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ORD 433 SilverRock - DA 2006-012 - LDD SilverRock (2006) ORDINANCE NO. 433 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LA GUINTA, CALIFORNIA, APPROVING A DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF LA GUINTA AND LDD SILVERROCK, LLC DEVELOPMENT AGREEMENT 2006-012 WHEREAS, the Planning Commission, at its regularly scheduled meeting of November 14, 2006, considered the request of the City of La Quinta to enter into a Development Agreement with LDD SILVERROCK, LLC, establishing the fees associated with Condo Hotel occupancy at the proposed hotels at SilverRock Resort; and WHEREAS, after consideration of all written and oral testimony presElnted at the hearing, the Planning Commission recommended approval of the . Development Agreement by the City Council; and WHEREAS, the City Council, at its regularly scheduled meeting of November 21, 2006, considered the Planning Commission's recommendation at a public hearing, including all written and oral testimony; and WHEREAS, at said 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 recommending approval of said Development Agreement: 1. The proposed Development Agreement is consistent with the objectives, policies, general land uses arid .programs of the City of La Quinta General Plan and Specific Plan 06-080. 2. The. land uses authorized and regulations prescribed for the Development Agreement. are compatible with the zoning and its related regulations applicable to the property. 3. The proposed Development Agreement conforms to public convenience and the general welfare by providing for extensive public improvements and conforms to good land use practice by encouraging a long-range, comprehensive approach to the development of major hotel services and commercial development. Ordinance No. 433 LDD SUverRock I Development Agreement Adopted: December 5, 2006 Page 2 4. Approval of this Development Agreement will not be detrimental to the health, safety, and general welfare since adequate provisions has been made in previous City approvals. to provide for necessary and desirable improvements which are incorporated .herein. 5. Approval of this Development. Agreement will not adversely affect the orderly development of the subject or surrounding property nor the preservation of area-wide property values, but rather will. enhance them by encouraging planned,.phased growth. . 6. Consideration of the Development Agreement 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, said Development Agreement has complied with the requirements of "The Rules to Implement the California Environmental Quality Act of 1970" as amended (Resolution 83-63) in that the La Quinta Community Development Department has determined that the proposed Development Agreement was previously reviewed as part of the Mitigated Negative Declaration for the SilverRock Resort Specific Plan (EA No. 2002-453) and its Addendum, approved by the City Council under Resolution No. 2006-082, and that conditions have not changed, the project is in substantial conformance with the Specific Plan, and no further environmental review is required (PRC Section 21166). THE CITY COUNCIL OF THE CITY OF LA GUINTA, CALIFORNIA, DOES ORDAIN AS FOLLOWS: . SECTION 1. FINDINGS AND APPROVAL: The above recitals are adopted as the findings of the City Council and the City Council approves the Development Agreement and authorizes the City Manager to execute the Agreement. SE;CTION 2. E;FFECTIVE.DATE: AND RECORDATION: This Ordinance shall be in full force and effect thirty (30) days aher its adoption. Within 10 days. after the effective date of this Ordinance, the City Clerk shall cause the fully executed Development Agreement to be recorded in the office of the Riverside County Recorder. Ordinance No. 433 LDD SilverRock I Development Agreement Adopted: December 5,2006 Page 3 SECTION 3. POSTING: The City Clerk shall cause this Ordinance to be posted in at least three public places designated by resolution of the City Council, shall certify to the adoption and posting of this Ordinance, and shall cause this Ordinance and its certification, together with proof of posting to be entered into the Book of Ordinances of the City of La Quinta. PASSED, APPROVED and ADOPTED, at a regular meeting of the La Quinta City Council held this 5th day of December, 2006 by the following vote: AYES: Council Members Henderson, Kirk, Osborne, Sniff, Mayor Adolph NOE;S: None ABSENT: None ABSTAIN: None (\,.,~ DON AD LPH, yor City of La Quinta, California ATTEST: ~ VERONICA J. M . rECINO, CMC, City Clerk City of La Quinta, California (CITY SEAL) APPROVED AS TO FORM: Ordinance No. 433 LOO SlIverRock I Development Agreement Adopted: December 5. 2006 Page 4 STATE OF CALIFORNIA) COUNTY OF RIVERSIDE) ss. CITY OF LA QUINT A ) . I, VERONICA J. MONTECINO, 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. 433 which was introduced at a regular meeting on the 21st day of November, 2006, and was adopted at a regular meeting held on the 5th day of December, 2006, 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 98.109: . V RONICA J. MO C NO, CMC, City Clerk City of La Quinta, California :: . - . DECLARATION OF POSTIN& .~ c , . I, VERONICA J. MONTECINO, City Clerk of the City of La Quinta, California, do . hereby certify that the foregoing ordinance was posted on~, /5 ....?Od ~ , pursuant to Cooncil Resolution. . L{dt?,OL 1~/I1o& VERONICA J. MON CINO, CMC, City Clerk City of La Quinta, alifornia . 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 and 27383) DEVELOPMENT AGREEMENT by and between CITY OF LA QUINTA and LDD SILVERROCK, LLC 423 '82/015610-0084 750537 08 a12/01/06 -1- TABLE OF CONTENTS Pate 1.0 GENERAL........................................................................................................................3 1.1 Term......................................................................................................................3 1.2 Effective Date.......................................................................................................3 1.3 Amendment or Cancellation.................................................................................3 1.4 Termination...........................................................................................................3 1.5 Definitions.............................................................................................................4 2.0 DEVELOPER'S RIGHTS AND LIMITATIONS REGARDING CONSTRUCTION OF THE PROJECT...........................................................................7 2.1 Right to Develop...................................................................................................7 2.2 Additional Applicable Codes and Regulations.....................................................8 2.3 Permitted Density, Height and Use Limitations...................................................9 2.4 Developer Impact Fees.........................................................................................9 3.0 DEVELOPER'S OBLIGATIONS....................................................................................9 3.1 Development and Operation of the Project...........................................................9 3.2 Conditions of Approval; Mitigation Monitoring Program..................................10 3.3 Declaration of Covenants, Conditions and Restrictions.....................................11 3.4 Sign Agreements.................................................................................................11 3.5 Maintenance Agreements....................................................................................11 3.6 Water Agreements..............................................................................................12 3.7 Other Fees and Charges; Assessment Appeals...................................................12 3.8 Dedications and Improvements...........................................................................12 3.9 Indemnification...................................................................................................12 3.10 Insurance.............................................................................................................13 3.11 Transient Occupancy Tax Obligations................................................................15 4.0 CITY'S OBLIGATIONS................................................................................................15 4.1 Scope of Subsequent Review/Confirmation of Compliance Process.................15 4.2 Project Approvals Independent...........................................................................15 4.3 Review for Compliance......................................................................................15 5.0 DEFAULT; REMEDIES................................................................................................16 5.1 Notice of Default.................................................................................................16 5.2 Cure of Default...................................................................................................16 5.3 City Remedies.....................................................................................................16 5.4 Developer's Exclusive Remedy..........................................................................17 6.0 MORTGAGEE PROTECTION; CERTAIN RIGHTS OF CURE.................................17 6.1 Encumbrances on the Project Site......................................................................17 6.2 Mortgage Protection............................................................................................17 6.3 Mortgagee Not Obligated....................................................................... :........... 