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2010 07 06 RDAea# 4 4 OAZ Redevelopment Agency agendas are available on the City' web page @ www.la-quinta.org REDEVELOPMENT AGENCY AGENDA CITY COUNCIL CHAMBERS 78-495 Calle Tampico La Quinta, California 92253 Regular Meeting TUESDAY, JULY 6, 2010 3:30 P.M. Closed Session / 4:00 P.M. Open Session Beginning Resolution No. RA 2010-007 CALL TO ORDER Roll Call: Agency Board Members: Adolph, Franklin, Henderson, Sniff, Chairperson Evans PUBLIC COMMENT At this time, members of the public may address the Redevelopment Agency on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. CLOSED SESSION NOTE: Time permitting the Redevelopment Agency Board may conduct Closed Session discussions during the dinner recess. In addition, persons identified as negotiating parties are not invited into the Closed Session meeting when acquisition of real property is considered. 1. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, DOUGLAS R. EVANS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF A PORTION OF 525± ACRES LOCATED AT THE SOUTHWEST CORNER OF AVENUE 52 AND JEFFERSON STREET. PROPERTY OWNER/NEGOTIATOR: LDD SILVERROCK, LLC, THEODORE R. LENNON. JR. '84 j 001 Redevelopment Agency Agenda 1 July 6, 2010 RECESS TO CLOSED SESSION RECONVENE AT 4:00 P.M. 4:00 P.M. PUBLIC COMMENT At this time members of the public may address the Redevelopment Agency on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. CONFIRMATION OF AGENDA APPROVAL OF MINUTES APPROVAL OF MINUTES OF JUNE 15, 2010. CONSENT CALENDAR NOTE: Consent Calendar items are considered to be routine in nature and will be approved by one motion. 1. APPROVAL OF DEMAND REGISTER DATED JULY 6, 2010. 2. ADOPTION OF RESOLUTIONS APPROVING THE FISCAL YEAR 2010-2011 LA QUINTA REDEVELOPMENT AGENCY BUDGET AND DETERMINING THE PLANNING AND ADMINISTRATION EXPENSES TO BE FUNDED IN FISCAL YEAR 2010-2011. 3. APPROVAL OF AN ASSIGNMENT AND ASSUMPTION AGREEMENT AND CONSENT BY AND AMONG PRECISION LANDLEVELING, INC., LA QUINTA FARMS, LLC, AND THE LA QUINTA REDEVELOPMENT AGENCY FOR SILVERROCK RESORT FARMING. 4. APPROVAL OF A PROFESSIONAL SERVICES AGREEMENT WITH INTERACTIVE DESIGN CORPORATION FOR A SITE STUDY FOR AN AFFORDABLE HOUSING COMPLEX AT CENTRE POINTE, AND APPROPRIATION OF FUNDS. Redevelopment Agency Agenda 2 July 6, 2010'" 002, BUSINESS SESSION CONSIDERATION OF AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE LA QUINTA REDEVELOPMENT AGENCY AND LDD SILVERROCK, LLC. A. MINUTE ORDER ACTION 2. CONSIDERATION OF A RESOLUTION APPROVING THE OWNER PARTICIPATION AGREEMENT BETWEEN THE LA QUINTA REDEVELOPMENT AGENCY AND GARFF PROPERTIES -LA QUINTA, LLC, FOR PROPERTY LOCATED AT THE SOUTHWEST CORNER OF HIGHWAY 111 AND LA QUINTA DRIVE, AND THE APPROPRIATION AND TRANSFER OF FUNDS. A. MINUTE ORDER ACTION STUDY SESSION — NONE CHAIR AND BOARD MEMBERS' ITEMS — NONE PUBLIC HEARINGS — NONE ADJOURNMENT The next regular meeting of the Redevelopment Agency will be held on July 20, 2010, commencing with closed session at 3:00 p.m. and open session at 4:00 p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253. Redevelopment Agency Agenda 3 July 6, 2010 DECLARATION OF POSTING I, Veronica Montecino, City Clerk of the City of La Quinta, do hereby declare that the foregoing agenda for the La Quinta Redevelopment Agency meeting of July 6, 2010, was posted on the outside entry to the Council Chamber at 78-495 Calle Tampico and on the bulletin boards at 51-321 Avenida Bermudas and 78-630 Highway 1 1 1, on July 2, 2010. DATED- July �2,,`2010 VERONICA J. NTECINO, City Clerk City of La Q ta, California Public Notice Any writings or documents provided to a majority of the Redevelopment Agency regarding any item on this agenda will be made available for public inspection at the City Clerk counter at City Hall located at 78-495 Calle Tampico, La Quinta, California, 92253, during normal business hours. 'a...1) 004 Redevelopment Agency Agenda 4 July 6, 2010 z V CF` OF T4�'9`VS RDA MEETING DATE: July 6, 2010 ITEM TITLE: Demand Register Dated July 6, 2010 RECOMMENDATION: It is recommended the Redevelopment Agency Board: Receive and File the Demand Register Dated July 6, 2010 of which $410,115.30 represents Redevelopment Agency Expenditures. AGENDA CATEGORY: BUSINESS SESSION CONSENT CALENDAR STUDY SESSION PUBLIC HEARING PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA IN,! 005 w- T� 4 ZPQumrcu iC AGENDA CATEGORY: COUNCIL/RDA MEETING DATE: July 6, 2010 BUSINESS SESSION: ITEM TITLE: Adoption of a (1) Resolution Approving the m Fiscal Year 2010-201 1 La Quinta Redevelopment CONSENT CALENDAR: Agency Budget and a (2) Resolution Determining the Planning and Administration Expenses to be Funded in STUDY SESSION: _ Fiscal Year 2010-1 1 PUBLIC HEARING: RECOMMENDATION: Adopt a Resolution of the Redevelopment Agency approving the Fiscal Year 2010- 201 1 City of La Quinta Redevelopment Agency Budget and determining the planning and administration expenses to be funded in Fiscal Year 2010-11. SEE CITY COUNCIL STAFF REPORT 006 RESOLUTION NO. RA 2010- A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY APPROVING A BUDGET FOR FISCAL YEAR 2010-2011 WHEREAS, each year the La Quinta Redevelopment Agency adopts a Budget for Revenues and Expenditures for the upcoming Fiscal Year; and WHEREAS, the La Quinta Redevelopment Agency desires to make provisions for a level of services commensurate with the needs of the City; and WHEREAS, the La Quinta Redevelopment Agency has reviewed said budget and has had several public meetings to receive public input; and WHEREAS, the La Quinta Redevelopment Agency has, after due deliberation and consideration, made such amendments in the proposed budget as it considers desirable; and NOW, THEREFORE, BE IT RESOLVED by the La Quinta Redevelopment Agency to adopt, as follows: SECTION 1. The Fiscal Year 2010-2011 Budget which is on file with the La Quinta Redevelopment Agency Secretary is hereby approved. SECTION 2. Continuing Appropriations which remain unspent and were authorized by Council in Fiscal Year 2009-2010 are approved in the Fiscal Year 2010- 2011 Budget in an amount not to exceed $352,000 (Attachment 1). SECTION 3. Budget adjustment procedures are approved as follows: A. Additional appropriations and the transfer of cash or unappropriated fund balance from one fund to another shall be made only upon Redevelopment Agency approval. B. Transfers of budgeted appropriations between divisions or capital projects shall be made only upon Redevelopment Agency approval. C. Transfers of budgeted appropriations between accounts within a division or capital project may be made with the approval of the Executive Director or his designee. D. Prior year budget continuing Appropriations and Encumbrances for •n.,). 007 Resolution No. RDA 2010- Budget Approval FY 2010-2011 Adopted: July 6, 2010 Page 2 unexpended capital project appropriations remaining from uncompleted prior year capital projects shall be made with Executive Director approval. These carry-over appropriations are for prior year Redevelopment Agency approved capital projects and shall not exceed the approved project budget. SECTION 4. The Executive Director shall render a monthly report to the La Quinta Redevelopment Agency Board on the status of Agency operations as it relates to the approved budget and any amendments thereto. PASSED, APPROVED, and ADOPTED at a regular meeting of the La Quinta Redevelopment Agency held on this 6th day of July, 2010, by the following vote: AYES: NOES: ABSENT: ABSTAIN: LINDA EVANS, Chair La Quinta Redevelopment Agency ATTEST: VERONICA J. MONTECINO, CMC, Agency Secretary La Quinta Redevelopment Agency (SEAL) APPROVED AS TO FORM: M. KATHERINE JENSON, Agency Counsel La Quinta Redevelopment Agency P ^ 0O8 RESOLUTION NO. RA 2010 - A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF LA QUINTA DETERMINING THAT THE PLANNING AND ADMINISTRATION EXPENSES TO BE FUNDED IN FISCAL YEAR 2010-2011 BY THE LOW -AND MODERATE -INCOME HOUSING FUND ARE NECESSARY FOR THE PRODUCTION, IMPROVEMENT AND/OR PRESERVATION OF AFFORDABLE HOUSING FOR LOW - AND -MODERATE INCOME HOUSEHOLDS WHEREAS, the City Council of the City of La Quinta has heretofore adopted the Redevelopment Plan for Project Area 1 on December 29, 1983 by Ordinance No. 43; and WHEREAS, the City Council of the City of La Quinta has heretofore adopted the Redevelopment Plan for the Project Area 2 on May 16, 1989 by Ordinance No. 139; and WHEREAS, pursuant to Section 33334.2(a) of the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.) not less than 20% of all taxes which are allocated to the Agency shall be set aside by the Agency in a Low -and Moderate -Income Housing Fund and used by the Agency for the purpose of increasing, improving and preserving the community's supply of low- and moderate - income housing available at affordable housing costs to people and families of low and moderate income; and WHEREAS, pursuant to Section 33334.3 (d) of the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.) it is the intent of the California State Legislature that the amount of money spent for planning and general administration from the Low -and Moderate -Income Housing Fund not be disproportionate to the amount actually spent for the cost of production. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of La Quinta as follows: 1. The Agency hereby determines that it is necessary to allocate $2,304,539 of the estimated $1 1,360,272 Fiscal Year 2010-201 1 Affordable Housing Budget for the planning and administrative expenses necessary for the production, improvement, and or preservation of low and moderate income housing during the 2010-201 1 fiscal year. 2. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. 009 Resolution No. RA 2010- Planning & Administrative Expenses FY 2010-2011 Adopted: July 6 2010 Paget PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta Redevelopment Agency held on this 6th day of July 2010, by the following vote: AYES: NOES: ABSENT: ABSTAIN: LINDA EVANS, Chair La Quinta Redevelopment Agency ATTEST: VERONICA J. MONTECINO, CMC, Authority Secretary La Quinta Redevelopment Agency (AGENCY SEAL) APPROVED AS TO FORM: M. KATHERINE JENSON, Agency Counsel La Quinta Redevelopment Agency ' •»d010 c&ty/ 4 s4a Qu&rry COUNCIL/RDA MEETING DATE: July 6, 2010 ITEM TITLE: Approval of an Assignment and Assumption Agreement and Consent by and Among Precision Landleveling, Inc., La Quinta Farms, LLC, and the La Quinta Redevelopment Agency for SilverRock Resort Farming RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: a STUDY SESSION: PUBLIC HEARING: Approve an Assignment and Assumption Agreement and Consent by and Among Precision Landleveling, Inc., La Quinta Farms, LLC, and the La Quinta Redevelopment Agency for SilverRock Resort Farming and authorize the Executive Director to execute. FISCAL IMPLICATIO None for this action. BACKGROUND AND OVERVIEW: On August 4, 2009, the La Quinta Redevelopment Agency entered into an agreement with Precision Landleveling, Inc. to manage and maintain the entire 290 acres of undeveloped property at SilverRock Resort for PM10 purposes. Precision Landleveling, Inc. was provided a revocable license to farm up to 50 acres of property, at no cost to the City, to grow and sell fruits and vegetables. This operation would be separate from the management of the undeveloped property as indicated in the Contract Services and Revocable License Agreement. The agreement provides flexibility for the farming portion to be relocated on the undeveloped property if necessary. The owner of Precision Landleveling, Inc., Joe Manion, has decided to turn the company over to his son while continuing to maintain the SilverRock Agreement under the new business name La Quinta Farms, LLC. The Assignment and Assumption Agreement and Consent will allow Joe Manion to continue the services of the Agreement under a new business name. FINDINGS AND ALTERNATIVES: Alternatives available to the Agency Board include: 1. Approve an Assignment and Assumption Agreement and Consent by and Among Precision Landleveling, Inc., La Quinta Farms, LLC, and the La Quinta Redevelopment Agency for SilverRock Resort Farming and authorize the Executive Director to execute; or 2. Do not Approve an Assignment and Assumption Agreement and Consent by and Among Precision Landleveling, Inc., La Quinta Farms, LLC, and the La Quinta Redevelopment Agency for SilverRock Resort Farming; or 3. Provide staff with alternative direction. Respectf Ily submitted, Edie Hylton Community Services Director Approved for submission by: Thomas P. Genovese, Executive Director Attachment: 1. Assignment and Assumption Agreement and Consent 012 ATTACHMENT 1 ASSIGNMENT AND ASSUMPTION AGREEMENT AND CONSENT This Assignment and Assumption Agreement and Consent (this "Assignment") is entered by PRECISION LANDLEVELING INC., a California corporation ("Contractor"), LA QUINTA FARMS, LLC, a California limited liability company ("Assignee") and, for the purpose of providing consent to this Assignment, the La Quinta Redevelopment Agency, a public body, corporate and politic (the "Agency"), as of the _ day of 2010 ("Effective Date"), with reference to the following facts: A. Contractor and the Agency, have entered into that certain Contract Services and Revocable License Agreement dated as of August 5, 2009 (the "Agreement"). B. In accordance with Section 4.3 of the Agreement (i) Contractor now desires to assign all of its obligations and its right, title, and interest in and to the Agreement to Assignee, (ii) Assignee desires to accept such assignment on, and subject to, the terms and conditions set forth in this Assignment and (iii) Agency desires to consent to the assignment of the Agreement on, and subject to, the terms and conditions set forth in this Assignment. C. Capitalized terms not defined herein shall have the same meaning as set forth in the Agreement. THEREFORE, the parties agree as follows: 1. Assignment. Commencing on the Effective Date, Contractor assigns and transfers to Assignee all of Contractor's rights in, under and to the Agreement, and all of Contractor's obligations arising under the Agreement. 2. Acceptance and Assumption. Commencing on the Effective Date, Assignee hereby accepts from Contractor all of Contractor's rights in, under and to the Agreement, and agrees, to assume all of Contractor's obligations arising under the Agreement, and Assignee agrees to timely discharge, perform or cause to be performed and to be bound by all of the liabilities, duties and obligations imposed in connection with the Agreement to the same extent as if Assignee had been the original party thereto. 3. Conforming Provisions of Agreement. A. Section 4.1 of the Agreement (entitled "Representative of Contractor") is revised to delete the following: "b. Bret Manion, Secretary." 2156/015610-0065 1097671.02 a06/10/10 , p_.� 013 B. Section 9.1 of the Agreement (entitled "Notice") is revised to delete the address of the Contractor and replace it with the following: La Quinta Farms, LLC Attn: Joe Manion 82372 Samantha Court Indio, CA 92201 4. Further Assurances. Each party hereto hereby agrees to execute any additional documents, and take any further actions necessary to effect or evidence the assignment and assumption set forth in Sections 1 and 2 above. 5. Agency Consent. Agency consents to the Assignment. Any further assignment, as defined in Section 4.3 of the Agreement, will continue to require Agency consent in the manner provided therein. 6. Counterparts. This Assignment may be executed in counterparts, each of which shall be deemed an original, and both of which together shall constitute one and the same instrument. 7. Miscellaneous. This Assignment shall be binding on and inure to the benefit of the parties and their respective successors and assigns. The paragraph headings of this Assignment are for convenient reference only and shall not be used in interpreting this Assignment. 8. California Law. This Assignment shall be governed by and interpreted in accordance with the internal laws of the State of California, without regard to conflict of law principles. 9. Costs of Dispute Resolution. In the event of any action or proceeding brought by any party against any other parties under this Assignment, the prevailing parties shall be entitled to recover from the non - prevailing parties all costs and expenses, including attorneys' and experts' fees and expenses, in such action and proceeding in such amount as the court may adjudge reasonable. The prevailing parties shall be determined by the court based upon an assessment of which party's major arguments made or positions taken in the proceedings could fairly be said to have prevailed over the other parties' major arguments or positions on major disputed issues. [SIGNATURES INCLUDED ON FOLLOWING PAGE] 2156/015610-0065 1097671.02 46/10/10 014 IN WITNESS WHEREOF, the parties have executed this Assignment as of the date and year first above written. "AGENCY" CITY OF LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic Thomas P. Genovese, Executive Director ATTEST: Veronica J. Montecino, CMC Secretary, La Quinta Redevelopment Agency APPROVED AS TO FORM: M. Katherine Jenson, Agency Counsel La Quinta Redevelopment Agency "CONTRACTOR" PRECISION LANDLEVELING INC., a Califor Corpo tion e sy: Its: p/CE-S/OE�T— "ASSIGNEE" LA QUINTA FARMS, LLC, a California limit bility company By 2156/0156M0065 0 5 1097671.02 a06/10/10 -3- U ry C�hl OF TtTt''9� COUNCIL/RDA MEETING DATE: July 6, 2010 ITEM TITLE: Approval of a Professional Services Agreement with Interactive Design Corporation for a Site Study for an Affordable Housing Complex at Centre Pointe and Appropriation of Funds RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: _ CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Approve the Professional Service Agreement with Interactive Design Corporation for the preparation of a Site Study to determine potential land uses, authorize the Executive Director to execute the Agreement, and appropriate $23,000 from Project Area No. 2 Housing Funds. FISCAL IMPLICATIONS: An appropriation of $23,000 from Unreserved Fund Balance in Low- & Moderate - Income Fund, Project Area 2 (246-000.290-00-00) will be required to prepare the Site Study for the Centre Pointe housing parcel. BACKGROUND AND OVERVIEW: The Centre Pointe (CP) Specific Plan currently designates a 9.45 acre site for a future affordable housing project. The specific plan designates the property for 60 single- family homes, of which 40 must be affordable to moderate -income households. The property owner, CP has attempted to structure a development plan for the property under the existing specific plan and after several years has not been able to do so. In order to move forward with the Redevelopment Agency's affordable housing program, staff is proposing to conduct a detailed Site Study and prepare a conceptual land use plan. This Site Study will lay out the development scenario of the site based on the Agency's direction and will be utilized by the Agency to evaluate the existing specific plan and development potential of the site. A Professional Services Agreement (Attachment 1) has been prepared with Interactive Design for the preparation of a Site Study that will evaluate a development program 016 within Centre Pointe. The Site Study will consist of Research, Program Review, Conceptual Design Phase and a Schematic Design Phase. Staff anticipates the cost to retain Interactive Design Corporation to prepare plans and attend meetings is $23,000. FINDINGS AND ALTERNATIVES: The alternatives available to the Agency Board include: 1. Approve the Professional Services Agreement with Interactive Design Corporation for a Site Study, authorize the Executive Director to execute the Agreement, and appropriate $23,000 from Project Area No. 2 Housing Funds; or 2. Do not approve the Professional Services Agreement; or 3. Provide staff with alternative direction. Respectfully submitted, Douglas R. Evans Assistant City Manager -Development Services Approved for submission by: Thomas P. Genovese, Executive Director Attachment: 1 . Professional Services Agreement 'a.._, 017 ATTACHMENT 1 PROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT FOR CONTRACT SERVICES (the "Agreement") is made and entered into by and between the LA QUINTA REDEVELOPMENT AGENCY, ("Agency"), and INTERACTIVE DESIGN CORPORATION ("Consultant"). The parties hereto agree as follows: 1.0 SERVICES OF CONSULTANT 1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant shall provide those services related to Site Study for a 9.45 acre housing parcel at Centre Pointe, La Quinta, as specified in the "Scope of Services" attached hereto as Exhibit "A" and incorporated herein by this reference (the "services" or "work"). Consultant warrants that all services will be performed in a competent, professional and satisfactory manner in accordance with the standards prevalent in the industry for such services. 1.2 Compliance with Law. All services rendered hereunder shall be provided in accordance with all ordinances, resolutions, statutes, rules, regulations and laws of the La Quinta Redevelopment Agency and any Federal, State or local governmental agency of competent jurisdiction. 1.3 Licenses, Permits, Fees and Assessments. Except as otherwise specified herein, Consultant shall obtain at its sole cost and expense such licenses, permits and approvals as may be required by law for the performance of the services required by this Agreement. Consultant shall have the sole obligation to pay for any fees, assessments and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for the performance of the services required by this Agreement. 1.4 Familiarity with Work. By executing this Agreement, Consultant warrants that (a) it has thoroughly investigated and considered the work to be performed, (b) it has investigated the site of the work and fully acquainted itself with the conditions there existing, (c) it has carefully considered how the work should be performed, and (d) it fully understands the facilities, difficulties and restrictions attending performance of the work under this Agreement. Should Consultant discover any latent or unknown conditions materially differing from those inherent in the work or as represented by Agency, Consultant shall immediately inform Agency of such fact and shall not proceed except at Consultant's risk until written instructions are received from the Contract Officer (as defined in Section 4.2 hereof). - •a " 018 1.5 Care of Work and Standard of Work. a. Care of Work. Consultant shall adopt reasonable methods during the life of the Agreement to furnish continuous protection to the work performed by Consultant, and the equipment, materials, papers and other components thereof to prevent losses or damages, and shall be responsible for all such damages, to persons or property, until acceptance of the work by Agency, except such losses or damages as may be caused by Agency's own negligence. The performance of services by Consultant shall not relieve Consultant from any obligation to correct any incomplete, inaccurate or defective work at no further cost to Agency, when such inaccuracies are due to the negligence of Consultant. b. Standard of Work. Consultant acknowledges and understands that the services and work contracted for under this Agreement require specialized skills and abilities and that, consistent with this understanding, Consultant's services and work will be held to a heightened standard of quality and workmanship. Consistent with Section 1.4 hereinabove, Consultant represents to Agency that it holds the necessary skills and abilities to satisfy the heightened standard of work as set forth in this Agreement. 1.6 Additional Services. In accordance with the terms and conditions of this Agreement, Consultant shall perform services in addition to those specified in the Scope of Services when directed to do so by the Contract Officer, provided that Consultant shall not be required to perform any additional services without compensation. Any addition in compensation not exceeding five percent (5%) of the Contract Sum may be approved by the Contract Officer. Any greater increase must be approved by the Agency Board. 1.7 Special Requirements. Additional terms and conditions of this Agreement, if any, which are made a part hereof are set forth in Exhibit "D" (the "Special Requirements"). In the event of a conflict between the provisions of the Special Requirements and any other provisions of this Agreement, the provisions of the Special Requirements shall govern. 2.0 COMPENSATION 2.1 Contract Sum. For the services rendered pursuant to this Agreement, Consultant shall be compensated in accordance with Exhibit "B" (the "Schedule of Compensation") in a total amount not to exceed Twenty-three Thousand Dollars ($23,000) (the "Contract Sum"), except as provided in Section 1.6. The method of compensation set forth in the Schedule of Compensation may include a lump sum payment upon completion, payment in accordance with the percentage of completion of the services, payment for time and materials based upon Consultant's rate schedule, but not exceeding the Contract Sum, or such other 2- Po...� _ 019 methods as may be specified in the Schedule of Compensation. Compensation may include reimbursement for actual and necessary expenditures for reproduction costs, transportation expense, telephone expense, and similar costs and expenses when and if specified in the Schedule of Compensation. 2.2 Method of Payment. Any month in which Consultant wishes to receive payment, Consultant shall submit to Agency no later than the tenth (10th) working day of such month, in the form approved by Agency's Finance Director, an invoice for services rendered prior to the date of the invoice. Such invoice shall (1) describe in detail the services provided, including time and materials, and (2) specify each staff member who has provided services and the number of hours assigned to each such staff member. Such invoice shall contain a certification by a principal member of Consultant specifying that the payment requested is for work performed in accordance with the terms of this Agreement. Agency will pay Consultant for all expenses stated thereon which are approved by Agency pursuant to this Agreement no later than thirty (30) days after invoices are received by the Agency's Finance Department. 3.0 PERFORMANCE SCHEDULE 3.1 Time of Essence. Time is of the essence in the performance of this Agreement. 3.2 Schedule of Performance. All services rendered pursuant to this Agreement shall be performed diligently and within the time period established in Exhibit "C" (the "Schedule of Performance"). Extensions to the time period specified in the Schedule of Performance may be approved in writing by the Contract Officer. 3.3 Force Majeure. The time period specified in the Schedule of Performance for performance of the services rendered pursuant to this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of Consultant, including, but not restricted to, acts of God or of the public enemy, fires, earthquakes, floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, acts of any governmental agency other than Agency, and unusually severe weather, if Consultant shall within ten (10) days of the commencement of such delay notify the Contract Officer in writing of the causes of the delay. The Contract Officer shall ascertain the facts and the extent of delay, and extend the time for performing the services for the period of the forced delay when and if in his or her judgment such delay is justified, and the Contract Officer's determination shall be final and conclusive upon the parties to this Agreement. -3- 01. 020 3.4 Term. The term of this agreement shall commence on July 7, 2010 and terminate on July 7, 2011 (initial term). This agreement may be extended for six additional month(s) upon mutual agreement by both parties (extended term). Unless earlier terminated in accordance with Sections 7.7 or 7.8 of this Agreement, this Agreement shall continue in full force and effect until completion of the services, except as otherwise provided in the Schedule of Performance. 4.0 COORDINATION OF WORK 4.1 Representative of Consultant. The following principals of Consultant are hereby designated as being the principals and representatives of Consultant authorized to act in its behalf with respect to the work specified herein and make all decisions in connection therewith: a. Reuel Young It is expressly understood that the experience, knowledge, capability, and reputation of the foregoing principals were a substantial inducement for Agency to enter into this Agreement. Therefore, the foregoing principals shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the services hereunder. The foregoing principals may not be changed by Consultant and no other personnel may be assigned to perform the service required hereunder without the express written approval of Agency. 4.2 Contract Officer. The Contract Officer shall be Douglas R. Evans, or such other person as may be designated by the Agency Executive Director. It shall be Consultant's responsibility to assure that the Contract Officer is kept informed of the progress of the performance of the services and Consultant shall refer any decisions, which must be made by Agency Executive Director to the Contract Officer. Unless otherwise specified herein, any approval of Agency Executive Director required hereunder shall mean the approval of the Contract Officer. 4.3 Prohibition Against Subcontracting or Assignment. The experience, knowledge, capability and reputation of Consultant, its principals and employees were a substantial inducement for Agency to enter into this Agreement. Except as set forth in this Agreement, Consultant shall not contract with any other entity to perform in whole or in part the services required hereunder without the express written approval of Agency. In addition, neither this Agreement nor any interest herein may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of Agency. 4- 021 4.4 Independent Contractor. Neither Agency nor any of its employees shall have any control over the manner, mode or means by which Consultant, its agents or employees, perform the services required herein, except as otherwise set forth. Consultant shall perform all services required herein as an independent contractor of Agency and shall remain at all times as to Agency a wholly independent contractor with only such obligations as are consistent with that role. Consultant shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of Agency. 4.5 Agency Cooperation. Agency shall provide Consultant with any plans, publications, reports, statistics, records or other data or information pertinent to services to be performed hereunder which are reasonably available to Consultant only from or through action by Agency. 5.0 INSURANCE AND INDEMNIFICATION. 5.1 Insurance. Prior to the beginning of and throughout the duration of the Work performed under this Agreement, Consultant shall procure and maintain, at its cost, and submit concurrently with its execution of this Agreement, personal and public liability and property damage insurance against all claims for injuries against persons or damages to property resulting from Consultant's acts or omissions rising out of or related to Consultant's performance under this Agreement. The insurance policy shall contain a severability of interest clause providing that the coverage shall be primary for losses arising out of Consultant's performance hereunder and neither Agency nor its insurers shall be required to contribute to any such loss. A certificate evidencing the foregoing and naming Agency and its officers and employees as additional insured (on the general liability policy only) shall be delivered to and approved by Agency prior to commencement of the services hereunder. The following policies shall be maintained and kept in full force and effect providing insurance with minimum limits as indicated below and issued by insurers with A.M. Best ratings of no less than A -:VI: Commercial General Liability (at least as broad as ISO CG 0001) $1,000,000 (per occurrence) $2,000,000 (general aggregate) Commercial Auto Liability (at least as broad as ISO CA 0001) $1,000,000 (per accident) Errors and Omissions Liability $1,000,000 (per claim and aggregate) Workers' Compensation (per statutory requirements) Consultant shall carry automobile liability insurance of $1,000,000 per accident against all claims for injuries against persons or damages to property arising out of the use of any automobile by Consultant, its officers, any person directly or indirectly employed by Consultant, any subcontractor or agent, or anyone for whose acts any of them may be liable, arising directly or indirectly out of or related to Consultant's performance under this Agreement. If Consultant or Consultant's employees will use personal autos in any way on this project, Consultant shall provide evidence of personal auto liability coverage for each such person. The term "automobile" includes, but is not limited to, a land motor vehicle, trailer or semi -trailer designed for travel on public roads. The automobile insurance policy shall contain a severability of interest clause providing that coverage shall be primary for losses arising out of Consultant's performance hereunder and neither Agency nor its insurers shall be required to contribute to such loss. A certificate evidencing the foregoing and naming Agency and its officers and employees as additional insured shall be delivered to and approved by Agency prior to commencement of the services hereunder. Professional Liability or Errors and Omissions Insurance as appropriate shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the consultant and "Covered Professional Services" as designated in the policy must specifically include work performed under this agreement. The policy limit shall be no less than $1,000,000 per claim and in the aggregate. The policy must "pay on behalf of" the insured and must include a provision establishing the insurer's duty to defend. The policy retroactive date shall be on or before the effective date of this agreement. Consultant shall carry Workers' Compensation Insurance in accordance with State Worker's Compensation laws with employer's liability limits no less than $1,000,000 per accident or disease. All insurance required by this Section shall be kept in effect during the term of this Agreement and shall not be cancelable without thirty (30) days written notice to Agency of proposed cancellation. The procuring of such insurance or the delivery of policies or certificates evidencing the same shall not be construed as a limitation of Consultant's obligation to indemnify Agency, its officers, employees, contractors, subcontractors, or agents. 5.2 Indemnification. a). Indemnification for Professional Liability. When the law establishes a professional standard of care for Consultant's Services, to the fullest extent 6- �_.0� 023 permitted by law, Consultant shall indemnify, protect, defend and hold harmless City and any and all of its officials, employees and agents ("Indemnified Parties") from and against any and all claims, losses, liabilities of every kind, nature and description, damages, injury (including, without limitation, injury to or death of an employee of Consultant or subconsultants), costs and expenses of any kind, whether actual, alleged or threatened, including, without limitation, incidental and consequential damages, court costs, attorneys' fees, litigation expenses, and fees of expert consultants or expert witnesses incurred in connection therewith and costs of investigation, to the extent same are cause in whole or in part by any negligent or wrongful act, error or omission of Consultant, its officers, agents, employees or subconsultants (or any entity or individual that Consultant shall bear the legal liability thereof) in the performance of professional services under this agreement. b). Indemnification for Other Than Professional Liability. Other than in the performance of professional services and to the full extent permitted by law, Consultant shall indemnify, defend and hold harmless Agency, and any and all of its employees, officials and agents from and against any liability (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses or costs of any kind, whether actual, alleged or threatened, including, without limitation, incidental and consequential damages, court costs, attorneys' fees, litigation expenses, and fees of expert consultants or expert witnesses) incurred in connection therewith and costs of investigation, where the same arise out of, are a consequence of, or are in any way attributable to, in whole or in part, the performance of this Agreement by Consultant or by any individual or entity for which Consultant is legally liable, including but not limited to officers, agents, employees or subconsultants of Consultant. c). Standard Indemnification Provisions. Consultant agrees to obtain executed indemnity agreements with provisions identical to those set forth herein this section from each and every subconsultant or any other person or entity involved by, for, with or on behalf of Consultant in the performance of this agreement. In the event Consultant fails to obtain such indemnity obligations from others as required herein, Consultant agrees to be fully responsible according to the terms of this section. Failure of Agency to monitor compliance with these requirements imposes no additional obligations on Agency and will in no way act as a waiver of any rights hereunder. This obligation to indemnify and defend Agency as set forth herein is binding on the successors, assigns or heirs of Consultant and shall survive the termination of this agreement or this section. d). Scope of Indemnification. To the fullest extent permitted by law, Consultant shall indemnify, defend, and hold harmless Agency and Agency's agents, officers, officials, employees, representatives, and departments n...� 024 ("Indemnified Parties") from and against any and all claims, losses, liabilities of every kind, nature and description, damages, injury (including, without limitation, injury to or death of an employee of Consultant or subconsultants), costs and expenses of any kind, whether actual, alleged or threatened, including, without limitation, incidental and consequential damages, court costs, attorneys' fees, litigation expenses, and fees of expert consultants or expert witnesses incurred in connection therewith and costs of investigation, that arise out of, pertain to, or relate to, directly or indirectly, in whole or in part, the negligence, recklessness, or willful misconduct of Consultant, any subconsultant, anyone directly or indirectly employed by them or anyone that they control. 5.3 Remedies. In addition to any other remedies Agency may have if Consultant fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, Agency may, at its sole option: a. Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under this Agreement. b. Order Consultant to stop work under this Agreement and/or withhold any payment(s) which become due to Consultant hereunder until Consultant demonstrates compliance with the requirements hereof. C. Terminate this Agreement. Exercise of any of the above remedies, however, is an alternative to any other remedies Agency may have. The above remedies are not the exclusive remedies for Consultant's failure to maintain or secure appropriate policies or endorsements. Nothing herein contained shall be construed as limiting in any way the extent to which Consultant may be held responsible for payments of damages to persons or property resulting from Consultant's or its subcontractors' performance of work under this Agreement. 6.0 RECORDS AND REPORTS. 6.1 Reports. Consultant shall periodically prepare and submit to the Contract Officer such reports concerning Consultant's performance of the services required by this Agreement as the Contract Officer shall require. 6.2 Records. Consultant shall keep such books and records as shall be necessary to perform the services required by this Agreement and enable the Contract Officer to evaluate the cost and the performance of such services. Books and records pertaining to costs shall be kept and prepared in accordance with generally accepted accounting principals. The Contract Officer shall have full and 025 free access to such books and records at all reasonable times, including the right to inspect, copy, audit, and make records and transcripts from such records. 6.3 Ownership of Documents. Originals of all drawings, specifications, reports, records, documents and other materials, whether in hard copy or electronic form, which are prepared by Consultant, its employees, subcontractors and agents in the performance of this Agreement, shall be the property of Agency and shall be delivered to Agency upon termination of this Agreement or upon the earlier request of the Contract Officer, and Consultant shall have no claim for further employment or additional compensation as a result of the exercise by Agency of its full rights of ownership of the documents and materials hereunder. Consultant shall cause all subcontractors to assign to Agency any documents or materials prepared by them, and in the event Consultant fails to secure such assignment, Consultant shall indemnify Agency for all damages suffered thereby. In the event Agency or any person, firm or corporation authorized by Agency reuses said documents and materials without written verification or adaptation by Consultant for the specific purpose intended and causes to be made or makes any changes or alterations in said documents and materials, Agency hereby releases, discharges, and exonerates Consultant from liability resulting from said change. The provisions of this clause shall survive the completion of this Contract and shall thereafter remain in full force and effect. 6.4 Release of Documents. The drawings, specifications, reports, records, documents and other materials prepared by Consultant in the performance of services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer or as required by law. Consultant shall not disclose to any other entity or person any information regarding the activities of Agency, except as required by law or as authorized by Agency. 7.0 ENFORCEMENT OF AGREEMENT. 7.1 California Law. This Agreement shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Consultant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. 7.2 Disputes. In the event of any dispute arising under this Agreement, the injured party shall notify the injuring party in writing of its contentions by submitting a claim therefore. The injured party shall continue performing its obligations hereunder so long as the injuring party commences to cure such default -9- n...^ 026 within ten (10) days of service of such notice and completes the cure of such default within forty-five (45) days after service of the notice, or such longer period as may be permitted by the Contract Officer; provided that if the default is an immediate danger to the health, safety and general welfare, Agency may take such immediate action as Agency deems warranted. Compliance with the provisions of this section shall be a condition precedent to termination of this Agreement for cause and to any legal action, and such compliance shall not be a waiver of any party's right to take legal action in the event that the dispute is not cured, provided that nothing herein shall limit Agency's right to terminate this Agreement without cause pursuant to Section 7.7. 7.3 Retention of Funds. Agency may withhold from any monies payable to Consultant sufficient funds to compensate Agency for any losses, costs, liabilities, or damages it reasonably believes were suffered by Agency due to the default of Consultant in the performance of the services required by this Agreement. 7.4 Waiver. No delay or omission in the exercise of any right or remedy of a non defaulting party on any default shall impair such right or remedy or be construed as a waiver. Agency's consent or approval of any act by Consultant requiring Agency's consent or approval shall not be deemed to waive or render unnecessary Agency's consent to or approval of any subsequent act of Consultant. Any waiver by either party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Agreement. 7.5 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 7.6 Legal Action. In addition to any other rights or remedies, either party may take legal action, at law or at equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement. 7.7 Termination Prior To Expiration Of Term. This section shall govern any termination of this Agreement, except as specifically provided in the following Section 7.8 for termination for cause. Agency reserves the right to terminate this Agreement at any time, with or without cause, upon thirty (30) days' written notice to Consultant. Upon receipt of any notice of termination, Consultant shall _1o_ p 027 immediately cease all services hereunder except such as may be specifically approved by the Contract Officer. Consultant shall be entitled to compensation for all services rendered prior to receipt of the notice of termination and for any services authorized by the Contract Officer thereafter in accordance with the Schedule of Compensation or such as may be approved by the Contract Officer, except as provided in Section 7.3. 7.8 Termination for Default of Consultant. If termination is due to the failure of Consultant to fulfill its obligations under this Agreement, Agency may, after compliance with the provisions of Section 7.2, take over work and prosecute the same to completion by contract or otherwise, and Consultant shall be liable to the extent that the total cost for completion of the services required hereunder exceeds the compensation herein stipulated (provided that Agency shall use reasonable efforts to mitigate such damages), and Agency may withhold any payments to Consultant for the purpose of setoff or partial payment of the amounts owed Agency as previously stated in Section 7.3. 7.9 Attorneys' Fees. If either party commences an action against the other party arising out of or in connection with this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs of suit from the losing party. 8.0 AGENCY OFFICERS AND EMPLOYEES; NONDISCRIMINATION. 8.1 Non -liability of Agency Officers and Employees. No officer or employee of Agency shall be personally liable to Consultant, or any successor in interest, in the event or any default or breach by Agency or for any amount which may become due to Consultant or to its successor, or for breach of any obligation of the terms of this Agreement. 