titled Choices with Your Information, and Access and Correction. If you have questions regarding the choices you have with regard to your personal information or how to access or correct your personal information, contact your mortgage loan servicer. Access and Correction To access your Personal Information in the possession of FNF and correct any inaccuracies, please contact us by email at privacy@fnf.com or by mail at: Fidelity National Financial, Inc. 601 Riverside Avenue Jacksonville, Florida 32204 Attn: Chief Privacy Officer Your Consent To This Privacy Notice By submitting Personal Information and/or Browsing Information to FNF, you consent to the collection and use of information by FNF in compliance with this Privacy Notice. We reserve the right to make changes to this Privacy Notice. If we change this Privacy Notice, we will post the revised version on the Website. Contact FNF Please send questions and/or comments related to this Privacy Notice by email at privacy@fnf.com or by mail at: Fidelity National Financial, Inc. 601 Riverside Avenue Jacksonville, Florida 32204 Attn: Chief Privacy Officer Copyright © 2016. Fidelity National Financial, Inc. All Rights Reserved. EFFECTIVE AS OF APRIL 1, 2016 FNF Privacy Notice Effective: April 1, 2016 Notice of Available Discounts Pursuant to Section 2355.3 in Title 10 of the California Code of Regulations Fidelity National Financial, Inc. and its subsidiaries ("FNF") must deliver a notice of each discount available under our current rate filing along with the delivery of escrow instructions, a preliminary report or commitment. Please be aware that the provision of this notice does not constitute a waiver of the consumer's right to be charged the field rate. As such, your transaction may not qualify for the below discounts. You are encouraged to discuss the applicability of one or more of the below discounts with a Company representative. These discounts are generally described below; consult the rate manual for a full description of the terms, conditions and requirements for each discount. These discounts only apply to transaction involving services rendered by the FNF Family of Companies. This notice only applies to transactions involving property improved with a one -to -four family residential dwelling. FNF Underwritten Title Company FNF Underwriter FNTC - Fidelity National Title Company FNTIC - Fidelity National Title Insurance Company FNTCCA —Fidelity National Title Company of California Available Discounts CREDIT FOR PRELIMINARY REPORTS AND/OR COMMITMENTS ON SUBSEQUENT POLICIES (FNTIC) Where no major change in the title has occurred since the issuance of the original report or commitment, the order may be reopened within 12 or 36 months and all or a portion of the charge previously paid for the report or commitment may be credited on a subsequent policy charge. DISASTER LOANS (FNTIC) The charge for a lender's Policy (Standard or Extended coverage) covering the financing or refinancing by an owner of record, within 24 months of the date of a declaration of a disaster area by the government of the United States or the State of California on any land located in said area, which was partially or totally destroyed in the disaster, will be 50% of the appropriate title insurance rate. CHURCHES OR CHARITABLE NON-PROFIT ORGANIZATIONS (FNTIC) On properties used as a church or for charitable purposes within the scope of the normal activities of such entities, provided said charge is normally the church's obligation the charge for an owner's policy shall be 50% to 70% of the appropriate title insurance rate, depending on the type of coverage selected. The charge for a lender's policy shall be 40% to 50% of the appropriate title insurance rate, depending on the type of coverage selected. CA Discount Notice Effective Date: 12/02/2014 ATTACHMENT ONE CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY —1990 EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage or for the estate or interest insured by this policy. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws. EXCEPTIONS FROM COVERAGE - SCHEDULE B, PART I This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records. 2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession thereof. 3. Easements, liens or encumbrances, or claims thereof, not shown by the public records. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the public records. 6. Any lien or right to a lien for services, labor or material not shown by the public records. CLTA HOMEOWNER'S POLICY OF TITLE INSURANCE (12-02-13) ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE EXCLUSIONS In addition to the Exceptions in Schedule B, You are not insured against loss, costs, attorneys' fees, and expenses resulting from: 1. Governmental police power, and the existence or violation of those portions of any law or government regulation concerning: a. building; b. zoning; c. land use; Attachment One (6-5-14) CA & NV d. improvements on the Land; e. land division; and f, environmental protection. This Exclusion does not limit the coverage described in Covered Risk 8.a., 14, 15, 16, 18, 19, 20, 23 or 27. 