17 6.4 Notice of Default to Mortgagee; Right of Mortgagee to Cure ............................18 882/01561M084 750537 08 a12/01/06 '1' Page 7.0 TRANSFERS OF INTEREST IN SITE, AGREEMENT, OR MANAGEMENT............................................................................................................18 7.1 Transfers of Interest in Site, Agreement, or Management..................................18 7.2 Successors and Assigns.......................................................................................20 7.3 Assignment by City.............................................................................................20 8.0 MISCELLANEOUS.......................................................................................................21 8.1 Notices................................................................................................................21 8.2 Binding Effect.....................................................................................................21 8.3 Independent Entity..............................................................................................22 8.4 Agreement Not to Benefit Third Parties.............................................................22 8.5 Covenants............................................................................................................22 8.6 Nonliability of City Officers and Employees.....................................................22 8.7 Covenant Against Discrimination.......................................................................22 8.8 Amendment of Agreement..................................................................................22 8.9 No Waiver...........................................................................................................23 8.10 Severability......................................................................................................... 23 8.11 Cooperation in Carrying Out Agreement............................................................23 8.12 Estoppel Certificate.............................................................................................23 8.13 Construction........................................................................................................24 8.14 Recordation.........................................................................................................24 8.15 Captions and References.....................................................................................24 8.16 Time....................................................................................................................24 8.17 Recitals & Exhibits Incorporated; Entire Agreement.........................................24 8.18 Exhibits...............................................................................................................24 8.19 Counterpart Signature Pages...............................................................................25 8.20 Authority to Execute; Representations and Warranties......................................25 8.21 City Approvals and Actions................................................................................25 8.22 Governing Law; Litigation Matters....................................................................25 8.23 No Brokers..........................................................................................................26 "2/015610-0084 750537 08 a12/01106 -11- DEVELOPMENT AGREEMENT This Development Agreement (the "Agreement') is entered into as of the 5`h day of December, 2006 ("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 LDD SILVERROCK, LLC, a Delaware 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 multiple phases, certain real property located within the City at the southwest intersection of Jefferson Street and Avenue 52 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 commercial development, and other permitted uses. The Project is more fully described in, and subject to (i) this Agreement, (ii) the SilverRock Resort Specific Plan, also known as Specific Plan 06-080, which was amended by Resolution No. 2006-083, which resolution was duly adopted by the City Council on July 18, 2006 (the "Specific Plan"); (iii) the DDA, (iv) the Mitigated Negative Declaration prepared for the Project, approved by the Agency on May 15, 2002, by Agency Resolution 2002-09, as updated by the Addendum to Mitigated Negative Declaration, approved by the City Council on July 18, 2006, by City Council Resolution No. 2006-082 (collectively, the "Updated 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) Parcel Map No. 33367 and any further parcel or subdivision maps to be recorded on the Site and the conditions of approval thereon; and (vii) the conditions of approval associated with each and all of the foregoing approvals (collectively, the "Conditions of Approval'). The documents, permits, approvals, and conditions described in the foregoing clauses (i)-(vii) 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. 882/015610-0084 75053708 a] 2/01/06 h/ C 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) obligating Developer to enter into and record, against each Parcel a City Declaration of CC&Rs that sets forth certain requirements of the owners of (a) the Condominium Hotel Units to pay certain resort fees if their Unit fails to generate specified levels of Transient Occupancy Tax, and (b) all of the Fractional Units to pay a resort fee; (ii) requiring the Developer to enter into maintenance agreements with the Agency or City obligating the Developer to maintain certain portions of the golf course lakes located or to be located adjacent to the Site and certain landscaped parkways, sidewalks, and trails, all as depicted on Exhibit "B" hereof, which is attached hereto and incorporated herein by this reference (collectively, the "Public Improvements"); (iii) requiring the Developer to enter into water agreements and signage agreements; and (iv) setting forth the manner in which Developer shall construct, develop, use and operate the Project, if Developer purchases the site as provided in the DDA. 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 if it acquires the Site in accordance with the DDA, it 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 Planning Commission and the City Council have 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 December 5, 2006, the City Council adopted its Ordinance No. 433 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: - 4'7 882/015610-0084 750537.08 a12/01/06 -2- 1.0 GENERAL 1.1 Term. The term of this Agreement shall commence on the Effective Date hereof and shall continue for thirty (30) years thereafter, unless said term is otherwise terminated, modified, or extended as 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 January 4, 2007, which is the date that Ordinance No. 433 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. Notwithstanding the foregoing, in the event that one or more Parcels are under different ownership at some time during the Term hereof, the City and the then -owner of any Parcel may amend the terms of this Development Agreement and the Development Plan with respect to said Parcel, without obtaining the approval or consent of the owners of the other Parcels. 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, and shall have no effect on the obligations imposed under the City Declaration of CC&Rs. Notwithstanding anything herein to the contrary, in the event the "Initial Escrow" (as that term is defined in the DDA) fails to close within the time period set forth in the DDA, as such time may be extended pursuant to the terms of the DDA, this Agreement shall automatically terminate. Within 30 days after the opening of the Initial Escrow, Developer shall deliver to the Escrow Officer, in a form acceptable to the City Attorney and the "Title Company" (as that term is defined in the DDA), a quitclaim deed, releasing of all of Developer's interest in this Agreement in a form which may be recorded (the "Quitclaim") in the event that the Initial Escrow fails to close within the time set forth in the DDA, as such time may be extended pursuant to the terms of the DDA (the "Initial Escrow Closing Date"). In such event, within ten (10) days after the Initial Escrow Closing Date, Developer agrees to execute and submit to the Title Company or the City joint escrow instructions authorizing the Escrow Officer to record the Quitclaim. The Developer and City agree to execute and record such additional document(s) as the Title Company reasonably requires to remove this Agreement of record. 