8.2 Conflict of Interest. No officer or employee of Agency shall have any personal interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to the Agreement which affects his or her personal interest or the interest of any corporation, partnership or association in which she or he is, directly or indirectly, interested, in violation of any State statute or regulation. Consultant warrants that it has not paid or given and will not pay or give any third party any money or general consideration for obtaining this Agreement. 8.3 Covenant against Discrimination. Consultant covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the performance of this Agreement. Consultant shall take affirmative action to insure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, marital status, national origin or ancestry. 9.0 MISCELLANEOUS PROVISIONS 9.1 Notice. Any notice, demand, request, consent, approval, communication either party desires or is required to give the other party or any other person shall be in writing and either served personally or sent by prepaid, first-class mail to the address set forth below. Either party may change its address by notifying the other party of the change of address in writing. Notice shall be deemed communicated forty-eight (48) hours from the time of mailing if mailed as provided in this section. To Agency: LA QUINTA REDEVELOPMENT AGENCY Attention: Thomas P. Genovese Executive Director 78-495 Calle Tampico P.O. Box 1504 La Quinta, California 92247-1504 To Consultant: INTERACTIVE DESIGN CORP. Attn: Reuel Young CEO 199 S. Civic Drive, Suite 10 Palm Springs, CA 92262 9.2 Integrated Agreement. This Agreement contains all of the agreements of the parties and all previous understanding, negotiations and agreements are integrated into and superseded by this Agreement. 9.3 Amendment. This Agreement may be amended at any time by the mutual consent of the parties by an instrument in writing signed by both parties. 9.4 Severability. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder. 9.5 Authority. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that by so executing this Agreement the parties hereto are formally bound to the provisions of this Agreement. 12- .w..J . 029 IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates stated below. LA QUINTA REDEVELOPMENT AGENCY Thomas P. Genovese, Executive Director Date ATTEST: Veronica J. Montecino, CIVIC, Agency Secretary APPROVED AS TO FORM: M. Katherine Jenson, Agency Counsel CONSULTANT: INTERACTIVE DESIGN CORPORATION By: Name Title: Date: -"- b.. 030 Exhibit A Scope of Services (Attached) "D.. •- 031 14 EXHIBIT "A" MEN INTERACTIVE DESIGN CORPORATION NEE] 199 South Civic Drive Suite 10, Palm Springs, CA 92262 AGREEMENT FOR ARCHITECTURAL SERVICES Centre Pointe La Quinta Affordable Housing IDC #1009 INTERACTIVE DESIGN CORPORATION (the Architect), a California Corporation, and the Redevelopment Agency of City of La Quinta, CA, (the Client) agree as follows: CONTRACT INFORMATION 1.1 Date of Agreement 1.2 Agreement between The Client The Architect 1.3 For services related to 1.4 Client's designated representative: 1.5 Architect's designated representative: 1.6 Project Name: 1.7 Project Description: 11 PROJECT DESCRIPTION July 6, 2010 Redevelopment Agency of the City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 T: 760.777.7125 Interactive Design Corporation 199 South Civic Dr. Suite 10 Palm Springs, California 92262 Tel: 760.323.4990 Fax: 760.322.5308 Email: mail@interactivedesigncorp.com Site and architecture design services Doug Evans, Assistant City Manager Reuel Young Centre Pointe Affordable Housing, La Quinta, CA Multi -family apartment complex in La Quinta, CA 2.1 PROJECT PARAMETERS A. Site: The vacant site is approximately 9 acres in size. It is bordered on the north by a city park, on the east by single family homes, on the south by vacant land which is owned by Eisenhower, to the west by a parking lot for the recently -constructed Eisenhower Medical Facility. The parcel is part of the Centre Pointe Specific Plan. B. Proposed Use: Affordable multi -family development. C. Program: The development will consist of affordable multi -family apartments. Agreement Between Client and Architect dated 06JUL 10 IDC No. 1009 Centre Pointe Affordable Housing, La Quinta Page I of 10 032 INTERACTIVE DESIGN CORPORATION ONE] 199 South Civic Drive Suite 10, Palm Springs, CA 92262 I. The unit mix will be developed based upon current demand at similar projects in the area. The building types may include one-story courtyards, two-story courtyards and townhouses, and perhaps three-story buildings with townhouses and flats. The total unit count is initially estimated to range between 90 — 120 units depending on the density and building mass acceptable to the Agency. 2. The RDA of La Quinta has defined "livability and sustainability" as important design objectives. The initial design effort will be devoted to establishing the appropriate balance between unit count and livability. 3. The architectural character will probably be "contemporary desert" compatible with the recently -constructed Eisenhower medical office building, but also acknowledging the recent buildings to the north (Homewood Suites, Applebee's and two-story condominiums). D. Process: Ultimately the Project will be entitled under an amended Specific Plan. I. However, the services provided under this Agreement are focused on developing a comprehensive plan that will balance the needs for livability, affordability and sustainability, and will be an aesthetic asset to the community. The effort under this Agreement will be to develop a Schematic Design which may include site plan, site sections, building massing, and architectural vocabulary. 2. Special studies have already been performed for the existing Specific Plan, and the proposed use will be less intensive in terms of service demands and environmental impacts than the original modeling. 3. The primary contacts for interfacing with the Agency will be Doug Evans, Assistant City Manager — Development Services, and Les Johnson, Planning Director, each of which will provide assistance in development standards and Agency expectations and concerns. 4. The program, unit mix, functional and operational requirements will be directec by the Coachella Valley Housing Coalition (CVHC): John Mealey, Executive Director, and John Aguilar, Director of Development. 5. Discretionary approvals will be required for an amendment to the Specific Plan, all architectural design, landscape architectural design and preliminary engineering. Ultimately, the La Quinta Architectural Review Committee, (ARC), the Planning Commission (PC), and the City Council (CC) will review and approve the Project. However, these services are not part of this Agreement. III ARCHITECT'S SERVICES AND RESPONSIBILITIES 3.1 DESIGN SERVICES The Architect shall provide the following Services: A. Research: I. Study and examine the Project site in relationship to its environment, research code requirements and restrictions, review previous development proposals, designs, site plans and the Centre Pointe Specific Plan. 2. Prepare such documents and drawings for the Architect's internal use as are in the Architect's judgment appropriate and economically justified. Agreement Between Client and Architect dated 06JUL 10 Page 2 of 10 IDC No. 1009 Centre Pointe Affordable Housing, La Quinta 033 MEN INTERACTIVE DESIGN CORPORATION END 199 South Civic Drive Suite 10, Palm Springs, CA 92262 B. Pre -Design Programmine: I. Review the program for the Project with the Client, the Agency staff and the developer (CVHC) to determine the profile of the overall project. Investigate, with approval from the Client and the developer, potential impacts that future developments on the Eisenhower parcel may have on the design of the Project. Determine the appropriate types of units and buildings, and most desirable unit mix and organization of the site. Review possible programmatic alternatives for the existing park. C. Conceptual Design Phase: I. Prepare Conceptual Plans to illustrate alternative development patterns for the Project. Illustrate circulation and access alternatives, and what building configurations are possible. Determine the building types and the probable number of each type. Determine probable unit count and mix. 2. Based upon direction from the Agency staff and CVHC, develop the preferred conceptual site plan into a schematic dimensioned site plan showing internal streets, site sections, building footprints and massing, and generally communicate graphically the character of the neighborhood. 3. Study the scale and relationships of the components within the Project each to the other and to the neighborhood as a whole. Analyze site issues that may influence the design of the projects such as views, adjacent land uses, privacy, road -to -building relationships, building -to -building relationships, and outdoor social spaces. Collaborate with the Client -retained civil engineer to determine grading and drainage alternatives. 4. Prepare Drawings and other exhibits considered appropriate by the Architect to convey the overall site design, building massing and architectural character. 5. Review the Conceptual Design documents with the Agency staff, and CVHC, and obtain Client's approval prior to proceeding to the next Phase. D. Schematic Design Phase: I . From the approved Conceptual Design documents, prepare the Schematic Design documents consisting of drawings and other documents that fix and describe the character and scale of the Project for in-house presentation to the Redevelopment Agency Board of the City of La Quinta. 2. Review the exhibits with the Client, Agency staff and developer to affirm that the exhibits will "tell the story" for the proposed development in enough detail and richness that the Agency staff and developer will be confident about gaining non -binding approval by the RDA Board for RDA staff to proceed toward land acquisition discussions and negotiations. 3.2 OUTCOME A. The positive outcome of this effort will be a shared agreement that the proposed Schematic Design is consistent with the quality and density appropriate for such a project in La Quinta and a project framework (site organization, building types and massing, unit mix and type, and architectural vocabulary) that will serve as the substantive basis for discussions, analysis and critique by Agency staff, CVHC, and Agreement Between Client and Architect dated 06JUL 10 Page 3 of 10 IDC No. 1009 Centre Pointe Affordable Housing, La Quints 034 ONE INTERACTIVE DESIGN CORPORATION SE•❑ 199 South Civic Drive Suite 10, Palm Springs, CA 92262 Agency consultants. The Schematic Plan will inevitably be revised and modified by the process of review and analysis by the developer and Agency staffs, as well as by input from the public, so the documents prepared are not intended to be the final design: changes to the site design, the size, configuration and architectural character may be suggested during the process, and incorporated into the design before the project is submitted for formal entitlement and design review. B. Method: The Architect will work collaboratively with consultants hired directly by the Agency, CVHC and Agency Staff. The architect will review the conceptual design with the Building Code official to confirm mutual understanding of Code requirements. 3.3 CONSULTANTS A. Included under this Agreement, the Architect will not retain any consultants 3.4 ADDITIONAL SERVICES At the express request of the Client, the Architect will provide any of the following additional services at the Architect's hourly fee rates or such fixed fees as may be mutually agreed upon: A. Prepare artist's renderings, 3D CAD models, videos and/or physical models for presentations. B. Assist the Client in any reasonable and appropriate manner in challenging or appealing decisions of any governmental or quasi -governmental entity with jurisdiction over the Project. C. Consult with or assist any of Client's other consultants. D. Make revisions to instruments of service previously prepared by the Architect where such revisions are inconsistent with prior Client approval or due to substantial changes in or untimely decisions concerning the Project; necessitated by amendments to or changes in the interpretation of the laws and regulations applicable to the Project; or the result of untimely decisions by others or of site conditions of which the Architect was not informed. E. Prepare to serve or serve as a consultant or witness for or on behalf of the Client in any litigation, public hearing or other legal or administrative proceeding involving the Project. F. Provide any other architectural or other design consultant services to which the Architect and the Client may mutually agree. 3.5 EXCLUDED SERVICES The other provisions of this Agreement notwithstanding, in no event will the Architect be responsible for services which it has not expressly agreed to undertake in writing; and in particular and without limitation, the Architect: A. Will not provide Specific Plan amendment or Change of Zone services, or other Entitlement services. B. Will not provide any soils engineering or other geotechnical services whatsoever, or otherwise have any liability or responsibility for the Project's soils, subterranean water and/or subsurface conditions. Agreement Between Client and Architect dated 06JUL 10 Page 4 of 10 IDC No. 1009 Centre Pointe Affordable Housing, La Quinta 035 BEN INTERACTIVE DESIGN CORPORATION END 199 South Civic Drive Suite 10, Palm Springs, CA 92262 C. Will not provide any hazardous waste or toxic substances engineering or other such services, or otherwise have any liability or responsibility concerning compliance with any federal or state environmental or pollution laws, nor investigate any product for environmental or pollution hazards not identified in the product manufacturer's published literature. D. Will not verify or otherwise be responsible for the accuracy or completeness of data and/or design work provided to the Architect by the Client, other design professionals (other than the Architect's own subconsultants), or other reasonably reliable sources. E. Will not provide professional cost estimating services. F. Will not provide utility contact and coordination. IV CLIENT'S RESPONSIBILITIES 4.1 The Client shall make all reasonable efforts to cooperate with the Architect, including but not limited to the following: A. Providing the Architect with legal descriptions, deeds depicting the true and accurate conditions of the property, including any existing or potential easements or dedications, and such other documents as are needed to determine legal restrictions on the property, including but not limited to Community Associations Guidelines and CC&R's. B. Providing the Architect with appropriate title reports, geotechnical report(s), boundary survey and a topographic map of the Project site (if available). C. Retaining experienced and licensed consultants required to complete the project, but not included under this agreement. Such consultants may include Civil Engineering, Entitlement and Environmental Assessment, special studies, cost estimating, marketing and financing. D. Responding to the Architect's questions and requests for approval within a reasonable time, and providing the Architect with reasonable access to the Project site. E. Allowing display of the Architect's job sign in compliance with MC Section 9.160.070 throughout the course of the construction, and the inclusion of representations and photographs of and non -confidential information about the Project in the Architect's promotional efforts and materials. F. Retaining and compensating such design consultants as the Architect and the Client determine are reasonably necessary for the Project. G. Compensating the Architect pursuant to the terms and conditions of this Agreement. Authorization from Client to proceed to next stage and/or payment of invoices signifies aesthetic approval of work completed and obligates Client to appropriate fees. V COMPENSATION The Client will compensate the Architect for all services rendered and costs incurred concerning the Project as set forth below. Agreement Between Client and Architect dated 06JUL 10 Page 5 of 10 IDC No. 1009 Centre Pointe Affordable Housing, La Quinta 036 BEN INTERACTIVE DESIGN CORPORATION NE■❑ 199 South Civic Drive Suite 10, Palm Springs, CA 92262 5.1 FEES The Architect shall be compensated for Design Services identified in this Agreement on an hourly basis: I. Research Hourly: NTX $1,500 2. Pre -Design Programming Hourly: NTX $2,000 3. Conceptual Design Hourly: NTX $8,500 4. Schematic Design Hourly: NTX $5,000 5. Meetings Hourly: $3,000 (estimate) 5.2 ARCHITECT'S INSURANCE Architect shall maintain the following insurance: I. Professional liability insurance in the amount of $1,000,000 per occurrence/$2,000,000 aggregate with a deductible not to exceed $50,000 from the date of this Agreement until thirty-six (36) months after Final Completion. 2. Workers' compensation insurance and employer's liability insurance in the maximum statutory liability amount, naming Client as an additional insured. 3. Commercial general liability insurance in the amount of $1,000,000 per occurrence/$2,000,000 aggregate naming the Client as an additional insured. Said policy(s) shall include contractual liability coverage, business papers coverage and automobile liability covering all owned, hired and non -owned vehicles. 4. Each policy described above shall provide that insurance may not be cancelled or non -renewed without thirty (30) days notice to Client. 5.3 ADDITIONAL SERVICES Any additional services will be compensated pursuant to the Architect's hourly fee schedule, or on a lump sum basis as may be mutually agreed. 5.4 HOURLY FEE SCHEDULE A. The Architect's current hourly fee schedule is as follows: Principal Architect $165 Senior Architect/Project Manager $140 Project Manager/CAD $105 Drafter $75 Administrative $55 5.5 FEE ADJUSTMENTS Lump sum fees will be equitably adjusted if the scope and/or difficulty of the Architect's performance is substantially increased by changes in the Project's scope or scheduling or by conditions neither foreseen nor reasonably foreseeable by the Architect at the time that the fee was determined, or if the Project is placed on hold for more than three (3) months or extended for reasons beyond the Architect's control for more than twelve (12) months. The Architect's hourly fee schedule is adjusted periodically in light of market and economic conditions and thus can change over the course of the Project; and hourly rate services are billed at the rate current at the time of performance. Overtime costs necessitated by the Client's express request for expedited service will be billed without markup. Agreement Between Client and Architect dated 06JUL 10 IDC No. 1009 Centre Pointe Affordable Housing, La Quince Page 6 of 10 037 I NTERACTI VE DESIGN CORPORATION 199 South Civic Drive Suite 10, Palm Springs, CA 92262 5.6 DIRECT EXPENSES The Architect will be reimbursed for direct expenses at one point fifteen (1.15) for handling, including but not limited to, the costs of blueprinting, CAD plotting, other printing, photo work, postage and handling charges, telephone, facsimiles, mileage at 35 cents per mile (outside of the Coachella Valley) transportation and lodging as approved by Client. Direct Expenses for this Project are estimated at $2,500. 5.7 INVOICING The Client will be provided with monthly invoices for services rendered and costs advanced. Each invoice shall be due and payable upon receipt, and delinquent thirty (30) days after the invoice date. In the event of delinquency, the Architect may suspend or terminate this Agreement and its related obligations with no liability for so doing, and in addition, service charges will be assessed from the invoice date at 1.5% per month or at the highest rate permitted by California law, whichever is lower, with payments applied first to accrued interest. In light of the obvious advantage of resolving questions and disputes regarding the Architect's billing quickly and while recollections are fresh, the Client will notify the Architect of any questions or dissatisfaction regarding any particular invoice within fifteen (15) days of the invoice date; and if the Client fails to give the Architect such notice, then the Client will have waived its right to dispute the accuracy and appropriateness of the invoice and the invoice will be binding upon the Client. VI GENERAL CONDITIONS 6.1 WARRANTY The Architect warrants that all of the services provided by and on its behalf pursuant to this Agreement will be performed with reasonable care, skill and diligence in accordance with generally and currently accepted design professional principles and practices. This warranty is in lieu of all other warranties, either express or implied. In particular, and without limitation, the Architect will use its best professional judgment in interpreting and applying the requirements of all laws applicable to the Project, but compliance with these laws as others may eventually interpret them cannot be guaranteed. In no event will the Architect guarantee cost estimates or Projections, or prognostications as to future events; and it is understood that when used in conjunction with the providing of services pursuant to this Agreement, such terms as "certify", "warrant", "verify", "confirm", "insure", "ensure", "assure", or the like do not constitute a guarantee, but rather a representation based on the Architect's professional opinion or judgment. 6.2 COOPERATION The Architect and the Client shall strive to maintain a good working relationship throughout the duration of the Project; and because of the importance of a good working relationship, either party may terminate this Agreement by giving written notice to the other, provided only that such notice is given in the good faith belief that Agreement Between Client and Architect dated 06JUL 10 IDC No. 1009 Centre Pointe Affordable Housing, La Quinta Page 7 of 10 E ao...� 038 MAN INTERACTIVE DESIGN CORPORATION NE■❑ 199 South Civic Drive Suite 10, Palm Springs, CA 92262 the working relationship is less than satisfactory. In the event that this Agreement is for any reason terminated, the Client shall compensate the Architect for only the reasonable value of whatever professional time and reimbursable expenses the Architect has devoted up to the time of the termination or must necessarily devote to the Project thereafter due to governmental requirements or otherwise necessary and reasonable to bring the Project to a close. 6.3 OTHER CONSULTANTS The Architect will coordinate the services provided pursuant to this Agreement with those services provided by the Client's other consultants; but the Architect will have no legal liability for any professional errors or omissions committed by these Consultants. 6.4 LEGAL RESPONSIBILITY The Architect will be legally liable for only the architectural services provided pursuant to this Agreement, and not otherwise. The Architect will not be legally liable for the providing of, or the failure to provide, legal, accounting, financial analysis, soils or geotechnical engineering or hazardous waste or toxic substance engineering services. Further, and without limitation, the Architect will not be responsible for delays beyond its reasonable control, for inaccurate information provided to it by the Client or other reasonably reliable sources, for site conditions of which it was not informed, for hazardous materials or toxic substances at the Project site, for the specification of products or equipment for purposes consistent with the manufacturer's published literature, for the Client's materials and equipment decisions, for implementing the Client's lawful decisions, for the timeliness or quality of any contractor performance, or for the actions or inaction of any governmental or quasi -governmental agencies. 6.5 RISK ALLOCATION In light of the disparity between Architect's fee and the potential liability for problems or alleged problems with the Project, and of the Architect's limited ability to affect the risks inherent in the Project, the Client will release and indemnify the Architect and its affiliated entities and individuals to the fullest extent allowed by law, even in situations involving actual alleged "active negligence" or "design defects", concerning any liability and/or loss related to the Project; provided, however, that this indemnification shall not apply to any indemnities sole negligence or willful misconduct. Further, in any event, the Client agrees to limit the total aggregate liability of the Architect and its affiliated entities and individuals concerning or relating to the Project on any and all legal and equitable theories and concerning any and all kinds of causes of loss to the m of $25,000 or the amount of the Architect's fee, whichever is greater. 6.6 THE ARCHITECT'S INSTRUMENTS OF SERVICE All sketches, drawings and other documents prepared by and on behalf of the Architect pursuant to this Agreement shall, as instruments of service, remain the Architect's property with all common law, statutory and other reserved rights including copyrights reserved; but upon payment of the related fees and costs, and for so long as the Agreement remains in force prior to its completion, the Client shall have a Agreement Between Client and Architect dated 06JUL 10 IDC No. 1009 Centre Pointe Affordable Housing, La Quinta Page 8 of 10 ,,,.^,. 039 000 INTERACTIVE DESIGN CORPORATION �� 199 South Civic Drive Suite 10, Palm Springs, CA 92262 nonexclusive license to use the Instruments of Service for the purposes of constructing and maintaining the Project. It is expressly agreed that because information stored in electronic form can be modified by others, intentionally or otherwise, without notice or indication of said modification, and in any event will deteriorate over time, the Architect reserves the right to retain possession of all information contained in any electronic medium in read-only format, and to remove all indicia of its involvement from any information contained in an electronic medium. The instruments of service shall not be used by Client on other Projects, or for the completion of the Project by others, except by written agreement with the Architect including provisions for appropriate compensation. The foregoing notwithstanding, the Architect shall refrain from the use of the Project's overall design on other Projects without the Client's express written approval. 6.7 DISPUTE RESOLUTION No lawsuit or other formal legal action of any kind may be commenced by either the Architect or the Client against the other regarding any dispute which may arise under or concerning this Agreement unless and until the complaining party has made a good faith effort to mediate the dispute by: (1) first providing the other party with a formal demand letter sent certified or registered mail fully and fairly describing the claim and setting forth a settlement demand or other proposed solution; (2) if the demand letter fails to bring about an agreement, attempting to initiate a formal mediation under the auspices of the JAMS Endispute, or other reputable and unbiased dispute resolution service. 6.8 TERMINATION OR SUSPENSION If the Client fails to make payments to the Architect in accordance with this Agreement, such failure shall be considered substantial nonperformance and cause for termination or, at the Architect's option, cause for suspension of performance of services under this Agreement. If the Architect elects to suspend services, prior to suspension of services, the Architect shall give seven days' written notice to the Client. In the event of a suspension of services, the Architect shall have no liability to the Client for delay or damage caused the Client because of such suspension of services. Before resuming services, the Architect shall be paid all sums due prior to suspension and any expenses incurred in the interruption and resumption of the Architect's services. The Architect's fees for the remaining services and the time schedules shall be equitably adjusted. This Agreement may be terminated by either party upon not less than seven days' written notice should the other party fail substantially to perform in accordance with the terms of this Agreement through no fault of the party initiating the termination. This Agreement may be terminated by the Client upon not less than seven days' written notice to the Architect for the Client's convenience and without cause. Agreement Between Client and Architect dated 06JUL 10 IDC No. 1009 Centre Pointe Affordable Housing, La Quinta Page 9 of 10 040 000 INTERACTIVE DESIGN CORPORATION �� 199 South Civic Drive Suite 10, Palm Springs, CA 92262 In the event of termination not the fault of the Architect, the Architect shall be compensated for services performed prior to termination, together with Reimbursable Expenses then due and all Termination Expenses as defined below. Termination Expenses are in addition to compensation for the services of the Agreement and include expenses directly attributable to termination for which the Architect is not otherwise compensated, plus an amount for the Architect's anticipated profit on the value of the services not performed by the Architect. 6.9 INTEGRITY OF THE AGREEMENT This Agreement supersedes all negotiations and prior agreements concerning the Project and is intended as a complete and exclusive statement of the entire agreement between the Client and the Architect concerning the Project. This Agreement is being entered into and will be performed in Riverside County, California; and it shall be interpreted and enforced under and pursuant to the laws of the State of California. No failure to exercise or delay in exercising any right under this Agreement shall be construed as a waiver, and no waiver of a breach of any term of this Agreement be construed as a waiver of a subsequent breach of the same or other terms. In the event the Architect reasonably seeks the assistance of an attorney in order to collect fees due pursuant to this Agreement, the prevailing party shall be entitled to recover from the other its reasonable litigation costs including expert and attorneys' fees. The Parties hereby mutually waive any claims for consequential damages, which either might have against the other concerning this Agreement or its termination. In the event that this Agreement is for any reason terminated, then its risk allocation and indemnity provisions shall remain in full force and effect; and in the event that any such provisions shall be prohibited by law, then the subject provisions shall not be void, but rather shall be interpreted as operating only to the fullest extent allowed by law. Any and all actual or alleged causes of action concerning any services rendered pursuant to this Agreement, including without limitation those for indemnification, shall be deemed to have accrued for purposes of any statutes of limitation or repose as of the date of the ArchitecC s last invoice concerning the Project. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective partners, joint ventures, principals, heirs, estates, personal representatives, successors and assigns. IN WITNESS WHEREOF, the parties hereby execute this Agreement based upon the Terms and Conditions stated above and on the date indicated below. �Wm//y Reuel A. Young, r sident Date Interactive Desi Corpor tion California License #C 10974 Executive Director Redevelopment Agency of the City of La Quinta Agreement Between Client and Architect dated 06JUL 10 IDC No. 1009 Centre Pointe Affordable Housing, La Quinta Page 10 of 10 0 041 Exhibit B Schedule of Compensation Payment shall be on a "Fixed Fee" basis in accordance with the Consultants Schedule of Compensation attached herewith for the work tasks performed in conformance with Section 2.2 of the Agreement. Total compensation for all work under this contract shall not exceed Twenty-two Thousand Five Hundred Dollars ($22,500) except as specified in Section 1.6 - Additional Services of the Agreement. 15 ^ G42 M.�, - Exhibit C Schedule of Performance Consultants Project Schedule is attached and made a part of this agreement. Consultant shall complete services presented within the scope of work contained within Exhibit "A" in accordance with the attached project schedule. 16 043 None. Exhibit D Special Requirements 17 �w..� . 044 Tdr 44Q" COUNCIURDA MEETING DATE: July 6, 2010 ITEM TITLE: Approval of an Amended and Restated Disposition and Development Agreement by and between the La Quinta Redevelopment Agency and LDD SilverRock, LLC RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Approve an Amended and Restated Disposition and Development Agreement by and between the La Quinta Redevelopment Agency and LDD SilverRock, LLC (Attachment 1) and Authorize the Executive Director to execute the Agreement subject to minor modifications approved by the Executive Director and Agency Counsel. FISCAL IMPLICATIONS: None at this time. BACKGROUND AND OVERVIEW: On December 19, 2006, the Agency entered into a Disposition and Development Agreement ("DDA") with LDD SilverRock, LLC ("LDD") for the development of a boutique hotel, resort hotel, casitas, and a resort retail village. The DDA established a development program, funding strategy and time frame to develop hotel and retail uses on 61 acres of the 525 acre SilverRock Resort. Per the DDA, LDD would develop at least 680 boutique and resort hotel rooms housed in two separate hotel complexes, 81,000 square feet of resort commercial uses, a 7,500 square foot theater/conference facility, and related amenities. LDD had completed about 55% of their construction plans for the Boutique Hotel (a condominium hotel); however, the condominium hotel market collapsed and LDD could not secure permanent lender financing commitments. As the overall economy and the tourism industry continued to weaken, hotel financing became increasingly difficult to I": 045 obtain. Therefore, the DDA was amended four times, primarily to extend the outside date for closing on the Boutique Hotel parcel. The current amendment expires on July 31, 2010. Staff and LDD have negotiated an Amended and Restated DDA, which is included as Attachment 1 . Key amendments include revised Schedules of Performance for the Boutique Hotel, Resort Hotel, Resort Retail, Casitas Units, and Black Box Theater. Completion dates have been pushed out several years to reflect anticipated economic recovery. Timing of property appraisals had previously been scheduled for six months before closing; appraisal dates have been changed to occur earlier, so that LDD may better define project economics when seeking equity and lender commitments. A portion of working deposit funds previously earmarked for design and development costs will be released to the Redevelopment Agency. LDD would no longer have first right to submit a proposal for "Phase 3" SilverRock development (Phase 3 includes two development parcels located at the southern end of the SilverRock property). FINDINGS AND ALTERNATIVES: The alternatives available to the Agency Board include: 1 . Approve an Amended and Restated Disposition and Development Agreement by and between the La Quinta Redevelopment Agency and LDD SilverRock, LLC and authorize the Executive Director to execute the Agreement subject to minor modifications approved by the Executive Director and Agency Counsel; or 2. Do not approve an Amended and Restated Disposition and Development Agreement by and between the La Quinta Redevelopment Agency and LDD SilverRock, LLC; or 3. Provide staff with alternative direction. Respectf I sub itt Douglas R. ans Assistant City Manager — Development Services Approved for submission by: Thomas P. Genovese, Executive Director Attachment: 1 . Amended & Restated Disposition and Development Agreement �1• ATTACHMENT i AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT By and Between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, and LDD SILVERROCK, LLC, a Delaware limited liability company, G47 882/015610-0084 1063073,06.07/01/10 TABLE OF CONTENTS Page 100. DEFINITIONS................................................................................................................. 2 200. CONVEYANCE OF THE PROPERTY........................................................................11 201. Disposition of the Property; Determination of Purchase Price ...........................11 201.1 The Initial Escrow...................................................................................12 201.2 The Second Escrow................................................................................12 201.3 The Third Escrow...................................................................................13 201.4 The Fourth Escrow.................................................................................13 201.5 The Ranch Development Escrow...........................................................14 201.6 Executive Director Discretion Regarding Phasing ................................. 14 202. Escrow; Escrow Deposit.....................................................................................14 202.1 Costs of Escrow......................................................................................15 202.2 Payment of Purchase Price..................................................................... 15 202.3 Escrow Instructions................................................................................15 202.4 Authority of Escrow Agent.....................................................................16 202.5 Closing....................................................................................................16 202.6 Termination.............................................................................................17 202.7 Closing Procedure...................................................................................17 203. Review of Title of Property................................................................................17 204. Title Insurance.................................................................................................... 18 205. Conditions of Closing.........................................................................................19 205.1 Agency's Conditions of Closing.............................................................19 205.2 Developer's Conditions of Closing........................................................ 22 206. Studies and Reports............................................................................................ 23 206.1 Access to Property.................................................................................. 23 207. Condition of the Property................................................................................... 25 207.1 Disclosure............................................................................................... 25 207.2 Investigation of Property........................................................................ 25 207.3 No Further Warranties As To Property; Release of Agency .................. 25 207.4 Developer Precautions After the Closing ............................................... 26 207.5 Developer Indemnity.............................................................................. 26 207.6 Compatibility Finding.............................................................................27 208. Deposit Payments.............................................................................................. 27 208.1 Disposition of Remaining Received Deposit Payment Funds................27 208.2 Additional Deposit Payments................................................................. 29 208.3 Agency Retention of Deposit Payment Funds ........................................ 30 300. DEVELOPMENT OF THE PROJECT..........................................................................31 301. Scope of Development; Developer's Development Team ................................. 31 302. Design Review.................................................................................................... 31 302.1 Developer Submissions..........................................................................31 302.2 City Review and Approval..................................................................... 31 302.3 Revisions.................................................................................................31 M 882/01561M084 _ 1063073.06 a07/01/10 -1 Page 302.4 Defects in Plans...................................................................................... 32 302.5 Land Use Approvals...............................................................................32 303. Schedule of Performance.................................................................................... 32 304. Indemnity and Insurance Requirements............................................................. 32 305. Indemnity............................................................................................................ 34 306. Rights of Access................................................................................................. 34 307. Compliance With Laws; Payment of Taxes ....................................................... 35 307.1 Compliance with Laws........................................................................... 35 307.2 Taxes and Assessments........................................................................... 35 308. Release of Construction Covenants.................................................................... 35 309. Financing of the Project......................................................................................36 309.1 Approval of Financing............................................................................ 36 309.2 Changes Requested by Lenders.............................................................. 36 309.3 Notice of Default to Mortgagee or Deed of Trust Holders; Right toCure.................................................................................................... 37 309.4 Failure of Holder to Complete Project .................................................... 37 309.5 Right of the Agency to Cure Mortgage or Deed of Trust Default.......... 38 309.6 Holder Not Obligated to Construct Project ............................................ 38 310. Developer CC&Rs..............................................................................................38 311. Interference with Municipal Golf Course........................................................... 38 312. Infrastructure Improvements.............................................................................. 39 313. Pipeline Across Boutique Hotel Parcel...............................................................40 314. Installation of Cellular Antennas........................................................................ 40 400. DEVELOPMENT AGREEMENT; RESORT RETAIL VILLAGE PARCEL GROUNDLEASE..........................................................................................................40 401. Term....................................................................................................................41 402. Rent.....................................................................................................................41 403. No Assignment...................................................................................................41 404. Permitted Uses....................................................................................................41 500. USE AND OPERATION OF THE PROPERTY...........................................................41 501. Operation of the Project......................................................................................41 502. Use in Accordance with Redevelopment Plan....................................................44 502.1................................................................................................................44 502.2................................................................................................................44 503. Maintenance Covenants......................................................................................44 504. Nondiscrimination..............................................................................................44 504.1 Nondiscrimination Covenants................................................................44 504.2 Nondiscrimination Clauses in Agreements............................................44 505. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction......................................................................44 506. Representations and Warranties.........................................................................44 506.1 Agency Representations.........................................................................44 506.2 Developer's Representations..................................................................44 882/015610-0084 1063073,06 a07/01/10 -11 049 Page 600. DEFAULTS AND REMEDIES..................................................................................... 44 601. Default Remedies................................................................................................44 602. Institution of Legal Actions................................................................................44 603. Termination Prior to the Close of the Initial Escrow .......................................... 44 603.1 Termination by Developer......................................................................44 603.2 Termination by Agency.......................................................................... 44 604. Termination Prior to Subsequent Parcel Conveyance........................................44 604.1 Termination by the Developer................................................................ 44 604.2 Termination by the Agency.................................................................... 44 605. Agency Option to Acquire Plans........................................................................44 606. Option Agreement.............................................................................................. 44 607. Right to Reverter and Power of Termination..................................................... 44 608. Acceptance of Service of Process....................................................................... 44 609. Rights and Remedies Are Cumulative................................................................ 