2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not limit the coverage described in Covered Risk 14 or 15. 3. The right to take the Land by condemning it. This Exclusion does not limit the coverage described in Covered Risk 17. 4. Risks: a. that are created, allowed, or agreed to by You, whether or not they are recorded in the Public Records; b. that are Known to You at the Policy Date, but not to Us, unless they are recorded in the Public Records at the Policy Date; c. that result in no loss to You; or d. that first occur after the Policy Date - this does not limit the coverage described in Covered Risk 7, 8.e., 25, 26, 27 or 28. 5. Failure to pay value for Your Title. 6. Lack of a right: a. to any land outside the area specifically described and referred to in paragraph 3 of Schedule A; and b. in streets, alleys, or waterways that touch the Land. This Exclusion does not limit the coverage described in Covered Risk 11 or 21. 7. The transfer of the Title to You is invalid as a preferential transfer or as a fraudulent transfer or conveyance under federal bankruptcy, state insolvency, or similar creditors' rights laws. 8. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence. 9. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances. LIMITATIONS ON COVERED RISKS Your insurance for the following Covered Risks is limited on the Owner's Coverage Statement as follows: • For Covered Risk 16, 18, 19, and 21 Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A. The deductible amounts and maximum dollar limits shown on Schedule A are as follows: Our Maximum Dollar Your Deductible Amount Limit of Liability 1.00% % of Policy Amount Shown in Schedule A or Covered Risk 16: $2,500.00 (whichever is less) $ 10,000.00 1.00% % of Policy Amount Shown in Schedule A or Covered Risk 18: $5,000.00 (whichever is less) $ 25,000.00 1.00% of Policy Amount Shown in Schedule A or Covered Risk 19: $5,000.00 (whichever is less) $ 25,000.00 1.00% of Policy Amount Shown in Schedule A or Covered Risk 21: $2,500.00 (whichever is less) $ 5,000.00 2006 ALTA LOAN POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; Attachment One (6-5-14) CA & NV (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13 or 14); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing - business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth -in -lending law. 6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy. 7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the Insured Mortgage in the Public Records. This Exclusion does not modify or limit the coverage provided under Covered Risk I I(b). The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE (Except as provided in Schedule B - Part II,( t(or T)his policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees or expenses, that arise by reason of: (PART I (The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material not shown by the Public Records. PART II In addition to the matters set forth in Part I of this Schedule, the Title is subject to the following matters, and the Company insures against loss or damage sustained in the event that they are not subordinate to the lien of the Insured Mortgage:) 2006 ALTA OWNER'S POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 9 and 10); or Attachment One (6-5-14) CA & NV (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title. 4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction vesting the Title as shown in Schedule A, is (a) a fraudulent conveyance or fraudulent transfer; or (b) a preferential transfer for any reason not stated in Covered Risk 9 of this policy. 5. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A. The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees or expenses, that arise by reason of: (The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown in the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and that are not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof, (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material not shown by the Public Records. 7. (Variable exceptions such as taxes, easements, CC&R's, etc. shown here.) ALTA EXPANDED COVERAGE RESIDENTIAL LOAN POLICY (04-02-15) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of. 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. (b) Any governmental police power. This Exclusion l(b) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27 or 28); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing - business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury, or any consumer credit protection or truth -in -lending law. This Exclusion does not modify or limit the coverage provided in Covered Risk 26. 6. Any claim of invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as to Advances or modifications made after the Insured has Knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11. 