882/015610-0084 750537.08 a12/01/06 -3- If the Initial Escrow does close, but one or more of the subsequent escrows described in the DDA fail to close within the time period set forth in the DDA, as such time may be extended pursuant to the terms of the DDA, this Agreement shall automatically terminate with regard to the Parcels involved in the escrow or escrows which failed to close, and Developer and City agree to execute and record such document(s) as the Title Company reasonably requires to remove this Agreement of record with respect to such Parcels. 1.5 Definitions. 1.5.1 "Agency" shall have the meaning ascribed in Recital C hereof. 1.5.2 "Authorized Manager" shall have the meaning ascribed in Section 3.1 hereof. 1.5.3 "Black Box Parcel' shall mean that certain real property designated as Lot 4 on the Parcel Map. The Black Box Parcel is comprised of approximately .78 acres. 1.5.4 `Boutique Hotel Parcel' shall mean that certain real property designated as Lot 19 on the Parcel Map. The Boutique Hotel Parcel is comprised of approximately 13.79 acres. The Boutique Hotel Parcel may be subdivided into two or more legal parcels after the Effective Date. In such event, when used herein, the terms "Boutique Hotel Parcel' shall refer to all such legal parcels. 1.5.5 "City" shall mean the City of La Quinta, a California municipal corporation and charter city organized and existing under the Constitution of the State of California. 1.5.6 "City Declaration of CC&Rs" shall have the meaning ascribed in Section 3.3.1 hereof. 1.5.7 "Conditions of Approval' shall have the meaning ascribed in Recital C hereof. 1.5.8 "Condominium Hotel Unit' means a Unit which is sold to a third party owner, but which, when not in use by such owner, is part of the inventory of rooms available for transient occupancy within the Project. 1.5.9 "CV WD" shall have the meaning ascribed in Section 3.6 hereof. 1.5.10 "DDA" shall have the meaning ascribed in Recital C hereof. 1.5.11 "Developer" shall mean LDD SilverRock, LLC, a Delaware limited liability company. 1.5.12 "Developer CC&Rs" shall have the meaning ascribed in Section 3.3.2 hereof. i 1.5.13 "Development Agreement Act' shall have the meaning ascribed in Recital A hereof. 882/015610-0084 750537 08 a12/01/06 -4- 1.5.14 "Development Agreement Ordinance" shall have the meaning ascribed in Recital B hereof. hereof. 1.5.15 "Development Plan" shall have the meaning ascribed in Recital C 1.5.16 "DHR" shall have the meaning ascribed in Section 3.1 hereof. 1.5.17 "Effective Date" shall have the meaning ascribed in Section 1.2 hereof. 1.5.18 "Existing Development Regulations" shall have the meaning ascribed in Section 2.1 hereof. 1.5.19 "Fee Transfer Release Date" shall have the meaning ascribed in Section 7.1.1 hereof. 1.5.20 "Four Star Quality" means that the applicable component of the Project offers and provides the services, facilities and amenities listed in Exhibit "C", which is attached hereto and incorporated herein by this reference. 1.5.21 "Fractional Unit' means a Unit that is either (a) a condominium, the ownership of which is divided into multiple fractional interests, including, without limitation, timeshare interests, each of which can either be owned by a separate owner or by single owner, and each of which gives such owner the right to use such Unit for a different period of time; or (b) a Unit that is owned in fee by the Developer, DHR, or a successor in interest that is authorized or permitted pursuant to Section 7.1 hereof, and in which memberships are sold to third parties giving such parties the right to use and occupy the Unit for certain periods of time. 1.5.22 "Golf Casitas Parcel' shall mean that certain real property designated as Lot 11 on the Parcel Map. The Golf Casitas Parcel is comprised of approximately eight and sixty-three one hundredths (8.63) acres. 1.5.23 "Hotel Unit' means the Units in the Project that will be owned in fee by Developer or any successor authorized pursuant to Section 7.1.1 hereof and managed by DHR or any successor hotel management entity authorized or approved by the City pursuant to Section 7.1.2 hereof. None of the Hotel Units may be sold as Condominium Hotel Units or as Fractional Units. 1.5.24 "Initial Escrow Closing Date" shall have the meaning ascribed in Section 1.4 hereof. 1.5.25 "Lake Casitas Parcel' shall mean that certain real property designated as Lot 23 on the Parcel Map. The Lake Casitas Parcel is comprised of approximately 3.82 acres. 1.5.26 "Lowe Enterprises" means Lowe Enterprises, Inc., a California corporation, which is an affiliate of Developer. 882/015610-0084 750537.08 a12/01/06 -5- 1.5.27 "Management Transfer" shall have the meaning ascribed in Section 7.1.2 hereof. 1.5.28 "Management Transfer Release Date" shall have the meaning ascribed in Section 7.1.2 hereof. 1.5.29 "New Laws" shall have the meaning ascribed in Section 2.1 hereof. 1.5.30 "Operating Covenant Release Date" shall have the meaning ascribed in Section 3.1.7 hereof. 1.5.31 "Parcel' shall mean any of the Boutique Hotel Parcel, Black Box Parcel, Resort Hotel Parcel, Resort Retail Village Parcel, Golf Casitas Parcel, or Lake Casitas Parcel. 1.5.32 "Parcel Map" means Parcel Map No. 33367, which has been prepared by the Agency for recordation in the Official Records of Riverside County, California, prior to or concurrently with the closing of the Initial Escrow. A copy of the Parcel Map is attached to the DDA as Attachment No. 11. 1.5.33 "Performance Audit' shall have the meaning ascribed in Section 3.1 hereof. 1.5.34 "Performance Consultant' shall have the meaning ascribed in Section 3.1 hereof. 1.5.35 "Performance Default Payment' shall have the meaning ascribed in Section 3.1 hereof. 1.5.36 "Phase of Development' shall mean the component of the Project to be constructed on a particular Parcel, as further described in the DDA. 1.5.37 "Project' shall have the meaning ascribed in Recital C hereof. 1.5.38 "Project Site Development Permits" shall have the meaning ascribed in Recital C hereof. 1.5.39 "Quitclaim" shall have the meaning ascribed in Section 1.4 hereof. 1.5.40 "Ranch Villas Parcel" means that certain real property designated as Lot 22 on the Parcel Map. The Ranch Villas Parcel is comprised of approximately 2.43 acres. 1.5.41 "Reference Date" shall have the meaning ascribed in the preamble hereof. 1.5.42 "Resort Hotel Parcel' means that certain real property designated as Lot 3 on the Parcel Map. The Resort Hotel Parcel is comprised of approximately 19.65 acres. 882/015610-0084 ~ 750537.08 a12/01/06 -6- �� v 1.5.43 "Resort Retail Village Parcel" means that certain real property designated as Lot 5 on the Parcel Map. The Resort Retail Village Parcel is comprised of approximately 11.88 acres. 1.5.44 "SilverRock Resort Area" means the real property included in and covered by the Specific Plan. 1.5.45 "Site" shall have the meaning ascribed in Recital C hereof. 1.5.46 "Specific Plan" shall have the meaning ascribed in Recital C hereof. 1.5.47 "Term" shall have the meaning ascribed in Section 1.1 hereof. 1.5.48 "Transfer" shall have the meaning ascribed in Section 7.1.1 hereof. 1.5.49 "Transient Occupancy Tax" shall have the meaning ascribed in Chapter 3.24 of the La Quinta Municipal Code. 1.5.50 "Unit" shall mean one of the approximately six hundred eighty (680) guest units comprising the Project. All Units shall be developed as Condominium Hotel Units, Fractional Units, and/or Hotel Units, and all such development shall be in accordance with the requirements of the Specific Plan. 1.5.51 "Updated Mitigated Negative Declaration" shall have the meaning ascribed in Recital C hereof. 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) shall be deemed vested upon approval of all of the components that comprise 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 of the DDA; or (d) as to a particular Phase of Development, or a particular Parcel, the earlier of the final approved City inspection of the completed development of such Phase of Development or Parcel, or the issuance by City of a final certificate of occupancy for such Phase of Development or Parcel. 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, nor shall the expiration of said vesting right cancel or terminate any recorded City Declaration of CC&Rs, regardless of the expiration of clause (a) above. Notwithstanding anything in this Agreement to the contrary, the Site and 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, including, without limitation, 862/015610-0084 750537 08 al2/01106 -7- Section 9.140.080 of the La Quinta Municipal Code (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, and as to such New Laws that would prevent or materially impair Developer's ability to develop the Project, they will not apply to the Project 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 and are necessary to protect the public's health and safety and do not result in a moratorium on development of the Site, (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 expressly reserves the right to apply under this Agreement, including but not limited to those in Sections 2.2 and 3.7; (iii) all subsequent development approvals and the conditions of approval associated therewith, including but not limited to Site Development Permits 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 Site and 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, so long as they are applied to the Project in a nondiscriminatory manner. 