44 610. Inaction Not a Waiver of Default....................................................................... 44 611. Applicable Law...................................................................................................44 612. Non -Liability of Officials and Employees of the Agency..................................44 613. Attorneys' Fees...................................................................................................44 700. GENERAL PROVISIONS.............................................................................................44 701. Notices, Demands and Communications Between the Parties ...........................44 702. Enforced Delay; Extension of Times of Performance ........................................ 44 703. Transfers of Interest in Property, Agreement, or Management .......................... 44 703.1 Transfers of Interest in Property or Agreement Prior to Agency's Issuance of a Release of Construction Covenants .................. 44 703.2 Transfers of Operational Obligations..................................................... 44 703.3 Assignment and Assumption of Obligations .......................................... 44 703.4 Successors and Assigns.......................................................................... 44 703.5 Assignment by Agency...........................................................................44 704. Relationship Between Agency and Developer ................................................... 44 705. Agency Approvals and Actions..........................................................................44 706. Counterparts........................................................................................................44 707. Integration........................................................................................................... 44 708. Real Estate Brokerage Commission................................................................... 44 709. Titles and Captions............................................................................................. 44 710. Interpretation....................................................................................................... 44 711. No Waiver...........................................................................................................44 712. Modifications......................................................................................................44 713. Severability.........................................................................................................44 714. Computation of Time.......................................................................................... 44 715. Legal Advice.......................................................................................................44 716. Time of Essence..................................................................................................44 717. Cooperation.........................................................................................................44 718. Conflicts of Interest............................................................................................ 44 719. Time for Acceptance of Agreement by Agency ................................................. 44 882/015610-0084 " 5 0 1063073.06 a07/0IA0 -111- Page ATTACHMENTS Attachment No. 1 - Legal Description of Property Attachment No. 2 - Site Map Attachment No. 3 - Form of Grant Deed Attachment No. 4 - Scope of Development Attachment No. 5 - Form of Option Agreement Attachment No. 6 - Release of Construction Covenants Attachment No. 7 - Schedule of Performance Attachment No. 8 - Memorandum of DDA Attachment No. 9 - Form of Parcel Map Attachment No. 10 - Four Star Quality Requirements Attachment No. 11 - Depiction of Public Improvements Attachment No. 12 - List of Authorized Managers Attachment No. 13 - Form of Assignment and Assumption Agreement .. 0 51 8821015610-0084 1063073.06 a07/01/10 -iv- AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT This AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement") is entered into as of , 2010 ("Effective Date"), by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and LDD SILVERROCK, LLC, a Delaware limited liability company ("Developer"). RECITALS The following recitals are a substantive part of this Agreement: A. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (Health & Safety Code Section 33000, et seq. ). B. Developer is a national real estate development company which, including its affiliates, specializes in the development and management of luxury hotels, resort condominiums, and related amenities. C. Agency owns fee title to that certain real property located at the southwest intersection of Jefferson Street and Avenue 52 in the City of La Quinta, California 92253 (the "Property"). The Property is located in La Quinta Redevelopment Project Area No. 1 (the "Project Area'), which Project Area is located in the City of La Quinta, California. D. The Agency and Developer (which later reorganized as "LRCF SRl, LLC" and then reorganized back to "LDD SilverRock, LLC") previously entered into that certain Disposition and Development Agreement dated December 19, 2006, and amended on or about October 23, 2008, on or about October 21, 2009, on or about November 20, 2009, and on or about April 21, 2010 (as amended, the "Original DDA"), pursuant to which the Agency agreed to sell to the Developer and the Developer agreed to purchase from the Agency, the Property, and to construct, complete, and operate thereon a commercial project containing a luxury four -star quality or higher boutique hotel and a four -star quality or higher luxury resort hotel, a retail village, condominium hotel units, resort units, and associated amenities. As of the Effective Date of this Agreement, the sale of the Property pursuant to the Original DDA has not occurred, and the Agency owns the Property. E. The Developer previously requested that the Agency approve an assignment of certain obligations under the Original DDA to an affiliated entity, LRCF SR2, LLC, a Delaware limited liability company ("LRCF SR2"). The Agency and Developer have been operating under the belief, and each of the amendments referenced in Recital D above so state, that the partial assignment to LRCF SR2 has occurred. The Agency and the Developer have recently discovered that said assignment was never effected. As a result, Developer acknowledges and agrees that all of the rights and obligations of the "Developer" in, under and to the Original DDA continue to remain with Developer. 052 882/015610-0084 1063073 06 .07/01/10 F. The Original DDA required, as a condition to the effectiveness thereof, that the Developer enter into with the City a Development Agreement substantially in the form attached to the Original DDA as Attachment No. 6 (the "Development Agreement"). On or about December 6, 2006 the Developer and the City entered into the Development Agreement, which was recorded in the Official Records of Riverside County on August 3, 2007, as Instrument No. 2007-0502623. G. Pursuant to the Original DDA, Developer was required to, and did, make certain deposits in the amount of One Million Six Hundred Fifty Thousand Dollars ($1,650,000) (the "Received Deposit Payment Funds"). Pursuant to the Original DDA, the Developer was able to (i) draw down portions of the Received Deposit Payment Funds to reimburse the Developer for certain costs incurred by the Developer that were related to the Project; and (ii) provide a deposit to the Agency from the Received Deposit Payment Funds to fund Agency's legal costs and fees in negotiating and preparing this Agreement (the "DDA Costs"). As of the date of this Agreement, the balance remaining of the Received Deposit Payment Funds is approximately Five Hundred Ninety -Seven Thousand Nine Hundred Seventy Dollars ($597,970) (the "Remaining Received Deposit Payment Funds"). To the extent the deposit provided to Agency is insufficient to cover all of the Agency's DDA Costs, additional funds from the Remaining Received Deposit Payment Funds will be provided to the Agency; to the extent that sixty (60) days after the Effective Date the Agency holds surplus funds from the deposit, such surplus deposit funds will be deposited with and become additional Remaining Received Deposit Payment Funds. H. The parties intend, by this Agreement, to amend and restate the Original DDA, in its entirety, and set forth the terms and conditions relating to (i) the disposition of the Remaining Received Deposit Payment Funds, (ii) the Agency's sale to Developer and Developer's purchase, of the Property, and (iii) Developer's construction, completion, and operation thereon of a commercial project containing a luxury four -star quality or higher boutique hotel and a four -star quality or higher luxury resort hotel, a retail village, condominium hotel units, resort units, and associated amenities. I. The Agency's disposition of the Property to Developer and Developer's subsequent construction, completion and operation of the "Project" (as that term is defined in Section 100 below) thereon, pursuant to the terms of this Agreement, are in the vital and best interest of the City of La Quinta and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state, and local laws and requirements. NOW, THEREFORE, the Agency and Developer hereby agree as follows: 100. DEFINITIONS "Additional Deposit Payment" or "Additional Deposit Payments" is defined in Section 208.2 hereof. "Additional Property Exceptions" is defined in Section 203 hereof. w.. 053 882/015610-0084 _ 1063073.06.07/01/10 -2 "Agency" means the La Quinta Redevelopment Agency, a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California, Health and Safety Code, Section 33000, et seq., and any assignee of or successor to its rights, powers and responsibilities. "Agency's Conditions Precedent to Closing" means the conditions precedent to a Closing to the benefit of Agency, as set forth in Section 205.1 hereof. "Agreement" means this Amended and Restated Disposition and Development Agreement by and between the Agency and Developer. "Assignment and Assumption Agreement" shall have the meaning ascribed in Section 703.3 hereof. "Authorized Manager" is defined in Section 501. "Best Knowledge" or "Actual Knowledge" means, for purposes of a representation or warranty given hereunder, that such party has conducted a reasonable review of its files and has made reasonable inquiry of its employees and agents responsible for the acquisition, development and disposition of the Black Box Parcel, the Boutique Hotel Parcel, the Ranch Development Parcel, the Resort Hotel Parcel, the Lake Casitas Parcel, the Resort Retail Village Parcel, or the Golf Casitas Parcel. "Black Box" means a multi -purpose theater, cinema, or conference hall building, containing approximately 7,000-7,500 square feet, with theater capacity for approximately 250- 300 persons, and required parking, as further described in the Specific Plan, Scope of Development, and Development Agreement. "Black Box Parcel" means that certain real property designated as Lot 4 on the Parcel Map. The Black Box Parcel is comprised of approximately .78 acres. "Boutique Hotel" means the component of the Project that consists of Developer's construction and subsequent operation of an intimate, Four -Star Quality hotel containing no more than two hundred twenty-five (225) Units, a sit-down restaurant that serves up to 80 persons concurrently inside and up to 40 persons concurrently outside, a first-class spa and fitness facility, a pool, at least ten thousand square feet (10,000 sf) of interior meeting space, a parking structure containing at least one hundred fifty (150) parking spaces, and other related amenities, all as further described in the Scope of Development and Specific Plan. Developer shall develop the Boutique Hotel on the Boutique Hotel Parcel. "Boutique Hotel Parcel" means 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 term "Boutique Hotel Parcel" shall refer to all such legal parcels. "Boutique Hotel Parcel Easement" is defined in Section 313 hereof. 882/015610-0084 -3- •� 054 1063073.06 a07/01/10 "Boutique Hotel Parcel Pipeline" is defined in Section 313 hereof. "Casita Unit" means a Unit that is not located in a main hotel building. "City" means the City of La Quinta, a California municipal corporation. "City Declaration of CC&Rs" means a Declaration of Covenants, Conditions and Restrictions substantially in the form attached to the Development Agreement as Exhibit "E". "Closing" means the close of escrow for the conveyance from the Agency to the Developer of one or more Parcels as set forth in Section 202.5 hereof. "Closing Date" means the date Escrow closes for the conveyance from the Agency to the Developer of one or more Parcels as set forth in Section 202.5 hereof. "Completion of Construction Date" is defined in Section 304 hereof. "Condition of Property Title" is defined in Section 203 hereof. "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. "Contractor Bonds" means payment and performance bonds ensuring the completion of a subcontractor's work in a Phase of Development. "CVWD" is defined in Section 205.1(r) hereof. "Default" means the failure of a party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure, as set forth in Section 601 hereof. "Design/Construction Development Drawings" means those plans and drawings to be submitted to the City with respect to the development of each Phase of Development, as set forth in Section 302 hereof. "Developer" means LDD SilverRock, LLC, a Delaware limited liability company, and its successors and assigns. "Developer CC&Rs" is defined in Section 310 hereof. "Developer Representatives" means, collectively, Developer's managers, directors, engineers, analysts, officials, employees, agents, contractors, representatives, attorneys, advisers, and consultants, including an Environmental Consultant. "Developer's Conditions Precedent to Closing" means the conditions precedent to a Closing to the benefit of Developer, as set forth in Section 205.2. 882/015610-0084 'it .. 055 1063073.06 a07/01/10 -4- "Developer's Development Team" shall mean the person or persons responsible for managing this Agreement and the Development Agreement, including ensuring the Developer's compliance with the requirements set forth in each of the foregoing agreements. As of the Effective Date, Developer's Development Team shall be comprised of Robert Lowe, Robert J. Lowe, and Theodore Lennon. "Developer's Title Approval Letter" is defined in Section 203 hereof. "Development Agreement" is defined in Recital E hereof. "DHR" means Destination Hotels & Resorts, Inc., a California corporation. "Effective Date" means the date inserted into the Preamble hereof, which is the date this Agreement becomes effective. "Environmental Consultant" means a consultant engaged by Developer, at Developer's sole cost and expense, which conducts the environmental investigations of the Property pursuant to Section 207.2 hereof. "Escrow" is defined in Section 201 hereof. "Escrow Agent" is defined in Section 202 hereof. "Escrow Deposit" is defined in Section 202 hereof. "Evidence of Financial Capability" means evidence reasonably satisfactory to Agency's Executive Director that Developer has the financial resources necessary for the acquisition of each Parcel and the subsequent development of each respective Phase of Development, as further described in Section 309. "Fee Transfer Release Date" is defined in Section 703.1. "FIRPTA" means the Foreign Investment in Real Property Transfer Act. "Four Star Quality" means that the applicable Phase of Development provides all of the services, amenities and facilities listed on Attachment No. 10, which is attached hereto and incorporated herein by this reference. "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 be owned by separate owners or by the same 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, Developer's successor in interest, DHR, or a successor in interest that is authorized or permitted pursuant to Section 703.2 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. "Golf Casitas Development" means, the component of the Project that consists of Developer's construction and subsequent operation of approximately seventy-two (72) Casita 882/015610-0084 L' S 6 1063073 06 a07/01/10 -5- Units. Developer shall develop the Golf Casitas Development on the Golf Casitas Parcel, in conformance with the Scope of Development and Specific Plan. "Golf Casitas Parcer' means that certain real property designated as Lot 11 on the Parcel Map. The Golf Casitas Parcel is comprised of approximately 8.63 acres. "Golf Course" is defined in Section 311 hereof. "Good Funds" means a confirmed wire transfer of immediately available funds, cashier's or certified check drawn on or issued by the office of a financial institution located in Riverside County, or cash. "Governmental Requirements" means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State of California, the County of Riverside, the City, or any other political subdivision in which the Property, or any portion thereof, is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the Developer, and/or the Property, or any portion thereof. "Grant Deed" means a grant deed, substantially in the form attached hereto and incorporated herein by this reference as Attachment No. 3, pursuant to which Agency shall convey to Developer title to one or more Parcels. "Hazardous Materials" means any substance, material, or waste which is, or becomes, regulated by any local or regional governmental authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste", "extremely hazardous waste", or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) methyl tertiary butyl ether, (ix) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (x) designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. §1317), (xi) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903) or (xii) defined as "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §9601 et seq. "Hotel Unit" means the Units in the Project that will be owned in fee by Developer or any successor authorized pursuant to Section 703 hereof and managed by DHR or any successor hotel management entity authorized or approved by the Agency pursuant to Section 703 hereof. None of the Hotel Units may be sold as Condominium Hotel Units or as Fractional Units. 882/015610-0084 •,,,, . 0 5 7 106307306 a07/01/10 -6- "Initial Escrow" is defined in Section 201.1. "Lake Casitas Development" means the component of the Project that consists of Developer's construction and subsequent operation of approximately fifty (50) Casita Units. Developer shall develop the Lake Casitas Development on the Lake Casitas Parcel in conformance with the Scope of Development and Specific Plan. "Lake Casitas Parcer' means that certain real property designated as Lot 23 on the Parcel Map. The Lake Casitas Parcel is comprised of approximately 3.82 acres. "Land Use Approvals" is defined in Section 302.5. "Less Than 80% Performance DefaultAmount" is defined in Section 502. "Less Than 95% Performance Default Amount" is defined in Section 502. "Letter of Commitment" means a letter of commitment from an Authorized Manager or other hotel entity acceptable to Agency, in Agency's sole and absolute discretion, to design, construct, and operate one or more Phases of Development, subject to conditions acceptable to Agency in Agency's sole and absolute discretion. "Lock -Off Feature" means a feature that enables one of the bedrooms/bathrooms in a Unit to be closed off from the remainder of the Unit and rented as a separate Unit. "Lowe Enterprises" shall mean Lowe Enterprises, Inc., a California corporation. "Management Transfer" is defined in Section 703.2. "Management Transfer Release Date" is defined in Section 703.2. "Memorandum of DDA" means the Memorandum of Disposition and Development Agreement substantially in the form attached hereto and incorporated herein as Attachment No. 8. "Notice" means a notice in the form prescribed by Section 701 hereof. "Option Agreement" means an option agreement substantially in the form of one of the three option agreements attached hereto and incorporated herein as Attachment No. 5. The applicable Option Agreement shall be recorded against each Parcel at the Close of Escrow that includes such Parcel. "Outside Date for Closing" means the last date Escrow may close for the conveyance from Agency to Developer of each Parcel. The Outside Date for Closing is referenced in Section 202.5 hereof and the Outside Date for Closing for each Parcel is set forth in the applicable Schedule of Performance for each Parcel. "Parcer' means any of the following: Black Box Parcel, Boutique Hotel Parcel, Golf Casitas Parcel, Lake Casitas Parcel, Ranch Development Parcel, Resort Hotel Parcel, or Resort 882/015610-0084 e� !1 C 1063073.06 a07/01/10 _.7_ 0 5 8 Retail Village Parcel. The term "Parcels" means all of the Parcels described in the immediately preceding sentence. "Parcel Map" means Parcel Map No. 33367, which has been prepared by the Agency. The Parcel Map shall be recorded prior to or concurrently with the first Closing hereunder. A copy of the Parcel Map is attached hereto and incorporated herein as Attachment No. 9. "Phase of Development" means any of the following components of the Project: Black Box, Boutique Hotel, Golf Casitas Development, Lake Casitas Development, Ranch Development, Resort Hotel, or Resort Retail Village Development. "Phase of Development Owner" is defined in Section 502. "Phase One of Boutique Hotel" is defined in Section 201.2. "Phase One of Resort Hoter' is defined in Section 201.4. "Progress Report" means a progress report to be submitted on a semi-annual basis by Developer to Rosenow Spevacek Group, 309 West 4t' Street, Santa Ana, CA 92701-4502, Attn: Frank Spevacek, demonstrating the progress that has been made during the preceding six (6) month period. Developer shall submit Progress Reports within the times set forth in the Schedule of Performance. "Project" means the commercial development to be constructed on the Property that consists of the Black Box, the Boutique Hotel, the Golf Casitas Development, the Lake Casitas Development, the Ranch Development, the Resort Hotel, and the Resort Retail Village Development. "Project Area" means the La Quinta Redevelopment Project Area No. 1, adopted by the City pursuant to the Redevelopment Plan. "Property" means that approximately 58.97 acres of real property located at the southwest intersection of Jefferson Street and Avenue 52 in the City of La Quinta, California 92253. The Property is legally described in the Property Legal Description and depicted in the Site Map. "Property Determination Date" is defined in Section 206.1. "Property Environmental Reports" means the collective environmental investigations of the Property conducted pursuant to Section 207.2 hereof. "Property Exceptions" is defined in Section 203. "Property Legal Description" means the description of the Property which is attached hereto as Attachment No. 1 and incorporated herein by this reference. .0e 059 882/015610-0084 1063073 06 a07/01/10 -8 "Purchase Price" means the price to be paid by Developer to the Agency in consideration of the Agency's conveyance to Developer of fee title to a Parcel. The Purchase Price for each Parcel shall be determined pursuant to the process set forth in Section 201 hereof. "Quarterly Equity Update" means an update to be submitted on a quarterly basis by Developer to Rosenow Spevacek Group, 309 West 4s' Street, Santa Ana, CA 92701-4502, Attn: Frank Spevacek, from Developer's equity manager, regarding the status of Developer's equity for the development of the Boutique Hotel. Developer shall submit Quarterly Equity Updates within the times set forth in the Schedule of Performance. "Quarterly Report" means a report to be submitted on a quarterly basis by Developer to the Agency that demonstrates the actions Developer has taken to obtain a Letter of Commitment, including, without limitation, the names and contact information of all persons that have been contacted by Developer with respect thereto. Developer shall submit Quarterly Reports within the times set forth in the Schedule of Performance. "Ranch Development" means the component of the Project that consists of Developer's construction and operation of approximately fifty (50) Casita Units. Developer shall develop the Ranch Development on the Ranch Development Parcel in compliance with the Scope of Development and Specific Plan. "Ranch Development Parcel" means that certain real property designated as Lot 22 on the Parcel Map. The Ranch Development Parcel is comprised of approximately 2.43 acres. "Received Deposit Payment Funds" is defined in Recital G hereof. "Remaining Received Deposit Payment Funds" is defined in Recital G hereof. "Redevelopment Plan" means the Redevelopment Plan for the Project Area, adopted on November 29, 1983, by Ordinance No. 43, of the City Council of the City of La Quinta, which Redevelopment Plan is incorporated herein by reference. "Release of Construction Covenants" means the document which evidences the Developer's satisfactory completion of a Phase of Development, as set forth in Section 308 hereof, substantially in the form of Attachment No. 6 hereto which is incorporated herein by this reference. "Resort Hoter' means the component of the Project that consists of Developer's construction and operation of a Four Star Quality or higher luxury hotel containing approximately Two hundred eighty-three (283) Units, with associated amenities, including, but not limited to, a sit-down restaurant that serves up to 100 persons concurrently inside and up to 60 persons concurrently outside, a first-class spa and fitness center, a parking structure containing not fewer than one hundred fifty (150) parking spaces, pools, and at least twenty thousand square feet (20,000 sf) of interior meeting space, all as further described in the Scope of Development and Specific Plan. At least ninety (90) of the Units in the Resort Hotel shall be Hotel Units. Developer shall develop the Resort Hotel on the Resort Hotel Parcel. 882/015610-0084 9 1063073.06 a07/01/10 -^ C 6 O "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. "Resort Retail Village Development" means the component of the Project that consists of Developer's construction and subsequent operation of approximately eighty-one thousand square feet (81,000 sf) of space, with approximately forty thousand square feet (40,000 sf) of such space developed for and dedicated to retail uses, fifteen thousand square feet (15,000 sf) of such space developed for and designated to restaurant use, and twelve thousand square feet (12,000 sf) of such space to be developed for and dedicated to residential uses, all as further described in the Scope of Development and Specific Plan. Developer shall develop the Resort Retail Village Development on the Resort Retail Village Parcel. "Resort Retail Village Parcer' 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. "Resort Retail Village Parcel Ground Lease" means the form of ground lease pursuant to which (i) the City contemplates leasing to Developer the Resort Retail Village Parcel if the Agency conveys its fee interests in such Parcel to the City; or (ii) the Agency contemplates leasing to Developer the Resort Retail Village Parcel if the Agency elects not to convey its interests in such Parcel to the City but instead elects to enter into the Resort Retail Village Parcel Ground Lease with Developer and to subsequently assign its interests in said ground lease to the City. As further provided herein, nothing herein shall be deemed a predetermination by Agency with respect to the Resort Retail Village Parcel, and Agency retains complete and unfettered discretion to elect either of the options set forth in clauses (i) and (ii) above or, alternatively, to sell such Parcel to Developer. The form of the Resort Retail Village Parcel Ground Lease shall be acceptable to the Agency and to Developer in each of their sole and absolute discretion. Notwithstanding the foregoing, however, the parties' failure to reach agreement on the form of the Resort Retail Village Parcel Ground Lease shall not give rise to any right of Developer to purchase the Resort Retail Village Parcel, and in the event of such failure, the Agency shall retain complete and unfettered discretion with respect to the disposition of such Parcel. "Schedule of Performance" means the Schedule of Performance attached hereto and incorporated herein as Attachment No. 7, setting out the dates and/or time periods by which certain obligations set forth in this Agreement must be accomplished. "Scope of Development" means the Scope of Development attached hereto and incorporated herein as Attachment No. 4, which describes the scope, amount and quality of development of the Project to be constructed by the Developer pursuant to the terms and conditions of this Agreement. "SilverRock Resort Area" means the real property included in and covered by the Specific Plan. "Site Map" means the map of the Property, which is attached hereto as Attachment No. 2 and incorporated herein by this reference. "Specific Plan" means the SilverRock Resort Specific Plan, which was approved by the City Council of the City on July 18, 2006. Developer's development and operation of the Project 882/015610-0084 1063073.06 a07/01/10 -10- .y e 6 i shall be in strict conformance with the Specific Plan. In the event this Agreement is inconsistent with the Specific Plan, the terms of the Specific Plan shall prevail. "Title Commitment" is defined in Section 203 hereof. "Title Company" is defined in Section 203 hereof. "Title Policy" is defined in Section 204 hereof. "Transfer" is defined in Section 703.1 hereof. "Unit" means one of the approximately six hundred eighty (680) units designed for overnight occupancy 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. 200. CONVEYANCE OF THE PROPERTY 201. Disposition of the Property, Determination of Purchase Price. Developer agrees to purchase the Property from the Agency, and the Agency agrees to sell to the Developer the Property, in accordance with and subject to all of the terms, covenants, and conditions of this Agreement. The Purchase Price for each of the Boutique Hotel Parcel, Golf Casitas Parcel, Lake Casitas Parcel, Ranch Development Parcel, Resort Hotel Parcel, Resort Retail Village Parcel (if sold to Developer), and Black Box Parcel shall be determined in the following manner: Within thirty (30) days after Agency approves a Letter of Commitment for a particular Phase of Development, Developer and Agency shall select an appraiser reasonably acceptable to both parties and commission an appraisal reflecting the fair market value of the Parcel to be developed with said Phase of Development (each, an "Appraisal"). The Purchase Price for the Parcel shall be the fair market value of the Parcel, as set forth in the Appraisal. Except as provided below, Agency shall be responsible for all of the costs associated with each of said Appraisals. Notwithstanding anything herein to the contrary, in the event Michael A. Scarcella is still an MAI appraiser at the time of an Appraisal, Mr. Scarcella shall be retained to perform any Appraisal required hereunder. In the event Michael A. Scarcella is no longer an MAI appraiser providing appraisal services at the time of an Appraisal or is not available to perform the Appraisal, and Agency and Developer cannot agree on an appraiser, either Developer or Agency may notify the other party, in writing, that they are invoking the following process, and such process shall then apply: Developer shall select, and shall be responsible for all of the costs for, an independent and qualified MAI appraiser to perform the Appraisal. Within five (5) business days after Developer's receipt of the Appraisal, Developer shall deliver to Agency a copy thereof. If Agency does not agree with Developer's Appraisal, Agency shall notify Developer in writing within five (5) business days after receipt thereof. Within sixty (60) days thereafter, or such additional time reasonably necessary for completion, Agency, at its cost, shall deliver to Developer an Appraisal prepared by an independent and qualified MAI appraiser. If Developer's Appraisal is higher than Agency's Appraisal, then Developer's Appraisal shall be used to determine the Purchase Price for the applicable Parcel. If Developer's Appraisal is lower than Agency's Appraisal, but less than or equal to five percent (5%) lower, the average of 882/015610-0084 -11- „ C 6 2 1063073.06 a07/01/10 Developer's Appraisal and Agency's Appraisal shall be used to determine the Purchase Price for the applicable Parcel. If Developer's Appraisal is lower than Agency's Appraisal, and is more than five percent (5%) lower, Agency and Developer shall appoint, and shall share the cost of, a third independent and qualified MAI appraiser who shall perform a review Appraisal and shall render a determination of the fair market value of the applicable Parcel. If Agency and Developer cannot agree on a third appraiser, then an amount equal to seventy-five percent (75%) of the difference between Agency's Appraisal and Developer's Appraisal shall be added to Developer's Appraisal and said amount shall be used to determine the applicable Purchase Price. Notwithstanding anything herein to the contrary, the Purchase Price for the Resort Retail Village Parcel shall be applicable only if said Parcel is sold in fee to Developer. At any time during the term hereof, Developer may request that Agency commission an appraisal of any Parcel then owned by Agency, for purposes of assisting Developer in its negotiations with potential investors and in analyzing anticipated costs and returns. Any such appraisal shall be to provide Developer with the estimated market value of said Parcel at that time, and shall have no binding effect on the Agency or the determination of the Purchase Price of the Parcel, which determination shall be made pursuant to the method described in the first two (2) paragraphs of this Section 201. In the event Michael A. Scarcella is still an MAI appraiser at the time Developer makes a request for an appraisal pursuant to this paragraph, Mr. Scarcella shall be retained to perform such appraisal. In the event Michael A. Scarcella is no longer an MAI appraiser providing appraisal services at the time Developer makes a request for an appraisal pursuant to this paragraph, or is not available to perform the appraisal, Agency shall retain an appraiser reasonably acceptable to Developer to perform such appraisal. All of the costs for any appraisal performed pursuant to this paragraph shall be solely and directly borne by Developer. Developer shall be entitled to purchase the Parcels, and commence construction thereon of the applicable Phase of Development, in the order set forth in this Section 201; provided, however, that nothing herein is intended to permit Developer to elect not to purchase any or all of the Parcels. Notwithstanding anything herein to the contrary, each conveyance by Agency to Developer of one or more Parcels shall be effected through an escrow ("Escrow") in accordance with the provisions of Section 202 hereto. With the exception of the "Initial Escrow" (as that term is described in paragraph (a) below), which shall be opened within the time set forth in the Schedule of Performance, each such Escrow shall be opened within the time reasonably required to affect each applicable conveyance, as set forth in the Schedule of Performance. 201.1 The Initial Escrow. Developer and Agency have opened an escrow with Escrow Agent for Agency's conveyance to Developer of the Boutique Hotel Parcel (Escrow No.: 2664502A) (the "Initial Escrow"). Notwithstanding the use of the term "Initial Escrow" in this Section 201.1, all of the general requirements for each Escrow, as set forth in Section 202, shall apply to the Initial Escrow, and each reference to an "Escrow" in this Agreement shall be deemed to include the Initial Escrow. 201.2 The Second Escrow. Upon Developer's (i) completion and opening of, and receipt of a temporary or final certificate of occupancy for, the core operating facilities of the Boutique Hotel, including, without limitation, the lobby, guest check -in area and facilities, 882/015610-0084 12- C 6 3 1063073.06 a07/01/10 -�Ar' administration, restaurant, and pool; (ii) completion of (including furnishings), and receipt of a temporary or final certificate of occupancy for, fifty percent (50%) of the Units to be developed in the Boutique Hotel, with all of such completed Units operational and made available for rental, all as determined by City's Community Development Director and Director of Building and Safety; and (iii) Agency's approval of a Letter of Commitment for the Phase of Development to be developed thereon, Developer shall have the right to purchase the Resort Hotel Parcel, the Black Box Parcel, and the Resort Retail Village Parcel. The obligations set forth in clauses (i) and (ii) above shall be collectively referred to as "Phase One of Boutique Hotel." Notwithstanding anything to the contrary in this Agreement, (A) Agency's Board of Directors may, in its sole and absolute discretion, elect to (1) convey the Resort Retail Village Parcel to the City for the City's subsequent lease of such Parcel to Developer, or (2) lease such Parcel to Developer and subsequently assign its leasehold interests to the City; and (B) Developer shall acquire fee title to or a leasehold interest in (as applicable) the Resort Retail Village Parcel within one (1) year after Developer's acquisition of the Resort Hotel Parcel. In the event Agency elects to lease the Resort Retail Village Parcel to Developer or to convey such Parcel to the City, such lease or conveyance shall occur at the same time designated in this Section 201.2 for the Agency's conveyance of the Resort Retail Village Parcel to Developer. The terms of the Resort Retail Village Parcel Ground Lease shall govern the leasehold transaction between the City and Developer or between the Agency and Developer (as applicable). 201.3 The Third Escrow. Upon (i) Developer's (a) satisfaction of all of the requirements of the Initial Escrow, as set forth in Section 201.1 above, (b) acquisition of the Boutique Hotel Parcel, and (c) completion of the Boutique Hotel; and (ii) Developer's (a) acquisition of the Resort Hotel Parcel and the Resort Retail Village Parcel, (b) completion of the second floor deck structure at the Resort Hotel, all as determined by City's Community Development Director and Director of Building and Safety and (c) Agency's approval of a Letter of Commitment for the Lake Casitas Development, Developer shall have the right to purchase the Lake Casitas Parcel. Notwithstanding anything to the contrary in this Agreement, no certificate of occupancy shall be issued for any Unit in the Lake Casitas Development until a temporary or final certificate of occupancy for the core operating facilities of the Resort Hotel, including, without limitation, the lobby, guest check -in area and facilities administration, restaurant, and pool has been issued and the foregoing core facilities are open. 201.4 The Fourth Escrow. Upon (i) Developer's (a) satisfaction of all of the requirements of the Initial Escrow, as set forth in Section 201.1 above, (b) acquisition of the Boutique Hotel Parcel, and (c) completion of the Boutique Hotel; (ii) Developer's (a) satisfaction of the requirements for the Third Escrow, as set forth in Section 201.3 above, (b) acquisition of the Resort Hotel Parcel and Lake Casitas Parcel, (c) completion and opening of, and receipt of a temporary or final certificate of occupancy for, the core operating facilities of the Resort Hotel, including, without limitation, the lobby, guest check -in area and facilities, administration, restaurant, and pool; and (d) completion of, and receipt of a temporary or final certificate of occupancy for, fifty percent (50%) of the Units to be developed in the Resort Hotel and fifty percent (50%) of the Units to be developed in the Lake Casitas Development, 882/015610-0084 •p' 064 1063073.06 a07/01/10 -13- with all of such completed Units operational and made available for rental; and (iii) Agency's approval of a Letter of Commitment for the Golf Casitas Development, Developer shall have the right to purchase the Golf Casitas Parcel. The obligations set forth in clauses (ii)(c) and (ii)(d) above shall be collectively referred to as "Phase One of Resort Hotel." 201.5 The Ranch Development Escrow. Developer and Agency acknowledge and agree that the Ranch Development Parcel is currently developed with a temporary clubhouse and cart barn serving Golf Course patrons, and that the City contemplates constructing a permanent clubhouse and cart barn in a different location. Agency shall provide Developer with a written notice at least sixty (60) days prior to the date the City intends to vacate the Ranch Development Parcel ("Agency's Ranch Development Parcel Vacation Notice"). Upon receipt of Agency's Ranch Development Parcel Vacation Notice, Developer shall commence preparing a site development permit application for the Ranch Development, and Developer shall submit such application in accordance with the time set forth in the Schedule of Performance. Provided (i) the City has completed and opened a permanent clubhouse in the SilverRock Resort Area and determined, in its sole and absolute discretion, that the Ranch Development Parcel is not necessary for use as a temporary clubhouse or cart barn, and (ii) Agency has approved a Letter of Commitment for the Ranch Development, Developer shall have the right to purchase the Ranch Development Parcel within the time set forth in the Schedule of Performance. Notwithstanding anything herein to the contrary, the Ranch Development Parcel may only be included in the Initial Escrow if the approved Letter of Commitment for the Boutique Hotel includes the design, development and operation of the Ranch Development. If the Ranch Development Parcel is not included in the Initial Escrow, the Ranch Development Parcel shall be included in the first Escrow to close following the date the City vacates the Ranch Development Parcel, provided the Agency has approved a Letter of Commitment for the Ranch Development. 201.6 Executive Director Discretion Regarding Phasing. Notwithstanding any of the foregoing, Agency's Executive Director shall have the authority, in his or her sole and absolute discretion, to permit Developer to purchase any or all of the Resort Hotel Parcel, Lake Casitas Parcel, and the Golf Casitas Parcel at any time if Agency's Executive Director determines that Developer has the necessary financial resources to develop such Phase(s) of Development earlier than scheduled, and that permitting such early acquisition is in the best interests of the Agency and the Project. 202. Escrow; Escrow Deposit. The parties shall open each Escrow with First American Title Company, at its office located at 3625 Fourteenth Street, Riverside, California 92502-0986, or another escrow company mutually satisfactory to both parties (the "Escrow Agent"). Within five (5) days after the opening of each Escrow, Developer shall deposit with Escrow Agent the sum of One Hundred Dollars ($100.00) (each, an "Escrow Deposit"). Agency and Developer agree that each such Escrow Deposit has been bargained for as consideration for Agency's execution and delivery of this Agreement and Developer's right to inspect the Property pursuant to this Agreement. The Escrow Deposit is in addition to and independent of any other consideration or payment provided for in this Agreement and is non-refundable in all events. At each Closing, the applicable Escrow Deposit shall be applicable to the Purchase Price of the Parcel acquired at such Closing. 882/015610-0084 6 V 1063073 06 a07/01/10 -14- 202.1 Costs of Escrow. (i) Agency shall pay the premium attributable to the ALTA standard form policy of title insurance for the applicable Parcel(s), as set forth in Section 204 hereof, (ii) Developer shall pay for any extended policy, coverages, or endorsements requested by Developer, as set forth in Section 204 hereof, (iii) Agency shall pay for the documentary transfer taxes, if any, due with respect to the conveyance of said Parcel(s), as applicable, and (iv) Developer and Agency each agree to pay one-half of all other usual fees, charges, and costs which arise from the Escrow. Due to Agency's status as a public entity, the parties do not anticipate that any recording fees will be charged in connection with any of the Escrows. Notwithstanding the foregoing, however, to the extent recording fees are charged or imposed, Developer shall pay all of such fees. 202.2 Payment of Purchase Price. On or before 5:00 p.m. on the business day preceding the applicable Closing Date (or such earlier time as required by Escrow) for a Parcel, Developer shall deposit with Escrow Agent the applicable Purchase Price, less the Escrow Deposit paid for such Parcel, in Good Funds, and such additional funds as may be required to meet Developer's portion of the closing costs as hereinafter provided; provided, however, that if Agency elects to lease the Resort Retail Village Parcel to Developer or to City rather than selling such Parcel to Developer, Developer shall not be required to pay to Agency the Purchase Price for the Resort Retail Village Parcel. In that event, Developer's financial obligations with respect to acquiring a leasehold interest in and to such Parcel shall be to pay to City or Agency (as applicable) any and all sums required under the Resort Retail Village Parcel Ground Lease. Notwithstanding that the "Closing" for the Resort Retail Village Parcel may not result in a fee conveyance to Developer, such "Closing" shall not occur until all of Agency's Conditions Precedent to the Closing and Developer's Conditions Precedent to the Closing as set forth in Section 205 have been satisfied or waived by the respective parties. 