7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching subsequent to Date of Policy. This Exclusion does not modify or limit the coverage provided in Covered Risk I I (b) or 25. Attachment One (6-5-14) CA & NV 8. The failure of the residential structure, or any portion of it, to have been constructed before, on or after Date of Policy in accordance with applicable building codes. This Exclusion does not modify or limit the coverage provided in Covered Risk 5 or 6. 9. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk 27(b) of this policy. 10. Contamination, explosion, fire, flooding, vibration, fracturing, earthquake, or subsidence. 11. Negligence by a person or an Entity exercising a right to extract or develop minerals, water, or any other substances. Attachment One (6-5-14) CA & NV py \ naNy N y m N O n t0 4y N „mQa m mt aR W tii 0 J p 0 N N G O 0 p 7 m F 3d m 3 N O. m N 0 Q 0 4 nmc3 ?8D�. O ^ p+ M � / m A OnNo A W y0 O v, 00 mA Q\ \ W AA 3 ti Asa oa Fz I oob -w0 Ono +A I g I j0 / 0009 aA / ip I ''iq,µ� zzaaa I O BOin ce IV A ; NA I A f0 IQ p — A $ 0 2 I TRA 020.199 O A TRA 020.026 Oy T 9y rOA Naz'�ez /F�I yv woo `v m �OS AOA 'o O O. ;a A Oin araa c ,p � N { V$ O p A 20 rl'I M A O razor >w I O v I -Z-I - Y CA m I I �M_ a � >O09 y Im O d O O Nm Q oA y I i"J cs'x �La'ty:'y ➢OA w I tr m 0 a ar°tt 0 � Jzs,zz - I / / f F L n N w z m rn rn G j w A O .J, A— m w OWNER'S DECLARATION The undersigned hereby declares as follows: (Fill in the applicable paragraph and strike the other) a. Declarant ("Owner") is the owner or lessee, as the case may be, of certain premises located at b. further described as follows: See Preliminary Report/Commitment No. 23089693-005-SM1-1MB for full legal description (the "Land"). Declarant is the of ("Owner"), which is the owner or lessee, as the case may be, of certain premises located at further described as follows: See Preliminary Report/Commitment No. 23089693-005-SM1-1MB for full legal description (the "Land"). 2. (Fill in the applicable paragraph and strike the other) a. During the period of six months immediately preceding the date of this declaration no work has been done, no surveys or architectural or engineering plans have been prepared, and no materials have been furnished in connection with the erection, equipment, repair, protection or removal of any building or other structure on the Land or in connection with the improvement of the Land in any manner whatsoever. b. During the period of six months immediately preceding the date of this declaration certain work has been done and materials furnished in connection with upon the Land in the approximate total sum of $ , but no work whatever remains to be done and no materials remain to be furnished to complete the construction in full compliance with the plans and specifications, nor are there any unpaid bills incurred for labor and materials used in making such improvements or repairs upon the Land, or for the services of architects, surveyors or engineers, except as follows: . Owner, by the undersigned Declarant, agrees to and does hereby indemnify and hold harmless Fidelity National Title Company against any and all claims arising therefrom. Owner has not previously conveyed the Land; is not a debtor in bankruptcy (and if a partnership, the general partner thereof is not a debtor in bankruptcy); and has not received notice of any pending court action affecting the title to the Land. 4. Except as shown in the above -referenced Preliminary Report/Commitment, there are no unpaid or unsatisfied mortgages, deeds of trust, Uniform Commercial Code financing statements, regular assessments, special assessments, periodic assessments or any assessment from any source, claims of lien, special assessments, or taxes that constitute a lien against the Land or that affect the Land but have not been recorded in the public records. There are no violations of the covenants, conditions and restrictions as shown in the above -referenced Preliminary Report/Commitment. The Land is currently in use as ; occupy/occupies the Land; and the following are all of the leases or other occupancy rights affecting the Land: 6. There are no other persons or entities that assert an ownership interest in the Land, nor are there unrecorded easements, claims of easement, or boundary disputes that affect the Land. 7. There are no outstanding options to purchase or rights of first refusal affecting the Land. This declaration is made with the intention that Fidelity National Title Company (the "Company") and its policy issuing agents will rely upon it in issuing their title insurance policies and endorsements. Owner, by the undersigned Declarant, agrees to indemnify the Company against loss or damage (including attorneys fees, expenses, and costs) incurred by the Company as a result of any untrue statement made herein. I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed on at Signature: MISCO220.doc — Owner's Declaration (Rev. 05105115)