2.2.2 In the event of fire or other casualty requiring reconstruction 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, Fire, 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. ti 4 882/015610-0084 750537.08 al2/01/06 -8- 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 resort fees described in and required pursuant to the City Declaration of CC&Rs, and to apply such new or increased fees to the Project or applicable portion thereof where such new or increased fees may be charged, so long as such fees are applicable City-wide. 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. 2.4 Developer Impact Fees. For purposes of calculating required Developer Impact Fees, all Units in the Project shall be deemed to be, and shall pay fees as, a hotel project, and shall not be treated as, nor charged Developer Impact Fees as, residential units. 3.0 DEVELOPER'S OBLIGATIONS 3.1 Development and Operation of the Project. Developer shall construct the Project on the Site in accordance with the Development Plan, including, without limitation, all of the timeframes set forth in the DDA. Developer shall enter into the necessary agreements to ensure that Destination Hotels & Resorts, Inc., a California corporation ("DHR"), shall initially manage and operate the Phases of Development developed on the Boutique Hotel Parcel, the Resort Hotel Parcel, the Lake Casitas Parcel, the Golf Casitas Parcel, and the Ranch Villas Parcel all in accordance with the requirements of this Section 3.1. Notwithstanding anything herein to the contrary, until the Management Transfer Release Date for each Phase of Development that includes Units, DHR or a successor entity authorized pursuant to Section 7.1.2 (DHR or such permitted successor entity, an "Authorized Manager") shall retain full management and operational control over all components of such Phase of Development. The Authorized Manager of the hotel and Units to be developed on the Resort Hotel Parcel shall also be the Authorized Manager for the Units to be developed on the Golf Casitas Parcel and the Lake Casitas Parcel. The Authorized Manager of the hotel and Units to be developed on the Boutique Hotel Parcel shall also be the Authorized Manager for the Units to be developed on the Ranch Villas Parcel, regardless of whether the Boutique Hotel Parcel is subsequently subdivided into two or more Parcels. Developer, on behalf of itself and any Authorized Manager, covenants and agrees that each of the Phases of Development that include Units shall, upon its completion, be operated in a Four Star Quality condition until the twentieth (201h) anniversary of the date the Agency issues a Release of Construction Covenants for such Phase of Development (the "Operating Covenant Release Date"). No more than once per year after completion of any of the Phases of Development that include Units, the City may select an independent consultant (the "Performance Consultant") to perform a quality audit of such Phase(s) of Development for purposes of determining that the applicable Phase of Development is operating at a Four Star Quality (the "Performance Audit"). The then -owner of the applicable n 882/015610-0084 .. 404 750537 08 al2/01/06 -9- Phase of Development shall reimburse the City for the reasonable costs of the Performance Audit. In the event that the Performance Audit concludes that the Phase of Development is not operating at a Four Star Quality, Developer shall pay to the City the sum of One Thousand Dollars ($1,000) per day, as liquidated damages (the "Performance Default Amount"), for each day that passes until the items noted in the Performance Audit have been corrected, as determined by the Performance Consultant. All of the costs and fees charged by the Performance Consultant for any follow-up inspections shall be paid by Developer. LIQUIDATED DAMAGES. IF THE PERFORMANCE AUDIT CONCLUDES THAT A PHASE OF DEVELOPMENT IS NOT OPERATING AT A FOUR STAR QUALITY, THEN AND IN SUCH EVENT, NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, CITY AND DEVELOPER AGREE THAT CITY WILL INCUR DAMAGES BY REASON OF SUCH DEFAULT BY DEVELOPER, WHICH DAMAGES SHALL BE IMPRACTICAL AND EXTREMELY DIFFICULT, IF NOT IMPOSSIBLE, TO ASCERTAIN. CITY AND DEVELOPER, IN A REASONABLE EFFORT TO ASCERTAIN WHAT CITY'S DAMAGES WOULD BE IN THE EVENT OF SUCH DEFAULT BY DEVELOPER, HAVE AGREED BY PLACING THEIR INITIALS BELOW, THAT CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE SUM TO THE RANGE OF HARM TO CITY THAT REASONABLY COULD BE ANTICIPATED, INCLUDING WITHOUT LIMITATION THE POTENTIAL LOSS OF TAX REVENUE TO THE CITY, AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT, THE PERFORMANCE DEFAULT AMOUNT SHALL BE DEEMED TO CONSTITUTE A REASONABLE ESTIMATE OF CITY'S DAMAGES UNDER THE PROVISIONS OF SECTION 1671 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN THE EVENT OF AND FOR SUCH DEFAULT BY DEVELOPER, DEVELOPER SHALL BE REQUIRED TO PAY TO CITY THE PERFORMANCE DEFAULT AMOUNT AS LIQUIDATED DAMAGES AND AS CITY'S SOLE DAMAGE REMEDY AGAINST DEVELOPER FOR A DEFAULT UNDER THIS SECTION 3.1; PROVIDED, HOWEVER, THAT CITY RETAINS AND RESERVES THE RIGHT TO EXERCISE ANY OTHER LEGAL OR EQUITABLE REMEDIES AVAILABLE TO CITY HEREUNDER, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO BRING AN ACTION FOR SPECIFIC PERFORMANCE. CITY AND DEVELOPER SPECIFICALLY ACKNOWLEDGE THIS LIQUIDATED DAMAGES PROVISION BY THEIR SIGNATURES BELOW: CITY DEVELOPER 3.2 Conditions of Approval; Mitigation Monitoring Program. Developer shall comply with all Conditions of Approval. The Developer shall also comply with the mitigation monitoring program set forth in Exhibit "D" attached hereto, which includes and incorporates the mitigation measures of the Updated Mitigated Negative Declaration to ensure that significant environmental effects will be mitigated or avoided (the "Mitigation Monitoring Program"). 882/01561M084 4 3 750537 08 al2/01/06 -10- 3.3 Declaration of Covenants, Conditions and Restrictions. 3.3.1 Recordation of City Declaration of CC&Rs. As one of the Agency's conditions to closing under the DDA for any Parcel that will be developed with Condominium Hotel Units and/or Fractional Units, Developer shall have entered into with the City and recorded against the underlying Parcel a Declaration of Covenants, Conditions and Restrictions in the form attached hereto and incorporated herein as Exhibit "E" (a "City Declaration of CC&Rs"), the covenants of which shall bind all of the Parcels on which Units will be developed and each and every Condominium Hotel Unit, Fractional Unit, and Hotel Unit developed thereon in perpetuity and shall survive the termination of this Agreement. 3.3.2 Recordation of Developer CC&Rs. Prior to and as a condition to the City's issuance of a temporary or final certificate of occupancy for any Parcel that will be developed with Condominium Hotel Units and/or Fractional Units, Developer shall have submitted to City, obtained City's approval of, and recorded against the underlying Parcel, a declaration of covenants, conditions, and restrictions that (i) establishes a homeowners' association, (ii) is necessary to create a condominium regime for the condominiums described on the Condominium Plan to be recorded in accordance with all applicable laws; (iii) clearly sets forth the maintenance obligations of the owners of the Condominium Hotel Units and Fractional Units; (iv) sets forth the obligations of the owners of the Condominium Hotel Units and Fractional Units to pay certain resort fees, as further set forth in the City Declaration of CC&Rs, and requires all such resort fees to be paid and brought current prior to any sale by the owner thereof, and (v) includes a disclosure regarding the public ownership and control of the existing golf course and any future golf course that may be developed in the SilverRock Resort Area and a statement that Developer does not and cannot guarantee that the City will not make changes to such golf course(s) or change the use of the underlying real property (the "Developer CC&Rs"). The Developer CC&Rs shall provide that the City is a third party beneficiary thereof with the right, but not the obligation, to enforce the terms thereof which are required hereby, and shall require the written approval of the City prior to any amendments thereto to any of the provisions which are required hereby. 3.4 Sign Agreements. As one of Agency's conditions to closing under the DDA for the Boutique Hotel Parcel, Resort Hotel Parcel, and Resort Retail Village Parcel, Developer shall enter into with the City or the Agency (as applicable) a signage agreement for such Parcel. Notwithstanding other signage locations to be determined during the site development permit process, the signage agreement for the Boutique Hotel Parcel shall provide for signage along Avenue 52, at the entry point to the development; the signage agreement for the Resort Hotel Parcel shall provide for signage on Jefferson Street, at the Resort Hotel entry point; the signage agreement for the Resort Retail Village Parcel shall provide for signage at the corner of Avenue 52 and Jefferson Street, Avenue 54 and Jefferson Street, and on Avenue 54, at the entry into the SilverRock Resort Area. 3.5 Maintenance Agreements. As one of Agency's conditions to closing for each Parcel under the DDA, Developer shall enter into with the City or the Agency (as applicable) a maintenance agreement requiring the Developer to maintain the Public Improvements located adjacent to such Parcel. 