202.3 Escrow Instructions. This Agreement constitutes the joint escrow instructions of Developer and Agency for each Escrow described herein, and the Escrow Agent to whom instructions are delivered is hereby empowered to act under this Agreement. Insurance policies for fire or casualty are not to be transferred, and Agency will cancel its own policies after the applicable Closing. All funds received in the Escrow shall be deposited with other escrow funds in a general escrow account(s) and may be transferred to any other such escrow trust account in any State or National Bank doing business in the State of California. All disbursements shall be made by check from such account. If in the opinion of either party and/or the construction lender it is necessary or convenient in order to accomplish the Closing of any of the Parcels, such party may require that the parties sign supplemental escrow instructions; provided that if there is any inconsistency between this Agreement and the supplemental escrow instructions, then the provisions of this Agreement shall control. The parties agree to execute such other and further documents as may be reasonably necessary, helpful or appropriate to effectuate the provisions of this Agreement. Each Closing hereunder shall take place within thirty (30) days after the date when both the Agency's Conditions Precedent to the Closing and the Developer's Conditions Precedent to the Closing as set forth in Section 205 have been satisfied or waived by the respective parties. Escrow Agent is instructed to release Agency's escrow closing and Developer's escrow closing statements to the respective parties. 882/015610-0084 •a- C 6 6 1063073.06 a07/01/10 -15- 202.4 Authority of Escrow Agent. At each Closing, Escrow Agent is authorized to, and shall: (a) Pay and charge Developer and Agency for their respective shares of the premium of the applicable Title Policy and any endorsements thereto as set forth in Section 204 and any amount necessary to place title in the condition necessary to satisfy Section 203 of this Agreement. (b) Pay and charge Developer and Agency for their respective shares of any escrow fees, charges, and costs payable under Section 202.1 of this Agreement. (c) Disburse funds, deliver one or more executed Option Agreement(s) to the Agency, and deliver and record the applicable Grant Deed(s) and the applicable Option Agreement(s) when both the Developer's Conditions Precedent to the Closing and the Agency's Conditions Precedent to the Closing have been fulfilled or waived by Developer and Agency. (d) At the Closing for the Initial Escrow only, deliver the executed Memorandum to the Agency, and deliver and record the Memorandum when both the Developer's Conditions Precedent to the Closing and the Agency's Conditions Precedent to the Closing have been fulfilled or waived by Developer and Agency. (e) Do such other actions as necessary, including obtaining the applicable Title Policy, to fulfill its obligations under this Agreement. (f) Within the discretion of Escrow Agent, direct Agency and Developer to execute and deliver any instrument, affidavit and statement, and to perform any act reasonably necessary to comply with the provisions of the Foreign Investment in Real Property Transactions Act ("FIRPTA") and any similar state act and regulation promulgated thereunder. Agency agrees to execute a Certificate of Non -Foreign Status by individual transferor and/or a Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act as may be required by Escrow Agent, on the form to be supplied by Escrow Agent. (g) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an IRS 1099-S form, and be responsible for withholding taxes, if any such forms are provided for or required by law. 202.5 Closing. Each transaction shall close ("Closing") within thirty (30) days after the parties' satisfaction of all of Agency's Conditions Precedent to the Closing and all of the Developer's Conditions Precedent to the Closing as set forth in Section 205 hereof, but in no event later than the applicable Outside Date for Closing, which is set forth in the Schedule of Performance for the applicable Phase of Development. The Outside Date for Closing for each Parcel may be extended for up to six (6) months, by mutual agreement of the Executive Director of the Agency and Developer. Subject to the provisions in this Section 202.5, Closing shall occur at a time reasonably agreed on by the parties. A "Closing" shall mean the time and day the applicable Grant Deed(s) is recorded with the Riverside County Recorder. A "Closing Date" shall mean the day on which the applicable Closing occurs. 882/015610-0084 _ 16_ u, r) C 6 7 1063073.06 a07/01/10 202.6 Termination. If an Escrow is not in condition to close by the applicable Outside Date for Closing, then either party which has fully performed under this Agreement may, in writing, demand the return of money or property and terminate such Escrow. If either party makes a written demand for return of documents or properties, the Escrow shall not terminate until ten (10) business days after Escrow Agent shall have delivered copies of such demand to all other parties at the respective addresses shown in this Agreement. If any objections are raised within said ten (10) business day period, Escrow Agent is authorized to hold all papers and documents until instructed by a court of competent jurisdiction or by mutual written instructions of the parties. Developer, however, shall have the sole option to withdraw any money deposited by it with the Escrow Agent respect to the Closing (other than any Escrow Deposit) less Developer's share of costs of the Escrow and cancellation fees. Termination of said Escrow shall be without prejudice as to whatever legal rights either party may have against the other arising from this Agreement. If no demands are made, the Escrow Agent shall proceed with the applicable Closing as soon as possible. 202.7 Closing Procedure. Escrow Agent shall close each Escrow as follows: (a) (i) Record, in the following order, the applicable Grant Deed(s), the applicable Option Agreement(s), the applicable City Declaration of CC&Rs, the Memorandum of DDA (at the Initial Escrow only), the applicable Maintenance Agreement, the applicable Water Agreement, and deeds of trust and other security instruments securing Developer's acquisition and construction financing, and (ii) deliver conformed copies of each of the documents listed in clauses (i) above, showing recording information to Agency and Developer; (b) Provide for the delivery of the original recorded Option Agreement(s), City Declaration of CC&Rs, Maintenance Agreement, Water Agreement, and, at the Initial Escrow only, the Memorandum of DDA, to the Agency with a copy to Developer; (c) Deliver the applicable Title Policy and Grant Deed(s) to Developer, (d) File any informational reports required by Internal Revenue Code Section 6045(e), as amended and any other applicable requirements; and (e) Deliver the FIRPTA Certificate, if any, to Developer; and (f) Forward to both Developer and Agency a separate accounting of all funds received and disbursed for each party and copies of all executed and recorded or filed documents deposited into the Escrow, with such recording and filing date and information endorsed thereon. 203. Review of Title of Property. First American Title Insurance Company (the "Title Company") has prepared and issued to Developer an ALTA Title Commitment dated May 11, 2007 (the "Title Commitment") with respect to the Property. The Agency has previously caused the Title Company to deliver legible copies of the documents underlying the exceptions set forth in the Title Commitment ("Property Exceptions"). Pursuant to its letter dated May 18, 2007 (the "Developer's Title Approval Letter), the Developer approved the Property Exceptions. From 882/016610-0084 _1 7_ r- 68 1063073,06 a07/OIAO and after the Effective Date hereof, and continuing until the earlier of (i) the Close of Escrow for the last portion of the Property Developer intends to acquire from Agency, or (ii) termination of this Agreement, Agency shall not further encumber the Property with additional Property Exceptions without the Developer's prior written consent; provided, however, that Agency's election to convey the Resort Retail Village Parcel to the City shall not be construed as a Property Exception and shall be expressly permitted hereunder. Developer shall have the right to approve or disapprove any further Property Exceptions (which are not created by Developer) reported by the Title Company after the date of Developer's Title Approval Letter ("Additional Property Exceptions"); provided, however, that the Developer hereby approves the following Property Exceptions, which shall not be construed as "Additional Property Exceptions": (a) The Redevelopment Plan. (b) The lien of any non -delinquent property taxes and assessments (to be prorated at close of each respective Escrow. (c) The Parcel Map. (d) All documents to be recorded at the close of the applicable Escrow. Developer shall have thirty (30) days after the date Agency notifies Developer of any Additional Property Exceptions to give written notice to Agency and Escrow Holder of Developer's approval or disapproval of any of such Additional Property Exceptions. Developer's failure to give written approval of such Additional Property Exceptions within such time limit shall be deemed disapproval of such Additional Property Exceptions. If Developer notifies Agency of its disapproval of any such Additional Property Exceptions or is deemed to have disapproved such additional Property Exceptions, Agency shall have the right, but not the obligation, to remove any such disapproved Additional Property Exceptions within thirty (30) days after (a) receiving written notice of Developer's disapproval or (b) the date Developer is deemed to have disapproved such Additional Property Exceptions, or provide assurances satisfactory to Developer that such Additional Property Exception(s) will be removed on or before the applicable Closing. If Agency cannot or does not agree to remove any of such disapproved Additional Property Exceptions before the applicable Closing, Developer shall have fifteen (15) days after the expiration of such thirty (30) day period to either give the Agency written notice that Developer elects to proceed with the purchase of the Property subject to such disapproved Additional Property Exceptions or to give the Agency written notice that the Developer elects to terminate this Agreement. Developer's failure to give written notice of its election within such fifteen (15) day period shall be deemed to be an election not to proceed with the purchase of the Property. Anything herein to the contrary notwithstanding, Agency shall remove from title all monetary encumbrances other than the lien referred to in (b) above in this Section 203. The condition of title, including all of the Property Exceptions and Additional Property Exceptions to title approved by Developer as provided herein shall hereinafter be referred to as the "Condition of Property Title". 204. Title Insurance. Concurrently with recordation of the applicable Grant Deed(s) conveying title to one or more of the Parcels, there shall be issued to Developer an ALTA standard owner's policy of title insurance (the "Title Policy"), together with such endorsements 882/015610-0084 -18- 1063073.06 a07/01/10 C as are reasonably requested by the Developer, issued by the Title Company insuring that the title to the applicable Parcel is vested in Developer in the Condition of Property Title approved by Developer pursuant to Section 203 of this Agreement (except that such Title Policy shall only reflect the applicable Parcel and the Property Exceptions applicable thereto). Agency shall pay the title insurance premium attributable to the ALTA standard owner's form policy of title insurance up to the Purchase Price for the applicable Parcel. The Title Company shall, if requested by Developer, increase the amount of the title insurance policy or provide the Developer with an extended policy, coverages, or endorsements. Developer shall pay the portion of the premium associated with such extended or additional coverages or endorsements, and the costs of preparation of a current survey of the Property, if requested by Developer. The Title Company shall provide the Agency with a copy of the Title Policy. 205. Conditions of Closing. Each Closing is conditioned upon the satisfaction of the following terms and conditions within the times designated below: 205.1 Agency's Conditions of Closing. Agency's obligation to proceed with each Closing is subject to the fulfillment or waiver by Agency of each and all of the conditions precedent (a) through (x), inclusive, described below ("Agency's Conditions Precedent to the Closing"), which are solely for the benefit of Agency, and which shall be fulfilled or waived by the time periods provided for herein: (a) No Default. Prior to the close of each Escrow, neither Developer, DHR, or any entity that has assumed Developer's, or DHR's obligations hereunder with respect to the development and/or operation of one or more Phases of Development shall be in default of any of its obligations under the terms of this Agreement and all representations and warranties of Developer contained herein shall be true and correct in all material respects. (b) Execution of Documents. Developer shall have executed and delivered into the Escrow the applicable Grant Deed(s), the applicable Option Agreement(s), the applicable City Declaration of CC&Rs, the applicable Maintenance Agreement, the applicable Water Agreement, and any other documents required hereunder, and, at the Initial Escrow only, the Memorandum of DDA. (c) Payment of Funds. Prior to each Closing, Developer shall have paid all of its required costs of the Closing into the applicable Escrow in accordance with Section 202.1 hereof. (d) Design Approvals. Developer shall have obtained approval by the City of the Design/Construction Development Drawings for the Phase of Development applicable to each Parcel to be acquired at the Closing, as set forth in Section 302 hereof. (e) Phasing Requirements. All of the conditions and requirements described in Section 201.2, 201.3, 201.4, and 201.5 that are applicable to the Escrow have been satisfied. (f) City Declaration of CC&Rs. Prior to each Closing that includes a 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 City( 7 1063073.06 a07$/01/10 -19- 0 1 O Declaration of CC&Rs, the covenants of which shall bind the Parcel and each and every Condominium Hotel Unit, Fractional Unit, and Hotel Unit developed thereon in perpetuity and shall survive the termination of this Agreement and of the Development Agreement. (g) Land Use Approvals. Developer shall have received all Land Use Approvals required for the Phase of Development applicable to each Parcel to be acquired at the Closing, pursuant to Section 302.5 hereof. (h) Insurance. Developer shall have provided proof of insurance as required by Section 304 hereof and Agency shall have approved of the same. (i) Financing. The Agency shall have approved Developer's financing for the Phase of Development applicable to each Parcel to be acquired at the Closing, pursuant to Section 309.1 hereof, and such financing shall close concurrently with the Closing and be available to the Developer upon the Closing. 0) Environmental. The Developer shall not have timely disapproved the environmental condition of the Property and shall not have timely elected to terminate this Agreement with respect to the Property pursuant to Section 207.2 hereof. (k) Grading Plans and Permits. Developer shall have obtained City approval of its precise grading plans for the Phase of Development applicable to each Parcel to be acquired at the Closing, and grading permits shall be ready to be issued (on payment of necessary fees, posting of required security, and similar items). (1) Building Plans and Permits. Developer shall have obtained City approval of its building plans for the Phase of Development applicable to each Parcel to be acquired at the Closing, and building permits shall be ready to be issued (on payment of necessary fees, posting of required security, and similar items). (m) Construction Costs and Contract(s). The Developer shall have provided the Agency's housing and economic development consultant, or such other person as the Executive Director may designate, a copy of the proposed contract(s), certified by the Developer to be a true and correct copy thereof, between the Developer and one or more duly licensed general contractors reasonably acceptable to the Agency for the construction of the Phase of Development applicable to each Parcel to be acquired at the Closing. Such proposed contract(s) shall provide for the grading and all of the physical construction of the Phase of Development. No material changes that (i) increase the time for completion of the Phase of Development (unless caused by force majeure), (ii) are inconsistent with the approved site development permit for the Phase of Development, or (iii) reduce the number of Units to be developed for the Phase of Development from the number set forth in the approved site development permit for the Phase of Development shall thereafter be made to such proposed contract(s) without the prior approval of the Agency's housing and economic development consultant or the Executive Manager's designee. Developer shall promptly provide the Agency with copies of all contracts subsequently entered into for completion of the development of the Phase of Development. 882/015610-0084 ' ^%�_ 1063073 06 a07/01/10 -20- (n) Performance Bond. The Developer shall have obtained from each subcontractor whose work on a Phase of Development (in the aggregate) will cost $500,000 or more, and delivered to the Agency evidence, in a form satisfactory to Agency, that said subcontractor has obtained lien and completion Contractor Bonds for the completion of such contractor's work in the construction of the Phase of Development applicable to each Parcel to be acquired at the Closing. Said Contractor Bonds shall provide that the Agency is authorized to enforce the same as a third party beneficiary. (o) Letter of Commitment. Developer shall have submitted to Agency and obtained Agency's approval of the Letter of Commitment for the Phase of Development applicable to each Parcel to be acquired at the Closing within the time set forth in the Schedule of Performance. (p) Operating Agreement. Developer shall have submitted to Agency and Agency shall have approved, an operating agreement with DHR that obligates DHR to operate the Phase of Development at a Four Star Quality or higher, and in accordance with all applicable requirements set forth herein and in the Development Agreement (an "Operating Agreement") (applicable only to Escrows that include the Boutique Hotel Parcel, Ranch Development Parcel, Resort Hotel Parcel, Lake Casitas Parcel, and/or Golf Casitas Parcel). (q) Deposit Payments. Developer shall have deposited with Agency all Additional Deposit Payments then due. (r) Water Agreement. Developer shall have entered into a standard Domestic Water and/or Sanitation Installation Agreement with the Coachella Valley Water District ("CV WD"), substantially in the form attached as Exhibit C to that certain Domestic Water and Sanitation System Installation and Irrigation Service Agreement entered into by and between the City and CV WD 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. (s) Completion Guarantee. Lowe Enterprises shall have executed a completion guarantee in substantially the form and substance of the completion guarantee provided to Developer's construction lender, in favor of the Agency, for the lien -free completion of construction of the improvements in the applicable Phase of Development for the Project. (t) Maintenance Agreement. Developer shall have entered into a maintenance agreement with the City or Agency regarding maintenance of certain portions of the Golf Course lakes located or to be located adjacent to the Property and certain landscaped parkways, sidewalks, and trails (collectively, the "Public Improvements") all as depicted on Attachment No. 11 hereof which is attached hereto and incorporated herein by this reference (each, a "Maintenance Agreement"). At all Closings subsequent to the Closing for the Boutique Hotel Parcel, the Maintenance Agreement shall be substantially in the form of the Maintenance Agreement executed and recorded at the Closing for the Boutique Hotel Parcel. (u) Signage Agreement. Developer shall have entered into with the City or the Agency (as applicable) a signage agreement (applicable only to the Closings for the Boutique Hotel Parcel, Resort Hotel Parcel, and Resort Retail Village Parcel). Notwithstanding C�2 882/015610-0084 -21- 1063073 06 a07/01110 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 said Phase of Development; the signage agreement for the Resort Hotel Parcel shall provide for signage on Jefferson Street, at the Resort Hotel entry point; and the signage agreement for the Resort Retail Village Parcel shall provide for signage at the corner of Avenue 52 and Jefferson Street, at the corner of Avenue 54 and Jefferson Street, and on Avenue 54, at the entry into the SilverRock Resort Area. (v) Parcel Mal). Agency shall have recorded or shall, concurrently with the Closing for the Initial Escrow, record the Parcel Map in the Official Records of Riverside County. (w) Final Phasing Plan. Developer shall have submitted to Agency's Executive Director and obtained approval therefrom of a final phasing plan for the Phase(s) of Development to be constructed on the Parcel(s) to be conveyed pursuant to the Escrow. (x) Developer's Organizational Documents. Developer shall have submitted to Agency's Executive Director copies of Developer's (i) Limited Liability Company Agreement, and (ii) Development and Sales Management Agreement, both of which shall have been revised to reflect Developer's current organizational structure. 205.2 Developer's Conditions of Closing. Developer's obligation to proceed with the purchase of each Parcel is subject to the fulfillment or waiver by Developer of each and all of the conditions precedent (a) through (k), inclusive, described below ("Developer's Conditions Precedent to the Closing"), which are solely for the benefit of Developer, and which shall be fulfilled or waived by the time periods provided for herein: (a) No Default. Prior to the applicable Closing, Agency shall not be in default of any of its obligations under the terms of this Agreement and all representations and warranties of Agency contained herein shall be true and correct in all material respects. (b) Execution of Documents. Agency shall have executed and delivered into Escrow, the applicable Grant Deed(s), the applicable Option Agreement(s), the applicable City Declaration of CC&Rs, the applicable Maintenance Agreement, and any other documents required hereunder, and, at the Initial Escrow only, the Memorandum of DDA. (c) Review and Approval of Title. Developer shall have reviewed and approved any Additional Property Exceptions, as provided in Section 203 hereof. (d) Title Policy. The Title Company shall, upon payment of Title Company's regularly scheduled premium, have agreed to provide to the Developer a Title Policy at the applicable Closing, in accordance with Section 204 hereof. (e) Environmental. The Developer shall not have timely disapproved the environmental condition of the Property and shall not have timely elected to terminate this Agreement with respect to the Property pursuant to Section 207.2 hereof. 882/015610-0084 073 1063073.06 a07/01/10 -22- �� (f) Design Approvals. Developer shall have obtained approval by the City of the Design/Construction Development Drawings for the Phase of Development applicable to each Parcel to be acquired at the Closing, as set forth in Section 302 hereof. (g) Land Use Approvals. Developer shall have received all Land Use Approvals required for the Phase of Development applicable to each Parcel to be acquired at the Closing, pursuant to Section 302.5 hereof. (h) Grading and Building Permits. All grading and building permits required for the construction of the Phase of Development applicable to each Parcel to be acquired at the Closing shall be available for issuance upon the payment of applicable permit fees, posting of required security, and similar items. (i) Financing. As provided in Section 309.1 hereof, Developer shall have obtained and the Agency shall have approved Developer's financing for the Phase of Development applicable to each Parcel to be acquired at the Closing, and such financing shall close and be available to the Developer upon the applicable Closing. 0) Parcel Map. Agency shall have recorded or shall, concurrently with the Closing for the Initial Escrow, record the Parcel Map in the Official Records of Riverside County. (k) Compatibility. Developer shall not have timely delivered to Agency written acknowledgement that the Project is incompatible with other development within the Parcel Map pursuant to Section 207.6. 206. Studies and Reports. 206.1 Access to Property. Commencing with the Effective Date and continuing until the "Property Determination Date," which shall mean and refer to the date that is six (6) months prior to the Outside Date for Closing for the Boutique Hotel Parcel, as set forth in the Schedule of Performance for the Boutique Hotel Parcel, as such date may be extended pursuant to the terms hereof, Agency shall provide representatives of Developer the right of access to all portions of the Property for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement, including without limitation the investigation of the environmental condition of the Property pursuant to Section 207 hereof. Any preliminary work undertaken on the Property by Developer prior to the Closing for the Boutique Hotel Parcel shall be done at the sole expense of the Developer. In no event shall Developer conduct any intrusive testing procedures on the Property without the prior written consent of Agency, which consent shall not be unreasonably withheld. Developer shall also have the right to investigate all matters relating to the zoning, use and compliance with other applicable laws, codes, and ordinances which relate to the use and occupancy of the Property. Agency shall cooperate to assist Developer in completing such inspections and special investigations at no cost or expense to Agency other than the time of Agency's personnel and incidental photocopying and like costs. Such inspections and investigations shall be conducted only (a) upon no less than forty-eight (48) hours' notice to Agency, (b) between the hours of 8:00 a.m. and 5:00 p.m., Monday through Friday, and (c) at such times and in such a 882/015610-0084 -23_ 1. 074 1063073,06 a07/01/10 manner as to minimize any disruption to the Property. Agency shall have the right, but not the obligation, to accompany Developer during such investigations and/or inspections. As a condition to any such entry, Developer shall (i) conduct all work or studies in a diligent, expeditious and safe manner and not allow any dangerous or hazardous conditions to occur on the Property during or after such investigation; (ii) comply with all applicable laws and governmental regulations; (iii) keep the Property free and clear of all materialmen's liens, lis pendens and other liens arising out of the entry and work performed under this paragraph; (iv) maintain or assure maintenance of workers' compensation insurance (or state approved self-insurance) on all persons entering the property in the amounts required by the State of California; (v) provide to Agency prior to initial entry a certificate of insurance evidencing that Developer and/or the persons entering the Property have procured and have in effect the insurance required by Section 306; and (vi) repair any damage it causes to the Property during the course of such investigations and/or inspections promptly upon completion of the investigations and/or inspections that caused such damage, and restore the Property to the condition existing prior to the investigations and/or inspections, including, without limitation, restabilizing any portions of the Property on which Developer's work removed or caused the removal of the soil stabilizer present on the Property, to the satisfaction of the City's Public Works Director. Any work undertaken pursuant to this Section 206 shall be undertaken only after securing any necessary permits from the appropriate governmental agencies. If the Developer, based upon the above tests, reports, and review, disapproves the environmental or soils condition of the Property, in its sole and absolute discretion, then the Developer may (x) at its sole cost and with prior written approval of the Agency of any remediation proposal, remediate the Property, or any specific contaminated portion thereof, to an acceptable condition, or (y) terminate this Agreement by written Notice to the Agency pursuant to Section 603 hereof, delivered not later than the Property Determination Date. From and after the Effective Date hereof, and continuing until the earlier of (1) the Close of Escrow for the last portion of the Property Developer intends to acquire from Agency, or (2) termination of this Agreement, Agency shall not take any affirmative action to affect the condition of the Property without the Developer's prior written consent. Agency may revoke the foregoing right of access upon two (2) days written notice to Developer delivered in accordance with Section 701 below in the event: (I) in the reasonable judgment of Agency, such revocation is necessary to protect the public health, safety, or welfare pursuant to the exercise of Agency's police powers; or (II) Developer is in violation of the terms of this Agreement or any applicable law, statute, ordinance, rule, or regulation pertaining to the preliminary work permitted hereunder or Developer's or the Developer Representative's entry upon the Property pursuant to this Agreement, and Developer has failed to cure such violation within two (2) days following Developer's receipt of written notice of such violation from Agency. 206.2 Indemnification. Developer shall protect, defend, indemnify and hold harmless Agency and City and Agency's and City's respective officers, officials, members, employees, agents, and representatives (any of the foregoing shall be known individually as "Indemnitee" and collectively as "Indemnitees"), and each of them, jointly and severally, against and from any and all claims, demands, causes of action, damages, costs, expenses, losses and liabilities, at law or in equity, of every kind or nature whatsoever, including attorneys' fees and expert witness fees, but excluding those resulting from environmental contamination of the Property or other defects on the Property existing prior to Developer's entry thereon or not otherwise caused by Developer or any of the Developer Representatives, 882/015610-0084 _24_ " 075 1063073.06 a07/01/10 but including, without limitation, injury to or death of any person or persons and damage to or destruction of any property, threatened, brought or instituted ("Claims"), arising out of or in any manner directly or indirectly connected with the entry upon the Property by Developer or any of the Developer Representatives pursuant to this Section or Section 207, below, including without limitation: (a) any damage to the Property and any liability to any third party incurred by reason of any acts or omission of, including, but not limited to, any commission of any negligent or tortious acts, by Developer or the Developer Representatives, or any of them; (b) any mechanics' or materialmen's liens, claims, demands, actions or suits arising (directly or indirectly) from (i) any work performed or materials supplied to or for Developer, or (ii) any activities of Developer or any of the Developer Representatives, or any of them, on or relating to the Property (including, without limitation, any claims by any of such Developer Representatives); and (c) any costs of removing Developer or the Developer Representatives from the Property after the expiration of the term hereof unless Developer is otherwise entitled to possession of the Property at such time. 207. Condition of the Property 207.1 Disclosure. The Agency shall, within the time set forth in the Schedule of Performance, provide to the Developer copies of any environmental studies and reports with respect to the Property of which it has actual knowledge, without any duty of investigation or inquiry. 207.2 Investigation of Property. Pursuant to Section 206 hereof, the Developer may engage an Environmental Consultant to make such investigations as Developer deems necessary, including any "Phase 1" and/or "Phase 2" investigations of the Property, and the Agency shall promptly be provided a copy of all final reports and test results provided by the Environmental Consultant (the "Property Environmental Reports"). The Developer shall be permitted to make such inspections of the Property pursuant to the requirements of Section 206. The Developer shall approve or disapprove of the environmental condition of the Property in the Developer's sole discretion, not later than the Property Determination Date. If the Developer, based upon the Property Environmental Reports, disapproves the environmental condition of the Property for any reason, in the Developer's sole discretion, then the Developer may (i) at its sole cost and with prior written approval of the Agency of any remediation proposal, remediate the Property, or any specific contaminated portion thereof, to an acceptable condition, or (ii) terminate this Agreement by written Notice to the Agency pursuant to Section 603 hereof delivered not later than the Property Determination Date. 207.3 No Further Warranties As To Property; Release of Agency. The physical condition, possession, and title of the Property is and shall be delivered from Agency to Developer in an "AS -IS" "WHERE IS" "WITH ALL FAULTS" condition, with no warranty expressed or implied by Agency, including without limitation, the presence of 882/015610-0094 -25- •• 076 1063073.06 a07/01/10 Hazardous Materials or the condition of the soil, its geology, the presence of known or unknown seismic faults, or the suitability of the Property for the development purposes intended hereunder. Upon the Agency's conveyance of fee title to each Parcel comprising the Property to Developer, Developer shall be deemed to have waived, released and discharged forever the Agency and the City, and their employees, officers, agents, members and representatives, from all present and future claims, demands, suits, legal and administrative proceedings and from all liability for damages, losses, costs, liabilities, fees and expenses, present and future, arising out of or in any way connected with the condition of such Parcel, any Hazardous Materials on the Parcel, or the existence of Hazardous Materials contamination due to the generation of Hazardous Materials from the Parcel or any other real property, however they came to be placed there, except that arising out of the sole negligence or intentional misconduct of the Agency, the City, or their employees, officers, agents or representatives. The Developer acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Only with respect to the condition of the Property as set forth in this Section 207.3, the Developer hereby waives and relinquishes all rights and benefits which it may have under Section 1542 of the California Civil Code. Developer's Initials Notwithstanding anything herein to the contrary, the release set forth in this Section 207.3 shall become effective as to the individual Parcels comprising the Property on the date Developer acquires fee title to each of said Parcel(s). 207.4 Developer Precautions After the Closin¢. Upon the Closing for one or more Parcels, the Developer shall take all necessary precautions to prevent the release into the environment of any Hazardous Materials which are located in, on or under such Parcels, or placed in, on, or under such Parcel(s) after the Close of Escrow for such Parcel(s). Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, the Developer shall install and utilize such equipment and implement and adhere to such procedures as are consistent with commercially reasonable standards as respects the disclosure, storage, use, removal and disposal of Hazardous Materials. 207.5 Developer Indemnity. Upon the Closing for one or more Parcels, Developer agrees to indemnify, defend and hold Agency harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorneys' fees), resulting from, arising out of, or based upon (i) the presence, release, use, generation, discharge, storage or disposal of 882/015610-0084 1 r 7 7 _26_ 1063073.06 a07/01/10 any Hazardous Materials on, under, in, or about, or the transportation of any such Hazardous Materials to or from, the Parcel(s) which first occurs after the Closing for such Parcel(s), or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in, or about, or to or from, the applicable Parcel(s) by Developer or by Developer's contractors, subcontractors, agents, consultants, or representatives which occurs after the Closing for such Parcel(s). This indemnity shall include, without limitation, any damage, liability, fine, penalty, cost or expense arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment. At the request of the Developer, the Agency shall cooperate with and assist the Developer in its defense of any such claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense; provided that the Agency shall not be obligated to incur any expense in connection with such cooperation or assistance. 207.6 Compatibility Finding. In the event that not less than six (6) months prior to the Outside Date for Closing for a Parcel Developer determines that the Project is not compatible with other development within the Parcel Map, Developer may terminate the applicable Escrow and this Agreement pursuant to Section 603 hereof by written Notice to the Agency. 208. Deposit Payments. 208.1 Disposition of Remaining Received Deposit Payment Funds. Within five (5) days after the Effective Date, Escrow Agent shall release the Remaining Received Deposit Payment Funds to Agency. Until such time as Agency is authorized hereunder to retain any of such funds for Agency's own use or to release any of such funds to Developer, Agency shall maintain such funds in a separate account. (a) Initial Release to Agency. Upon the Agency's receipt of the Remaining Received Deposit Payment Funds, One Hundred Thousand Dollars ($100,000) of such funds shall be permanently released to Agency for Agency's use. (b) Second Release to Agency. On the first anniversary of the Effective Date, One Hundred Thousand Dollars ($100,000) of the Remaining Received Deposit Payment Funds shall be permanently released to Agency for Agency's use. (c) Third Release to Agency. On the second anniversary of the Effective Date, One Hundred Thousand Dollars ($100,000) of the Remaining Received Deposit Payment Funds shall be permanently released to Agency for Agency's use. (d) Reimbursement of Sales Trailer Operations Costs. Developer shall be entitled to obtain from the Agency a disbursement of funds from the Remaining Received Deposit Payment Funds to reimburse Developer for costs Developer has incurred and continues to incur in operating the sales trailer on the Boutique Hotel Parcel during the period commencing 882/01561M084 -27- 078 1063073 06 a07/01 /10 on January 1, 2009, and continuing until December 31, 2010. Developer may request a reimbursement payment no more than once per month, and any such request shall be accompanied by (i) an itemized statement that sets forth all of the costs for which Developer is requesting reimbursement; and (ii) invoices or other documentation evidencing such costs, including the amount thereof and a description of the work or service provided. Reimburseable costs shall include lease payments, landscaping maintenance costs, building maintenance costs, building rental costs, insurance costs, and any administrative costs incurred in staffing said sales facility. No other costs shall be reimburseable unless Agency's Executive Director, in his or her sole and absolute discretion, approves the reimbursement of such costs. Notwithstanding anything herein to the contrary, the maximum amount that may be reimbursed to Developer pursuant to this Section is Fifty Thousand Dollars ($50,000) for each twelve (12) month period of operation covered hereunder, for a total potential reimbursement amount for the twenty-four (24) months covered hereunder of up to One Hundred Thousand Dollars ($100,000). (e) Reimbursement of Administrative Costs. Developer shall be entitled to obtain from the Agency a disbursement of funds from the Remaining Received Deposit Payment Funds to reimburse Developer for staff salaries and marketing costs Developer has incurred and continues to incur in managing the Original DDA, this Agreement, and the transactions contemplated by each of such agreements during the period commencing on January 1, 2009, and continuing until December 31, 2010. Developer may request a reimbursement payment no more than once per month, and any such request shall be accompanied by (i) an itemized statement that sets forth all of the costs for which Developer is requesting reimbursement; and (ii) invoices or other documentation evidencing such costs, including the amount thereof and a description of the work or service provided. No other administrative costs, including, without limitation, legal costs incurred by Developer, shall be reimburseable unless Agency's Executive Director, in his or her sole and absolute discretion, approves the reimbursement of such costs. Notwithstanding anything herein to the contrary, the maximum amount that may be reimbursed to Developer pursuant to this Section is Sixty Thousand Dollars ($60,000) for each twelve (12) month period, for a total potential reimbursement amount for the twenty-four (24) months covered hereunder of up to One Hundred Twenty Thousand Dollars ($120,000). (0 Eligible Phase 1 Costs. Portions of the Remaining Received Deposit Payment Funds that remain after the authorized releases contemplated pursuant to Section 208.1(a), Section 208.1(b), Section 208.1(c), Section 208.1(d), and Section 208.1(e), estimated to be approximately Seventy -Seven Thousand Nine Hundred Seventy Dollars (77,970) (the "Phase 1 Portion of the Remaining Received Deposit Payment Funds"), shall be released to Developer, to reimburse Developer for costs Developer incurs after the Effective Date for planning, designing, processing entitlements, and environmental review, including staff costs to the extent such costs do not comprise more than thirty-five percent (35%) of the requested disbursement, but not including legal fees and costs, that are related to the Boutique Hotel and/or the Ranch Development (the "Eligible Phase 1 Costs"), in accordance with the terms of this Section 208.1(1). To obtain a disbursement of a portion of the Remaining Received Deposit Payment Funds, Developer shall submit a written request to Agency, which evidences Developer's expenditure of Eligible Phase 1 Costs. Agency shall approve or disapprove, in Agency's reasonable discretion, any such request within twenty-one (21) days after receipt thereof. Within five (5) days after Agency's approval of a written request for disbursement of a 982/015610-0084 -28- .� . O 19 1063073,06 a07/01110 portion of the Phase 1 Portion of the Remaining Received Deposit Payment Funds, Agency shall release such portion to Developer. To the extent Agency has not paid to Developer all of the Phase 1 Portion of the Remaining Received Deposit Payment Funds, pursuant to the process set forth above by the Closing for the Boutique Hotel Parcel, all remaining portions thereof shall be applied towards the Purchase Price for the Boutique Hotel Parcel. 208.2 Additional Deposit Payments. Developer shall be required to deposit with Agency certain additional payments, to serve as a guarantee of Developer's commitment to develop the Project, in accordance with the schedule set forth in Section 208.2(a) below (individually, an "Additional Deposit Payment," and collectively, the "Additional Deposit Payments"). (a) Schedule of Payments. (i) First Additional Deposit Payment: Developer shall deposit Seven Hundred Thousand Dollars ($700,000) (the "First Additional Deposit Payment") with Agency no later than thirty (30) days after the Agency approves the Letter of Commitment for the Boutique Hotel; (ii) Second Additional Deposit Payment: Developer shall deposit Seven Hundred Thousand Dollars ($700,000) (the "Second Additional Deposit Payment") with Agency no later than the first (151) anniversary of the date Agency approves the Letter of Commitment for the Boutique Hotel; (iii) Third Deposit Payment: Developer shall deposit Two Hundred Thousand Dollars ($200,000) (the "Third Additional Deposit Payment") with Agency no later than the second (2"d) anniversary of the date Agency approves the Letter of Commitment for the Boutique Hotel. (b) Release of Additional Deposit Payment Funds to Developer. Portions of the funds comprising Additional Deposit Payments shall be released to Developer, to the extent such payments have been made by Developer, to reimburse Developer for costs Developer incurs after the Effective Date for planning, designing, processing entitlements, and environmental review, including staff costs to the extent such costs do not comprise more than thirty-five percent (35%) of the requested disbursement, but not including legal fees and costs, that are related to the Project (the "Eligible Costs"), in accordance with the terms of this Section 208.2(b). To obtain a disbursement of a portion of the Additional Deposit Payments, Developer shall submit a written request to Agency, which evidences Developer's expenditure of Eligible Costs. Agency shall approve or disapprove, in Agency's reasonable discretion, any such request within twenty-one (21) days after receipt thereof. Within five (5) days after Agency's approval of a written request for disbursement of a portion of the Additional Deposit Payments, Agency shall release such portion to Developer. (i) Resort Hotel and Lake Casitas Development Portion of the Additional Deposit Payments. Agency shall pay up to Four Hundred Thousand Dollars ($400,000) from the First Additional Deposit Payment, and up to the Four Hundred Thousand Dollars ($400,000) from the Second Additional Deposit Payment, to Developer iR .W.. J V 882/01561M084 _ 1063073.06 a07/OI/10 -29 to reimburse Developer for Eligible Costs related to the Resort Hotel and the Lake Casitas Development (the "Resort Hotel and Lake Casitas Development Portion of the Deposit Payments"). To the extent Agency has not paid to Developer all of the Resort Hotel and Lake Casitas Development Portion of the Additional Deposit Payments it has received, pursuant to the process set forth above by the Closing for the Resort Hotel Parcel or the Lake Casitas Parcel (whichever occurs earlier), all remaining portions thereof shall be applied towards the Purchase Price for the Resort Hotel Parcel or Lake Casitas Parcel (as applicable). (ii) Resort Retail Village Development Portion of the Additional Deposit Payments. Agency shall pay up to One Hundred Fifty Thousand Dollars ($150,000) from the First Additional Deposit Payment, and up to the One Hundred Fifty Thousand Dollars ($150,000) from the Second Additional Deposit Payment, to Developer to reimburse Developer for Eligible Costs related to the Resort Retail Village Development (the "Resort Retail Village Development Portion of the Additional Deposit Payments"). To the extent Agency has not paid to Developer all of the Resort Retail Village Development Portion of the Additional Deposit Payments it has received, pursuant to the process set forth above by the Closing for the Resort Retail Village Parcel, all remaining portions thereof shall be applied towards (i) the Purchase Price for the Resort Retail Village Parcel, if such Parcel is sold to Developer, or (ii) Developer's initial leasehold payment under the Resort Retail Village Parcel Ground Lease, if such Parcel is leased to Developer; provided, however, that to the extent any portions of the Resort Retail Village Development Portion of Deposit Payments remain after Developer's initial lease payment has been paid to the City or Agency (as applicable), Agency shall pay such remaining portions to Developer. (iii) Golf Casitas Development Portion of the Additional Deposit Payments. Agency shall pay up to One Hundred Thousand Dollars ($100,000) from the First Additional Deposit Payment, up to One Hundred Thousand Dollars ($100,000) from the Second Additional Deposit Payment, and up to Two Hundred Thousand Dollars ($200,000) from the Third Additional Deposit Payment, to Developer to reimburse Developer for Eligible Costs related to the Golf Casitas Development (the "Golf Casitas Development Portion of the Additional Deposit Payments"). To the extent Agency has not paid to Developer all of the Golf Casitas Portion of the Additional Deposit Payments it has received, pursuant to the process set forth above by the Closing for the Golf Casitas Parcel, all remaining portions thereof shall be applied towards the Purchase Price for the Golf Casitas Parcel. 