882/015610-0084 ' 75053708 a12/01/06 -11- ` J V 3.6 Water Agreements. City has entered into with the Coachella Valley Water District ("CVWD") that certain Domestic Water and Sanitation Systems Installation and Irrigation Service Agreement dated on or about June 11, 2005, and recorded in the Official Records of the County of Riverside, as Instrument No. 2005-0852063, on June 14, 2005 (the "CVWD Agreement"). Pursuant to the CVWD Agreement, the owner/developer of each Parcel is required to execute and record a Domestic Water and/or Sanitation Systems Installation Agreement, substantially in the form attached to the CVWD Agreement as Exhibit C (a "Water Agreement"), prior to obtaining domestic water service for each said Parcel. As one of Agency's conditions to closing for each Parcel under the DDA, Developer shall execute and record against such Parcel at the Closing therefor a Water Agreement. 3.7 Other Fees and Charges; Assessment Appeals. Nothing set forth in this Agreement is intended to 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 following two sentences, 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 on behalf of itself and on behalf of all persons or entities that may own an interest in the Site or the Units in the future that no action shall be taken, 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. Developer agrees on behalf of itself, and on behalf of all persons or entities that may own an interest in the Site or the Units in the future that during the term hereof no action shall be taken to challenge, cancel, reduce, or otherwise negate the payments required to be made to the City pursuant to the City Declaration of CC&Rs. 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. 3.8 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. 3.9 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 negligent or grossly negligent 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 882/015610.0084 4Ji 750537.08 a12/01106 -12- deaths, injuries, and damages, and claims therefor, suffered or alleged to have been suffered by reason of the negligent or grossly negligent 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. hi the event of litigation, the City agrees, at no cost to the City, to cooperate with the Developer. The Developer shall have the obligation to provide the defense of the City and/or Agency in the litigation, either by providing for legal counsel or, at the City's or Agency's option, timely paying the legal costs incurred by the City and or the Agency in the defense of litigation, even though negligence or gross negligence of the Developer or its contractors, subcontractors, agents, employees or other persons acting on its behalf has not been established at the time that the defense is provided. b. hi the event of any court action or proceeding challenging the validity of this Agreement or the Development Plan, 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 Development Plan, or any component thereof, 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. 3.10 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 policy of commercial general liability insurance written on a per occurrence basis in an amount not less than Three Million Dollars ($3,000,000.00) per occurrence and Three Million Dollars ($3,000,000.00) in the aggregate. A policy of workers' compensation insurance in such amount as will fully comply with the laws of the State of California against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by Developer in the course of carrying out the work or services contemplated in this Agreement. A policy of commercial automobile liability insurance written on a per occurrence basis in an amount not less than 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: 882/015610-0084 v 750537.08 a12/01/06 -13- All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation insurance, shall name City, Agency, and their respective officers, officials, members, employees, agents, and representatives as additional insureds, using a pre- 2004 additional insured endorsement (or equivalent). The insurer shall waive all rights of subrogation and contribution it may have against City, Agency, 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 materially amended or cancelled without providing thirty (30) days' prior written notice to City and Agency. 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 Effective Date, 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. Upon the request of the City Manager, Developer shall provide City with complete copies of each policy of insurance required by this Agreement. The policies of insurance required by this Agreement shall be satisfactory only if issued by companies (i) licensed and admitted to do business in California, rated "A" or better in the most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or better, or (ii) authorized to do business in California, rated "A+" or better in the most recent edition of Best Rating Guide, The Key Rating Guide, or in the Federal Registry and only if they are of a financial category Class XV. Notwithstanding the foregoing, in the event that the policies required hereunder are not available from such insurers at commercially reasonable rates, the City Manager shall have the authority, in his or her sole and absolute discretion, to waive one or more of such requirements provided the proposed policies will adequately protect the City's interests hereunder. City may reasonably require coverage increases, provided that the percentage increase in coverage shall not be required to exceed the percentage increase in the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Riverside -Orange County Average, All Items (1984 = 100) (the "Index"), from and after the date of this Agreement, or, if said Index is discontinued, such official index as may then be in existence and which is most nearly equivalent to said Index (the "CPI Adjustment"). Unless otherwise approved in advance by the City Manager, the insurance to be provided by Developer may provide for a deductible or self -insured retention of not more than Fifty Thousand Dollars ($50,000), with such maximum amount to increase at the same rate as the periodic increases in the minimum amount of total insurance coverage set forth above. 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. 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 3.9 or the extent to which Developer may be held responsible for the payment of damages to any persons or property 4� v 882/015610-0084 750537.08 a12/01/06 —14— resulting from the Developer's activities or the activities of any person or persons for which the Developer is otherwise responsible. 3.11 Transient Occupancv Tax Obligations. Developer acknowledges and agrees that all of the Units in the Project are Units in a "Group Hotel," as that term is defined in Section 3.24.020 of the La Quinta Municipal Code, for purposes of collecting and remitting to the City Transient Occupancy Tax. 4.0 CITY'S OBLIGATIONS 4.1 Scope of Subsequent 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. 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 terns, 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 41 882/015610-0084 750537.08 a12/01W6 -15- 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. 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 specificity the nature of the alleged default and the manner in which said default may satisfactorily be cured. A default of Developer under the DDA shall be deemed to be a default hereunder and shall give rise to all of City's remedies for a default hereunder. 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], and shall continuously and diligently prosecute such cure, correction or remedy to completion. 5.3 City Remedies. In the event of a default by Developer or its successors in interest of the terms of this Agreement that has not been cured within the timeframe set forth in Section 5.2 above, or of the terms of the DDA that has not been cured within the timeframe set forth therein for curing defaults, 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 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, cancel, 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. 44 882/015610-0084 750537.08 a12/01/06 -16- 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, including the owners of the Units, 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 any 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 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. 862/015610-0084 44 4 2 750537.08 a12/01/06 "17" 6.4 Notice of Default to Mortgagee; Right of Mortgagee to Cure. City shall, upon written request therefor 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 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 AGREEMENT, OR MANAGEMENT 7.1 Transfers of Interest in Site, Agreement, or Management. The qualifications and identity of the Developer as the developer and DHR as the operator of high quality commercial resort 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 property tax increment and Transient Occupancy Tax revenues to be generated by the operation of the Project on the Site. 7.1.1 Transfers of Interest in Site or Agreement Prior to Agency's Issuance of a Release of Construction Covenants. Except as provided in this Section 7.1, until the date the Agency issues a "Release of Construction Covenants" (as that term is defined in the DDA) for a particular Phase of Development (the "Fee Transfer Release Date"), (1) no voluntary successor in interest of the Developer shall acquire any rights or powers under this Agreement with respect to said Phase of Development; (2) the Developer shall not make any total or partial sale, transfer, conveyance, assignment, or lease of the whole or any part of the applicable Parcel or the Phase of Development thereon; and (3) no changes shall occur with respect to the ownership and/or control of Developer or of Lowe Enterprises, including, without limitation, stock transfers, sales of issuances, or transfers, sales or issuances of membership or ownership interests, or statutory conversions (any of the above, a "Transfer"). Prior to the Fee Transfer Release Date for a particular Phase of Development, the City may approve or disapprove a proposed Transfer in its sole and absolute discretion. Notwithstanding the foregoing, City approval of a Transfer prior to the Fee Transfer Release Date for a particular Phase of Development shall not be required in connection with any of the following: 882/015610-0084 -18- 4.113 750537.08 a12/01/06 a. The conveyance or dedication of any portion of the Site to an appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Project. b. Any assignment for financing purposes (subject to such financing being permitted pursuant to Section 311 of 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. The Transfer by Developer to an entity whose managing member, manager, or managing general partner is Developer or an entity in which Lowe Enterprises owns and controls at least fifty-one percent (51 %), and has day-to-day control of the development of the Phase of Development. d. The sale by Developer of Condominium Hotel Units to third party buyers. C. The sale, transfer or issuance of stock or membership interests of Lowe Enterprises so long as a minimum of fifty-one percent (51%) of the outstanding and voting stock, membership and/or ownership interests of Lowe Enterprises, and control of Lowe Enterprises, is held, directly or indirectly, by Robert J. Lowe or his estate or a member of his family. 7.1.2 Transfers of Operational Obligations. Notwithstanding anything in Section 7.1.1 to the contrary, until the tenth (10a) anniversary of the date the Agency issues a Release of Construction Covenants for each Phase of Development (the "Management Transfer Release Date"), (i) neither Developer nor DHR (or any permitted successor in interest) shall make any Transfer of the operational and/or managerial control, including, but not limited to, financial and managerial decisionmaking, of such Phase of Development; and (ii) no changes shall occur with respect to the ownership and/or control of DHR, or of Lowe Enterprises, including, without limitation, stock transfers, sales of issuances, or transfers, sales or issuances of membership or ownership interests, or statutory conversions (either of the above, a "Management Transfer") without the prior written approval of the City; provided, however, that transfers of the stock, ownership and/or membership interests of DHR or of Lowe Enterprises may be made so long as a minimum of fifty-one percent (51%) of the outstanding and voting stock, ownership, and/or membership interests of DHR and of Lowe Enterprises is held, directly or indirectly, by Robert J. Lowe or his estate or a member of his family. Notwithstanding the foregoing, City approval shall not be required for a Management Transfer to any of the entities listed on Exhibit "F," which is attached hereto and incorporated herein by this reference; provided, however, that if any of the entities on Exhibit "F" operate under a "flag" name, the flag shall be a flag that operates at a Four Star Quality. To the extent that the operating character or quality of any of the entities listed on Exhibit "F" substantially changes between the Effective Date and the date of the proposed Management Transfer, Developer or Developer's successor in interest shall demonstrate that the listed entity satisfies the requirements for transferee entities not listed on Exhibit "F", as outlined below in this Section 7.1.2. No Management Transfer or Transfers, individually or collectively, shall be made that results in different entities operating and managing the hotels and Units on the Resort Hotel Parcel, the Lakes 882/015610-0080 750537.08 a12/01/06 -19- 4,44 Casitas Parcel, and the Golf Casitas Parcel, and no Management Transfer or Transfers, individually or collectively, shall be made that results in different entities operating and managing the hotels and Units on the Boutique Hotel Parcel, regardless of whether the Boutique Hotel Parcel is subdivided into two or more legal parcels, and the Ranch Villas Parcel. City shall not unreasonably withhold, delay, or condition approval of a proposed Management Transfer to an entity that is not listed on Exhibit "F", provided that Developer or Developer's successor in interest demonstrates that the proposed operator has experience and reputation for operating luxury hotels at a Four Star Quality equivalent to the experience and reputation of DHR, Rosewood Hotels and Resorts, Vail Resorts, Inc., Loews Corporation, and Kimpton Hotel and Restaurant Group, LLC. Developer or Developer's successor in interest shall provide such information as may reasonably requested by the City to enable the City to review and approve (or disapprove) any proposed operator, and shall reimburse the City for the City's costs incurred in considering any such request. 7.1.3 Assignment and Assumption of Obligations. Except for the sale of individual Condominium Hotel Units, any Transfer by Developer of any interest in the Site or of any interest in this Agreement and all Management Transfers shall require the execution of an assignment and assumption of obligations in a form reasonably acceptable to the City Attorney. Transfers of Developer's rights and/or obligations under this Agreement made without an City -approved assignment and assumption agreement are null and void. This requirement shall apply regardless of whether City approval is required for the Transfer. Developer 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 applicable obligations under this Agreement. A party proposing to assign its obligations under this Agreement (i) shall remain liable for the obligations until and unless the City has received a fully executed assignment and assumption agreement in the form approved by the City Attorney, and (ii) shall remain liable for any default hereunder that occurred prior to the effective date of the assignment. Developer or Developer's successor in interest shall reimburse the City for any costs (other than staff time) the City incurs in reviewing any assignment and assumption agreement required hereunder. 7.2 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, and the term "Developer shall only mean the owner of a Phase of Development from time to time during the period of such entity's ownership, provided that the procedures set forth in this Agreement for that entity's acquisition and or disposition of the ownership have been followed, including, without limitation, the provisions of Section 7.1. 7.3 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. 4 15 882/015610-0084 750537 08 a12/01/06 -20- 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 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: City Manager Telephone: (760) 777-7031 Facsimile: (760) 777-7101 With a copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, California 92626 Attn: M. Katherine Jenson Telephone: (714) 641-5100 Facsimile: (714) 546-9035 To Developer: LDD SilverRock, LLC 74-001 Reserve Drive Indian Wells, California 92210 Attn: Theodore R. Lennon, Jr. Telephone: (760) 674-2200 Facsimile: (760) 779-1646 With a copy to: Manatt, Phelps & Phillips, LLP 11355 W. Olympic Boulevard Los Angeles, CA 90064 Attn: Timi Anyon Hallem Telephone: (310) 312-4217 Facsimile: (310) 312-4224 Any written notice, demand or communication shall be deemed received immediately if personally delivered or delivered by delivery service to the addresses above, and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 8.2 Binding Effect. Except as otherwise provided in this Agreement, 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 862/015610-0084 -21- ,� 446 750537 08 a12/01/06 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. 8.3 Independent Entity. The parties acknowledge that, in entering into and peribrming 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. No joint venture is formed by this Agreement. 8.4 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. 8.5 Covenants. The provisions of this Agreement shall constitute mutual covenants which shall run with the land comprising the Site for the benefit thereof, and for the benefit of the City's and the Agency's adjoining properties, 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. 8.6 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 in connection to this Agreement, or for any act or omission on the part of City. 8.7 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 of 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.). 