208.3 Agency Retention of Deposit Payment Funds. Subject to Section 603 and Section 604 below, in the event this Agreement is terminated for any reason other than as a result of a Default by the Agency which is not cured within the applicable cure period, Agency shall be entitled to retain all unreleased portions of any Remaining Received Deposit Payment Funds, including, without limitation, any Phase 1 Portion of the Remaining Received Deposit Payment Funds, and any Additional Deposit Payments, held by Agency. •%...0 081 882/015610-0084 1063073.06 a07/01/10 -30- 300. DEVELOPMENT OF THE PROJECT 301. Scope of Development; Developer's Development Team. The Developer shall develop or cause the development of the Project in accordance with the Scope of Development, the Specific Plan, the City Municipal Code, Governmental Requirements, Land Use Approvals, and the plans, drawings and documents submitted by the Developer and approved by the Agency as set forth herein. Developer shall not propose any changes to the Scope of Development, and no such proposed changes shall be accepted, unless the development proposed in such changes (i) is consistent with the Specific Plan, (ii) is formally approved by the Agency Board of Directors, and (iii) results in equivalent financial benefit to the Agency and City as the development required hereunder. Prior to commencement of construction of any Phase of Development the Developer shall obtain and deliver to the Agency evidence of the Contractor Bonds required pursuant to Section 205.1(n) covering the applicable Phase of Development, and which provide that the Agency is authorized to enforce such completion bond as a third party beneficiary. Developer shall provide written Notice to Agency of any proposed change to the composition of Developer's Development Team not less than thirty (30) days prior to Developer's implementation of such change. 302. Design Review. 302.1 Developer Submissions. Before commencement of construction of any Phase of Development, and as one of Agency's Conditions Precedent to the Closing pursuant to Section 205.1(d), at or prior to the time set forth herein, the Developer shall submit to the City any plans and drawings (collectively, the "Design/Construction Development Drawings") which may be required by the City with respect to any permits and entitlements which are required to be obtained to develop a Phase of Development, and such plans for the Phase of Development as required by the City in order for the Developer to obtain building and grading permits for the Phase of Development. Within thirty (30) days after the City's disapproval or conditional approval of such plans, the Developer shall revise the portions of such plans identified by the City as requiring revisions and resubmit the revised plans to the City. All such Design/Construction Development Drawings shall be consistent with the designs set forth in the SilverRock Resort Project Summary prepared by Lowe Enterprises dated June 15, 2005, and the SilverRock Resort Vision Summary 2005, prepared by OZ Architects, Inc., dated June 15, 2005, and Agency reserves the right to request that the City disapprove any plans or designs that Agency's Executive Director believes has too few Units compared to the maximum permitted under the Specific Plan. 302.2 City Review and Approval. The City shall have all rights to review and approve or disapprove all Design/Construction Development Drawings and other required submittals in accordance with the City Municipal Code, and nothing set forth in this Agreement shall be construed as the City's approval of any or all of the Design/Construction Development Drawings or other required submittals. 302.3 Revisions. Any and all change orders or revisions required by the City and its inspectors which are required under the City Municipal Code and all other applicable Uniform Codes (e.g. Building, Plumbing, Fire, Electrical, etc.) and under other applicable laws and regulations shall be included by the Developer in its Design/Construction 8821015610-0084 " O Q 1063073,06 a07/01/10 -31- V L Development Drawings and other required submittals and shall be completed during the construction of the applicable Phase of Development. 302.4 Defects in Plans. The Agency and the City shall not be responsible either to the Developer or to third parties in any way for any defects in any of the Design/Construction Development Drawings, nor for any structural or other defects in any work done according to the approved Design/Construction Development Drawings, nor for any delays reasonably caused by the review and approval processes established by this Section 302. 302.5 Land Use Approvals. Before commencement of construction of any Phase of Development or other works of improvement upon the Property, the Developer shall, at its own expense, secure or cause to be secured any and all land use and other entitlements, permits and approvals which may be required for the applicable Phase of Development or work of improvement by the City or any other governmental agency affected by such construction or work, including but not limited to, site development permits, conditional use permits, temporary use permits, minor use permits, and any environmental studies and documents required pursuant to the California Environmental Quality Act (collectively, the "Land Use Approvals"). 303. Schedule of Performance. The Developer shall submit all Design/Construction Development Drawings, commence and complete all construction of the Project, and satisfy all other obligations and conditions of this Agreement, within the times established therefor in the Schedule of Performance. 304. Indemnity and Insurance Requirements. The Developer shall indemnify, defend, and hold harmless the Agency and the City, and their respective officers, officials, members, employees, agents, and representatives, from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including expert witness fees, attorneys fees, and costs), which may be caused by any of the Developer's activities under this Agreement. Commencing with the Effective Date hereof and ending on the date Agency issues a Release of Construction Covenants for the final Phase of Development to be constructed on the Property (the "Completion of Construction Date"), Developer shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to the Executive Director, the following policies of insurance: 1. 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. 2. 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. 882/015610-0084 -32- �� . •^' O v 1063073 06 a07/01/10 3. 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. Prior to the start of construction of a Phase of Development and ending on the date the City issues a Certificate of Occupancy for said Phase of Development, Developer shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to the Executive Director, Builder's Risk (course of construction) insurance coverage in an amount equal to the full cost of the hard construction costs of the Phase of Development. Such insurance shall cover, at a minimum: all work, materials, and equipment to be incorporated into the Phase of Development; the Phase of Development during construction; the completed Phase of Development until such time as the City issues a final certificate of occupancy for the Phase of Development, and storage and transportation risks. Such insurance shall protect/insure the interests of Developer/owner and all of Developer's contractor(s), and subcontractors, as each of their interests may appear. If such insurance includes an exclusion for "design error," such exclusion shall only be for the object or portion which failed. Agency shall be a loss payee under such policy or policies and such insurance shall contain a replacement cost endorsement. The following additional requirements shall apply to all of the above policies of insurance: All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation insurance, shall name Agency, City, and their respective officers, officials, members, employees, agents, and representatives as additional insureds, using a pre- 2004 additional insured endorsement (or equivalent). The insurer shall waive all rights of subrogation and contribution it may have against Agency, City, and their respective 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 Agency and City. In the event any of said policies of insurance are cancelled, the Developer shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the Executive Director. Not later than the Effective Date of this Agreement, Developer shall provide the Executive Director with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the Executive Director. Upon the request of the Executive Director, Developer shall provide Agency 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 Executive Director shall have the 882/015610-0084 084 n 4 106307306.07/01/10 -33- Irt n U (y 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 Agency's interests hereunder. Agency 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 Executive Director, 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. 305. Indemnity. Commencing on the Effective Date and ending on the Completion of Construction Date, the Developer shall defend, indemnify, assume all responsibility for, and hold the Agency and the City, and their respective representatives, volunteers, officers, officials, members, employees and agents, harmless from all claims, demands, damages, defense costs or liability of any kind for damage to property or injuries to persons, including accidental death (including attorneys' fees and costs), which may be caused by any acts or omissions of the Developer under this Agreement, whether such activities or performance thereof be by the Developer or by anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement including, but not limited to, Developer's failure to pay, if required, prevailing wages on the construction and development of any Phase of Development. The Developer shall not be liable for property damage or bodily injury to the extent such property damage or bodily injury is occasioned by the negligence or willful misconduct of the Agency, the City or their respective agents or employees. 306. Rights of Access. Prior to the Completion of Construction Date, for purposes of assuring compliance with this Agreement, representatives of the Agency shall have the right of access to the Property, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including but not limited to, the inspection of the work being performed in constructing the Project so long as Agency representatives comply with all safety rules and do not interfere with construction. The Agency (or its representatives) shall, except in emergency situations, notify the Developer prior to exercising its rights pursuant to this Section 306. Agency shall indemnify, defend, and hold Developer harmless from and against all costs, claims, liability and judgments arising from the Agency's exercise of its right of access hereunder. a OB5 882/015610-0084 -34- 1063073.06 a07/01/10 307. Compliance With Laws, Payment of Taxes. 307.1 Compliance with Laws. The Developer shall carry out the design, construction and operation of the Project and each Phase of Development in conformity with all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, at seq., and the Unruh Civil Rights Act, Civil Code Section 51, at seq. Nothing herein constitutes a representation or warranty by Agency that the construction of the Project is (i) not a "public work" or (ii) not otherwise subject to California Health and Safety Code Sections 33423 through 33426, or Chapter 1 of Part 7 of the California Labor Code (commencing with section 1720), and all applicable statutory and regulatory provisions related thereto, and Developer, on behalf of itself and its contractors and subcontractors, expressly waives any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to the Property or Project. Developer shall indemnify, defend, and hold Agency harmless, including but not limited to litigation costs, expert witness fees, and reasonable attorneys' fees, from and against any and all claims pertaining to the payment of wages for the Property or Project or failure to comply with federal or state labor laws, regulations, or standards. 307.2 Taxes and Assessments. The Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Property (after such time that Developer acquires fee title to or becomes the ground lessee of each of the Parcels composing the Property), subject to the Developer's right to contest in good faith any such taxes. Developer agrees on behalf of itself, and on behalf of all persons or entities that may own an interest in the Property or in the Units in the future, that during the term of the City Declaration of CC&Rs neither Developer nor any such person or entity shall (i) apply for or receive any exemption from the payment of property taxes or assessments on any interest in or to the Project or any of the Parcels composing the Property, or (ii) take action, including any assessment appeal, to decrease the assessed value of any of the Property (including the value of each respective Phase of Development) below the final assessed value at the time the development of the Property or a Phase of Development (as applicable) is completed. 308. Release of Construction Covenants. Upon the City's issuance of the last and final certificate of occupancy for a Phase of Development, the Developer may request that the Agency furnish the Developer with a Release of Construction Covenants for the applicable Phase of Development. The Agency shall not unreasonably withhold any such Release of Construction Covenants, and if the Developer is entitled thereto shall furnish to Developer a recordable Release of Construction Covenants for the applicable Phase of Development within fifteen (15) days after Developer's request thereof. The Release of Construction Covenants shall be a conclusive determination of satisfactory completion of the applicable Phase of Development and the Release of Construction Covenants shall so state. Any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the real property for which a Release of Construction Covenants has been issued shall not (because of such ownership, purchase, lease or 8821015610-0084 -35- C v 1063073.06 a07/01/10�^' - acquisition) incur any obligation or liability under this Agreement except for those continuing covenants as described in Article 500 of this Agreement. If the Agency refuses or fails to furnish a Release of Construction Covenants after written request from the Developer, the Agency shall, within fifteen (15) days after written request therefor, provide the Developer with a written statement of the reasons the Agency refused or failed to furnish a Release of Construction Covenants. The statement shall also contain the Agency's opinion of the actions the Developer must take to obtain a Release of Construction Covenants for the applicable Phase of Development. A Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the applicable Phase of Development, or any part thereof. The Release of Construction Covenants is not a notice of completion as referred to in Section 309.3 of the California Civil Code. 309. Financing of the Project. 309.1 Approval of Financing. Within the times set forth in the Schedule of Performance, and as one of Agency's Conditions Precedent to the Closing for each Escrow, Developer shall submit to Agency evidence that Developer (i) has obtained or will have obtained as of the Closing, construction financing from a commercial lender necessary to undertake the acquisition of the applicable Parcel, and the construction of the applicable Phase of Development, in accordance with this Agreement which may be in the form of a commitment, a term letter, or such other form, with all such forms to be approved by Agency in Agency's reasonable discretion (a "Construction Loan"); (ii) if desired by Developer, has obtained "Mezzanine" financing in a form reasonably acceptable to Agency; and (iii) has obtained sufficient equity capital to cover the difference between (a) the sum of the Construction Loan and the Mezzanine financing and (b) the total cost of acquiring the applicable Parcel and developing the applicable Phase of Development ("Developer's Equity Contribution"). The Agency shall approve or disapprove such evidence of financing within thirty (30) days after receipt of a complete submission for the applicable Phase of Development. Approval shall not be unreasonably withheld, delayed, or conditioned. If Agency shall disapprove any such evidence of financing, Agency shall do so by Notice to Developer stating with reasonable specificity the reasons for such disapproval and Developer shall promptly obtain and submit to Agency new evidence of financing. Agency shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section 309.1 for the approval or disapproval of the evidence of financing as initially submitted to Agency. Developer shall close each approved Construction Loan prior to or concurrently with the real estate closing for the applicable Parcel. Such evidence of financing shall include the following: (a) a copy of a loan commitment(s) or term letter(s), obtained by Developer from one or more financial institutions for the Construction Loan, subject to such lenders' reasonable, customary and normal conditions and terms, and (b) documentation reasonably satisfactory to the Agency as evidence of the "Mezzanine" financing and Developer's Equity Contribution. 309.2 Changes Requested by Lenders. In the event that a lender which has been approved pursuant to Section 309.1 hereof requires one or more amendments to this 882/015610-0084 106307306 a07/01/10 -36- �� •^ Q 8 7 Agreement, or any of the attachments hereto, which amendments are reasonably acceptable to the Agency Executive Director and do not materially affect Agency's interest hereunder, the Agency Executive Director or his or her designee is hereby authorized to make such amendments without further authorization from the Agency Board; provided, however, that the foregoing is not intended to restrict or limit the Agency's legislative discretion. 309.3 Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by Developer, whenever the Agency may deliver any notice or demand to Developer with respect to any breach or default by the Developer in completion of construction of the Project or any Phase of Development, the Agency shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage or deed of trust which has previously requested such notice in writing. Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Property (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. 309.4 Failure of Holder to Complete Project. In any case where, sixty (60) days after the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Property or any part thereof receives a notice from Agency of a default by the Developer in completion of construction of the Project, or any Phase of Development under this Agreement, and such holder has not elected to commence a cure of such default as set forth in this Section 309, or if it has elected to commence such a cure but thereafter defaults hereunder and failed to timely cure such default, the Agency may purchase the mortgage or deed of trust by payment to the holder of the amount of the unpaid mortgage or deed of trust debt, including principal and interest and all other sums secured by the mortgage or deed of trust, including without limitation, any prepayment fees and costs. If the ownership of the Property or any part thereof has vested in the holder, the Agency, if it so desires, shall be entitled to a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: (a) The unpaid mortgage or deed of trust debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); (b) All expenses with respect to foreclosure including reasonable attorneys' fees; (c) The net expense, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent management of the Property or part thereof, 182/015610-0084 1063073,06 a07/01/10 -37- (d) The costs of any improvements or expenditures made by such holder; (e) An amount equivalent to the interest that would have accrued on the aggregate of the amounts set forth in (a) through (d) above had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agency; and (f) Any customary prepayment charges imposed by the lender pursuant to its loan documents and agreed to by the Developer. 309.5 Right of the Agency to Cure Mortgage or Deed of Trust Default. In the event of a mortgage or deed of trust default or breach by the Developer prior to the completion of the construction of the Project or any Phase of Development, Developer shall immediately deliver to Agency a copy of any mortgage holder's notice of default. If the holder of any mortgage or deed of trust has not elected to cure any default by Developer under this Agreement, the Agency shall have the right but no obligation to cure the default. In such event, the Agency shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the Agency in curing such default. The Agency shall also be entitled to a lien upon the Property, or portion of the Property against which the mortgage or deed of trust is recorded, to the extent of such costs and disbursements actually made by Agency. 309.6 Holder Not Obligated to Construct Project. The holder of any mortgage or deed of trust encumbering the Property shall not be obligated by the provisions of this Agreement to construct or complete the Project, or any portion thereof, or to guaranty such construction or completion; nor shall any such covenant or any other provision in this Agreement be construed so to obligate such holder. 310. Developer CC&Rs. Prior to the Agency's issuance of a Release of Construction Covenants for any Phase of Development that contains 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 make certain resort payments, as further set forth in the City Declaration of CC&Rs; and requires all such resort payments 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"). 311. Interference with Municipal Golf Course. Developer shall carry out the construction of the Project so as to minimize interference with the municipal golf course located in the SilverRock Resort Area (the "Golf Course"), including, without limitation, taking all 882/015610-0084 _38_ •to,,, eUU 1063073 06.07/01/10 necessary actions to ensure that dust (i) does not blow off or leave any Parceb under development and enter onto any portion of the Golf Course; or (ii) is not tracked from any Parcel under development onto any of the roadways within the SiverRock Resort Area. Developer shall screen any Parcel under development to minimize the visual impacts of such development on persons using the Golf Course. Developer acknowledges that the City has entered into a Use Agreement with the Desert Classic Charities, dba Bob Hope Chrysler Classic, pursuant to which the Golf Course may be utilized for the Bob Hope Chrysler Classic annual tournament. In any year when the tournament is held at the Golf Course, no construction activities shall take place during the televised portion of the tournament unless authorized, in writing, by the City Manager, and Developer and Developer's contractors and subcontractors shall ensure that during the tournament all construction sites are left in a neat and orderly condition. Developer additionally agrees to coordinate with the tournament officials to ensure that construction activities do not interfere with the tournament. 312. Infrastructure Improvements. Developer shall be responsible for all of the following: (a) The cost of any and all curb cuts necessary to connect any portions of the Project to the backbone infrastructure within the SilverRock Resort Area. (b) The cost to restore or replace any of the backbone infrastructure within the SilverRock Resort Area Developer believes should be altered once the City has completed the same and has certified that such completion is in accordance with any approved plans therefor. (c) The cost to repair any damage to the backbone infrastructure, Golf Course improvements, lakes, or other improvements within the SilverRock Resort Area caused by Developer's construction activities. (d) Reconnecting the existing water and sewer lines that serve the comfort station (i.e. the restroom facilities) located on the Boutique Hotel Parcel from the Golf Course to Developer's water and sewer lines located in the adjacent private street. In connection therewith, the parties shall determine the costs of the water and sewer service provided to the comfort station. (e) Relocating any above- and/or below -ground utility on any of the Parcels Developer acquires a fee or leasehold interest in hereunder or on real property adjacent to such Parcels if such relocation becomes necessary in the future. (f) Constructing and installing on the Parcels Developer acquires a fee or leasehold interest in hereunder water and sewer laterals and/or loops. (g) Installing and paying electricity costs for all on -site lighting needs. In performing any of the installations and other work described in this Section 312, Developer shall comply with all applicable ordinances, statutes, laws, regulations, and requirements, including, without limitation, the requirement to obtain encroachment permits and pay for City inspections. 882/015610-0084 'oo„ •j 1063073 06 a07/01/10 -39- i In addition to the foregoing, Developer hereby acknowledges and agrees that no alterations shall be permitted to the roadway and/or sewer alignment in the SilverRock Resort Area once the City submits its first plan review to the Coachella Valley Water District. In the event any such alterations are unavoidable, Developer acknowledges that City cannot guarantee that the altered connections will be available to Developer at the time the Boutique Hotel is completed and opened. 313. Pipeline Across Boutique Hotel Parcel. The Agency has installed a pipeline across portions of the Boutique Hotel Parcel (the "Boutique Hotel Parcel Pipeline"). The Parcel Map depicts the location of the easement required for the City to access, maintain, and repair the Boutique Hotel Parcel Pipeline (the "Boutique Hotel Parcel Easement"). Developer hereby acknowledges that Agency's conveyance of the Boutique Hotel Parcel shall be subject to the Boutique Hotel Parcel Easement. Developer shall use commercially reasonable efforts to design the Boutique Hotel around the Boutique Hotel Parcel Easement so as not to cause a reduction in the Unit count; provided, however, that if Developer is unable to do so, Developer may, at its sole cost and at no cost to the City or Agency, subject to the last sentence in this Section 313, relocate the Boutique Hotel Parcel Pipeline to a location and in a manner acceptable to the City Engineer and Community Development Director, in each of their reasonable discretion, in accordance with all City standards and requirements for such relocation. Any such relocation shall be fully performed during the summer or late spring, when play at the Golf Course is at a minimum. Once Developer has completed the relocation of the Boutique Hotel Parcel Pipeline, as determined by the City Engineer and Community Development Director, Developer shall convey to the City an easement to access, maintain, and repair the relocated Boutique Hotel Parcel Pipeline. The Purchase Price for the Boutique Hotel Parcel shall be reduced by the amount incurred by Developer to relocate the Boutique Hotel Parcel Pipeline; provided, however, that the maximum price reduction for the Boutique Hotel Parcel shall be Fifty Thousand Dollars ($50,000), even if the actual cost incurred by Developer to relocate the Boutique Hotel Parcel Pipeline exceeds such amount. 314. Installation of Cellular Antennas. Developer shall permit the installation of cellular antennas on the roofs of the structures that comprise the Project. Each such installation shall be made pursuant to a lease agreement to be entered into between Developer and the owner of the antenna(s), which provides for a reasonable lease payment to Developer, and requires that the antenna(s) be flat mounted or otherwise designed in a manner that is architecturally compatible with the underlying structure. Developer may determine the location of any such antenna(s), provided the location does not interfere with the signal strength or other operability criteria of the antenna(s). 400. DEVELOPMENT AGREEMENT; RESORT RETAIL VILLAGE PARCEL GROUND LEASE The City of La Quinta and Developer have entered into the Development Agreement. In the event Agency elects, in Agency's sole and absolute discretion, to convey the Resort Retail Village Parcel to City, the parties contemplate that City will enter into with Developer the Resort Retail Village Parcel Ground Lease, pursuant to which City will subsequently lease to Developer such Parcel. In the event Agency elects, in Agency's sole and absolute discretion, to retain the fee interest in and to such Parcel, Developer and Agency contemplate entering into the Resort 882/01561M084 . 1 090, 1063073 06 a07/01110 -40- Retail Village Parcel Ground Lease, and Agency contemplates assigning its interests in said lease to City. As set forth herein, in the Development Agreement, and in the Resort Retail Village Parcel Ground Lease (if applicable), Developer shall be required to construct and operate on the Resort Retail Village Parcel the Resort Retail Village Development. Any default of Developer under the Resort Retail Village Parcel Ground Lease or under the Development Agreement which has not been cured within the applicable cure period shall be deemed a Default hereunder, and shall give rise to all of Agency's remedies set forth herein. Notwithstanding anything herein to the contrary, the Resort Retail Village Parcel Ground Lease, if entered, shall have the following terms: 401. Tenn. The term of the Resort Retail Village Parcel Ground Lease shall be fifty- five (55) years. 402. Rent. Rental payments for the Resort Retail Village Parcel shall be eight percent (8%) of the Purchase Price (with the Purchase Price determined according to the appraisal process described in Section 201 hereof), increasing by two percent (2%) per year. Every fifth (5th) year during the term of the Resort Retail Village Parcel Ground Lease, the Resort Retail Village Parcel shall be reappraised, pursuant to the process described in Section 201 hereof, and the leasehold payments shall be adjusted, based on such reappraisal, such that the leasehold payments shall be eight percent (8%) of the then -fair market value of the Resort Retail Village Parcel, with all improvements existing on such Parcel as of the date of such reappraisal being taken into account in the valuation. 403. No Assignment. The Developer may not assign its interest in the Resort Retail Village Parcel Ground Lease until the Agency issues a Release of Construction Covenants for the Resort Retail Village Development. 404. Permitted Uses. The Developer shall use the Resort Retail Village Parcel only for the uses and purposes permitted pursuant to the Specific Plan and pursuant to any applicable Site Development Permit. 500. USE AND OPERATION OF THE PROPERTY 501. Operation of the Project. Developer shall enter into the necessary agreements to ensure that 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 Development Parcel all in accordance with the requirements of this Section 501. Notwithstanding anything herein to the contrary and with the one limited exception outlined in this paragraph, until the Management Transfer Release Date for each Phase of Development that includes Units, DHR or a successor entity authorized pursuant to Section 703.2 (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 Units to be developed on the Ranch Development Parcel shall also be the Authorized Manager for the hotel and Units to be developed on the Boutique Hotel Parcel, 882Jo15610-0084 -41- 0 91 1063073.06 ao7/01/10 regardless of whether the Boutique Hotel Parcel is subsequently subdivided into two or more Parcels. In the event that, consistent with the terms of this Agreement, some or all of the Fractional Units are developed as a residence club, in which memberships are sold to third parties giving such parties the right to use and occupy the Fractional Unit for certain periods of time, or as a timeshare program, Developer anticipates the residence club and timeshare program will be operated and managed by DHR. Developer shall obtain Agency's prior written approval, which approval shall not be unreasonably conditioned, withheld, or delayed, of any operator other than DHR that Developer proposes to operate and manage said residence club and/or timeshare program, and in no event shall more than one operator operate and manage said residence club and/or timeshare program, regardless of whether the Fractional Units in the residence club and/or timeshare program are located on more than one Parcel. Further, in no event will there be more than three operators operating and managing all of the Units in the Project. In connection with Developer's request for Agency's approval, Developer shall submit a proposed management plan that describes the residence club and/or timeshare program, including the operational and managerial obligations of the proposed operator, and that details how such operation and management will be effected in order to maintain the Fractional Units at a Four Star Quality and to ensure such Fractional Units remain and appear to remain affiliated with the other hotel portions of the Project. 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 (20th) anniversary of the date the Agency issues a Release of Construction Covenants for such Phase of Development. No more than once per year after completion of any of the Phases of Development that include Units, the Agency 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 Phase of Development (the "Phase of Development Owner") shall reimburse the Agency 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, the Phase of Development Owner shall have a period of sixty (60) days from the date the Agency provides the Phase of Development Owner with the Performance Audit to correct a sufficient number of the deficiencies noted therein so that the Phase of Development meets at least ninety-five percent (95%) of the applicable detailed Four Star Quality characteristics. If, at the expiration of said sixty (60) day period, a sufficient number of the deficiencies have not been corrected so that the Phase of Development still does not meet at least ninety-five percent (95%) of the applicable detailed Four Star Quality characteristics, the Phase of Development Owner shall pay to the Agency liquidated damages for each day after said sixtieth (60`h) day that passes until sufficient items noted in the Performance Audit have been corrected, as determined by the Performance Consultant, in the following amounts: (i) if the Phase of Development is operating such that eighty percent (80%) or more but less than ninety-five percent (95%) of the applicable detailed Four Star Quality characteristics are met, the Phase of Development Owner shall pay to the Agency the sum of Five Hundred Dollars ($500) per day (the "Less Than 95% Performance Default Amount") until the day as of which the Phase of Development meets at least ninety-five percent (95%) of the applicable detailed Four Star Quality characteristics; or (ii) if the Phase of Development is operating such that less than eighty percent (80%) of the applicable detailed Four Star Quality characteristics are met, the Phase of Development Owner shall pay to the 106 0 73 06 aO7/ —42— '�o. ) 092 1063073.06 a07/OI/10 Agency the sum of One Thousand Dollars ($1,000) per day (the "Less Than 80% Performance Default Amount") until the day as of which the Phase of Development meets at least eighty percent (80%) of the applicable detailed Four Star Quality characteristics; provided, however, that if on the day the Phase of Development meets at least eighty percent (80%) of the applicable detailed Four Star Quality characteristics the Phase of Development does not meet at least ninety-five percent (95%) of the applicable detailed Four Star Quality characteristics, then the Phase of Development Owner shall be required to pay the City the Less Than 95% Performance Default Amount, pursuant to clause (i) above, for each day until the day as of which the Phase of Development meets at least ninety-five percent (95%) of the applicable detailed Four Star Quality characteristics. All of the costs and fees charged by the Performance Consultant for any follow-up inspections shall be paid by the Phase of Development Owner. 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, AGENCY AND DEVELOPER AGREE THAT AGENCY WILL INCUR DAMAGES BY REASON OF SUCH DEFAULT BY DEVELOPER OR DEVELOPER'S SUCCESSOR IN INTEREST, WHICH DAMAGES SHALL BE IMPRACTICAL AND EXTREMELY DIFFICULT, IF NOT IMPOSSIBLE, TO ASCERTAIN. AGENCY AND DEVELOPER, IN A REASONABLE EFFORT TO ASCERTAIN WHAT AGENCY'S DAMAGES WOULD BE IN THE EVENT OF SUCH DEFAULT BY DEVELOPER OR DEVELOPER'S SUCCESSOR IN INTEREST, 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 AGENCY THAT REASONABLY COULD BE ANTICIPATED, AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR INCONVENIENT, THE LESS THAN 80% PERFORMANCE DEFAULT AMOUNT OR THE LESS THAN 95% PERFORMANCE DEFAULT AMOUNT (AS APPLICABLE) SHALL BE DEEMED TO CONSTITUTE A REASONABLE ESTIMATE OF AGENCY'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 OR DEVELOPER'S SUCCESSOR IN INTEREST, THE PHASE OF DEVELOPMENT OWNER SHALL BE REQUIRED TO PAY TO AGENCY THE LESS THAN 80% PERFORMANCE DEFAULT AMOUNT OR THE LESS THEN 95% PERFORMANCE DEFAULT AMOUNT (AS APPLICABLE) AS LIQUIDATED DAMAGES AND AS AGENCY'S SOLE DAMAGE REMEDY AGAINST THE PHASE OF DEVELOPMENT OWNER FOR A DEFAULT UNDER THIS SECTION 501; PROVIDED, HOWEVER, THAT AGENCY RETAINS AND RESERVES THE RIGHT TO EXERCISE ANY OTHER EQUITABLE REMEDY AVAILABLE TO AGENCY HEREUNDER, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO BRING AN ACTION FOR SPECIFIC PERFORMANCE (BUT NOT THE RIGHT TO SEEK ANY 182/015610-0084 093 n 706307306 a07/01/10 - - NO_' DAMAGES). AGENCY AND DEVELOPER SPECIFICALLY ACKNOWLEDGE THIS LIQUIDATED DAMAGES PROVISION BY THEIR SIGNATURES BELOW: AGENCY DEVELOPER Agency and Developer acknowledge and agree that the liquidated damages provision in this Section 501, in Section 1.2 of the applicable City Declaration of CC&Rs, and in Section 3.1 of the Development Agreement, are designed to be a single obligation of the Phase of Development Owner pursuant to this Section 501, Section 1.2 of the applicable City Declaration of CC&Rs, and Section 3.1 of the Development Agreement, and that either payment to Agency, under this Section 501, or payment to the City under Section 1.2 of the applicable City Declaration of CC&Rs or under Section 3.1 of the Development Agreement, shall satisfy the obligation of payment of the liquidated damages under this Section 501, under Section 1.2 of the applicable City Declaration of CC&Rs, and under Section 3.1 of the Development Agreement. 502. Use in Accordance with Redevelopment Plan. 502.1 The Developer covenants and agrees for itself, its successors, assigns, and every successor in interest to the Property or any part thereof, that upon the Developer's acquisition of the Property and during construction and operation of the Project, and thereafter, the Developer shall devote the Property to the uses specified in the Redevelopment Plan and this Agreement for the term of the land use controls of the Redevelopment Plan. 502.2 All uses conducted on the Property, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to the Redevelopment Plan and all applicable provisions of the City Municipal Code. The foregoing covenants shall run with the land until the expiration of the land use controls of the Redevelopment Plan. 503. Maintenance Covenants. The Developer shall maintain the Property and all improvements thereon, including all landscaping, in a first class condition, and in compliance with the terms of the Redevelopment Plan, and all applicable provisions of the City Municipal Code. 504. Nondiscrimination. 504.1 Nondiscrimination Covenants. Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person, or group of persons on any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any part thereof, nor shall Developer, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property, or any part thereof. The foregoing covenants shall run with the land. 882/015610-0084 _44_ 094 1063073 06 a07/01/10 �10, . 504.2 Nondiscrimination Clauses in Agreements. Developer agrees for itself and any successor in interest that Developer shall refrain from restricting the rental, sale, or lease of any portion of the Property, or contracts relating to the Property, on the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In contracts pertaining to the realty: "There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises which are the subject of this agreement, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." The covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, the City and any successor in interest to the Property, together with any 882/015610-0084 •10• 095 1063073.06 e07/01TO -45- property acquired by the Developer pursuant to this Agreement, or any part thereof. The covenants against discrimination shall remain in effect in perpetuity. 505. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction. The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Property or the Project Area. The Agency shall have the right, if this Agreement or the covenants herein are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches and to avail itself of the rights granted herein to which it may be entitled, except as may be otherwise set forth in this Agreement. The covenants contained in this Agreement shall not benefit or be enforceable by any owner of any other real property within or outside the Project Area, or any person or entity having an interest in such other real property. The covenants contained in this Agreement shall remain in effect for the periods described herein, specifically including, without limitation, the following: (a) The environmental covenants set forth in Sections 207.3, 207.4, and 207.5 shall remain in effect in perpetuity. (b) The covenants pertaining to use of the Property which are set forth in Section 502 shall remain in effect until the expiration of the land use controls of the Redevelopment Plan. (c) The covenants pertaining to maintenance of the Property, and all improvements thereon, as set forth in Section 503, shall remain in effect until the expiration of the land use controls of the Redevelopment Plan. (d) The covenants against discrimination, as set forth in Section 504, shall remain in effect in perpetuity. (e) The indemnity obligations, as set forth in Section 307 hereof, shall remain in effect for the time period set forth in Section 307. (f) The indemnity obligations, as set forth in Section 207.5 and in Section 307.1 hereof, shall remain in effect in perpetuity. 506. Representations and Warranties 506.1 Agency Representations. Agency represents and warrants to Developer as follows (a) Authority. Agency is a public body, corporate and politic, existing pursuant to the California Community Redevelopment Law (California Health and Safety Code Section 33000), which has been authorized to transact business pursuant to action of the City. Agency has full right, power and lawful authority to acquire, grant, sell and convey the Property as provided herein, and the execution, performance and delivery of this Agreement by Agency has been fully authorized by all requisite actions on the part of Agency. 