8.8 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. Developer shall be required to reimburse City for all costs City incurs in negotiating, preparing, and processing any such alterations, changes, 882/015610-0084 -22- 750537 09 a12/01106 or modifications. In connection with any request for an alteration, change or modification, Developer shall deposit with the City the sum of Ten Thousand Dollars ($10,000). Notwithstanding the foregoing, the City Manager shall have the discretion to authorize a lesser deposit, in the event he or she determines the proposed alteration, change or modification is minor. In the event the funds on deposit are depleted, City shall, notify Developer of the same, and Developer shall deposit with the City an additional Five Thousand. Dollars ($5,000) to complete processing of the requested alteration, change or modification. Developer shall make additional deposits to City, as needed, pursuant to the foregoing process, until the requested alteration, change, or modification is finalized. Within sixty (60) days after such alteration, change or modification is finalized, City shall reimburse the Developer any unused sums. 8.9 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. 8.10 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. 8.11 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. 8.12 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 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 shalt not be unreasonably withheld or delayed. The City Manager, Assistant City Manager, and Community Development Director are 882/015610-0064 750537.08 a12/O1/06 -23- 413 Q - } 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. 8.13 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. 8.14 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. 8.15 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. 8.16 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. 8.17 Recitals & Exhibits Incorporated; Entire Agreement. The Recitals to this Agreement, all of the exhibits and attachments to this Agreement, and the DDA 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, other than the DDA, shall be permitted to contradict or vary the terms hereof. 8.18 Exhibits. Exhibits "A" — "F" to which reference is made in this Agreement are deemed incorporated herein in their entirety. Said exhibits are identified as follows: 882/01561M084 -24- 750537.08 al2/01/06 A-1 Legal Description of Site A-2 Site Map B Depiction of Public Improvements C Four Star Quality Requirements D Mitigation Monitoring Program E Form of City Declaration of CC&Rs F List of Pre -Approved Operators 8.19 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. 8.20 Authority to Execute• Representations and Warranties. 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. 8.21 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. 8.22 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. 450 '82/015610-0084 -25- 750537 08 a12/01106 8.23 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, 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] '82/015610-0084 -26_ 750537 08 at 2/01/06 IN WITNESS WHEREOF, the Developer and the City have executed this Agreement as of the Reference Date. ATTEST: City Clerk APPROVED AS TO FORM RUTAN & TUCKER, LLP City Attorney "CITY" CITY OF LA QUINTA, a California municipal corporation City Manager "DEVELOPER" LDD SILVERROCK, LLC, a Delaware limited liability company LIM Its: .—t 882/015610-0084 _Z7_ �4 a% 4 750537.08 a12/01/06 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(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, a 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] 45: '82/015610-0084 -28- 750537.08 al2/01/06 EXHIBIT "A-1" LEGAL DESCRIPTION OF sin [To be inserted] 4 ,J 882/015610-0084 EXHIBIT A-1 750537.08 a12/01/06 EXHIBIT "A-2" SITE MAP [To be inserted] 882/015610-0084 EXHIBIT A-2 150537 08 al2/01/06 EXHIBIT `B" DEPICTION OF PUBLIC IMPROVEMENTS [To be inserted] �2 r /� `j u 882/01561M084 EXHIBIT B 750537 08 al2/O1106 n NE CM Of to WWtk O MW Or aMa= STAW Or '%Mo M REVISED TENTATIVE PARCEL MAP NO. 33367 The following areas depicted on Exhibit '13' shall be sut�ject to a Maintenance Agreement: 1. The north and south areas adjacent to Lot 'F' (main entry roadway) between Jefferson Street and the intersection of Lots 'G' and 'H'. 2. The west portion of Lot 'H', south of the main entry and adjacent to Lots 3, 4, and 6. 3 h side of Lot'G' adjacent to Lots 3, 11, and 23. 4. The entirety of Lot 'I' adjacent to Lot 11 b. All lake ff,Qyli,4,gg,adjacent to Lots 3, 5, 11, 19, and 23. EXHIBIT "C" FOUR STAR QUALITY REQUIREMENTS Four -Star Quality under this agreement indicates an outstanding hotel providing the guest with a luxury experience in a distinctive setting, including expanded amenities and exceptional service. Guests can expect an exceptional experience, where no less than ninety five (95) percent of the following detailed characteristics are consistently met or exceeded: Services Detail • Staff is well-groomed with professional, neat and well -maintained attire. • All staff encountered are pleasant and professional in their demeanor. • Front desk staff are articulate, smile and make eye contact. • The front desk is staffed twenty-four hours. • Restaurant on -site serving three meals daily. • Valet parking is available. • Baggage assistance is automatic. • Complimentary newspapers are delivered to room automatically. • Complete room service is available. • Workstation is available where guest can access Internet. • Basic fitness equipment is provided, including treadmills and cycles. • Written confirmation is automatic or offered, either by mail, fax or e-mail. • Guests name is used effectively, but discreetly, as a signal of recognition. • The time from arriving at the reception area until registration is complete does not exceed five minutes (includes queuing). • Bed is plush and inviting with oversized or numerous pillows. • Bedcovers are elegant and stylish and with linens of exceptional quality and comfort. • All written information is provided on good quality paper or pads, custom -printed or logoed. • Bathroom presentation and placement of amenities and linens is thoughtful, careful, and elegant. EXHIBIT C '82/015610-0084 Page 1 of 7 750537 08 al2/01/06 g • Fresh ice is provided during evening service or at another time during the day. • Turndown service is automatically provided. • During turndown service, guest clothing is neatly handled and guest toiletries are neatly arranged and displayed on a cloth or shelf. • Room service is delivered within 30 minutes. • Room service order is delivered within five minutes of quoted time. • Two hour pressing available • Same day laundry and dry cleaning is available seven days/week. • Wake-up call is personalized with guest's name and time of day. • Wake-up call is delivered within two minutes of requested time. • Special service desk identified as concierge/guest service is situated apart from reception/front desk. • If spa services are present, treatments are begun and ended on schedule, within five minutes of expected or booked time. • If spa services are present, during treatment, therapist appears to be genuinely expert, moving seamlessly through the treatment as described and expected. Facilities Details Self parking area is free of debris, good condition; surfaces, curbs, paths. All outdoor walkways and approaches are well -maintained and cleaned. • Outdoor awnings, signs, marquees, flags, and plantings are clean and in good condition. • Public spaces are free of obvious hazards. • Elevator landings, cars and doors/tracks are clean and in good condition. • Guest room corridor floors, walls and ceilings are free of debris, marks, and damage. • All furniture, fixtures and equipment are clean, neat and well -maintained. • Ashtrays throughout public areas are well -maintained and free of excessive debris. • Temperature in all interior public areas are maintained in general comfort range. Public washrooms very hygienic and neat, with well -stocked paper and soap. • Public washroom fixtures, walls and floors are in very good condition. EXHIBIT C 4 882/015610-0084 Page 2 Of 7 750537.08 al2/01/06 g • Meeting rooms are well -signed so that it is easy to find and arrive at a specific room. • Meeting room doors are in good condition, free of nicks and damage. • Meeting room interiors are in generally good condition, including walls, floors and ceiling. • Lobby provides a comfortable seating area. • Lobby floors, walls and ceiling are free of debris, marks and damage. • Lobby areas feature elegant live plants and/or fresh floral displays. • Notices are professional, matching decor, not "homemade". • Vending and/or ice machines are located on each guest floor. • Vending and/or ice areas and equipment are clean, well -lit, and well -maintained. • Service doors are clean, free of marks and damage, and closed. • A variety of different sized and appointed rooms available in hotel. • High quality, varied, and major brand sundry selections are available in an on -site store. • Suite (separate bedroom and living areas) accommodations are available. • A dedicated and secure luggage storage area is available. • Public phones are convenient, and equipped with seats, privacy panels and pad/pens. • Public washrooms are furnished with upgraded materials and appointments/luxurious