882/015610-0084 1063073 06 a07/01/10 -46 ,�o • 096 96 (b) FIRPTA. Agency is not a "foreign person" within the parameters of FIRPTA or any similar state statute, or is exempt from the provisions of FIRPTA or any similar state statute, or has complied and will comply with all the requirements under FIRPTA or any similar state statute. (c) No Conflict. To the Agency's best knowledge, Agency's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Agency is a party or by which it is bound. (d) Conformance with Redevelopment Plan. The development and use of the Project as required hereunder is in conformance with the Redevelopment Plan. Until the Closing for any of the Parcels, Agency shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 506.1 not to be true as of the respective Closing, immediately give written notice of such fact or condition to Developer. Such exception(s) to a representation shall not be deemed a breach by Agency hereunder, but shall constitute an exception which Developer shall have a right to approve or disapprove. If Developer elects to close the applicable Escrow following disclosure of such information, Agency's representations and warranties contained herein shall be deemed to have been made as of the applicable Closing, subject to such exception(s). If, following the disclosure of such information, Developer elects to not close the applicable Escrow, then this Agreement as to the applicable Escrow shall automatically terminate, any then-undisbursed Remaining Received Deposit Payment Funds and Additional Deposit Payments deposited with Agency by Developer shall be paid to Developer, and neither party shall have any further rights, obligations or liabilities hereunder; provided, however, that in the event the Initial Escrow closes, a failure to close any subsequent Escrow shall not terminate this Agreement. In the event the Initial Escrow fails to close, this Agreement shall automatically terminate and neither party shall have any further rights or obligations hereunder, except that both parties agree to take whatever actions are reasonably necessary to terminate any other agreements that may have been executed in furtherance hereof. The representations and warranties set forth in this Section 506.1 shall survive each of the real estate Closings provided for herein. 506.2 Developer's Representations. Developer represents and warrants to Agency as follows: (a) Authority. Developer is a duly organized limited liability company formed within and in good standing under the laws of the State of Delaware. Developer has full right, power and lawful authority to purchase and accept the conveyance of each of the Parcels, and to undertake all obligations as provided herein and the execution, performance and delivery of this Agreement by Developer has been fully authorized by all requisite actions on the part of the Developer. (b) Experience. The Developer is experienced in the development of the type of commercial projects which would satisfy the development requirements set forth herein. 882/0156IM084 .'• .. ^ 097 1063073 06 a07/01 /10 -47- (c) No Conflict. To the best of Developer's knowledge, Developer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which the Developer is a party or by which it is bound. (d) No Developer Bankruptcy. Developer is not the subject of a current or pending bankruptcy proceeding. Until the Closing for any of the Parcels, Developer shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 506.2 not to be true as of the respective Closing, immediately give written notice of such fact or condition to Agency. Such exception(s) to a representation shall not be deemed a breach by Developer hereunder, but shall constitute an exception which Agency shall have a right to approve or disapprove. If Agency elects to close the applicable Escrow following disclosure of such information, Developer's representations and warranties contained herein shall be deemed to have been made as of the applicable Closing, subject to such exception(s). If, following the disclosure of such information, Agency elects to not close the applicable Escrow, then this Agreement as to the applicable Escrow shall automatically terminate, and neither party shall have any further rights, obligations or liabilities hereunder; provided, however, that in the event the Initial Escrow closes, a failure to close any subsequent Escrow shall not terminate this Agreement. In the event the Initial Escrow fails to close, this Agreement shall automatically terminate and neither party shall have any further rights or obligations hereunder, except that both parties agree to take whatever actions are reasonably required to terminate any other agreements that may have been executed in furtherance hereof. The representations and warranties set forth in this Section 506.2 shall survive each of the real estate closings provided for herein. 600. DEFAULTS AND REMEDIES 601. Default Remedies. Subject to the extensions of time set forth in Section 702 of this Agreement, failure by either party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A party claiming a Default shall give written notice of Default to the other party specifying the Default complained of. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other party shall not be in Default if such party cures such default within thirty (30) days from receipt of such notice, or if the nature of such default is that it cannot reasonably be expected to be cured within such thirty (30) day period, if such party, with due diligence, commences to cure, correct or remedy such failure or delay within thirty (30) days from receipt of such notice, and completes such cure, correction or remedy with diligence. 602. Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, either party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, or to obtain any other remedy consistent with the purpose of this Agreement. Agency shall also have the right to pursue damages for Developer's defaults. Notwithstanding the foregoing, however, in no event shall the Developer be entitled to damages 882/015610-0084 _48_ "1 .. , 098 1063073 06 a07/01/10 of any kind from Agency, including damages for economic loss, lost profits, or any other losses or consequential damages of any kind. Such legal actions must be instituted in the Superior Court of the County of Riverside, State of California, or in the District of the United States District Court in which such county is located. 603. Termination Prior to the Close of the Initial Escrow. 603.1 Termination by Develo er. In the event that prior to the close of the Initial Escrow (a) one or more of the Developer's Conditions Precedent to the Closing for the Initial Escrow is not fulfilled on or before the time set forth in the Schedule of Performance and such failure is not caused by Developer, or (b) any default of the Agency under this Agreement prior to the close of the Initial Escrow is not cured within the time set forth in Section 601 hereof, after written demand by Developer, then this Agreement may, at the option of Developer, be terminated by written Notice thereof to the Agency. From the date of the written Notice of termination of this Agreement by Developer to the Agency and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties with respect to the Property, or any portion thereof, by virtue of or with respect to this Agreement. Upon termination (i) made in strict accordance with the provisions of Section 206.1. Section 207.2, or Section 207.6, (ii) as a result of clause (b) above, or (iii) as a result of Developer's failure to obtain City's approval of plans that are consistent with this Agreement and with the Specific Plan, after diligent efforts by Developer to so obtain, any then-undisbursed and unreleased Remaining Received Deposit Payment Funds, including, without limitation, any Phase 1 Portion of the Remaining Received Deposit Payment Funds, and any Additional Deposit Payments, deposited by Developer and held by the Agency shall be paid to Developer. 603.2 Termination by Agency. (a) In the event that prior to the close of the Initial Escrow (a) the Developer (or any successor in interest) assigns this Agreement or any rights herein or in any of the Parcels in violation of this Agreement, or assigns the Development Agreement or any rights therein; or (b) one or more of the Agency's Conditions Precedent to the Closing is not fulfilled on or before the Outside Date for Closing (as it may be extended) and such failure is not caused by the Agency; or (c) the Agency Board determines, in its sole and absolute discretion, in closed session held prior to December 31, 2012, that the most recent Progress Report and/or Quarterly Report fails to demonstrate that the Developer has made sufficient progress during the period covered by the applicable report; or (d) any hotel or resort that is located in Southern California and is owned by any of Developer or Lowe Enterprises, or any corporation, limited liability company, or other entity in which Developer or Lowe Enterprises owns a majority interest, including, without limitation, Estancia, Auberge, Miramonte, or Terranea, is sold at a foreclosure sale, or a lender or other entity acquires the deed to such real property in lieu of foreclosure; or (e) the Developer is otherwise in default of this Agreement and fails to cure such default within the time set forth in Section 601 hereof, after written demand by the Agency; or (f) Developer or Lowe Enterprises is the subject of a bankruptcy proceeding, whether voluntarily or involuntarily commenced, then this Agreement shall, at the option of the Agency, be terminated by the Agency by written Notice thereof to Developer. From the date of the written Notice of termination of this Agreement by the Agency to Developer and thereafter this Agreement shall 882/015610-0084 1063073.06 a07/01/10 - -49- o. �. 099 be deemed terminated and there shall be no further rights or obligations between the parties, except that Agency shall be entitled to retain all then-undisbursed and unreleased Remaining Received Deposit Payment Funds, including, without limitation, any Phase 1 Portion of the Remaining Received Deposit Payment Funds, and any Additional Deposit Payments, deposited by Developer and held by the Agency, and shall have any and all rights available to the Agency as set forth in Section 605. Section 606, and Section 607 hereof. (b) In the event that prior to the close of the Initial Escrow and during the period commencing on January 1, 2011 and ending on December 31, 2011, the Agency receives a bona fide offer from a person or entity to purchase and develop the Boutique Hotel Parcel in a manner consistent with the Specific Plan, either as a stand-alone transaction or in connection with the purchase of one or more of the other Parcels (either of the foregoing, a "Third Party Offer"), then the Agency may terminate this Agreement in accordance with the terms of this paragraph. Within thirty (45) days after receiving a Third Party Offer that Agency desires to accept, Agency shall provide Developer with written Notice of the price, proposed use, and development timeframe set forth in the Third Party Offer ("Agency's Third Party Offer Notice"). Developer shall have sixty (60) days after receiving Agency's Third Party Offer Notice to notify Agency, in writing, of Developer's agreement to purchase and develop the Boutique Hotel Parcel, and any other Parcel(s) included in the Third Party Offer, on the same terms, including price, proposed use, and development timeframe, as set forth in the Third Party Offer ("Developer's Notice to Match Terms"). If Developer timely delivers Developer's Notice to Match Terms, the parties shall endeavor to negotiate the terms of an amendment to this Agreement (a "DDA Amendment") that revises the terms of this Agreement to reflect the terms of the Third Party Offer. In the event the parties are unable to reasonably agree to the terms of a DDA Amendment within ninety (90) days after Developer delivers to Agency Developer's Notice to Match Terms, then Agency shall have the right to terminate this Agreement by providing written Notice thereof to Developer. If Developer fails to deliver to Agency Developer's Notice to Match Terms within the sixty (60) day period after Agency provides to Developer Agency's Third Party Offer Notice, Agency shall have the right to terminate this Agreement by providing written Notice thereof to Developer. If this Agreement is terminated pursuant to this paragraph, Developer shall be entitled to delivery of all then-undisbursed and unreleased Remaining Received Deposit Payment Funds, including, without limitation, any Phase 1 Portion of the Remaining Received Deposit Payment Funds, and any Additional Deposit Payments, deposited by Developer and held by the Agency. 604. Termination Prior to Subsequent Parcel Conveyance. 604.1 Termination by the Developer. In the event that, after the close of the Initial Escrow but prior to the close of any subsequent Escrow (a) one or more of the Developer's Conditions Precedent to the Closing for the applicable Escrow is not fulfilled on or before the time set forth in the Schedule of Performance and such failure is not caused by the Developer, or (b) any default of the Agency under this Agreement prior to the Closing is not cured within the time set forth in Section 601 hereof, after written demand by the Developer, then this Agreement with respect to that Escrow and all contemplated subsequent Escrows (if any) may, at the option of the Developer, be terminated by written Notice thereof to the Agency. From the date of the written Notice of termination of this Agreement by the Developer to the Agency, this Agreement shall be deemed terminated with respect to such 882/015610-0084 -50- 1063073 06 a07/01 /10 100 Escrow and there shall be no further rights or obligations between the parties with respect to said Parcel(s) by virtue of or with respect to this Agreement. Upon termination (i) made in strict accordance with the provisions of Section 207.6, (ii) as a result of clause (b) above, or (iii) as a result of Developer's failure to obtain City's approval of plans that are consistent with this Agreement and with the Specific Plan, after diligent efforts by Developer to so obtain, any then-undisbursed and umeleased Remaining Received Deposit Payment Funds, including, without limitation, any Phase 1 Portion of the Remaining Received Deposit Payment Funds, and any Additional Deposit Payments, deposited by Developer and held by the Agency shall be paid to Developer. 604.2 Termination by the Agency. In the event that, after the close of the Initial Escrow but prior to the close of any subsequent Escrow (a) the Developer (or any successor in interest) assigns this Agreement or any rights herein or in the applicable Parcel(s) in violation of this Agreement, or assigns the Development Agreement or any rights therein; or (b) one or more of the Agency's Conditions Precedent to the Closing for the applicable Escrow is not fulfilled on or before the applicable Outside Date for Closing (as it may be extended) and such failure is not caused by the Agency; or (c) the Agency Board determines, in closed session held prior to December 31, 2012, that the most recent Progress Report and/or Quarterly Report fails to demonstrate that the Developer has made sufficient progress during the period covered by the applicable report; or (d) any hotel or resort that is located in Southern California and is owned by any of Developer or Lowe Enterprises, or any corporation, limited liability company, or other entity in which Developer or Lowe Enterprises owns a majority interest, including, without limitation, Estancia, Auberge, Miramonte, or Terranea, is sold at a foreclosure sale or a lender or other entity acquires the deed to such real property in lieu of foreclosure; or (e) is otherwise in default of this Agreement and fails to cure such default within the time set forth in Section 601 hereof, after written demand by the Agency; or (f) either Developer or Lowe Enterprises is the subject of a bankruptcy proceeding, whether voluntarily or involuntarily commenced, then this Agreement with respect to that Escrow and all contemplated subsequent Escrows (if any) shall, at the option of the Agency, be terminated by the Agency by written Notice thereof to Developer. From the date of the written Notice of termination of this Agreement by the Agency to Developer, this Agreement with respect to such Escrow(s) shall be deemed terminated and there shall be no further rights or obligations between the parties with respect to said Parcel(s) by virtue of or with respect to this Agreement. 605. Agency Option to Acquire Plans. If, at any time after the close of the Initial Escrow this Agreement is terminated by the Agency as a result of a default by the Developer, at the option of the Agency and without any additional consideration, which option may be exercised in the Agency's sole and absolute discretion, the Developer shall deliver to the Agency an executed assignment in a form reasonably acceptable to the Agency of the Developer's right to use all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to the construction of the Project on the Property (the "Plans"), together with copies of all of the Plans, as have been prepared for the development of the Project to date of the termination. Notwithstanding the foregoing, however, Developer does not covenant to convey to the Agency the copyright or other ownership rights of third parties. Agency understands and agrees that the assignment to Agency under this Section 106017306 a078/01/10 -51 °0-'/ 101 605 is subject and subordinate to any assignment which Developer may make to a lender providing financing for the project, and Agency agrees to execute any documents required by such lender acknowledging and effectuating such subordination of Agency's rights in and to the assignment. Agency's acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall assume all risks in the use of the Plans. 606. Option Agreement. In addition to any other rights and remedies available to Agency hereunder, Agency shall be entitled, in its sole and absolute discretion, to repurchase the Property, or any Parcel, with all of the improvements thereon, from Developer in the event that, (i) Developer fails to commence construction of a Phase of Development within certain specified timeframes, (ii) after commencement of construction, Developer fails to continuously proceed with, and complete, construction of a Phase of Development within certain specified timeframes, or (iii) Developer transfers or suffers an involuntary transfer of the Property, or a portion thereof, in violation of the terms hereof. Said repurchase rights shall be as set forth in an option agreement to be recorded at each Closing, against the applicable Parcel. The forms of the Option Agreement are attached hereto and incorporated herein as Attachment No.5 ("Option Agreement"). Only the form of Option Agreement applicable to the subject Parcel shall be recorded at the Closing for such Parcel. 607. Right to Reverter and Power of Termination. In addition to any other rights and remedies available to Agency hereunder, Agency shall be entitled, in its sole and absolute discretion, to reenter and take possession of the Property, or any Parcel, subject to all liens and other matters of record, with all of the improvements thereon, from Developer in the event that (i) Developer fails to commence construction of a Phase of Development within certain specified timeframes, (ii) after commencement of construction, Developer fails to continuously proceed with and complete, construction of the Phase of Development within certain, specified timeframes, or (iii) Developer transfers or suffers an involuntary transfer of the Property, or a portion thereof, in violation of the terms hereof. Said rights shall be as set forth in each Grant Deed pursuant to which Agency shall convey a Parcel to Developer. 608. Acceptance of Service of Process. In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director of the Agency or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service upon any officer of the Developer, whether made within or outside the State of California, or in such other manner as may be provided by law. 609. Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 610. Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any 882/015610-0084 -52- •��^ 1 0 1063073.06 a07/01/10 Default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 611. Applicable Law. The internal laws of the State of California shall govern the interpretation and enforcement of this Agreement, without regard to conflict of law principles. 612. Non -Liability of Officials and Employees of the Agency. No member, official or employee of the Agency or the City shall be personally liable to the Developer, or any successor in interest, in the event of any Default or breach by the Agency (or the City) or for any amount which may become due to the Developer or its successors, or on any obligations under the terms of this Agreement. 613. Attorneys' Fees. In any action between the parties to interpret, enforce, reform, modify, rescind, or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled, in addition to damages, injunctive relief, or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs, reasonable attorneys' fees and expert witness fees. 700. GENERAL PROVISIONS 701. Notices Demands and Communications Between the Parties. Any approval, disapproval, demand, document or other notice ("Notice") which either party may desire to give to the other party under this Agreement must be in writing and may be given by any commercially acceptable means to the party to whom the Notice is directed at the address of the party as set forth below, or at any other address as that party may later designate by Notice. To Agency: Notices Delivered by U.S. Mail: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, CA 92247 Phone No.: 760-777-7031 Facsimile No.: 760-777-7101 Attention: Assistant Executive Director Notices Delivered Personally or by Courier: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Phone No.: 760-777-7031 Facsimile No.: 760-777-7101 Attention: Assistant Executive Director 882/015610-0084 •• 103 1063073 06 a07/01/10 -53- With a copy to: Rutan & Tucker, LLP 611 Anton, Suite 1400 P.O. Box 1950 Costa Mesa, California 92628 Phone No.: 714-641-5100 Facsimile No.: 714-546-9035 Attention: M. Katherine Jenson, Esq. To Developer: LDD SilverRock, LLC 74-001 Reserve Drive Indian Wells, California 92210 Phone No.: 760-674-2200 Facsimile No.: 760-779-1469 Attention: Theodore R. Lennon, Jr. With a copy to: Manatt, Phelps & Phillips, LLP 11355 W. Olympic Boulevard Los Angeles, California 90064 Phone No.: 310-312-4217 Facsimile No.: 310-312-4224 Attention: Timi A. Hallem and to: Lowe Enterprises, Inc. 11777 San Vicente Blvd., Suite 900 Los Angeles, California 90049 Attn: Corporate Counsel Phone No.: 310-820-6661 Facsimile No.: 310-820-8131 Any written notice, demand or communication shall be deemed received upon delivery if delivered by hand, including by reputable delivery service providing a receipt with the date and time of delivery, and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 702. Enforced Delay' Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to causes beyond the control or without the fault of the party claiming an extension of time to perform, which may include the following: war; insurrection; acts of terrorism; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; or acts or failures to act of the City or any other 882/015610-0084 ' 104 1063073 06 a07/01/10 -54- public or governmental agency or entity (other than the acts or failures to act of the Agency which shall not excuse performance by the Agency), including, without limitation, activities of the CV WC that adversely affects playability of the Golf Course or physically interferes with the Developer's ability to develop portions of the Project other than the Boutique Hotel or Ranch Development. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall only be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Agency and Developer. Notwithstanding any provision of this Agreement to the contrary, Developer is not entitled pursuant to this Section 702 to an extension of time to perform because of past, present or future difficulty in obtaining suitable construction or permanent financing to commence or complete the Project or any Phase of Development or because of economic or market conditions. The Executive Director shall have the authority to grant extensions to the Developer's times to perform hereunder, provided that (i) the cumulative amount of such extensions shall not exceed six (6) months; and (ii) Developer provides "Evidence of Continued Low Occupancy in the Coachella Valley" (as that term is defined below) to the Executive Director. Notwithstanding the foregoing, the Executive Director may only approve an extension to the deadline for submitting to the Agency and obtaining the Agency's approval of the Letter of Commitment for the Boutique Hotel if Developer provides to the Agency, in addition to Evidence of Continued Low Occupancy in the Coachella Valley, a nonrefundable payment of Fifty Thousand Dollars ($50,000). The Executive Director shall have the authority to approve additional extensions to perform (including, without limitation, additional extensions to the Letter of Commitment for the Boutique Hotel submittal deadline referenced above), of up to six (6) months each, upon the Developer's submittal to the Agency of (a) a nonrefundable payment of Fifty Thousand Dollars ($50,000); and (b) Evidence of Continued Low Occupancy in the Coachella Valley. None of the payments provided by Developer pursuant to this Section 7.02 shall be applicable to the Purchase Price of any Parcel acquired by Developer. As used herein, the term "Evidence of Continued Low Occupancy in the Coachella Valley" shall mean evidence that during the preceding twelve (12) month period, the average occupancy rate at the La Quinta Resort, Esmeralda, Hyatt Grand Champions, Rancho Las Palmas, and Doral resorts, multiplied by the average room rate at those same resorts, was less than $31,938 [which number represents a 50% occupancy rate x $175 per day x 365 days]. 703. Transfers of Interest in Property, 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 Agency. Furthermore, the parties acknowledge that the Agency has negotiated the terms of this Agreement in contemplation of the development and operation of the Project on the Property and the property tax increment and Transient Occupancy Tax revenues to be generated by the operation of the Project on the Property. 703.1 Transfers of Interest in Property or Agreement Prior to Agency's Issuance of a Release of Construction Covenants. Except as provided in this Section 703.1, 882/01561M084 —55— ' 105 1063073,06 a07/01/10�0" ' until the date the Agency issues a Release of Construction Covenants 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 Agency may approve or disapprove a proposed Transfer in its sole and absolute discretion. Notwithstanding the foregoing, Agency 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: (a) The conveyance or dedication of any portion of the Property 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 309 of this Agreement), 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 (i) whose managing member, manager, or managing general partner is (A) Developer or (B) an entity which is at least twenty percent (20%) capitalized by Lowe Enterprises or the senior management of Lowe Enterprises; and (ii) which engages as the project/development manager for the Phase of Development an entity which is at least fifty-one percent (51%) owned and controlled by Lowe Enterprises. (d) The sale by Developer of Condominium Hotel Units to third party buyers. (e) 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. 703.2 Transfers of Operational Obligations. Notwithstanding anything in Section 703.1 to the contrary, commencing on the date the Agency issues a Release of Construction Covenants for each Phase of Development and continuing until the tenth (loth) anniversary thereof (the "Management Transfer Release Date"), (i) subject to the provisions of Section 501 hereof concerning the potential for separate management of Fractional Units in a residence club and/or timeshare program, neither Developer nor DHR (or any permitted 882/015610-0084 -56- 'n , , 106 1063073.06 a07/01 /10 successor in interest) shall make any Transfer of the operational and/or managerial control, including, but not limited to, financial and managerial decision -making, 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 Agency; 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, Agency approval shall not be required for a Management Transfer to any of the entities listed on Attachment No. 12, which is attached hereto and incorporated herein by this reference; provided, however, that if any of the entities on Attachment No. 12 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 Attachment No. 12 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 Attachment No. 12, as outlined below in this Section 703.2. 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 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 Ranch Development Parcel and the Boutique Hotel Parcel, regardless of whether the Boutique Hotel Parcel is subdivided into two or more legal parcels. Agency shall not unreasonably withhold, delay, or condition approval of a proposed Management Transfer to an entity that is not listed on Attachment No. 12, 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 be reasonably requested by the Agency to enable the Agency to review and approve (or disapprove) any proposed operator, and shall reimburse the Agency for the Agency's costs incurred in considering any such request. 703.3 Assignment and Assumption of Obligations. Except for the sale of individual Condominium Hotel Units or Fractional Units, any Transfer (including Transfers not requiring prior Agency approval) by Developer of any interest in the Property or of any interest in this Agreement and all Management Transfers shall require the execution of an assignment and assumption of obligations substantially in the form attached hereto and incorporated herein as Attachment No. 13 (an "Assignment and Assumption Agreement"). Transfers of Developer's rights and/or obligations under this Agreement made without an executed Assignment and Assumption Agreement are null and void. The requirement for the provision to the Agency of an executed Assignment and Assumption Agreement shall apply regardless of whether Agency approval is required for the Transfer. Developer agrees that (a) at least thirty (30) days prior to any Transfer it shall give written notice to Agency of such 882/015610-0084 -57-) 10 7 1063073 06 a07/01 /10 ,M proposed Transfer; and (b) within three (3) business days after any Transfer it shall provide City with a copy of the fully executed Assignment and Assumption Agreement evidencing that the assignee has assumed in writing 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 Agency has received a fully executed Assignment and Assumption Agreement, 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 Agency for any costs (other than staff time) the Agency incurs in reviewing any Assignment and Assumption Agreement required hereunder. 703.4 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon the Developer and its permitted successors and assigns. Whenever the term "Developer" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided, 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. 703.5 Assignment by Agency. The Agency may assign or transfer any of its rights or obligations under this Agreement with the approval of the Developer, which approval shall not be unreasonably withheld; provided, however, that the Agency may assign or transfer any of its interests hereunder to the City or to a joint powers authority in which Agency or the City is a member at any time without the consent of the Developer. 704. Relationship Between Agency and Developer. It is hereby acknowledged that the relationship between the Agency and the Developer is not that of a partnership or joint venture and that the Agency and the Developer shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the Attachments hereto, the Agency shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Project. 705. Agency Approvals and Actions. The Agency shall maintain authority of this Agreement and the authority to implement this Agreement through the Agency Executive Director (or his duly authorized representative). Any reference to the Agency Executive Director herein shall be deemed to include such authorized representative. The Agency Executive Director, or his or her designee, shall have the authority to make approvals, issue interpretations, waive provisions, and/or enter into amendments of this Agreement on behalf of the Agency so long as such actions do not materially or substantially change the uses or development permitted on the Property, or materially or substantially add to the costs incurred or to be incurred by the Agency as specified herein, and such approvals, interpretations, waivers and/or amendments may include extensions of time to perform as specified in the Schedule of Performance. All other material and/or substantial interpretations, waivers, or amendments shall require the consideration, action and written consent of the Agency Board. 706. Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. This Agreement is executed in two (2) originals, each of which is deemed to be an original. 106 0 73,06 a0 / -58- " 1063073 06 a07/01 /10 707. Integration. This Agreement contains the entire understanding between the parties relating to the transaction contemplated by this Agreement, notwithstanding any previous negotiations or agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. This Agreement includes Attachment Nos. 1 through 13, which are incorporated herein. 708. Real Estate Brokerage Commission. The Agency and the Developer each represent and warrant to the other that no broker or finder is entitled to any commission or finder's fee in connection with the Developer's acquisition of the Property from the Agency. The parties agree to defend and hold harmless the other party from any claim to any such commission or fee from any other broker, agent or finder with respect to this Agreement which is payable by such party as a result of the actions of the indemnifying party. 709. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. Reference to section numbers are to sections in this Agreement, unless expressly stated otherwise. 710. Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation". This Agreement shall be interpreted as though prepared jointly by both parties. 711. No Waiver. A waiver by either party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 712. Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party. Developer shall be required to reimburse Agency for all costs Agency incurs in negotiating, preparing, and processing any such alterations, changes, or modifications. In connection with any request for an alteration, change or modification, Developer shall deposit with the Agency the sum of Ten Thousand Dollars ($10,000). Notwithstanding the foregoing, Agency's Executive Director 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, Agency shall notify Developer of the same, and Developer shall deposit with the Agency an additional Five Thousand Dollars ($5,000) to complete processing of the requested alteration, change or modification. Developer shall make additional deposits to Agency, 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, Agency shall reimburse the Developer any unused sums. 882/015610-0084 -59- �pe�J O 1063073,06 a07/01/10 713. Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. 714. Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during the day, that time shall be Pacific Time Zone time. 715. Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 716. Time of Essence. Time is expressly made of the essence with respect to the performance by the Agency and the Developer of each and every obligation and condition of this Agreement. 717. Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. 718. Conflicts of Interest. No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. 719. Time for Acceptance of Agreement by Agency. This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency on or before forty-five (45) days after signing and delivery of this Agreement by the Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. [signatures on next page] 882/015610-0084 *IQ....J 110 1063073.06 a07/01/10 -60- IN WITNESS WHEREOF, the Agency and the Developer have executed this Amended and Restated Disposition and Development Agreement as of the date set forth above. ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP M. Katherine Jenson Agency Counsel AGENCY: LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic AN Executive Director Developer: LDD SILVERROCK, LLC, a Delaware limited liability company Its: 882/015610-0084 ,10'"J - 111 1063073 06 a07/0I/10 -61- ATTACHMENT NO. 1 PROPERTY LEGAL DESCRIPTION Lot Designation Lot 3 Resort Hotel Parcel Lot 4 Black Box Theater Parcel Lot 5 Resort Retail Parcel Lot 11 Golf Casitas Parcel Lot 19 Boutique Hotel Parcel Lot 20 Ranch Development Parcel Lot 23 Lake Casitas Parcel [See following documents for legal descriptions of lots designated above] 106 0 73,06 00 / ATTACHMENT NO. 1 1° 12 1063073.06 a07/OI I10 LOT 3 THAT' PORTION OF TIIFi I?AST HALF SECTION 8, TOWNSHIP 6 SOLI"LI I, RANGE -7 FAST. SAN BERNARDINO MERIDIAN, MORE ACC'URAI FlL IfiSCRIFI ;D AS FOLLOWS: C01�v1MF.NCIN(i AT THE SOLITIIEAST CORNER OF SAID SI-CTION 8; 'Till"N( I NORTH Cl'03'41)" 1V'13ST, ALONG THE. EASTI':RLY I -NV. OF SAIL) SEC'1lON 8 A DI�I AN(E OF 3h12'$ FEET TO AN IN'LFR5V.C'[ION WITH fill' 50U I HF--RLY RiGI-I F-OF-WAY LINEOF 'THE ALI, AMLRIC,AN CANAL ALSO KNOWN AS HIE COACHELLA CrAiJAL; THENCE SOUTH 89"52'48" WEE'1ALONG SAID SOUTHERLY RIGHT-OF-WAY A DISTANCE OF 1988.7� PP,I:T; 'I'EiENCE DFI'ARTING SAID RI(ill P-OF-WAY SOUTH 0"07't2" EAT 123.'%4 UFF:I IO TIfI:'. BFUNNINCi OF A P�3.00 FEET RADIUS CURVE CONCAVE EAS'I'BRI Y; TIIF.NCF'. SOO THE RLY ALONO TIFE AR(' OF SAID CURVL TIFROUGH A ('F.NJRAI. ANOLF, OF 3Y34'49" A DISTANCI' OF 104,06 I�EF:I' VO A PUIN'L OF Ia',VI'J(Sls CURVATURE WI -I'll A 267-(10 FEL-T RADIUS CURVE CONCAVE WFSTERLY; 1113NC'F: SO(7TIIL'R1,Y ALONG THR ARC OF SAID CURVF. 'THROUGH A (J;,NIIRA1. ANGEF: Of' 36`54' 12" A DISTANCE OF 171.9`r PIEFSI' TO A POINT OF RI'?VERSE CURVAIVRE WITH A 333.00 FEET RADIUS CONCAVE EASTERLY; HE.NCF. SOUTHERLY AI,ONG THE ARC OF SAID CURVI-, THROUGH (13N'I'RAL ANGLE OF 8"17'50" A DI`,TANCF OF 48.22. FP TO A POINT OF KF-VE.RSF CURVATURE WITH A 32.00 FEST RADIUS' CURVI•, CONCAVE V4'Ef'fN.RLY; 't'ITF;NCE SOUTIIP.RLY ALONG* 'I'HL ARC OF SAID CURVP. 'LlIROUGTI A CEN"1'RAI. ANGLE OF' 41`06'44" A DISTANCE OF 22.96 FFFI F0 A I'OIN'f OF REVERSI. CURVATURE WITH A 63.00 FEET RADIUS CURVE ( O'N(:AVF FASTERL.Y; THENCE SO(iTFIERLY ALONG '1'1I1" ARC' OF SAID C'I1RVI', THROUGH A C'BNFRAI, AN101.E OF I 2"32'06" A DISI ANCF OF 13.4.73 VF,FT 10 A 1'U1NT OF Rf VERSE (UVVA'IURf; WITH A 32.00 TUFT RADIUS C'URVI: CONCAVE SOU'TIIWLS"I'ERI,Y';'1'Hf NCl: SOILFHL:ISTFRL,Y' Al,ONG TIIP. ARC OF SAID CURVE TLFROUGI I A CI{N'T RAL ANC;LI� OF 43° 1Y49 °� OIS VANC E OF 24.44 FEET TO A POINT OF REVF,RSF CURVATURE WITH A 633,00 FBF.`I RADIUS CIJR,ti°E CONCAVE NORTHEASTERLY; THI':N(:F, SO(I'1'IIEASTLRLY M,ON(; TFI13 ARC OF S;11D (:URVE'I'HROU(Ji A C AN'TRAI. A-\(FLIZ OF 2S"40'?z" A DIS I'ANCP, 01; 316.78 F(.'L;j TO I HF? TRUE POINT OF BEGINNING; TIIENCI. t:'ONTINUFN(.i ALONG- ARC" ( SAID C'UNVI THROUCII A CI NTRAI, AN(jLF' ()F 9"20'38" A DIST.-NNCE OF 103.23 '1'O A P01N'T OF REVERSE CURVATURE WITH A 497.(10 1F}`C RADIUS CURVE, CONC:AVI: SMITH VVLSTERLY , I'FlENCfi SOUTHEAS 1 (RLY ALQNCi TIW ARC OF SAID CUR`dl' -TiIROUCiII A CE'.N'T'RAI. AN(;I,E OI' lfi`58'3C' A DISTAN(IF OL' 147.20 I'I I.I TO A P(`)IN'I TO A POINT OF COMPOUND CURVA'r(,RE WI`I'1[ A 2b7.0{I FIEF l RADIUS (`1)RVE CONCAVE SO[1TH WFSTFRLY; THENCE ALONG II[P. ARC 0L SAID CURVE TFIROUGH A CENTRAL A. (3LF OI 4296150" A DISTANCE OF 1 -iv FF:I:if TO .A POINT OF COMPOUND C'URVAI'HRE WII-IT A 567.00 FEET RADIUS CURVE CONCAVE WF:STFRLY; 'THENCE SOUTFIERI.Y ALONG 'tHi? ARC OF 882/015610-0084 -I- '1e..� 113 1063073.06 a07/01/10 SAID 7 )", I. CH OF I'llROUGH A CENTRAL ANOLF OF 2,'30 A DISTAN NO64TANGEN1 2900 FEET RADIUS Cl-kVE CONCAVE NOR r T I W IF' STF. R L Y HAVING A PADIAL TO WHICH REARS NCH011 84042'41" THENCE. sOurrylIVESTERLY ALONG THE ARC OF SAID (!jjKvE nwoUGH A CENTRAL ,),NlGI..E OF 10736'27 A DIS'lANGE, OF 55.40 FEET 10 A P(jjNj' OF cuRVATURF" W11V A. 61185 FEET RADIUS CURVE C,(-)NCAVF SOU'l](FRLY; WE� ,-uilRoLjGll A CFNTRAL STFRLY At ()N(�; IIJE ARC 011 SAID (IjRVF ANCY U OF 1"I I'lCr !% DISTAN(A? OF 1213 FFE-rj THENCL SOUTH 42'36- WEST 75.54 FFFF TO A poisur ON 1111! ARC OF A NON-I'.,\N'(;F,,NT 53%31 Fill' RADIUS (,,ljRVF CONCAVE: SOLY114FRALY HAVING 'A RAIXALIO WHICH BEARS SOLn'll 2104216" EASTERLY ALONOT'l HE ARC' 01, SAID CURVE THROUGH A CENTRAL ANGLE OF IU"46'06" A DISIANCE OF 7.''3 FFFJ TU A 1q)INrl, OV (jON4pOljND CURVATURI i OF A Nl()N-T,,\N(-;!.,,N'i- 22A0 FEET RADIUS CON -niwHot-ERLY HAVING A RADIAL: TO WHICH BEARSL CAVE', sou, SOU TH 25u52'36"wElVQliFNCL SOIT111 EASTERLY A].,(.)\'(; 11IF—ARE; OF SAID CtjRVF,' 'j'JJROl,j(.;H A CENTRAL AN(TA OF 60017'57 A DISTANCk OF 23.15 FEF77 TO A POINT OF REVERSE cunpauRF, WITH A 93AO FEET RADIUS (.'I)P,VF-. CONCAVE NORTHEASTERLY: IIIPNC'E SoU'lFll--,ASTFRf-Y ALONG THE ARC OF' SAID CI)RVF'I'l-IROLIGH A CENTRALANCiLE OF2-14'177" A DIS'] ANCII OF 3'->.8s FEHv rO A PONT OF REVERSE CHRVATURE WITH A 37JM PER!, RADIUS CliffillF, CONCAVE WESTERLY; THENCE SoUlH[,.RLY ALONG HIE ARC OF SAID CURVE THROIRIFIA CENTRAKANGKOW 51"57'48- A DISFANCF. OF 3306 HAN TO 'A POINT OF REVERSE CURVATURE WITH A 508,010 FFFF RADIUS mizVF, CONCAVE SOUTHEASTERLY: ltll*-.N(,L So-k: H 1WHSTERI.Y ALONG THE ARC OF PAID CURVE THROUGH A CI-,,,-NTRAl, ANGLE OF 76c()()'1I" A I.ASTANCF, OF 23155 PEER IIIENCE S01"ll 8911UP29" WEST 13312 MIJ: T! lHNCF SOUTH 00"0"'00" LAST' 140.01 H.'FT; TFIFN(!F FFFT; TlIFNCE NORI'll. 24"22'35" WEST 2127 nvp rill;NCE NORTH 33'l,iS'4t2'W1.'SI 7,49FEET: 11IFNCENORT11 71'08'05"WFST2696 Fl-JFTOTFIF, ' I3E(-jjNNP,\'(; OF A NON-TANCENT X(M FHHl RADIUS Ci!RVE CONCA WESTERLY. THENCE NORTilERLY AIMN(l '11H! I"(: OF SAID CIANIE I'11ROlj(1ll A cENTRAl. ANGLE OF X'731'26" A DlS'lAN(:F OF 70.2',' FFFT. ,j,j-jFN,cF j\1ORTH 5?1'29'35" \%-'FS 1' 12.72 FF.E'l TO THE 13F,GINNIN(i 0I, A 6T00 RADilic (-jjRV[ CONCAVF SOU' OURL0 THPACF, VIES-1EKLY Al,()NO THF.', ARC OF SAID CjjRVF, '111RC)UGH A CENTRAL ANGLE OF 3900'41" P DISTAIX&CA7 46AD FEET TOA PowrroF REVERSE CURVATURE %VlI-IfA ()000 M;jfr RADII CIJRVE(-'ONCAVE NORTHEASTERLY; 'DIEN(T N(MCHIERI y, ALONG TILE ARC OF SAID Cj1RVI7�'LIjR-0LAA I A C.ENTRAI.. ANCILT", OF 0`20'45" 'S' A DISTANCF, OF (1,14 FITITI; TFH!N(7i,;. NORTH 33'4��-41j" WE I* ?I.Nf) NORTH 33-`48'461, WEST 52,19 F1,TT; '['I (FN0-i NoR'f 1-1 26'00'10" WES I 72.3 . 4 Fl,,ET "I'() THE 131,1.61NNING OF A NONKANGETKI 19600 FEET RADIUS C[,lRVk CONCAVE, FASTERI-,Y HAVING A RADfAl. TO WIIICH BEARS NORTH NORTHERLY AL.0,N(-)' THE ARC OF SAW (ljKVF 64*21'31" EAST; llt"" 'IjjR()UGFI A CENTRAL ANGLE OF KA9'59" A DISI'ANCE OF ISK70 FEE]*; T[FLNCF, NORTH20"I 1'30- EAST 110,45 FEFT TO TFJL 6F-CjINNIN(; OF A 19600 FEET RADIUS (:URVF CONCAVI-WESTFRIN; ThtENCE NORTHERLY Ail"(' SKM0610-0084 1063073 06 a07/0 1 /10 -2- 114 1'H.F. ARC OF SAID CURVE THROUGH A CENTRAL ANGLF, OF 4411WO , A DISTANCE OF 150.97 FEHT TO A POINT OF REVERSE. CURVATUIZF, WITH A 187.00 FFI I' RADIUS CURVE CONCAVE EASTERLY; Ft-IF,NCF, NORTHERLY AI.ON(:;'l'HF. ARC' OF SAID CIiBVfti'I IIR.OL1GIi A (TNTRAI, :W(iI,1? OF 66"04'- A DISTANCE OF 1.50.40 FELT; THFNCF NORTH 22"09'10" EAST 99.0/ FEET TO TIT, RE(lilNNING OF A NON -TANGENT 210.0C FEET RADIUS ('NiRVE, CONCAVE WFSTERLY HAVING A RADIAI. LINE. 'TO WHICII BEARS NORTH 67'51'46" WI7,SI; THENCE NORTHERLY ALONG 'FEW ARC OF SAID CURVE TIIROLIGH A CF>NTRAL ANGLE OF 47"34'55" A DISTANC F OF 174AQ FEET TO A POINT OF REVERSE CURVATURE WITH A 37.00 FEET RADIUS CURVE CONCAVE GASTERLI'; THENCE NOWHIFRLY ALONG "I'{IIi ARC OF SAID CURVE THROUGH A CENTRAL ANGLEOF 50'26'40" A DISI'ANCI� OF 37,.5E FEED TO A POINT OF REVERSE CURVATURE WITH A 82.00 FI?FFf RADIUS CARVE _)NCAVE W'F', FERLY HAVING A RADIALI.IN'E TO WH1C'H BEARS NORTH 64°59'`55" WEs,r; 'r[iLNCP. NORTHERLY ALONG THE ARC OF SAID CJIRVE 1'14ROUCI[I A CEWRAL ANCLE OF 75°09'02" A DISTANCE OF 107.55 1'RIiT; IT-IF.NCE NOR I'li 90^00'00" EAST 428.65 FEF:1 TO THE 'I'R11F.. POINT OF BEGINNING. REFERENCE IS \MADE TO EXHIBIT `A" .ATTACHED HERETO AND MADE A PART HEREOF. CONTAINING: 555,764 SQ.FT. 19.646 ACRES *I No. 4665 mac^- ,.•�_� c ac-,-�: ,..�� .- C� G ;' OITN F. 1'OL (i , f Ii(i] --- I)A%I I'F Ll es ims6lo-oosa 3 �. '' 115 1063073,06.07/01/10 RIVPR.S'11)E COUNTY CALIFORNIA ls;k'TIIRIT "13" LOT 3 TAIL 33W ILL )LUKRIL51N (AN'41, 11 I (� � 'cal I CS71�� ;r•.grr 1r ^ i I ::iJiA1V'f i i QUA � � I 1.IbflYL' [. l i.tJl,U NJ.ro l5T' Ya 1J' R r6N fi/, I I 1 Fai I u:n',cu ezn]" i ]kl S I ti>]nw Nh u. as ro 1 ca ��,J• �; \, r�]9.15`W N9'inl^P' F:- 1 1 fI revrLj i 2, fs � ill E=11JEj.NTATI VLCONSTRUCTION TESTING ENGINEERING33 �61N iIr6 Lwl Uxv+YINp 10 [ t =INCPAPCIT6 i fr_civil III Cr_ 1 Ou:ift '0 ]. fJJ1141$LI fIA'I 882/015610-0084 116 1063073,06.07/01/10 _4_ a (} RIVERSIDE COUNTY C4f F,XIIIBIT 71' LOT 3 _DATA __-- TABLE__ _ 111 SLOUi =0'71 ?(71'lIB1J7, •Y+' :i 7/I t-1 2 GF 2 GO-n87"Ff I IIIINIIIIIIIIIIIIIIIIINIIIIINIIIIIIIIIIIIi1Vll 1 N2,+.: 22''f 57ON P1,N]SEA) TENTATINT �s oren CONSTRITMONTESTING &ENGI?lEPING,IP PARCIU, MAP :3a1ili'/ LOT :l _ 882/015610-0084 _5_ •• ^ 117 1063073.06 a07/01/10 LOT 4 THAT PORTION OFTHE EAST HALF' SIC."PION I'O\VNSHIP 6 SOUTH. RANOF. 