design. • Televisions feature premium cable TV (two movie channels, two all -news, two financial). • Pay -Movie selections are available through television. • Guest room telephones have two lines. • Guest rooms equipped with data ports (guest can connect laptop to the Internet). • Direct dial phones with direct long distance dialing are available in each guest room. • If public phonebook present, it is displayed in attractive cover. Guest Room Detail Hardware and hangings (door locks, racks, artwork, etc.) are secure and in good condition. • Carpet/floor is free of debris, stains, wear, loose threads, open seams, etc. EXHIBIT C 882/015610-0084 Page 3 of 7 750537.08 al2/01/06 g • Walls and ceilings are free of marks, stains and damage. • Drapes are free of stains, damage; pull easily and hang properly. • Furniture is free of dust, marks and damage. • All printed material including collateral, phonebooks and stationery are neat, crisp and current. • Drawers and shelves arc clean, free of dust and debris. • All light bulbs operate; all light fixtures and lamps are in good condition, clean. • Mirrors and windows are free of smudges and damage throughout. • If safe is provided, it is clean, functional and convenient. • Room equipped with accurate, functional clock and radio/stereo. • Color television works and is equipped with remote control, and is minimum 19". • All bedding and linens are free of debris, hairs, damage and stains. • Room heating and air conditioning is easily controlled by guest and is quiet. • Air is fresh and clean, no stuffiness or odors. • Sink, tub, shower, toilet, bidet are very clean, free of hairs, stains and discoloration. • Bathroom tile and grouting is clean, not discolored, cracked or mildewed. • Faucets and drains operate smoothly and easily. • Minimum bath linen is present: one bathmat; two each of facecloth, hand towel and bath towel. • If robes are provided, they are free of spots, stains and loose threads. • Guest room door and frame free of marks, scratches and scuffs. • Comfortable seating for two people (other than bed). • Guest service directory, pad and pen/pencil present and conveniently placed. • Enclosed closets (means closets must have doors). • There are three spacious drawers or enclosed shelves (inside closet). • A Luggage rack or bench provided; and adequate space to leave suitcase. • Extra clean and hygienic blanket and pillow provided in room. • Lighting throughout the room is adequate. 4 EXHIBIT C 882/015610-0084 Page 4 of 7 750537.08 a12/01/06 g `t L • The room can be fully darkened. • Full-length mirror present in room. • A hairdryer present in room, clean and functional. • Each guest room has two phones (one could be in the bathroom). • Comfortable desk and chair are available for working, complete with telephone, data port, and light. • Insulated ice bucket, vinyl or better, as well as glass glassware; clean and hygienic are present in room. • Minibar is present (defined as selection of several beverages and snacks). It is non auto - charge, and premium products are attractively displayed. • Minibar is hygienic, free of spills and damage, all products are sealed, price list present. • If coffeemaker is present, it is hygienic, and ceramic mugs and napkins are available. • Pillows are plush and full, no foam. • Framed artwork or interesting architectural features exist. in room. • Excellent lighting is provided in bathroom for makeup and shaving. • Hygienic soap, shampoo and four other bath amenities are provided. Amenities are presented attractively, thoughtfully (not simply lined up on counter). • Towels are of absorbent quality, with soft nap and no discoloration. • Towels are free of spots, stains, tears and obvious frays. • Guest room is of generous size, and provides ample seating for more than two persons. • Selection of at least 10 hangers including a variety of bars, clips and padded. • In -room safe,is present. • Bed is triple sheeted or features washable duvets. • Live plants are present in guest rooms. • Shaving/makeup, lighted magnifying mirror is present. Specialized Facility Detail • Pool/beach furniture is clean, hygienic and well -maintained. • Pool deck or beach/sand is clean and free of excessive debris. ,e,1 EXHIBIT C J 882/015610-0084 Page 5 of 7 750537.08 al2/01/06 g • Pool deck and tiling are in good condition, free of excessive damage or wear. • Pool water is clean, free of debris and free of notable odors. • Pool fittings and equipment (ladders, dive boards) are secure and in good condition. • If tennis exists on site under same management, court surfaces are in good condition, free of damage and well -marked. • Tennis courts and surrounding areas are clean and free of debris. • Fixtures, nets, lights, fences are well -maintained and good condition. • If golf exists on site under same management, pro shop/clubhouse interior are clean and well -maintained; displays and counters neat and tidy. • Pro shop/clubhouse and surrounding areas are clean with well -maintained appearance. • Golf carts are clean, well -organized and maintained. • Rental equipment is clean and good condition, including bags. • Guest can pick up e-mail and access the Internet from a Business Center workstation. • Business Center working areas are clean, tidy and professional. • Comfortable office -style chairs at the Business Center guest workstations. • All fitness, treatment and relaxation areas are hygienic, neatly organized and maintained. • Spa reception area is well-defined, neat and professional. • Fitness equipment is clean, in very good condition, conveniently laid out. • Fitness/workout area is well -ventilated, with comfortable temperature. • Fitness equipment is available with personal headphones/televisions. • Sound system or television provided in fitness/workout areas. • Towels are provided in locker and fitness areas. • Grooming area equipped with hairdryers; soap and shampoo conveniently placed. • All amenities are neatly and professionally presented; very hygienic. • Locker room, showers, sauna and hot tub extremely clean, hygienic appearance. • If Business Center is present, a semi -private working area with workstation and telephone is available for guests. • If a spa exists on site, robes and slippers or spa sandals are available in variety of sizes, and they are clean and in good condition. EXHIBIT C a 882/01SMM084 Page 6 of 7 4 () 750537.08 a12/01/06 g • If spa or fitness center exists on site, complimentary amenities to include body lotion, shower caps, talc/deodorant and combs. • If spa exists on site, at least two types of massage and either body treatments or facials are also offered. • If tennis is available on site, water is available courtside. • If pool or beach service is present, ample towels are available poolside or at the beach. • Current newspapers and national -title magazines are provided in fitness and locker areas. • If spa, treatment rooms are equipped with individually controlled temperature and sound systems. ti v EXHIBIT C 882/015610-0084 Page 7 of 7 750537.08 a12/01/06 g EXHIBIT "D" MITIGATION MONITORING PROGRAM PROJECT MONITORING CHECKLIST (CEQA Mitigation Measures) [To be inserted] 882/01561M084 EXHIBIT D 750537.08 al2/01/06 •a° �aG kk 5 m 5 9610 E r. ya E �€ a�� E d �w O% a� a k G H m {i� 9 E d o 3 « g0�o Q C� •L• .O $ N ia O o L O E ((JC a > G 5 a N y y a a Q9k'b;O �E�. 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O A.O q V mod' u (3 u cicyJ: O G@ C L Y, o° p O p, bo O m •W F y d 0 L a F w y G y y d ro G A a._@a y y d xv'^N ago. >..a:9u",3>o•..N._ @ C G'T' q T a sl G A; V C A boA F rR .O E 7 i>! y p> p= Y F Y u '� 7 M q L E E � O •.• N 'O O r yy Y@ q 7 @ N 'O bo L bo �Eaq � ED. �AEQr d mCq �YOLE^y � @ 3 .b E �i � �' w O g• �I y � �'i .S y C 'E 0 E C T,_ 2up, G � @ •O q �. r pp 0. 7 a; G �i Y q •� '00 8 A g � a Y O S �i epovi _ E O q Y �• V at. 3LY a c t a S w s o.� y y r r C pp q C m A 5 C m A C m C C Y 5 Y Y 5 Y A 5 Y A ry A A A A q Y w N O O O O O C Y d U;;ug 3d 3y� 3uY yY � w � dv m.dv a�•O a cmm aY v z" A a a" A a a" " A a a v 3 5 t Z' Y b q m g q °1 5 go fGSI 'a A'E:c c.79 72 & C YE{pyggaEE o y Q X� C e°u� pE> CO ; b 'O em°D'a�� b E+ 'pmm V G N 'r L E O > O m NO•'C ii � N � G N� Y o my � wx�+°:� 5bu�d'�:. �_s�'°� 60.5� •aJ°bv$ 7a Y. uY >m'S'o gin^.2o.�E3 �:c F°3Eao'oo3�'c� � A H k 3 � , / 6 4 §[ !) }\{ /k )]!/)k|!•i/§ \_)) 4)§ - /°$a»§!`�4 �}a��l�k}k fr .5- 50 ! �Ke§■�.,�;. )| e. 45 EXHIBIT "E" FORM OF CITY DECLARATION OF CC&Rs [See following document] 431 882/015610-0084 EXHIBIT E 750537.08 al2/01/06 EXHIBIT "F" LIST OF PRE -APPROVED OPERATORS 1. Tishman Hotel Corporation 2. Rosewood Hotels and Resorts, LLC 3. Gemstone Resorts International, LLC 4. Noble House Hotels and Resorts 5. Intercontinental Hotels Group 6. Marriott International, Inc. 7. Starwood Hotels and Resorts Worldwide, Inc. 8. Global Hyatt Corporation 9. Fairmont Raffles Holdings 10. Four Seasons Hotels, Inc. 11. Loews Corporation 12. West Paces Hotel Group 13. Mandarin Oriental Hotel Group 14. The Hong Kong and Shanghai Hotels 15. Vail Resorts, Inc. 16. Hilton Hotels Corporation 17. Ritz Carlton Hotel Company, LLC 18. Kimpton Hotel and Restaurant Group, LLC '82/015610-00a4 EXHIBIT F 750537 08 a12/01 /06 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, a 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] 882/015610-0084 750537 08 al2/01/06