7 EAST'. SAN 13F.RNARDINO MERIDIAN, MORP..ACCURAFkI,Y OF.SCI} [BF.1:) AS FOL:I.OWS: COIVIN NCING AT '11-I1: SOUTFIF AST CORNER OF SAID SFC,j*ION R; TIIFM-T NORTH000V49" \VL-ST, AI,O\(i THE EASTERLY LINT. OF SAID SECTION 8 A D15'I'ANCE OF 3812.2S Pvrn- TO AN IN ERSECI'1ON wit'll FlIE SO11T11ERLY RIGHT-OF•WAY LINE OF THE ALL AMERIC'AN CANAL ALSO KNO\VTI AS T'H1" C'OACIIELLA CANAL: 'THENCE SO(,i'T'H 89°52'481' WEST ALONG SAID Si�lf'PI11�:{tl.l' RIOH`I-OF-WAY A DISTANCI OF 19KR.75 FEET; TIIENC'I-, DEPARTING SAID RIGFI1'-OF-WAY SOIJ'i'll 0°p7 I'„ EAST 123.'24 I+F.'T TO TH( FIECIINNING OF rA 183.00 FFET RADIUS CURVE CONCAVfa F-AS'CERLY; TIIEN(i SOUTHERLY ALONG T tIE ARC OF SAII) CORVE'1 FIROUCH A C'ENT'RAL. AN(d F. OI� 32°34'48" A DISTANCE OF 104.06 FF'TT 'hO A POINT OF RI'NFRSI� CURVATURE WITH A 267.00 FEIsT RADII'S CURVE CONCAVE WESTERL); THENCE SOUT'I►I?RLY ALONG THE ARC OF SAID CURVI: THROU 314 A C13NTRAL ANGLE OF 36"54'12" A DISTANCE, OF 171.97 FEET I'(.) THE CSEGI�NNING OF A 333.00 FEET` RADIUS CURVi: CONCAVE WI?S 1 I-RLY; THENCI`, SC?U'IFIGRLN' ALONG'[ IfE ARC OF .SAID CURNETUROUGII A CI: .N'I RAL,ANULF OF 118"1^'50" A I:)1S IANCf OF 4 .2'L I E6'1' 1'O I1iB LiEC,iIANIN6 CIF A 32.00 Ft-'T RADIUS CURVE': CONCAVE W'EST'ERI,Y; THENCE Sf11.11 f1F,RL1' ALONG THE ARC: OI� St11D C'0RV1�: THR.UUC�H A C;CN'I'RA1., ANCJLE C)17 41°{)h'44" A I)IS-GNNCI�. OF 23.L)6 FEF�1' TO A POINT OF RF.VF.RS1; CURVATI.:RL WII'II A (i3.i3O FHP.1' RADIUS CURVF CONCAVE EASTERLY; 1 HENC'I'.5(;)OTllFPLY ALONG 111E ARC O.F; SAID CURVE T'HROIIGH A C`FN FINAL ANGLE OF ID,32T0" A DISTANCL « P 134.73 FEE 1' TO A POINT OF ILEVFRSF C URVAI'I IRR WITH A 32.00 FF ET RADII•S ('I.]RVE, CONCAVE SOLITFI WESTERLY; TFFFNC'F. SOlJTIIF,AS'CERLY AL:ONG'[HI'. ARC OF SAID CURV(, THROUGH A CENTRAL ANGLE. OF 4:3'45'49" A DISTANCE. OF 24.44 FFF-T TO A P(:)INT OF RI?VFRSE CURVATURE WITH A 633.00 F1'F,T RADIUS CIiRVG CONCAVEiNORT'Flh.AS"fT:RL,I'; " HFNICIi 5C)Lf"IHf ASTERI,Y ALONG THE ARC OF SAID CURVE THROUW1 A CENTRAL ANOLF. OF 23140'23" A DISTANCE OF 31679I.EET;'IT[PNGE CONCINIJIN'G ALONG'l I1B ARC OF SAID C'I IRVF. T IfROO(.;FI A CENTRAL ANGLE OF 9°20'38" A DISTANCT' OF 103.23 TO A POINT OF REVERSFi. C::URVATURF WITH A 497.00 FFFT RADIUS C'IJRVI C:ONC;AVI SOUTH \VESLERLY; THENCE SOUTHEASTERLY ALONG THE ARC: OF SAID CURVES'MROUGH A CENTRAL ANOI1; OF 16"58'36" A. DISTANCE OF 147.20i FEET TO A POINT TO A POINT OF COMPOUND CURVATURE WI I'll A 2(i7.0(I FEF F RADIUS CtjlMi CONCAVE SOUTH WESTERL:1'; 1 HENCE ALONCI T FIF ARC Ol' SAID CI.RVI; THROUGH A Ca.?NTRAI, ANC;1.1; OF 42"3`i50" A 1:715TANCI: OF 198.58 FI;ETTO A POIN1 OF COMPOUND CURVATURE WITH A 567.00 1T<I;`C RADIUS CURVIL C:ONC'AVFs 14+F.S't'L'((I_Y; TNRINCF. SOU1II11RI.Y ALONC'I'I'HIi AR(: OP 5.A11.) CURVE THROUGH A C'F.N'TRAI. ANGLH (w :.i" 0'21- A DISI'ANC[. , OP 272.20 FEET; TTMNCE SOUTH 7"iCJ'16 WES'L 124.73 FFF.F TO 882/015610-0084 _6_ '�°• "� 1063073 06 a07/01 /]0 -THE. BEGINNING OF A NON -TANGENT 29.50 FFET RADIUS CURVE CO NCAVF NORTHWESTERLY HAVING A RADIAL TO WHICH BEARS NORTH 84 211" WEST; 'THENCE SOUTHWESTERLY ALONG; THE ARC OF SAID CURVF: THROUGH A CENTRAL ANGLE OF 107036'27 A DISTANCE OF 55AO FEET PO .A POINT OF REVERSE, CURVATURE WITH A 61415 FEET RADUS CURVF. (:UNCAVE SOUTHERLY; THENCE WESTERLY ALONG) THIS. .ARC: UP SAID CURVL TFdRQU(jH A CF,NTRAL AN(;I.,E OE 1°11-10" A IMSTANCIi O 213 FLIRT; SOUTH 21°42'36" WEST 7534 MITI 11) A POINI ON ME ARC; OF A NON -TANGENT 53131 FEET RADIUS CURVE CONCAVE SOUTHERLY HAVING A RADIAL. TO WHICH BEARS SUIT"I'l-I 21c42136" WEST; THENCE EASTERLY ALONG THE ARC OF SAID CURVE'THROMM A CENTRAL ANOIL OF O°46,06" A DISTANCE OF T23 FEET TO .A POINT OF COMPOUND CURVATURE OF A NON -TANGENT 2210 FEET RADIUS CURVE, CONCAVE SOU'THWHS"I'CRLY HAVING A RADIAE..`ITO WHICII BEARS SOUTTI S2'36" O'VI;ti'1; "THENCE SOUTH EASTERLY ALONCJ'THE.ARC OF SAID CURVE1111ROU611 A CENTRAL ANGLE OF 60"IT57" A DISTANCE OF 211.5 FEET TO A POINT OF RFVERSE CURVATURE WITH A 93.00 FEET RADl1.JS CURVE CONCAVE NORTHEASTERLY; THENCE SOUTHRASTERLY ALONG 'THE, ARC OF SAID CLiRVE THROUGH A CENTRAL ANGLE OP 24°W17" A DISTANCE, OJ' 39.9S FEET TO A POINT OF REVERSE CURVATURF, WITH A 37,00 FEET RADIUS CURVE CONCAVI-, WESTERLY; THENCE SOUTHERLY ALONG THE ARC OF SAM CURVE THROUGH .A CENTRAI. ANGLE OF 51057:48" A DISTANCE OF 33.56' DENT TO A POIN'l OF REVERSE ClJRVATURF WTI'll A 508,o0 I,L•:Ivr RADIUS CARVE CONCAVE SOU I'll EASTERLY; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE. THROUGH A CENTRAL, ANGLE OF 26000' 1 I" A DFSTANCF OF 23M55 FEET TO WE TRUE POINTOF BECINNING; 'THENC73 CONTINUING SOUTHERLY ALONCi THE ARC OF SAID CURVF THROUGH A CENTRAL ANGLF OF 49IS'25" A DISTANCE. OF 36.71 FEET; THENCE. SOUTI1 6034'32" F;AS'I10310 FEET: 'I I II?NCE SOUTH 89"IIY29" WEST 250.00 FF;ET; "I'IIF.NCIi NORTH 0'00'00" EAST 140.01 FEFT' THENCE. NORTH 899009" EAST 235."22 FL:E"I' "I'O'fl[E't'ICUL POINT OF BECINNINC:, REFERENCE IS MADE TO E.X111BIT "A" All AC:IIEII HERETO AND MADE A PART HEREON'. CONTAINING: 33,888 SQ.lq'. 11.78 .ACRES S.IC)I IN F. YOUNG i . PLS,!C{65 D;1�1'IS *(_No. 4085 882/015610-0084 _ 1063073 06 a07/01 / 10 _7 '"" .0 119 I I I I I I I I I • I I I I I I I I �I I �I I I � �I I I I I scncc: I I t \ ` I I \ \ 1 f/ 1 a A4D nGN;G 5NL5! l 01 ? EXHIBIT "B " LOT 4 TPV 33367 L , ALL AAfARICAN CANA/. I I I \ I ,} I I 1 f I Lti] I {rJl J ��7)'JG21. I I Ivr%7, n;a._s gz56Zpp' I 1 -1711 P 1x» j1 j II JJidN 1. Y;)Urdt. iS '1ib� UA!L CONSTRUCTION TESTING & ENGINEERING, INC. KA43IXG •GIVIEx GIXEf XIXX-tw st,VEWIvo GEoff Cxxl[At im %DNI it iD%. UcE IXf ESGXX GIGO fA IN41, XX ir0l ill-IG:S t+p. 9-30-Od no. aces REVISED TENTATIVE PARCEL MAP 33367 LOT 4 h� ;a of I — �1 — zl I I I I ©�i 9 r 1 16 SEC71 ;J CCR 882/015610-0084 1063073,06 a07/01 /10 -g 120 882/015610-0084 '� r 121 1063073.06 a07/01/10 LOT 5 l'}fA l' PC`)R'1'ION C7F THE BAST 11ALh SRC'I'1C_)N Ill)() SOL'I 11. RANGE BAST, SAN BERNARDINO N'IHRIDLAN, MORI', ACCURAI'FI:Y DF:.SCRIBED AS FQL.I,pWS: COAdMENCING AT I'liE SOUTHEAST (;ORNE,11 OF SAID SEC7114iN B: THENCE NO1011 0003'49" WEST. ALONG, HIF FA4'PFRIY LhNI; OI' SAID SEC-TION 1ti A DISTANCE OF 3812-28 FEET TO AN INTERSECTION WI'L11 VIII& SC�W11FRLY k1Cill'1'-OF•,WAY LIW-, OF THE ALL AIMERICAN CANAL. AIS() KNOWN AS THE COAC I-IFI.LA CANAL; THI:NC'Ii SOI;TH 89052'4S Wl-,SFALONG 5All) SOIHAHRLY 1t1GH1 Uh-WAY A D[STANCE OF I//074 FEET: IIiN.iNUE I-)EPARI'ING SAID RIGFFE-OF-yVAY SM111 W0712" EAST 123.24 FFFT TO THI, BEGINNINCi OF A 18100 FEET RAMS CIIRVIi CONCAVI. i?:AS"1'LiRL,Y`, 'THENCE solri-HERLY ALONG V IF ARC OF SAID CURVF THROUGH A C'LN'I'RAL ANGLk; OF 32`34'49" A DISTANCE OF 10406 FEET TO ;A POINI OF REVI�-ASL 0-IRVATURE \V1TIf A 267MO Mor RADIUS CUR%"E CONCAVE, \Vt,S1FRL.Y; I'III�:NCF SOCTLIERLY ALONG 'THE ARC: OF SAID CIAM', ThRC)11CIff A CENTRAL ANGLE OF 36054'12" A DISTANCE OF 171.97 Fism, TO A POINT OF REVERSE MRVATURE WHO A 3330) FEI_I' RADIUS C;ONCAVI; YASFFRLY; PHFNCF, SOU'I HFRLY AWNG THE ARC OF SAID C;LIRvE THRC.)IIGEI "\ CENTILAL \NGI.E O1/ R`'17'S0" A I:)15'TANCIA OF 48.2.2 FEF�i TO A POINT 01; KEVF SE CURVATURE A%'ITH A 32&0 FEET RAMUS CURVE C(-)NC'AVF %MMIX; niENC1; SOLi"I IERLY ALONG; THF, ARC 01 SAID CARVE -11IIR00011 A ClINTRAL ANG1.11 OF 41°06'44" A DIS 1'ANCF OF ?2 96 FFI.; I"1'O A POINT OF REVERSE Ci_1 WAT'URE WITH A 63.00 FEET 1tiAl)11;S MRVL C:ONCAVF', EASTERLY', 'EHf-NC:'E SOIIHIERLY ALONG; ME ARC "SAIL) C:URVU THROUGLI A CENTRAL ANGLE OF 12202'06" A D1tiIAN F OF 134.73 FI".ICE TO A POINT 01' REVERSE CIIRVAf URF WITH A 32.60 FTLT RADIUS C'URVI- CONCAVE Sot. TF1WESTER LY; TIIFNC;I; SOIL 111FASTER L,Y AI,OAG Tl lL ARC' OF SAII) C'.C1It%'E T'HItOUGiI A C;EN'I'RAL A14(i!Ai ()I' 43°45'49" A DIS I AVCF. OF 24.4,1 FL`E`I' TO A POINT OF iwvFRSP, CURVATURF, WIIt A 633M0 FFEr KADIUS ('PRV'L; CONCAVE. NOR EH FASTERLY; TILENCa'. -CIU'YI-lEASTFRI-Y ;AI_ON6 111F, ARC OF SAID C'L1RvF'I1IROM1Ii A CEN 1 RAI_ ANGIA. 01 2804003" A DISTANC I; OF 31WX FEFTi TIIENC I-; CON'[ INUING ALONO 1 l l[-_ ARC. 01' Sall) ('UKVIi.'I'f 11tOIIC FI A C.I:N'I R:VI!1NC"I,E t7F )'2,0'35'"' A I)ISTANC E OF 10313 "1'O .A I'l)1Nl' O REVERSE CURVATURE %VITI :1 417.00 I'Iili'I' RADIUS CURVIi (:oNC;AVI SCAT 1-1-1 W'FS`I'FRL,Y; '1'LIIsNCI^: 9OIJ1'IiIsAw 1 CRLY AI.ON(-j 1H1, ARC OF SAID CURVI', THROUGH A CI-NTRAI, ANOLL OF t6,*' R'36" A DIS I A,NCL- 01' I/17,26 FEETTO A POINT TO A POINT OF COMPOUND CUR -Iir"'N AVI'Fi1 A 267.00 FEET RADIUS CURVE CONCAVE? SOIJ'fI1 W'F.S'i'kRL'r; '1-HEiNCF ALONG ME ARC OF SAID CURVE 'THROUGH A CENTRAL ANGI_N. OF 42"36'50- A DIS FANCE OF i98.58 FEET TO A POINT' OF C ONIPCCIND (JAWATURE WITH A 56700 FEET RADIUS CURVE CONCAVE WFS'['ERLY� THL NC I,. SOLI I HL';RIX ALONG I'1IE ARC OF SAID C'URVF. T] IROUG1I A C i;,N I R AL ANCII.E O1 -1 r =301 2I" 122 882/015610-0084 _ I O_ M63073,06 aNAM/10 A DIST'ANCF OF 272.20 YEET1 THENCE-` SOUTH ; 110'16 WEST' 124.73 Fk.r"l�P0 THE BEGINNING 01' A NON -TANGENT 20150 FEET RADIUS ("URVF? COL C'iAV1i N Q 1tTIIWI STERLY HAVING A RADIAL TO WHICH REARS NIORTH 84"42'41" WI-.ST; TIIF:N(.,E SOI)THWESTFRIN A1.,ONG " IW, ARC OF SAID CURVE 'I'lliw(1GH A CENTRAL ANGLE OF W703C27".A DISTANCP.OF 55.40 H',F-'1 -10 A POINT (-)I' ItF.VFRSE CIIRVAT URF, W11'Il A 614X; FEET RADIUS CURVE CONCAVN 5O1JTIIFRIN: TFIUMA" NVESTERI,Y ALONG THE ARC OF SAID CL IIt\`l.:' THROUGH A CHNFRAL AN(;LI3, OF I"11'10" A DIST'ANC:E OF 12.73 HN;1T: TI-IENCI; SOU'I"II 21`42'36" WEST 75.54 FFFT TO A POINT ON TIIli ARC OF A. NON-TAN(IF;NT 539,31 FEET RADIUS CURVE CONCAVE SOUTHERLY HAVING A RADIAL TO WHICH BEARS SOLITTI 2PV—,6" 1A/FST; T7TFNCIS FASTERI Y ALONG THE ARC OF SAID (VRVF. THROIGFI A CPNT RAI. ANGLE, OF p�41.06" A DISTAN(01/ T23 I FE"i TO A POINT OF ('OMp(R;ND CURVATURE OF A E NON -TANGENT 22.00 IT:FI' RADIUS ClIRVI? CONC.; VF: SOI1'I`I-ItiVFStE-ILLY' I IAVIN'G A RADIAL T'O W111CH BEARS SOUTH 25"5T36" WF,ST; THEN(' SOUTH I(ASTERLN AL(.)N(i TIIE ARC OF SAID CCIItVE THROUGH A CENl'RAL ANGLE OF 6017'57" A DISTANCE 01: 2315 FITT "1"(:) A POINT OF RFi.A'I),I?SF. C,URVA"I tJRL-i WITI-1 A 93.00 FEET RAI)ILIS CURVF. CONCAVE NORFHEAM ERL.Y: T'HFNCE SOUTHF.ASTI'TLY ALONG THE AP.C. OF SAID CURVE, THROUGH A CiiNTRAL ANGIJli OF 24"34117" A DIST'ANCH OF 39.8S FGIi"I' TO A POINT OF REVERSF. CURVATURE' WITH A :i7.00 FFETRADIUS CHRVF CONCAVE WF;STERLY; THLNC;F SOClIIERL,Y ALONG THE. ARC OF SAID C11RVF'IIiR(:JUGH A CE.:NTRAJ. ANGLE (:)F Sl°57'48" �\ F)lS'IANCL OF 3°.56 FLET '10 A PUIN'1' OF REVERSE' M-7RV.M'I-JRE WI'1-il .A 50ii.00 FFFT RADWS CUR\11'.CONCAVIF8OU'I'FI LASFIFRIXY TIIFNCI:SOIJ'I'IIWFSTI:RIN AC,ONG'lIlF ARC OF SAID CIIRVI THRC)UGIi A C I'N'I'itAL ANGLE OI' 30°CiS 3b" .A DISTANCE (:)F 267.26 FEET; '1'IIENCE SOUTH (,`34'32" EAST 103.90 FLil..T, PO m TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH 6034'32" EAST 240.ti3 Fki.H'F TO IJTE BEGINNING ( , A I"11.00 FHGT' RADIUS CURVE CONCAVE WE9T'ERLY; "I'HF.NCE SOUTHERLY ALONG T'IIE ARC OF SAID CURVI IHROU611 A CENTRAL ANGLE. OF 13`51'15" A DISTANCE OF 317.24 H-Fl; T1IENC'I; SOUTH 7`16'43" WliST '281.12 FEET; "1'I-117NCH E NOR 9((°t1T)'Oil" WI'S'l 248.02 FHHT '10 'THE A POINT ON TlIF ARC, OF A NON-T"ANOENT 62.-00 FEET itM)IUS CURVF. CONCA,VF SOUTHwl;t 'I'ERIN HAVNCi A RADIAL LINE 'IO WHICH BEARS NOR: IA 75'01'19" WEST; THFN(T NORTHL-RIN A1,0NO I,HI-, ARC OF' SAID CURI.VF' THROU(ill A Cl;,,NTRAt. AN671l OF I05"17129" .A D1S'TANCF OF 113.94 FISHT;'I'11N.NCG SOI "1'! I (;VOs,0I ` WF_ST' 58.78 FI'.Fi"1"l O l'H F: BE(;INNIN(i OF A 290,00 H;E;T RADIUS CURVE: CONCAVE NORRIF_.RLY; HIiNCE Wl-, TFE.RLY ALONG THP ARC OF SAID ( I.)RVI='I HROI;GII A C'HN IRr T I AN)Ll'i. OP 53"43'18" A DIST".ANCF. OF 2?L94 FRET TO A POIN'l OF CO\�1POUND CURVATURE WITH A 130,00 FEI--T RADIUS CURVE CONCAAdl'. NOR'I"HEAST RLY; TFIENCL NORTHWESTERLY ALONG THF, ARC OF SAIL) CURVE '1*11ROUGH A (TN1RA1, ANGLE OF SPOT34" A DISTANCN OF 199.76 TO A POINT OF RI.4VERSF. CURVATURE WITH A WITH A 128.00 FhET RADIUS C`LlRVE C'UNCAVE E.ASTI;RLY THIiNC NORTHF.IZIN ALONG; THE ARC OF SAID CURVI? THROUGH A CENTRAL: ANGLE; OF 45`D9' 13 ' P, DTST'ANHE OF 100.87 FF.FFT 'FHENCI? NORTH IS"18'(l0" 'ATS'1 T7,5;3 I'1'I I 'lU T'NE 882/015610-0084 + 1063073.06 a07/01/10 BEGINNING OF A 63.00 FEET RADIUS CURVE CONCAVI'l P,AS'I'ERLY;'I'HNNCL'' NORTHERLY ALONG THF. ARC Ol; SAID CURVE THROUGH A CENTRAL ANGLL OF 37°34'59" A DISTANCE OF 41.32 FLF.F" `I'HLNCE NORTH 22"1W59" h:AST 85.32 'TO '[']IF BEGINNING OF A 220,00 F'E.ET RADIUS C'URVIC CONCAVE NORTHWESTERLY; THENCE.. NOR'HIEASTHFIIAY ALONG THE ARC OF SAID C'IJRVE-IiIROUGH A CENTRAL ANGLE OF 18049'53" A DISTANCE OF 72.31 FFFT TO A POINT OF REVERSF CURVATURE WITH A 46.00 Fl"fi1' RADII;S CURVE: CONCAVE SUU'TFIEASTERLY; `l'lll?NCF. NORTH IiASTERLY ALONCr THE. ARC CJI-' SAID CURVE'I'HROLIGII A CENTRAI., ANGLE OF 84039' 14" A DISTANCE OF 6796 FEET: "THFNCE NORTH 88"06'20" I=AST 44,4417EETTO "I'Ii]I BEC}INNING OF A 72.00 FF.FT RADIUS C'URVI: CONCAVE NORT11W ESTERI.Y; 'THENCE NORTHEASTERLY ALONG THL ARC OF SAID CURVE ,HIR000H A CENTRAL ANGLE.. OF 64022'26" A DISTANCE OF 80.89 FEFT TO A POINT OF COMPOUND CURVATUKU WITH ,A 100.00 FI?E'I RADIUS C'I,'RVF. CONCAVE 'WUS'ILRLY; 1"IIL.NC'l NORTHERLY ALONG, THE ARC OF SAID CURVE 'THROUGH A CENTRAL. ANGEL'. OF, 67°16'50" A DlSTANCF. OF 117.43 l:FFT: l HFNCii NORTH 56"38'44" WEST 26,25 FEET; 'I`HENCF NORTH S9'10'29" EAST 523.90 I-C-LT TO THFTRUE; POINI'OF BEGINNIM.. REFERENCE IS MADE TO ENIUBIT "A" ATTAC:HF:J) HLRETO AND MADE A PART HERIsOF. CONTAINING: 517,687 SQ.FT. 11.88 ACRES JOFIN F. Y'OIfN/ , I'1.S 66.5 — D.K"I'I No, 4585 xv.413010E 882/015610-0084 'a" ' ' 124 1063073.06 a07/01/10 -12 RIVERSIDE COUNTY CALIFORNId EXHIBIT 17Y LOT ✓` TPdf 33367 1 I rLIP- RA P .roaYir I /I r, saxno' 1 �r 2 �� / �I !.✓r 1G � 1rJ IFUa- I � I irl \ 0.i-1 till l i l i l I I I I G RGVISGU 'r NTATINTF ° CONSTRUCTION TESTING & ENGINEERING NU PARCEL b1Al 333G7 pum�Me.;!uer:me[xue-ur; :un��•ise-etmeoxnr," LOT 5 12. Ooi0fi�� 01 ui npx`If� PCn6, :'n OE L! fSt UAf i90 P B:[!f. r81i611'�E. oisS I 882/015610-0084 0 ' 1063073.06 a07/01/10 -13- 125 7F 60/INTY CA EXHIh'1'l' U Loll 5 DATA C:1131,H: tf lA.9;7 �ifi7M_C uUIiJS__ l rr.rf 7il 7 F3 J4' I S00 '01_ 71d._7t'' _YJ- Y__OD' IOax:' 6 C;iJ' I 67 rW . j, 44 IM IIIIIIIIIIIIilllllllllllllllllllllilllll{Illlllllllllll f°�`Gy° ' I it M1- lnA[l,i I iM1IfIl I Il.Ipann; G r r ,s11 ti RFV[5?DIIL I'AP[vE UUIVaTFUC1IONT[STING 5 ENGINEERiidC INC ARCEM1P 3(5 xG ; LO Ilnl1, Ot J 882/015610-0084 +� ' ' 126 1063073 06 a07/01 /10 -14- LOT 11 THAT PORTION OF THE. EAST HALF SE'.(;"1'ION 8, TOWNSI IIP 6 50U'T'11, RANGE 7 EAST, S.AN BEMARDINO h'1F.RIDIAN, MOR13 ACCURATTLY DESCRIBED A FOLLOWS: CONIMENCING AT THE' SOUTHEAST CURNER OF SAID SECTION 8; 'THE':C'E NOR'IH 0"03'49" WEST, ALONG T'IIE EASI'Fit1.Y LINT, OF SAID SECTION :8 A DISTANCE OF 3812.28 FEET TO AN INTHRSEC"I'I0N WfIH THE SOIlI-HERLY MUFIT-OF-A' AY LINE OF 'LHF. ALL AMERICAiN CANAL ALSO KNOWN AS TFIE COACHELLA CANAL; THENCE? SOUTH h9'52'4S" WEST ALONG SAID SOUTHERLY RIGHT-OF-WAY A DISTANCE OP 191'.'1..7 FEED; Tlil`NCE Di�PAR'HNG SAID RIGI-IT-OF-WAY SOUTH 0M'12," EAST I243.2.4 FEET TO Tlfh. BEGINNING OF A 117.00 FEET RADIUS CURVE, C'ONCAVI-' FASTFRLY;'FHF:NUF'' 801)Tllf-IRI,Y ALONG T'111' AIW OF SAH) CURVE THROUGH A CliN FRAI. ANGLE 01: 32"34'48" A DISTANCEi OF 66.53 FEET TO A POINT OF RF:VISILSh CI;RRADIUS WITH A 333.00 FHE"T ADIUS CURVL CONCAVF SOUTHWESTERLY; THENCE SOUT'FIRASTERLY ALONG THE ARC OF SAID ULRVIi THROUGH A CENTRAL ANGLE OF 28-27'17" A DISTANCE OF I4i5.38 FEET TO A POINT OF INTERSHCTION \-VIT'H A NON -TANGENT 150.00 1:14,R ' RADIUS CURVE. HAVING A RADIAL LINETO WHICH BEARS SOUT11 0°03'38" EAST, SAID POINT BEING THE TRUE POINT OF BEGINNING; THENCE I AS'ITRLY ALONG 'IHE ARC OF SAID CURVE THROUGH A CE,N'T'ItAL ANGLE OF' 4?° I9'4$" A 17IST'ANC'E O1' 123.91 FFET I'O A POINT OF REVERSE CURVATURE ii'TH A 809.20 FEIS`I' RADIUS CURVY. CONCAVE NORTHFASTIs'RLY; THI-MT SOU H I F?AS'I ERV A1.0'1vG TITF, ARC OF SAID CURVE THROTIGII A (I?NTRAL ANU.F OF 20" 31)'0r1" DIS FANCE OF a24.1 1 F'LEi' FO A POINT' 01" COMPOUND ('1)RVA I'l1RP WI1111 A 450A0 PEET RADIUS CURVE CONCAVE NORTIIF?RLY; THFtNCI; LASTERLY ALONG THE ARC 01" SAID CURVFi TITRODU-I A CEN' Fj%l- ANGLE OF 41`1 7'02" A DISTANCE OF :? 11,27 FFVT; THENCI- NORTH 7.5 20'02" EAST 130.18 FEET TO I`IlE BEGINNING OF A 200.00 FEET RADIUS CURVE CONCAVE SOUTHERLY; TI I1'NC;E EASTERLY ALONG THE ARC OF SAID C)RVE'THROFI(1II A C ENTRA1, AN(11_.I OF 50`29'26" A DISTANCE: OF 1 76.2-5 FEIF; THENCE' SOUTH )4'10'-'2" EASF 36.66 FEF:I' TO THE BEGINNING OF A 75,00 FEET ClIRVV CONCAVE; FAS'WRLY; THF'.NCE SOUTHERLY ALONG THE ARC OF SAID (1.)RV'I", TIIRCN-TGII A CHNIRAL ANGLF. OF 71"28' I5" AD ISTAN CH 93.5E FFiEET; '11-1ENC7 SOUT'11 1717"13" WEST 74,73 FEtF.T TO '1'1-1G IIEGINNINCI OF A 90.0") FFI:;I RADIUS (-MRVE CONCAVE EASTERL); THENCE SO LITHERLY ALONG THF. ARC; OF SAID CURVE. HIROUGH A CI:AN'TRAL ANGL.F. OF 65"55'38" A DISTANCE OF 103.56 PFET; THENCE SOUTH 48"37S15 EAST 196.68 FEETTO T1IL BEGINNING OF A 125.00 FEE[ RADIUS CIIRVLCONIC"AVE WF.SAFFRI.Y; ITIENCE SOUTHERLY ALONG 'IITE ARC' CIF SAID CURVE TIIROUGTI A CENTRAL, ANGLE OF 73`041'09" A DISTANCE OF 159,41 F'EEF; THFNCF' SOUTH 24"26'14" WEST 59.02 FEET '1'0 THE REGINNINC OF A 175.00 PEST RADIUS CURVE CONCAVE NORTHWESTERI_V; T11IM'k SOU'I'I1Wf�".SfGICLY ALONG 882/015610-0084 n 1063073.06 a07/01/10 -15- ']'HE ARC OF SAID CIJRVF THROUGH A CF.NTRAI. ANGLE OF 65"24'55: A DISTANCE OF 199.12 FRET. THENCE SOUTH 89°5P09" ` E-ST 116.33 FFIi"I' TO TIIE BF:GINNINC) OF A 140.00 FEET RADIUS CURVE CONCAVF NOICTITEAS'I'F.RLY; TEIENC13 NOR'PIIW'FSTERLl' ALONG THE ARC; OF SAID CURVE THROUGH A CENTRAL ANGLE OF 94018'57" A I)IS'FANCE OF 230.46 FPF I'; THENCE NORTIT 4°10'06 FAST 111.79 FEET' TO THE BEGINNING OF A I t5.00 FFFT RADIUS CURVE CONCAVI? SOU '1'IIWF,STERLY; 'I HENCE. ALONG THF. ARC OF SAID CURVE THROUGH A CRMFRAL ANGLE OF SI'IS'13" A DISTANCP OF 149.84 FEET; THENCE NORTH 77'08'07" Wl ,ST 16.05 FLEE I'O A 110IN'I' OP INTERSECTION WITH A 333.00 FEET RADIUS CURVE CONCAVE Sot) 'I'll WESTI.`RLY HAVING A RADIAL LINE TO WHICH REARS SOUTH (,8`39'29" WEST; THENCE NORTHWESTI,,RLY ALONG THR ARC OF SAID CURVE "THROUGH A CENTRAL ANGLE OF 0'47'06" A DISTANCE OF 240.91 FEET I'O A POINT OI' COMPOUND CURVATURE WI'111 A 563.00 FEET RADIUS CURVE CONC.AVI'. SOUTHWESTERLY; THFN'CE NORTHWESTERLY ,ALONG THE ARC OP SAID CURVE THROUGH A CENTRAL ANGLE OF 16°58'36" A DISTANCE OF 16682 FEET TO A POINT OF REVERSE CURVATURF. WTTH A 567,00 FEE:F RADIUS CURVE: CONCAVE NORTEIEASIT.RLY; THENCE NORTHWESTERLY" ALONG; THE ARC: OF SAID CURVE THROUGH A CENI'RAI, ANGLE OF 37"17'3?" A DISTANCEOF 369.06 FEET TO A POIN OF COMPOUND CURVATURE WI I'll A 3200 FEE"I' RADIUS CURVE CONCAVE NORTHEASTERLY; I'HENCI NOR'FHW'ESTERLY ALONG "TIIE ARC OF SAID CURVETHROUGH A CI?NTRAC, ANGLE OF 50'25'57" A DISTANCE OF 28.17 PEEL' TO A POINT OF RFsVFRSI. CURVATURE, WITH A 6300 FEET RADIUS CURV(_� CONCAVE SOUTHWESTERLY; THENCE aNORTHWRSTRRLY ALONG 'PHI; ARC OF SAID CURVI` THROUGH A C'ENFRAL ANGLE OF 63'51'20" A DISTANCE OF 70.21 FEET TO A POINT OF REVERSE CURVATURE WI"1'FI A 32.00 FEET RADIUS CURVE CONCAVE. NOR'I'IIEAS7'ERLY;'IIIENCL' NORTHWESTIRLY ALONG'FHE .ARC'. OF SAID CURVI; THROUGH ACENI'RAI. ANGLE OF 54046'50" A DISTANCE 01' 30.60 FEET TO A POINT OF RF,VERSE CURVATURE WITH A 26T00 FEET RADIUS CARVE CONCAVE WESTERL),: THENCE NORTHFRLY ALONG THE AR(' OF SAID CURVE THROUC Fl A CENTRAL ANGLE 01' 5�19120" A DISTANCE, OF 24.80 FEET TO A POINT OF COMPOUND CURVATURE WITH A 333.00 FFFT RADIUS CURVE CONCAVE WESTERLY; THENCE KORT'HERI..Y ALONG THE ARC OF SAID CURVF THROUGH A CENTRAL .AN(;I.E OI+ 8"26'55" A DISTANCE 01; 49.10 FEET TO THETRUP, POINT OIL BEGINNING. REFERENCE IS MADE- TO EXITIHIT "A" A7"IAC:HEU HERE:I'O AND MADE: A PARTHEREOF. CON PAINING: 375,971 SQ.TT J011N F. YOC; 8.631 ACRES e 882/015610-0084 1063073.06 a07/01/10 -16- " �'" 128 RIVERSIDE COUNTY CALIFORNIA saJtt r t of 2 E;YHIIIIT »B» LOT 11 TPAf 33367 COACHELLA CANAL _ -------- taw --Jy� es.zI nsaau' I I I } I I I 1 I / rY\U� \ I I a i Lu> I Tt. I � 2o.B Af.RGO I C.'Y JAY 1 o, S❑ I I C,fW AGRn'b I I I I ily I� Ij I I I II I �}i E. I "=300• \\SCALE. 1 1.01' 10 ib.Db A4'tK8 � II I 'r i LOT Ti 0.7 ACRES JOHN F. YOUNG c.p. 9-30-08 .O 1001 REVISED TENTATIVE s-ao6e CONSTRUCTION TESTING & ENGINEERING, INC. PARCEL MAP 33367 r=3oo' V FANNING -CIVU E461Nf ERING 4eYG 1¢RYFNgG GEGtf CNNICA; Lori. 1 I & L .aw G nu u6xu[A RGAG, sul;¢ w [scoxmR6 u. nuG, fx.psA; ;rt.0 s, 1 11 i0 06 am 882/015610-0084 1063073 06 a07/01/10 - 17 ^ 129 SN££T 2 OF EXHIBIT 'B' LOT 11 DATA TABLE No. DEL TA EARING RADIUS LENGTH ! SOOV712"E 12J24 _ 2 A=32'34'48" 117.00' 66.53' p=2827'17' J3300' 165.J8' 4 L=477948" 150.00' 12391' 5L =10 39 U6 89910' 324.11' 6 0=411702 450.00 J24.24' 7 N7570 02 f 130.18 g ,=507976 200.00' 176.25' 9 S547032f J6.66 10 0=717815 75.00 9156' 11 S1777 43 W 74.78 12 L=655538 90.00 103.55' 1J S483755 E 196.68 rf A=73174'09' 125.00 159.41' 15 S2476'14'W 59.02 16 'L '24'S5' 17500' 199.80' ! S895109W 116.J3 i6 �=947857' 140.00' 2J046' 19 N047006 E 111.79 p=8178'1,J" 11500' 163.19' 1 N77V607"W i6.05 1 n=417706" J33.00 240.91' J 0 =1658 J6' 563.00' 166.62' 4 n-3777J7' 56700" J59.06' 5 A=502557' 32.00 28.17' 2 Z�=635120 63.00' 70.21' L =54 46 50' J200' 3060' 8 n=057920" 267.00' 24.80' p=087635" 33d00' 49.10 1111111111111111111111111illlllllllllllllllllll1111Jill o e cf 795�� Cuf sim T101TFSImOu 2 E 1UINEEFM INC. PARCEL MAP 33367 LOT 11 982/015610-0084 w 1063073 06 a07/01/10 -1 8 f LOT 19 THAT PORTION OF THE SOUTHEAST Q1 ARTER OF THE SOU"I*I IIEAS"I' QUARTP,R OP SECTION 6, THE SOU`THW`t's8'f QUARTER OF ME S0IJTHWEST QIJARTIiR 017 SFC"PION 5 AND TIIE NORTH WI -I' 1QUAR`FC".R OF TM: NORTH WHS'1' QUARTER OF SECTION 8, TOWNSHIP 6 SOUTH, RANOF 7 FAST, SA RERNARDINO MERIDIAN, MORE ACCURA'I'JUX DESCRIBED AS FOI.LOWS: COMMI77jNCINC_; AT THE NORTHWEST CORNER OF SAID SEECTION S. THENCI: NORTH 89'52'23" EAST ALONG'.; THE NORTHERLY LINIF OF SAID S,LCTION SA DISTANCE OF 433.99 FBUT TO TIIE TRUE POINT OF BEGINNING; 'I HENCE NORTH 41"57'54" WEST 674.79 FEET; THFNCI. NORTH 88"27'13 " WEST 244.20 FFE1'; TFIENCE NORTH P4T15" WEST 289.62 FEET; THENCI: NORTH 83"26'2! FEAST 39S.98 HEFT; THENCl/. SOII'H 29°58'01" EAST 952.82 FEET; 'I'HI:NCF, SOLI'1-11 52°39'03" EAST 485.41 FEET; I'11FNCE SOUTH 57'10'16" FAST 463.15 FEIST; THENCE SOUTH 30°58'20" WEST 18.'52 F'Plk'Y TO THI'E BEGINNING OF A NON'1'ANGEN'1' 60.00 FEE I' RADIUS CIJRVF CONCAVIE SOU'T11ERL.Y HAVING A RADIAL FINE TO WHICH BEARS NORTH 10057'4�" W'GST; 'IfiENCI: WF.0 I'L:RLY ALONG 'l'l ll' ARC OI' SAJD CARVE THROU(iI l A CENTRA L ANGLE OF 32`4T26" A DISTANCE OF 34.34 FEET 'IO A POINT OF COMPOUND Cl RV'A'IMRE. WPH A 118.00 FEFI' RADIUS CURVE HAVING A RADIAL. TO W'IIIGIE BEARS SOUTH 21°49'41" WEST; THENCE WI','IERI_Y A1,0NG THE ARC OF SAID CURVE THROUGH A CEN` I' AI. ANGLE. 01' 51027'56" A DISTANCE: OF 105.99 FEFI'; THENCE SOUTH 40020'0S" WFST 75.20 FFPIT TO THE RfGINNINCI OF AN 80.00 FEET RADIIIS (1)WE CONCAVE NOW111FRLY; 1-11FNCE WESTERLY ALONG THE ARC 01; SAID CURVE TFIROUGH A CENTRAL ANGLE; OF 34 32' 16" A DISTTANCL; OF 45.84 FLEET; THENCI? SOUTH 2`t°00'4I" EAS"I' 1FFVIT THENCE SOUTH GI"59'U" WEST 26.211 FEET TO 'TFIF. BEGINNING OF A 240.00 FEET RADIUS CURVE CONCAVE NORTHEASTERLY; TIIENCF. NORTH WESTERLY ALONG TIFF. ARC'. OF SAID C'.URVPI I-IROUCif-1 A CENTRAL ANGLE OF 57°00'22" A DISTANCE? OF 71S.79 FEET TO A POINT ON A 227.84 FPI,T RADIUS CURVE CONCAVE NORTHEASTERLY HAVING A RADIAL TO WHICH REARS NORTH 20"04'07" EAST: TFIENCE NOR'I'1I W'ESTF.RI.Y ALONG THE ARC OF SAID CI.IRVE THROUGH iA CENTRAL. ANGLE 01; 36°31'16" A DISTANCE OF 145.23 FEET'. THF_N(. t: NORTH 33°24'37" WEST 99.07 I'EET; THP,NCF. NORTH fib°23'28" EAST 120,28 FEF1; TIIFNCF NORTH 231813" WI;S"I' 532.29 FFFT; THENCF. NORTH 4 1 "57'54" W ES'T 149.34 FEET TO THE TRUE POINT OF BEG'INzXIN(,:. REFERENCE IS jv1,4d)F I'O EXHIBIT "A" ATTMAILD HERETO AND MADE A PART HEREOF. CON'I"AINING: 600,614 SQ. F'I'. 13.79 ACR,E.S No. 4065 1 * DAGF' 882/0I5610-0084 1063073.06 a07/01110 -19- 3 a 3 LOT 19 J 9B.Ye 98' I / ' 1 I I I rr. ACCdS'S ROAD 7 ,urs �aJ9 . \ LOT A 111 N I LOT 19 �s LOT A K 57&ZO�h N66 N3324'77'W 41U.14 32 4' GR37Sff Jf• RL. R 61 Lsl�5�{y� R- �=5I �j7(�fQjl Sgg/59'/9,w I I j Z0.2B v JOHN F. YOUNG Exp. 9-30-08 Na 405 le 'JOHN F. YOUX6 �j[fS 4-665 DATE jf OF CA�If� CONSTRUCTION TESTING & ENGINEERING, INC. CLANNING CIVIL CNGIN LEI SIG LAMU SUAVE VIN G - 6 ECT CNNIC A: n uACAS I IL IOA0. SUITE II! EfiWAUIUC CA, 01011, PNatl% 101A65 PARCEL MAP 33367 FOR LOT 19 GN= SCALE: T "=J00' 882/015610-0084 ' 1063073.06 a07/01 /10 -20- n 132 LOT 20 THAT PORTION OF THE NORTHWEST QUARTER OP SEC' "I ION 9, I'O%VNSI IIP 6 SOUTH, R.ANGF. 7 EAST, SAN BERNARDINO NiFRIDIAN. MORE ACCURATELY DFSCRIHED AS FOLLOWS: COMMENCING, AT THE NORTFIWEST CORNER OF SAID SE("'LION ,S, I'11FNC'E NORTH 89:'52'23" EAST ALONG TI-IF,, NORTHERLY LINE 01; SAID SEC FFON S A DIRI"ANCE OF 132E.32 F/EET TO HIE NORTliI_AST CORNER OI: 111E. N(.)RTHWF(yT QUARTER 01; TH1,: NORl'IIWR,;"I QUARTFR FIH;T OF SAIL) ECI'IC)N 8; •T'HENCE SOU'llI 000W57" WEST ALON(a'II-IE FAS-IF;RLY LING OF SAIL) NOR'I'HWE'ST QUARTEIL OF 'ITIE NORTI-WWEST QUARTER_ h'96.07 FF.B'1'; 771ENC'E NORTH 84°57120" EAST 115.10 FFE'l;'I'HENC;E SOUTII R0'"5140" EAST 31,00 FF'FT'fO A POINT ON TIM ARC OF A NON-TANGFNT 950.00 FFK.T It<1DIUS CURVF CONCAVE WESTERLY HAVING A RADIAL LINE TO WHI(Ji BEARS NORTH 8.0057'I t'' WEST, SAID VOI:NT A1._SO BIAM.; I HE TRUE POINT OF BFGINNINC; t'HF.NCI. NOR'IHF,RU ALO G THI: ARC OF SAID CURVE 111R00011 A CENTRAL ANGI..'.. OF 3"40'19" A DISTANCE OF 60.8i FFk!'; IIIFNCF: SOUTH 30"01154" FAST271.72 I f�.P.'T;'TFIFNCG SOC.r'fll �13"IR'I'" ��.AST 1 0.71 FF.E`I"TO 'I HE. BEGINNING OF A NON-'IANGENI' 60.01 FILET RADll15 CURVE C:ON('AVE SOLI't'FIWES'I'ERI,Y HAVING A RADIAL LINE TO 1V1I101 BEARS SOUTH 46"33'01" W'ES'I;'IIfkNCL SOUTHERI-Y ALONE; THE ARC' ()1= SAM CuRVF THROUGH A CENTRAL ANGLE OF 44"08'05" A DIS'I ANC'F. OF 46.22 VEFT; TIIENC;Ii SOUTH il'41'06" WEST 95.1I FEET; THENCE NORTH 79`39'40" WEST 503,52 FEET; '1'HFNCE NORTH 24"13'40" EAS1' 50,?,S FFhl'; T'HF.NCF NOR"I'H 2401V42" F3AST 7 8. 02 FIiEI';-IIIENC'E SOU'1'll 69`S1'12 F.AS'I' 40.59 F'F.FTI 'THENCE. NORTH 2i,("03'I7" EAST 15.59 FFIAF; I'fWNCG NORTH 48`18'02" EAST 13,21 FEETTO THE BEGINNING OF' NC)N- FANGENT 57.1)0 FEET RADIUS CURVE CONCAVF: NORTFIRRLY I[AVING A RADIAL, LINE TU WHICII BEARS NORTH 37"37'19" VAST: 'THENCE. UASTERIA' ALONG TI-11; ARC.' OF SAID CURVE THROUGH A CCN"1RAL ANGLE OF 51'P56'00*' A DISTANCT, UI 50.67 i�EFT' 'i'IIENCE NORTH 70°05'07" EAST 5.50 FEET; THENCE NClRTIJ S<)^,8'05" EASF 5.26 FFEI; 'LFIEN(E NORTH 57'17'10" F_AS'f 6.+)1 11.1 V; THENCE NORTH 63°23'36" FAST 6.23 FEET: "IHENCF' NORTH 61°4?'2T' LAST 4.t)7 FhET; `E'IIENC',I NORTH 48°16159" LAST 4.0h FF''.I',T TO'IIIF. 13F.(IINN ING OF A NON -TANGENT 57.00 FRET RADIUS URVIF, CONC'AVE N(-)R1'HtVEST0ZI,Y HAV'INU A RADIAL LINE FROM WHICH BFIARS NOR"I'IF 45`30'S5" WL;.S'T; IIlENCF NORTH EASTERLY ALONG'1'llFl ARC OF SAID ("UR 'E T'HROIJC;II A ('ENE'RAL. AN(_3J,U OF 66`18'23" A DISTANCE OF 65.96 FEED; THFiNCF NORiFi 80E7'25" WEST 35.32 FEE'E; I'HENCI NORTH lit"36'56" EA5'1' 57.z4,"1 FEET; TEELNCF. NORTII I 58'?4" EAST 09.7; FEET TO 'PHI: TRUE MINI OF ItEl(;1INN ING. 882/015610-0084 21 _ 1063073 06.07/01/10 _R REFERENCE IS MADE TO EXHIBIT 'B" ATTACHED HERETO AND MADE A PART HEREOF. CONTAINING: 105,642 SQ. Ff. 2.43 ACRES No.4BSS )* .,OHN'' F. 1'OUNIQ01'I_S 466!/ [>•� C: ' 10607306 a0/0 134 1063073 O6 a07/01/10 -22- " 7 T XIVC'XSll)f (,UUwfY GA EXHIBIT 'B' LOTS 20 & 22 LD7' Ll 5i'LL.' i �' 2 =ion REVISED TENTATIVE CONSTRUCTION TESTING& ENGINEERING, INC. PARCEL MAP 33367 :" -,au "wON7 R AM. I neeI's €i:mIn. CA a ie Eva 11 aj 74 41 is FOR LOTS 20 & 21 W1U/7; p;5T°w'rJVP 1. 882/015610-0084 1063073 06 a07/01/10 -23 SHE£1 EXHIBIT I LOTS 20 & 22 DATA TABLE S LR01N 0=3'4019 95000 60.88 =44 i18'05' 60.00 46.22' N2473'40 f 50.28' S69'5172 £ TO 59 N20YN'17 £ 15.59 N4678 £ 13.21 p=505606 5Z00' 50.67N7OV5'07f78'0.5 lf5 E N5777'10E 6.01 N6373"36E 6.2J N61'4527 £ 46 N487639E 4.08 S8055'40 E 31.00 IIIIII IIIIIII lull IIII IIIIII lull IIIII III IIIIII III IIII nzi oR 45 ;F {,�,1 i,'I�C;II(,f� TES If G8 �fauil[rRI�iS IIVC PARCEL MAP 33367 FOR LOTS 20 & 21 to/2VS6 JPR 136 182/015610-0084 1063073.06 a07/0i/10 -24- LOT 23 TI IAT PORTION OF TI IF, FAST IIALF SE(,71ON 8, TOWNS 111' 6 SOUTH, RANGE 7 EA>I`. SAN BERNARDINO M} RIDI.AN, MORE ACCURATELY DESCRIBED AS FOI A ,OWS: COMMENCING, AT 'THE, SOUTHEAST CORNER. OF SAID SECTION 8; 'THENCE NORTH 0"03'49" WES"F, ALONG THE EASTERLY LINT. OF SAID SECTION 8 A DIST'AN'CE, OF 3MIZ28 FEET TO AN INTFRSIi.C'TION I HI -I THE SOUTHERLY RIGFFI'-OF-WAY LINE OF THE ALI- AMERICAN CANAL ALSO KNOWN! AS "ITIF. COACI-IFLI-.A CANAL; THENCE SOUTH 89''5218" war AWNG SAID SOUTH6RIAr RIGHT-OF-WAY A DISTANCE. OF 1988.75 FF> `F TO 'LIFE T'13CF: PO]N'IO1+ 13FA-4NNING; THENCE DEPARTING SAID RIGI1'I-OF-AWAY SOUTH WOW12" EAST 12324 FIfEr TO THE BEGINNING OF A 183MO FEET RADIUS (.'URVE CONCAVE EASTI?RI.Y; THENCE SOUPHERC.Y ALONG THE ARC. OF SAID CURVE.. THROUGH A CHN'FRAL ANGLE OF 32034'49" A DISCANCF OF 104A6 FEET TO A POINT OF REVERSE CURVATURE 1V1TTI A 267MO FFF I RADII.IS CURVE CONCAVE WESTERLY; TKIENCE SOU7�1FERI.Y ALONG; THE ARC (MI SAID CIrRVEI'FI-IR000aH A CF,N'I'RAL.AN(-iLE ()I' 3654'1"' A DISTANCE OF 171 97 FEF:F TO A POINT OF REVERSE CURVAI'URF; WITH A 333.00 FEET RADIUS CONCAVE EAS'I`I'.RL-Y; THENCE, SOU11IF:RLY ALONG -TIIL, ARC, OF SAID CURVE THROUGH A C;F,N'I'RAL ANGLE OF 8"17'50" A DISI'ANC'E. 01: 48.22 FEET TO A POINT OF REVERSE CURVATIJRF, WITH A. 3100 FEET RADIUS CURVE CONCAVI', THENCE SOUTHERLY ALONG; THE; ARC OF SAID CI JR V E THROUC;II A IsHwI'RAL ANCIL,E OF 41 °O(;'44" A DISTA NCF OF 22.96 I EiF'1' TO A POINT OF REVERSE. (J;RVATURF WITH A 63.00 FEET RADIUS CUFWL CONCAVE EASTERLY; THENCE S01,1THERLY ALONG TLFE ARC OF SAID CARVE 'I'EIROUGH A CENTRIAL ANGLE OF 12203TIA" A DISTAN01 OF 13433 FEET TC) A POINT OF REVERSE tURVATURE WI41 A 3210 FIEF: L RADIUS CURVE CONCAVE SOU'fH14'E5"I'ERLl ;ff1F:NG13 S(11;'11IF'.AS'1'IRLY' ALONG TFI: ;MAC OF SAID C'URVF T'HROUGI I A CENTRAL. ANG I-.I'i (:)F 43°4S'4�).A DIS FANCE OF 24.44 TO A POINT OF RFVFI6H CURVATURE WITH .A 633)00 1-11`1' RADIUS C'IIRVE C7ONCAVE NORTHEASTERLY; THENCE SOU HEAS'I'I'RLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 28°40'24" A DISFANC'i', OF 316.78 FEET;'FHENCE NORTH 9O°0(YO0" WEST 42$.GS FI'ET" FO A POINT ON THE ARC OF A NUN-TANGF,NT 82.00 FEET RADIUS CURVE. CONCAVE, WESTERLY HAVING A RADIAL- LINE TO WHICH BEARS SOUTH 86035'18" WEST; 111ENC1_. NORTHERLY ALCTNCi TIIP. ,ARC OI' SAID CURVE, '1'11RO UGH A CENTRAL ANGLE OF 4604015" A 11ISTANC;E OF 66,89 FELT; 'I'HF:NCE NORTH 500W*57" WEST 134.3$ FEF�T T'O THE, 13136INNING OF A 47,00 I-h:ET RADIUS CORM; CONCAVE NORTIIF.AS'I'ERLY; THENCE NOR'I'HWE417-RLY ALONG I'H13 ARC OF SAID CURVE THROUGH A CENTRAL ANGLIT (H 29'29':38" A DISIAN'CE OF 24.19 FEET; THENCE NORTH 01319" WEST 26,65 FEET; TI-ICNCE NORTH 16`5O'59- WFSJ' IS 54 EEL:"f;'fIiENC;i: NORTH 28'12`57" WEST 1928 FEET' To THE BEGINNING OF A 37MO FERT RADIUS CI;RVF; CONCAVE EASTERLY; THENCE NORTHERLY ALONC; THE, ARC OF 882/015610-0084 1• 137 1063073.06 a07/01/10 -25- SAID CURVE TIIRCHIGH A CENTRAL ANGLE OF 54"07'55" A DISTANCE OI' 34.90, Pk6T; THENCE NORTH 27°09'48" EAST 40.67 FEI; I' TO T ilk BEGINNING OF A 250.00 FEET RADIUS CURVE CONCAVE NORHIWHSTF:RLY. THENCE NORTHEASTERLY ALONG 1'HE ARC OF SAID CURVE 1HROIUGH A CENTRAL ANGLE' OF 2V50'21'` A DISTANCE OF 99.65 FEET TO A POINT OF REVERSE CURVATURE WITH A NON -TANGENT 82.00 FELT RADIUS CURVE CONCAVE SOUTiEAS"I"ERLY HAVING A RADIAL, TO WHICH BEARS SGUTEI 85"40'33" FAST: 'I'FIfNCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 54^26'03" A DISTANCE OF 77.90 FEET; TFIENCE NOR"I'FI 27'59'09" LAST 16.70 FFF,T TO THE BEGINNING OF A 56.00 1'Eli[' RADIUS CURVE CONCAVE? S0UI'HI'ASTERLY; TIIFNCF. NOR'ITIEAS111,NLY ALONG THE ARC Of,' SAID C'URVF THROU(ill A CFNFRAL ANGLE OI' 28"W36" A DISTANCE OF 28.00 FEET; THENUE NOPTII 1910'35" I?AST 27.25 FEET TO THE BEGINNING OF A 100.00 Pl;i?T RADIUS CURVE CONCAVi:: W117,STERLY; THENCE NORTHERLY A[,( .)NG THE, ARC OF SAID C4!RVF THROUGH A CENTRAL ANGLE OF 35032700" A DISTANCE OF 62.02 FEET: THItNCE NORTH 40"04'06" WEST 64.22 FEET; THENCE NORTII 42°34'54" WP.S 1'47s0 FI F..T; THI?NICE NOR'CH 7°36'08" WEST 102.14 FEET `I-O A POINTON SAID SOUTHERIN RIGHT -CIF -WAY OF THE ALL AiMMIC:AN CANAL; THENCF: NORTH 89352'48" EAST ALONG; SAID RIGHT-OF-WAY ?I5.01 FEET "10 'I'NE 'INUE POINT OF BECINNINC:. REFERENCE IS R7ADETO EXHLBI'F °`A" A'I"I'ACIIED HERETO AND IMAD1 A PART IIEREOF. CONTAINING: 166,459 SQ.I,T. 3.82 ACRES C(v1(i(.i i06.073 06 078/01/10 -26- 138 rdtl SCALE - 300 I i K/Vh.KD7Ut1 LVUIVlr F,ALIYEI EXHIBIT "B " LOT 23 T111 33367 -- - - m<.•.AF f I—_ COACHEL4 CANAL 0/ J It I I I I I I I I I I I I I I I I I II � 1 A \. 1 — — — - — — — easa'+e'w r. ------ LOT 0" "J? ACP5,q / I A,� I I /U7�12 I 1`\ �=IA�AA'aJ• I a.Aucu` W� near azAcs' n.7 , ~\ \N, Fl 1 I ` I'tl! A^.h_5 . +I I I C I 16 l SECTI CCN AIN F. YOUNG ` E'P. . J�hl:` !. )'L'1 I� �',-1iS'-� / j%ir• r.. U/ gA1.� P.EVISED TENTATIVE " 15-0068 CONSTRUCTION TESTING 8 ENGINEERING, INC. PARCEL MAP 33367 I IdA MIN fI tliF 11PEPING 1 Is"RoU 1V.iYEEIXG 9i CIECHMIGAI 23 11 was nc 1111 YEvpFI IOAO, SLIP_ I!fi IB[9A0100 L-. 9iM1tE, it111 IILUiS LC1�� 23 11 I$ Ob JP R 882/015610-0084 ^ 139 1063073 06 a07/01/10 -27- SNFEr 2 6F 2 EXHIBIT Y LOT 23 DATA TABLE No. DELfA EARLVG RADIUS LEA'GTN _ I S00'0T/2'£ 123.24 2 p=327449" 16J.00' 104.0 3 =3654'12' 26700 171.97' _ 4 p =8775G ' 333.00 _ 48.22 _ _ p=41'06'44" J2.00' 22.96' _5 6 =12232'06" 63.00' 134,73' 7 �,_ =43'4549" J2. 00' 14.44' 8 A=464475" 6200 - 56.69' 9 p =2979 38 47 00' 24.19' I0 ND4'1J09'W - 26.65' 11 mv6'50'59"W 18.54' 11 A'281257"W _ 19.28 13 p=54'07'55" J700' 34.96' 14 N27'09'48C - 40.67' 5 p=225021" 150.90' 99.65' 16 I7 5425'03° N2759'09 E 82.00' 7790' _16.70 _ 1d =28'3B'36" 5600' 28.00' 19 N)910'35 E 2725 0 p=35'32'06" 100.-00' 62.02' 6� N0'0 4.22' 22 N423954"W 4750' 2JI 08,yN3736b —� I0214 I I��III�IIII��II'II II IIIII�I IIIII �II'�III III�I�I'IIII� GL9Ei^AF;G` 557 REVISED TENTATIVE s-acre CONSTRUCTION TESTING & ENGINEERING, INC. PARCEL MAP 33367 RPNnIN4 CIYII S N 6INE I P I Id- L A N D bDNMtY1NG-GIDIEUN'i C'I O G�tl — Fqii 1111 MDAGIII PEAR. SW E 116 FSCOIG100 E1 9t3}fi, PM:(II [� 110-Ilia LOT 23 11/151361 ki 882/015610-0094 1106 073 06 a07 01/10 -28- 140 ATTACHMENT NO.2 mkdoldrLu [To be Inserted] 882/015610-0084 1063073.06 ao7/01/10 ATTACHMENT NO.2 •• �.4 •I I I I� 1 • � I F I •I 9 I �� l jq I l • Ij rl Iq IN II i sl I • i •I li+@l0 IIII 1 it III I lii IBI dl 0 1 � e "C-3 CrJ a =55555555555555555555ifiGiSiifS[ G ry "G � Q G 1� 1! �M [R`S 1 is'• �� I@!@BI!•B�li�l,@�I�g SIB �Z" ....'—'-' I le 1• :1 fit el 1, 1 e O ► 3 Aliiijilee�e�..eil;li@@jl"I�BIBII' �1 '" � it B1 I: B1 '• ' Ip '! y e iniihTal !ii i@iiei!! 11 Ij '' JilGtea!E � Illii i II 1 1i F ,' I I•, " I B � •�• C pj Jill 19 ri ii B @ I ca tt INIBI1Bib 1BiI1BNBIBIIIIBIBIB111 882/015610-0084 1063073.06 e07/01 /10 ' 1 142 ee ATTACHMENT NO.3 FORM OF GRANT DEED [See Following Document] 882/015610-0084 'it. 143 106307306 a07/01/10 ATTACHMENT NO. 3 RECORDING REQUESTED BY, MAIL TAX STATEMENTS TO AND WHEN RECORDED MAIL TO: LDD SilverRock, LLC 74-001 Reserve Drive Indian Wells, California 92210 Attn: Theodore R. Lennon, Jr. This document is exempt from payment of a recording fee pursuant to Government Code Section 27383 GRANT DEED ( Parcel) For valuable consideration, receipt of which is hereby acknowledged, The LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), acting to carry out the Redevelopment Plan ("Redevelopment Plan") for the La Quinta Redevelopment Project Area No. 1 (the "Project Area"), under the Community Redevelopment Law of California, hereby grants to , a ("Developer"), the real property hereinafter referred to as the "Parcel," described in Exhibit A attached hereto and incorporated herein, subject to the existing easements, restrictions and covenants of record described there. 1. Reservation of Mineral Rights. Agency excepts and reserves from the conveyance herein described all interest of the Agency in oil, gas, hydrocarbon substances and minerals of every kind and character lying more than five hundred (500) feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the Parcel lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals from said Parcel or other lands, but without, however, any right to use either the surface of the Parcel or any portion thereof within five hundred (500) feet of the surface for any purpose or purposes whatsoever, or to use the Parcel in such a manner as to create a disturbance to the use or enjoyment of the Parcel. 2. Parcel Conveyance in Accordance With Redevelopment Plan, Disposition and Development Agreement. The Parcel is conveyed in accordance with and subject to the Redevelopment Plan for the La Quinta Redevelopment Project Area No. 1 ("Redevelopment Plan") which was approved and adopted by Ordinance No. 43, on November 29, 1983, of the City Council of the City of La Quinta, and an Amended and Restated Disposition and Development Agreement entered into between Agency and dated , 2010 (the "DDA"), a copy of which is on file with the Agency at its offices as a public record and which is incorporated herein by reference. The DDA generally requires the Developer to construct and operate on the Parcel a [Project Description[ (the "Phase Development'), and other requirements as set forth therein. All terms used herein shall have the same meaning as those used in the DDA. 882/015610-0084 ^ 14 `P 1063073,06 a07/01/10 '��., . 3. Permitted Uses. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Parcel or any part thereof, that upon the date of this Grant Deed ("Grant Deed") and during construction through completion of development and thereafter, the Developer shall devote the Parcel to the uses specified in the Redevelopment Plan for the periods of time specified therein. All uses conducted on the Parcel, including, without limitation, all activities undertaken by the Developer pursuant to the DDA, shall conform to the DDA, the Redevelopment Plan, and all applicable provisions of the City Municipal Code. The foregoing covenants shall run with the land. 4. Restrictions on Transfer. The Developer further agrees that, except as permitted or approved by the Agency pursuant to Section 703 of the DDA, (i) until the Developer obtains a Release of Construction Covenants for the Phase of Development, no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under the DDA or this Grant Deed, nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Parcel or the Phase of Development thereon, and (ii) for a period of ten (10) years, commencing upon the date Developer obtains a Release of Construction Covenants for the Phase of Development, Developer shall retain full managerial and operational control of the Phase of Development. 5. Binding on Successors. All of the terms, covenants and conditions of this Grant Deed shall be binding upon the Developer and the permitted successors and assigns of the Developer. Whenever the term "Developer" is used in this Grant Deed, such term shall include any other successors and assigns as herein provided. 6. Nondiscrimination. Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person, or group of persons on any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Parcel herein conveyed, or any part thereof, nor shall Developer, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Parcel herein conveyed, or any part thereof. The foregoing covenants shall run with the land. Developer agrees for itself and any successor in interest that Developer shall refrain from restricting the rental, sale, or lease of any portion of the Parcel, or contracts relating to the Parcel, on the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and 8001561M084 1063073.06 a07/01 /10 -2 10 , . , 145 paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In contracts pertaining to the realty: "There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises which are the subject of this agreement, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." 7. Agency's Right of Reverter and Power of Termination. The Agency has the right, at its election, to reenter and take possession of the Parcel, with all improvements thereon, and terminate and revest in the Agency the estate conveyed to the Developer, subject to all liens and other matters of record, if after the closing and prior to the Agency's issuance of the Release of Construction Covenants for the Phase of Development, the Developer (or its successors in interest) shall: a. fail to start construction of the Phase of Development as required by the DDA for a period of ninety (90) days after written notice thereof from the Agency; or b. abandon or substantially suspend construction of the Phase of Development required by the DDA and fail to resume construction within ninety (90) days after written notice thereof from the Agency; or 882/015610-0084 146 1063073 06 a07/01/10 -3- '� C. contrary to the provisions of Section 703 of the DDA Transfer or suffer any involuntary Transfer in violation of the DDA, and such Transfer is not rescinded within sixty (60) days of notice thereof from the Agency. For purposes of this Grant Deed, the term "construction" shall mean excavation work or physical construction, but shall not include any grading work completed by Developer on the Parcel prior to the execution date hereof. Such right to reenter, terminate and revest shall be subject to and be limited by, shall not defeat, render invalid or limit, and shall be subordinate to: Any mortgage or deed of trust permitted by the DDA; or 2. Any rights or interests provided in the DDA for the protection of the holders of such mortgages or deeds of trust. Upon the revesting in the Agency of title to the Parcel as provided in this Section 7, the Agency shall, pursuant to its responsibilities under state law, use its reasonable efforts to resell the Parcel as soon and in such manner as the Agency shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan, as it exists or may be amended, to a qualified and responsible party or parties (as determined by the Agency) who will assume the obligation of making or completing the Phase of Development, or such improvements in their stead as shall be satisfactory to the Agency and in accordance with the uses specified for such Parcel or part thereof in the Redevelopment Plan. Upon such resale of the Parcel, the net proceeds thereof after repayment of any mortgage or deed of trust encumbering the Parcel which is permitted by the DDA, shall be applied: i. First, to reimburse the Agency, on its own behalf or on behalf of the City, all costs and expenses incurred by the Agency, excluding City and Agency staff costs, but specifically, including, but not limited to, any expenditures by the Agency or the City in connection with the recapture, management and resale of the Parcel or part thereof (but less any income derived by the Agency from the Parcel or part thereof in connection with such management); all taxes, assessments and water or sewer charges with respect to the Parcel or part thereof which the Developer has not paid; any payments made or necessary to be made to discharge any encumbrances or liens existing on the Parcel or part thereof at the time or revesting of title thereto in the Agency, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Developer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Parcel, or part thereof, and any amounts otherwise owing the Agency, and in the event additional proceeds are thereafter available, then ii. Second, to reimburse the Developer, its successor or transferee, up to the amount equal to the sum of (a) the costs incurred by Developer for the acquisition and development of the Parcel and for the improvements existing on the Parcel at the time of the reentry and possession, less (b) any gains or income withdrawn or made by the Developer from the Parcel or the improvements thereon. 882/015610-0084 147 1063073.06 a07/01/10 -4- Any balance remaining after such reimbursements shall be retained by the Agency as its property. The rights established in this Section 7 are not intended to be exclusive of any other right, power or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy authorized herein or now or hereafter existing at law or in equity. These rights are to be interpreted in light of the fact that the Agency will have conveyed the Parcel to the Developer for redevelopment purposes, particularly for development of the Phase of Development, and not for speculation in undeveloped land. 8. Violations Do Not Impair Liens. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest permitted by Section 703 of the DDA. 9. Covenants Run With Land. All covenants contained in this Grant Deed shall be covenants running with the land. All of Developer's obligations hereunder, except as otherwise provided hereunder, shall terminate and shall become null and void upon the expiration of the effectiveness of the Redevelopment Plan. Every covenant contained in this Grant Deed against discrimination contained in paragraph 6 of this Grant Deed shall remain in effect in perpetuity. 10. Covenants For Benefit of Agency. All covenants without regard to technical classification or designation shall be binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for the entire period during which such covenants shall be in force and effect, without regard to whether the Agency is or remains an owner of any land or interest therein to which such covenants relate. The Agency, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. The covenants contained in this Grant Deed, without regard to technical classification, shall not benefit or be enforceable by any owner of any other real property within or outside the Project Area, or any person or entity having any interest in any other such realty. 11. Amendments to Redevelopment Plan. No amendment to the Redevelopment Plan shall require the consent of the Developer, but no such amendment shall diminish or restrict the Developer's rights or expand the Developer's obligations hereunder or under the DDA without the Developer's consent, except as required by State law. /:UlTol`►ue" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Date: > _ By: ATTEST: Secretary of the Agency Executive Director 882/015610-00841 4 1063073.06 a07/01/10 -5- APPROVED AS TO FORM: RUTAN & TUCKER, LLP M. Katherine Jenson Agency Counsel Date: Developer: , LLC, a Delaware limited liability company Its: 882/015610-0084 14 9 1063073.06 a07/01/10 -6- �� State of California County of Riverside On , before me, (insert name and title of the officer) Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. State of California County of Riverside 3r, before me, (Seal) (insert name and title of the officer) Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) 882/015610-0084 r. 150 1063073.06 a07/01/10 -7- EXHIBIT A LEGAL DESCRIPTION OF PARCEL [TO BE INSERTED] 882/015610-0084 151 106307306 a07/01/10 -8- ATTACHMENT NO.4 SCOPE OF DEVELOPMENT I. GENERAL SUMMARY This document outlines the general requirements for the improvements to be constructed on the Property. Specific details are addressed in the SilverRock Specific Plan 2006-080, as amended by Resolution No. 2006-083, which was duly adopted by the City Council on July 18, 2006 ("Specific Plan"), and in the construction plans that will be prepared for the development. The Property is located at the southwest intersection of Jefferson Street and Avenue 52 in the City of La Quinta, and is approximately 58.97 acres in size. The Specific Plan provides for the development of a commercial development project that contains all of the following: a luxury boutique hotel and related amenities, a resort hotel and related amenities, resort -style condominium/casitas units, two parking structures, and a resort retail village. The Specific Plan sets forth the maximum number of Units that may be developed in (i) the Boutique Hotel, (ii) the Ranch Development, and (iii) the Resort Hotel, Golf Casitas Development, and Lake Casitas Development. Notwithstanding that this Agreement does not set forth a "minimum" number of Units that must be developed in each Phase of Development, Developer acknowledges that the Agency's intent in entering into this Agreement is to achieve the maximum number of Units that may be designed and developed pursuant to the Specific Plan in each Phase of Development. II. PROJECT COMPONENTS A. Boutique Hotel The Boutique Hotel shall be a Four Star Quality or higher luxury hotel with expanded amenities, a high level of service and a unique architectural theme. The Boutique Hotel shall provide an exceptional and personalized level of accommodation, services, and facilities. Facilities shall be designed for short-term stay and shall include a management program to encourage rental of any Condominium Hotel Units when not in use by their owners. The Boutique Hotel shall contain not more than 225 Units. All Units in the Boutique Hotel may be sold as Condominium Hotel Units. All Units will have full access to resort amenities and services. A minimum of 35 of the Units shall have a Lock -Off Feature. The public spaces in the Boutique Hotel, including restrooms, restaurants and meeting spaces, shall be furnished with upgraded materials such as granite, marble, specialty lighting, and custom millwork. Distinctive and authentic architectural details such as clay tile, iron gates, fountains, and pavers shall be included throughout. Lobby areas shall feature elegant live plants and floral displays. Services offered shall include, but are not limited to, on -site sales efforts that solicit and/or serve group meetings, turndown service, room service, laundry service, personalized wake up calls, concierge and bell services, secure luggage storage facilities, and covered valet parking. Amenities shall include at least one signature dining restaurant with minimum seating for 80 indoor and 40 outdoor, a well appointed lounge/bar with minimum seating for 40, guest ATTACHMENT NO. 4 882/015610-0084 _ 1063073 06 a07/01110 -1 lo„ , n 152 registration lobby of at least 1,500 square feet, a first-class spa and fitness facility of at least 8,000 square feet (sf), at least one fully amenitized pool offering food service and cabanas, and at least 10,000 sf of interior meeting space. A highly upgraded Presidential Suite shall also be included of at least 2,500 sf. Landscaping shall include distinctive entry water features, use of fountains throughout, and substantial landscaping material. Hardscape materials shall include tumbled pavers and tile in courtyard areas. At least 50 percent of required parking shall be provided in covered or trellised parking areas. At least 150 parking spaces shall be included in a parking structure to be developed on -site. When not in use by the owners, all Units (except Fractional Units) in the Boutique Hotel shall be offered for rental as a part of the Boutique Hotel. Such rental may be offered by the owner of the Unit, a third party rental agent or an agent affiliated with the operator of the Boutique Hotel. All use of all of the Units in the Boutique Hotel, including by the owners thereof, shall be through the Boutique Hotel front desk check -in and check-out procedure, using electronic keys controlled by the operator of the Boutique Hotel. The operator shall have the ability to book all unbooked Units (except Fractional Units) as demand dictates within 2 weeks of the date being requested, and may charge a booking fee for such bookings. All Units in the Boutique Hotel shall be finished with upgraded materials such as stone, wood, and tile flooring, upgraded carpet and pad, granite or tile counters, tile and/or marble baths, decorative wood beam ceilings where applicable, flat screen televisions, LodgeNet or equal services, 2 telephones, kitchenette with top -of -the -line or equal appliances, custom fireplaces in some units, luxurious bedding, and top-quality furnishings, uniformity of units/furnishings. B. Ranch Development The Ranch Development shall contain approximately fifty (50) Units, and all of such Units shall have a Lock -Off Feature. All Units in the Ranch Development may be sold as Condominium Hotel Units. Resort pool area(s) shall be provided for the Units in the Ranch Development. No pools shall be owned by an individual Unit. When not in use by the owners, all Units (except Fractional Units) in the Ranch Development shall be offered for rental as a part of the Boutique Hotel. Such rental may be offered by the owner of the Unit, a third party rental agent or an agent affiliated with the operator of the Boutique Hotel. All use of all of the Units in the Ranch Development, including by the owners thereof, shall be through the Boutique Hotel front desk check -in and check-out procedure, using electronic keys controlled by the operator of the Boutique Hotel. The operator shall have the ability to book all unbooked Units (except Fractional Units) as demand dictates within 2 weeks of the date being requested, and may charge a booking fee for such bookings. All Units in the Ranch Development are to be finished with upgraded materials such as stone, wood, and tile flooring, upgraded carpet and pad, granite or tile counters, tile and/or marble baths, decorative wood beam ceilings where applicable, flat screen televisions, LodgeNet or equal services, 2 telephones, kitchenette with top -of -the -line appliances, custom fireplaces in some Units, luxurious bedding, and top quality furnishings. ATTACHMENT NO. 4 882/015610-0084 'to.. 5 3 1063073.06 a07/01/10 -2- C. Resort Hotel/Golf Casitas Development/Lake Casitas Development 1. Resort Hotel The Resort Hotel shall be a Four -Star Quality or higher luxury hotel with expanded resort amenities, specifically designed to create a single source location for guests to enjoy their stay. The Resort Hotel shall contain at least ninety (90) Hotel Units that are owned and operated by Developer or an entity authorized or approved by the Agency pursuant to Section 703. The public spaces in the Resort Hotel, including restrooms, restaurants and meeting spaces shall be furnished with upgraded materials such as granite, marble, specialty lighting, and custom millwork. Distinctive and authentic architectural details consistent with the resort theme shall be included throughout. Lobby areas shall be expansive and shall feature elegant live plants, floral displays, and outstanding views. Services offered shall include, but are not limited to, on -site sales efforts that solicit and/or serve group meetings, turndown service, room service, laundry service, personalized wake up calls, pool services, activities center, kids clubs, excursions, concierge and bell services, secure luggage storage facilities, and covered valet parking. Amenities shall include at least one signature dining restaurant with minimum seating for 80 indoor and 30 outdoor, a well appointed lounge/bar with seating for a minimum of 40, a three -meal dining option seating at least 100 indoor and 60 outdoor, guest registration lobby of at least 3,500 sf, a first-class spa and fitness facility of at least 12,000 sf, a kids club and teen center of at least 2,500 sf, at least two fully amenitized resort pools offering food service, cabanas and swim areas for children, one adult pool, and at least 20,000 sf of interior meeting space. Landscaping shall include distinctive entry features, use of themed elements, and mature landscaping material. At least 30 percent of the required parking shall be provided in covered or trellised parking areas. At least 150 parking spaces shall be provided in a parking structure to be developed on -site. All Units are to be finished with upgraded materials such as stone, wood, and tile flooring, upgraded carpet and pad, granite or tile counters, tile and/or marble baths, decorative wood beam ceilings where applicable, flat screen televisions, LodgeNet or equal services, 2 telephones, kitchenette with top -of -the -line appliances, custom fireplaces in some units, luxurious bedding, and top quality furnishings. 2. Lake Casitas Development and Golf Casitas Development The Lake Casitas Development shall contain approximately fifty (50) Units; the Golf Casitas Development shall contain approximately 72 Units; and all of such Units shall have a Lock -Off Feature. All Units in the Lake Casitas Development and in the Golf Casitas Development may be sold as Condominium Hotel Units. Resort pool area(s) shall be provided for the Units in the Lake Casitas Development and for the Units in the Golf Casitas Development. No pools shall be owned by an individual Unit. ATTACHMENT NO. 4 10630 73.06 00 /0 154 1063073.06 a07/01/10 -3- �9"' When not in use by the owners, all Units (except Fractional Units) in the Lake Casitas Development and in the Golf Casitas Development shall be offered for rental as a part of the Resort Hotel. Such rental may be offered by the owner of the Unit, a third party rental agent or an agent affiliated with the operator of the Resort Hotel. All use of all of the Units in the Lake Casitas Development and in the Golf Casitas Development, including by the owners thereof, shall be through the Resort Hotel front desk check -in and check-out procedure, using electronic keys controlled by the operator of the Resort Hotel. The operator shall have the ability to book all unbooked Units (except Fractional Units) as demand dictates within 2 weeks of the date being requested, and may charge a booking fee for such bookings. All Units in the Lake Casitas Development and in the Golf Casitas Development are to be finished with upgraded materials such as stone, wood, and tile flooring, upgraded carpet and pad, granite or tile counters, tile and/or marble baths, decorative wood beam ceilings where applicable, flat screen televisions, LodgeNet or equal services, 2 telephones, kitchenette with top -of -the -line appliances, custom fireplaces in some Units, luxurious bedding, and top quality furnishings. 3. Unit/Lock-Off Feature Requirements. The Resort Hotel, Golf Casitas Development, and Lake Casitas Development, collectively, shall contain not more than 405 Units, and at least 115 of such Units shall have a Lock -Off Feature. 4. Fractional Units. Up to 30% of all Units which are developed, other than those which must be retained as Hotel Units, may be sold as Fractional Units, of which no more than ten percent (10%) of the aggregate number of Fractional Units may be developed within the main building of the Resort Hotel. D. Resort Retail Village Development The Resort Retail Village Development shall consist of specialty retail development intended to provide a variety of additional retail, restaurant, and entertainment options to hotel guests and members of the local community. Subject to the approval of the City Council and any conditions imposed by the City Council, this mixed -use village may also include resort -oriented office, live -work loft units, and multi -family residential units. The design of the Resort Retail Village Development shall be complimentary to the Resort Hotel, the Golf Casitas Development and the Lake Casitas Development in terms of both quality and aesthetics. Pedestrian access shall be designed to encourage a seamless flow between resort accommodations and resort retail village. Tenants permitted in the Resort Retail Village Development shall include, but not be limited to, themed or signature national presence restaurants, local and national retailers, banks, general store, brokerage, art galleries, gourmet market and resort -oriented offices. Other uses may be approved in writing by the Director of Community Development ATTACHMENT NO. 4 881/015610-0084 5 1063073.06.07/01/10 -4- ,� III. DEVELOPMENT CONCEPT The Property shall be improved by the Developer in accordance with the provisions of this Agreement, the Specific Plan, and all applicable codes, ordinances, and statutes including requirements and procedures set forth in the La Quinta Municipal Code, and the Redevelopment Plan regulations adopted in conjunction with or subsequent to execution of this Agreement. IV. ON -SITE DEVELOPMENT AND IMPROVEMENTS Developer shall prepare such plans, reports, and studies, and obtain such permits and approvals as required, including, but not limited to, grading plans for construction of the Project. Plans shall be prepared by a licensed civil engineer in good standing and subject to the approval of the Director of Public Works. Developer shall grant and permit all necessary and appropriate utility easements and rights for the development of the Project, including but not limited to sanitary sewers, storm drains, water, electrical power, telecommunications, natural gas, cable television, etc. V. LANDSCAPING Developer shall be responsible to fully landscape the Project in accordance with the Specific Plan and landscape plans approved by the City. VI. ON -SITE INFRASTRUCTURE IMPROVEMENTS Developer shall be responsible for the construction of (i) all on -site infrastructure improvements that may be identified per the Specific Plan, including, but not limited to, all required internal utilities, and any off -site infrastructure improvements that may be identified per the Specific Plan that are not constructed by the Agency; and (ii) all on -site and off -site improvements as required by any applicable site development permits or subdivision maps. All such construction shall be done to City standards. Additionally, Developer shall be responsible for obtaining and delivering to the City such bonds or other improvement security as City may require in accordance with applicable law, including but not limited to payment and performance bonds. VIL DEVELOPMENT STANDARDS All development on the Property shall conform to the development standards set forth in the Specific Plan, and other applicable City codes and development standards. ATTACHMENT NO. 4 15 6 882/015610-0084 1063073.06 a07/01/10 -5- ATTACHMENT NO.5 FORMS OF OPTION AGREEMENT [See following Documents: #774752 for form of Option Agreement to be recorded against Boutique Hotel Parcel and Resort Hotel Parcel; 2. #790071 for form of Option Agreement to be recorded against Golf Casitas Parcel, Lake Casitas Parcel, and Ranch Development Parcel; 3. 4790218 for form of Option Agreement to be recorded against Black Box Parcel and Resort Retail Village Parcel] 882/015610-0084 1063073 06 a07/01/I0 ATTACHMENT NO. 5 157 FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, CA 92247 Attn: Executive Director (SPACE ABOVE THIS LINE FOR RECORDING USE) (EXEMPT FROM RECORDING FEE PER GOV. CODE § 27383) (Boutique Hotel Parcel/Resort Hotel Parcel) NOTICE: THIS OPTION AGREEMENT CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS OPTION AGREEMENT ("Option Agreement") is made this day of , (the "Effective Date"), by and between LDD SILVERROCK, LLC, a Delaware limited liability company ("Developer"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"). RECITALS A. Developer has entered into a Disposition and Development Agreement dated December 19, 2006, with the Agency, which has been amended on or about October 23, 2008, October 21, 2009, November 20, 2009, and April 21, 2010 (as amended, the "DDA"), pursuant to which Agency conveyed to Developer that certain real property located at the southwest intersection of Avenue 52 and Jefferson Street, in the City of La Quinta, County of Riverside, State of California (the "Site"). All defined terms used herein shall have the same meaning as set forth in the DDA unless otherwise stated. The Site is legally described in Exhibit "A." which is attached hereto and incorporated herein by this reference. B. Pursuant to the DDA, Developer has agreed to construct on the Site a commercial development that consists of a main hotel building containing _ units designed for overnight occupancy (each, a "Unit," and collectively, the "Units"), and one or more "casita buildings" (as that term is defined below) containing _ U Units (collectively, the "Project"). The Project shall be constructed in two (2) phases. The first phase of the Project ("Phase One") shall consist of Developer's (i) completion and opening of, and receipt of a temporary or final certificate of occupancy for, the core operating facilities of the Project, including, without limitation, the lobby, guest check -in area and facilities, administration, restaurant, and pool; and (ii) completion of (including fumishings), and receipt of a temporary or final certificate of occupancy for, fifty percent (50%) of the Units to be developed in the Project, with all of such completed Units 882/015610-0084 774752.05 a06/30/10 n i operational and made available for rental, all as determined by City of La Quinta's Community Development Director and Director of Building and Safety. The second phase of the Project ("Phase Two") shall consist of Developer's completion of the Project, including, without limitation, Developer's receipt of a temporary or final certificate of occupancy for the remaining fifty percent (50%) of the Units to be developed in the Project, with all of such completed Units operational and made available for rental, all as determined by City of La Quinta's Community Development Director and Director of Building and Safety. As used herein, the term "casita building" shall mean and refer to building that is not a main hotel building. C. The Project shall be constructed on the Site in accordance with all of the requirements set forth in the DDA. D. As a condition to the Agency's conveyance of the Site to Developer, Developer was required to grant to Agency (a) an option to repurchase the Site, or any portion thereof, from Developer, if Developer (i) fails to commence construction of the Project within certain specified time frames, (ii) fails to continuously proceed with construction of the Project or to complete construction of Phase One of the Project within certain specified time frames, or (iii) transfers the Site, or any portion thereof, in violation of the terms of the DDA; and (b) a right of first offer to purchase the Site, or any portion thereof, if (1) Developer fails to complete construction of Phase Two of the Project within certain specified timeframes, or (2) Agency's option under subparagraph (a)(ii) or (a)(iii) above is triggered, Agency does not exercise the applicable option, and the default which gave rise to Agency's option under subparagraph (a)(ii) or (a)(iii) has not been cured, all as further described herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals and all of the terms and conditions contained in the DDA, Developer hereby grants to Agency the following repurchase options: 1. Repurchase Option I - Failure to Commence Construction Subject to Section 5(f), Developer hereby grants to Agency an exclusive option to repurchase the Site, or any portion thereof ("Repurchase Option I"), if Developer fails to commence construction of the Project within sixty (60) days after the Effective Date. For the purposes of this Option Agreement, the term "commence construction" shall mean Developer's commencement of mass grading for the entire Site, subject to Section 5(f) below. In the event of Developer's failure to commence construction of the Project within the time period described above, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of sixty (60) days following the expiration of the time period described above and the cure period described in Sections 5(b) and 5(c) hereof. ("Repurchase Option I Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option I by giving written notice to Developer ("Agency's Notice of Option 1 Exercise"), in accordance with Section 6 of this Option Agreement, prior to the expiration of the Repurchase Option I Period. Failure of Agency to 882/015610-0084 774752 05 a06/30/10 _2 fi 15 .10 exercise Repurchase Option I shall constitute a waiver of Agency's right to exercise the Repurchase Option I, but shall not constitute a waiver by Agency of Developer's breach of its obligation to timely commence construction of the Project or of any remedies Agency may have under the terms of the DDA or under any other agreement for Developer's failure to timely commence construction of the Project. (b) Repurchase Price - Repurchase Option I Agency's repurchase price for the Site, or portion thereof ("Repurchase Option I Repurchase Price"), shall be , which is eighty percent (80%) of Developer's purchase price for the Site, or applicable portion thereof. In the event that there are any outstanding mortgages or deeds of trust recorded against the Site that (i) have been approved by the Agency pursuant to Section 309.1 of the DDA; (ii) meet the requirements for Agency subordination set forth in Section 5(g) herein; and (iii) have been subordinated to by the Agency (any of the foregoing, a "Valid Lien") at the time that Repurchase Option I is exercised, Developer and Agency agree that the Repurchase Option I Repurchase Price shall be paid to the lender on any such Valid Lien, up to the then outstanding balance due under same; provided, however, that the outstanding balance due under a Valid Lien shall not exceed eighty percent (80%) of Developer's purchase price for the Site. Any portion of the Repurchase Option I Repurchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. 2. Repurchase Option II - Failure to Continuously Proceed With Construction of the Project or to Complete Construction of Phase One Developer hereby grants to Agency an exclusive option to repurchase the Site, or any portion thereof ("Repurchase Option II") if, after commencement of construction of the Project, Developer fails to continuously proceed with construction of the Project, or to complete Phase One of the Project within twenty-four (24) months after Developer commences construction of the Project (the "Phase One Completion Deadline"). For purposes of this Option Agreement, "continuously proceed with construction" shall be defined as construction that is interrupted, if at all, for periods of no longer than thirty (30) days. In the event of Developer's failure to continuously proceed with construction, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of sixty (60) days following such failure and after expiration of the cure period described in Sections 5(b) and 5(c) hereof ("Repurchase Option II Failure to Continuously Proceed Period"). In the event of Developer's failure to complete construction of Phase One of the Project by the Phase One Completion Deadline, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the completion of the "Cost Audit" (as that term is defined in Section 2(b) below) and after expiration of the cure period described in Sections 5(b) and 5(c) hereof ("Repurchase Option II Failure to Complete Phase One Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option II by giving written notice to Developer, in accordance with Section 6 of this Option Agreement, prior to the expiration of the Repurchase Option II Failure to Continuously Proceed Period or the Repurchase Option II Failure to Complete Phase One Period (as applicable). Failure of Agency to exercise the Repurchase 882/015610-00841 774752.05 a06/30/10 -3-10 . •160 Option II shall constitute a waiver by Agency of Agency's right to exercise Repurchase Option II only with respect to Developer's specific incidence of failure to continuously proceed with construction that gave rise to Repurchase Option II or of Developer's failure to complete construction of Phase One of the Project by the Phase One Completion Deadline (as applicable), but shall not constitute a waiver by Agency of Developer's breach of its obligation to continuously proceed with construction of the Project or to complete construction of Phase One of the Project by the Phase One Completion Deadline (as applicable) or of any remedies Agency may have under the terns of the DDA or under any other agreement for Developer's failure to continuously proceed with construction of the Project or to complete construction of Phase One of the Project by the Phase One Completion Deadline (as applicable). (b) Determination of Repurchase Price - Repurchase Option II Agency's repurchase price for the Site, or portion thereof ("Repurchase Option II Repurchase Price"), shall be the sum of (a) Developer's purchase price for the Site, or applicable portion thereof, plus one hundred percent (100%) of "Developer's Construction Costs." For purposes of this Option Agreement, the term "Developer's Construction Costs" shall mean the construction costs actually incurred by Developer for development of the Project from the Effective Date to the date Agency exercises this Repurchase Option II, as determined by an independent audit, performed by an auditor selected by Agency who is reasonably acceptable to Developer (the "Cost Audit"), which costs shall consist only of (i) the amount(s) paid by Developer to the contractor or contractors performing the works of improvement; and (ii) reasonable inspection and testing costs paid by Developer to independent third party engineers or consultants in conjunction with said works of improvement (but not including costs, fees, charges, or profits allocated to Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer). Developer shall promptly provide Agency and the independent auditor with all records and documentation necessary for the auditor to perform the Cost Audit. In the event that there are any Valid Liens at the time that Repurchase Option 11 is exercised, Developer and Agency agree that the Repurchase Option II Repurchase Price shall be paid to the lender on any such Valid Lien, up to the then outstanding balance due under same. Any portion of the Repurchase Option II Repurchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. 3. Repurchase Option III - Transfer of the Site Prior to Completion of Project Developer hereby grants to Agency an exclusive option to repurchase the Site, or portion thereof, if, prior to the time Developer completes the Project, Developer transfers or suffers an involuntary transfer of the Site in violation of the terms of the DDA ("Repurchase Option III"). In the event of Developer's transfer of the Site in violation of the DDA (an "Unauthorized Transfer"), Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for sixty (60) days following the later of (a) the date of the Unauthorized Transfer that gives rise to Agency's option under this Section, (b) Developer's written notice to Agency of the Unauthorized Transfer that gives rise to Agency's option under this Section, or (c) Agency's discovery of the Unauthorized Transfer that gives rise to Agency's option under this Section ("Repurchase Option III Period"). 882/015610-0084 y 774752.05 a06/30/10 -4- 'oo„ . 161 (a) Exercise of Option Agency shall exercise the Repurchase Option III by giving written notice to Developer ("Agency's Notice of Option III Exercise"), in accordance with Section 6 of this Option Agreement, prior to the expiration of the Repurchase Option III Period. Failure of Agency to exercise the Repurchase Option III shall constitute a waiver by Agency only with respect to the specific Unauthorized Transfer that gave rise to Repurchase Option III, but shall not constitute a waiver by Agency of Developer's breach of the transfer provisions in the DDA pursuant to this Option Agreement or of any remedies Agency may have under the terms of the DDA or under any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Site. (b) Repurchase Price - Repurchase Option III Agency's repurchase price for the Site ("Repurchase Option III Repurchase Price") shall be as follows: i) In the event Developer has not yet commenced construction of the Project at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III Price shall be the Repurchase Option I Repurchase Price, as set forth in Section 1(b) of this Option Agreement. ii) In the event Developer has commenced construction of the Project at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III Repurchase Price shall be ninety percent (90%) of the purchase price paid to Developer in connection with the Unauthorized Transfer that triggered Agency's right to exercise Repurchase Option II. In the event that there are any Valid Liens at the time that Repurchase Option III is exercised, Developer and Agency agree that the Repurchase Option III Repurchase Price shall be paid to the lender on any such Valid Lien, up to the then outstanding balance due under same. Any portion of the Repurchase Option III Repurchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. 4. Agency's Right of First Offer Developer hereby grants to Agency a right of first offer to purchase the Site, or any portion thereof, in accordance with the terms and conditions in this Section 4 ("Agency's Right of First Offer"), in the event that (a) (i) Agency has had the right to exercise Repurchase Option II with respect to Developer's failure to continuously proceed with construction or Repurchase Option III, and has failed to exercise or has elected not to exercise Repurchase Option II with respect to Developer's failure to continuously proceed with construction or Repurchase Option III (as applicable) in accordance with the terms of this Option Agreement and Developer's default that gave rise to Repurchase Option II with respect to Developer's failure to continuously proceed with construction or Repurchase Option III (as applicable) has not been cured, or (ii) Developer fails to complete construction of Phase Two of the Project within thirty-six (36) months after Developer commences construction of the Project; and (b) Developer has determined to sell or otherwise transfer the Site. 882/015610-0084 � rj 774752 05 a06/30/10 -5- 00.• • 16 is (a) Developer's Notice to Agerim Agency's Election In the event that the circumstances described in clauses (a) and (b) of the immediately preceding paragraph exist, then prior to entering into any transaction with a third party concerning the sale of the Site, Developer shall provide Agency with written notice of Developer's intent to sell the Site and Developer's proposed sale price for the same ("Developer's Sale Notice"). Agency shall have sixty (60) days after receiving Developer's Sale Notice to notify Developer, in writing, of Agency's election to exercise Agency's Right of First Offer to acquire the Site, or portion thereof, at the price noted in Developer's Sale Notice ("Agency's Election to Exercise"). (b) Agency's Failure to Exercise Agency's failure to deliver to Developer Agency's Election to Exercise within such sixty (60) day period shall be deemed Agency's election not to exercise Agency's Right of First Offer and, except as provided below, Agency's Right of First Offer with respect to the Site shall then terminate and Agency shall have no further right of first offer with respect to the Site. If Agency elects not to exercise (or is deemed to have elected not to exercise) Agency's Right of First Offer then Developer may sell the Site to a third party purchaser; provided, however, that in the event Developer determines to sell the Site at a price that is less than ninety-five percent (95%) of the price set forth in Developer's Sale Notice, Developer shall provide Agency with a written notice of Developer's intent to sell the Site with Developer's new proposed sale price for the same ("Developer's Second Sale Notice"), and Agency's Right of First Offer shall again apply with respect to the Site, in accordance with the process outlined in subparagraph (a) above and this subparagraph (b). (d) No Subordination of Agency's Right of First Offer Agency's Right of First Offer shall not be subordinated to any mortgage or deed of trust, including without limitation mortgages or deeds of trust approved by the Agency pursuant to Section 309.1 of the DDA, and, notwithstanding anything herein to the contrary, any subordination by the Agency pursuant to Section 5(g) hereof shall not affect Agency's Right of First Offer, which shall survive any foreclosure by a lender of a mortgage or deed of trust. In the event of any such foreclosure, Agency shall have the right to exercise Agency's Right of First Offer at the time such lender determines to sell the Site, pursuant to the process outlined above. Notwithstanding the foregoing, nothing herein is intended to or shall have the effect of waiving the transfer restrictions set forth in the DDA, and any proposed sale or transfer by Developer shall be effected in accordance with the same. 5. Additional Terms Applicable to the Repurchase Options The following additional terms shall apply to Repurchase Option I, Repurchase Option II, Repurchase Option III, and Agency's Right of First Offer: (a) Successors and Assigns. The Repurchase Option I, Repurchase Option II, Repurchase Option III, and Agency's Right of First Offer created hereby shall be irrevocable by 882/015610-0084 _6_ ,,• .. 16 3 774752,05 a06/30/10 Developer and, subject to any subordination by Agency in accordance with paragraph (g) below, shall be binding upon the successors and assigns of Developer and on the Site. (b) Developer's Right to Cure Certain Defaults. Notwithstanding anything herein to the contrary, Agency shall not be entitled to exercise Repurchase Option I or Repurchase Option II until Agency has provided a written notice to Developer regarding Developer's failure to commence or continuously proceed with construction of the Project, or to complete construction of Phase One of the Project (with any of the above failures referred to hereinafter as an "Option Triggering Event"), and Developer has not, within sixty (60) days after receipt of such notice, cured, corrected, or remedied such Option Triggering Event, or, for those Option Triggering Events that cannot reasonably be cured, corrected, or remedied within sixty (60) days, commenced to cure, correct or remedy such Option Triggering Event within said sixty (60) day period, and diligently prosecute the same to completion. (c) Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by Developer whenever the Agency may deliver any notice or demand to Developer with respect to an Option Triggering Event, the Agency shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage or deed of trust which has previously requested such notice in writing. Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Property (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. (d) No Agency Obligation. Notwithstanding any covenant, term, or provision in this Section 5 to the contrary, Agency shall not be obligated to exercise Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer. (e) Termination of Option Agreement. In the event Developer commences and completes construction of the Project, as evidenced by Agency's issuance of a Release of Construction Covenants for the Project and Agency has not exercised Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer, Agency shall execute and record a termination of this Option Agreement within fifteen (15) business days after Agency's issuance of the Release of Construction Covenants for the Project. (f) Enforced Delay Pursuant to DDA. Notwithstanding anything to the contrary herein, in the event performance by Developer under the DDA is extended pursuant to Section 702 of the DDA, such that the time by which Developer is required thereunder to commence construction of the Project, complete construction of Phase One of the Project, or complete construction of Phase Two of the Project, is extended, such extensions shall automatically apply hereto to (as applicable) extend the time by which Developer is required to 882/015610-0084 774752.05 a06/30/10 -7 . a 1 G q commence construction of the Project, complete construction of Phase One of the Project, or complete construction of Phase Two of the Project, by the same time as extended under the DDA. (g) Subordination. The Agency agrees to subordinate Sections 1, 2, and 3 of this Option Agreement to any mortgage or deed of trust that has been approved by the Agency pursuant to Section 309.1 of the DDA, and to execute a subordination agreement evidencing same, to be recorded in the official records of the County Recorder for the County of Riverside, provided all of the following conditions are met: i) Loan Amount. The maximum cumulative principal amount of the construction loan for the Project shall not exceed ninety percent (90%) of the lender's appraised value of the Project, upon completion of the Project, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction; ii) Use of Loan Proceeds. The loan(s) shall obligate Developer to expend loan proceeds for no other purpose than the Project; iii) Disbursement Limitations. The loan shall include provisions which ensure that the loan proceeds disbursed to Developer prior to the time Developer completes the mass grading for the Site shall not exceed eighty percent (80%) of the Developer's purchase price for the Site; iv) Agency's Opportunity to Bid. The loan shall require the lender to provide Agency with notice of a foreclosure, and shall provide that in the event of a foreclosure the Agency shall have an equal opportunity to bid for the Site; and v) Notice and Agency's Opportunity to Cure. The loan(s) shall provide that any notice of a Developer breach or default shall also be sent to the Agency at the address listed in Section 6 and that upon receipt of such notice, Agency shall have the right to (A) cure the noticed breach or default, (B) negotiate with the lender regarding the noticed breach or default, and (C) purchase the Site from Developer subject to the construction lender's deed of trust, without the consent of Developer or the holder of the construction lender's deed of trust, and that Agency's exercise of the foregoing rights shall not, in and of itself, give rise to any right on the part of the lender to accelerate the amounts due under the loan. (h) Agency's Investigation of Site. Agency shall have forty-five (45) days after the occurrence of an event that triggers Agency's ability to exercise any of Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer, to enter upon the Site (or applicable portion thereof) to conduct any tests, inspections, investigations, or studies of the condition of the Site (or applicable portion thereof). Developer shall permit Agency access to the Site (or applicable portion thereof) for such purposes. Agency's obligation to close "Escrow" (as defined below) shall be subject to Agency's approval of any environmental and other site testing conducted by Agency in Agency's discretion. Agency shall indemnify, defend, and hold harmless Developer and its officers, directors, shareholders, employees, agents, and representatives from and against all claims, liabilities, or damages, and including expert 882/015610-0084 774752 05.06/30/10 -8- (� 5 witness fees and reasonable attorney's fees and costs, arising out of any such testing, inspection, or investigatory activity on the Site (or applicable portion thereof). (i) Escrow Provisions. i) Within five (5) business days after Agency has exercised Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer (as applicable), or as soon thereafter as reasonably practicable, an escrow shall be opened ("Escrow") with an escrow company selected by Agency for the reconveyance of the Site (or applicable portion thereof) to Agency ("Escrow Holder"). Escrow shall be deemed opened on the date that a fully executed copy of this Option Agreement and a notice of exercise of option prepared by Agency are delivered to Escrow Holder ("Opening of Escrow"). Escrow Holder shall notify Developer and Agency in writing of the date of the Opening of Escrow promptly following the opening of the Escrow. ii) Escrow shall close on or before the date that is ninety (90) days after the Opening of Escrow ("Close of Escrow" or "Closing Date"). The terms "Close of Escrow" and "Closing Date" shall mean the date the grant deed conveying fee title to Agency ("Agency Grant Deed") is recorded in the Office of the County Recorder of the County of Riverside, State of California. Possession of the Site, or portion thereof, shall be delivered to Agency at the Close of Escrow. iii) This Option Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of Developer and Agency to Escrow Holder as well as an agreement between Developer and Agency. In the event of any conflict between the provisions of this Option Agreement and Escrow Holder's standard instructions, this Option Agreement shall prevail. iv) The Escrow shall be subject to Agency's approval of a then -current preliminary title report. Any monetary lien(s) or encumbrance(s) shown on such preliminary title report that is (are) created concurrent with or after the close of escrow that conveyed the Site from Agency to Developer shall be removed by Developer at its sole expense prior to the Close of Escrow pursuant to this Section 5(i) unless such exception(s) is (are) accepted by Agency in its sole discretion; provided, however, that Agency shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title existing on the date of recordation of the Grant Deed to the Site (in the form of Attachment No. 4 to the DDA); and (iii) matters shown as printed exceptions in the standard form ALTA policy of title insurance. In the event the Site is encumbered by a mortgage or deed of trust, Agency shall be permitted to unilaterally instruct Escrow Holder to satisfy the indebtedness secured thereby out of the proceeds payable to Developer through the foregoing Escrow. Any additional amount necessary to satisfy such indebtedness shall be paid by Developer. v) On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Agency shall deposit in Escrow (i) the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, the Repurchase Option III Repurchase Price, or the price noted in Developer's Sale Notice or Developer's Second Sale Notice (as applicable) (the "Right of First Offer Repurchase Price"); (ii) one-half (1/2) of the 982/015610-0084 9.. 166 774752,05 a06/30/10 -9- escrow fees; (iii) the portion of the title insurance premium attributable to any extra or extended coverages, or any additional charge resulting from Agency's request that the amount of insurance be higher than the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, the Repurchase Option III Repurchase Price, or the Right of First Offer Repurchase Price; and (iv) any and all additional instruments or other documents required from Agency (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Developer shall deposit in Escrow (i) the Agency Grant Deed, executed and acknowledged; (ii) one-half (1/2) of the escrow.fees; and (iii) any and all additional instruments or other documents required from Developer (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. Developer shall also be required to pay for documentary tax stamps, recording fees, and for an ALTA standard form owner's policy of title insurance in the amount of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, the Repurchase Option III Repurchase Price, or the Right of First Offer Repurchase Price (as applicable), showing title vested in Agency free and clear of all liens and encumbrances except those permitted by paragraph (4) above (the "Title Policy"). Agency's receipt of the Title Policy shall be a condition to the Close of Escrow. Any other costs and expenses shall be allocated between the parties in the manner customary for a commercial property conveyance in Riverside County. vi) If, on or before the Closing Date, Escrow Holder has received all of the documents and funds listed in paragraph (v) above, and Escrow Holder is in a position to cause the Title Policy to be issued to Agency, and provided Agency has approved of the condition of the Site, or applicable portion thereof, Escrow Holder shall close the Escrow by taking the following actions: (i) recording the Agency Grant Deed in the office of the County Recorder of the County of Riverside, California, and delivering the recorded Agency Grant Deed to Agency; (ii) causing the Title Policy to be issued to Agency; and (iii) delivering the portion of the applicable of the Option I Repurchase Price, the Option II Repurchase Price, the Option III Repurchase Price, or the Right of First Offer Repurchase Price remaining after payment of all Valid Liens, to Developer. 0) Agency's Right to Acquire the Site. Notwithstanding anything herein to the contrary, upon Agency's exercise of Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer, Developer's commencement to cure the default that led to Agency's exercise shall not affect Agency's right to close the Escrow and acquire the Site (or applicable portion thereof). (k) Agency's Repurchase of Uncompleted Portions of the Property. Notwithstanding anything herein to the contrary, in the event that as a result of Agency exercising Repurchase Option II or Repurchase Option III Agency acquires the Site, or portion thereof, if Developer has obtained from the City a certificate of occupancy and has sold to third parties one or more of the Units developed thereon, the provisions of this Option Agreement shall apply only to those portions of the Site which have not been sold to third parties ("Uncompleted Portion of the Repurchase Property") and any calculations for determining the Repurchase Option II Repurchase Price or the Repurchase Option III Repurchase Price (as applicable) shall be based solely upon the Uncompleted Portion of the Repurchase Property. 882/015610-0084 774752.05 a06/30/10 -1 �- � ^ 1 67 (1) Agency's Right to Purchase Plans. At the time Agency exercises any of Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer, Agency shall also have the right, which Agency may exercise in its sole and absolute discretion, to purchase from Developer for the actual cost Developer incurred in preparing the same, all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to the construction of the Project on the Site (the "Plans"), together with copies of all of the Plans, as have been prepared for the development of the Site to date of the Agency's exercise of Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer (as applicable). Notwithstanding the foregoing, however, Developer does not covenant to convey to the Agency the copyright or other ownership rights of third parties. Agency's acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall assume all risks in the use of the Plans. (m) Agency's Purchase Price Reflects Reasonable Approximation of Damages. Agency and Developer agree that Agency has the right to either proceed with its remedies under the DDA or to exercise Repurchase Option I, Repurchase Option II, or Repurchase Option III. Notwithstanding anything to the contrary herein or in the DDA, in the event Agency exercises any of Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable), to acquire the Site, or a portion thereof, Agency shall be deemed to have elected to waive the remedies to which it would otherwise be entitled under the DDA. Agency and Developer agree that Agency will incur damages by reason of the default that gave rise to Agency's ability to exercise Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable), which damages shall be impractical and extremely difficult, if not impossible, to ascertain. Agency and Developer, in a reasonable effort to ascertain what Agency's damages would be in the event of such default by Developer, have agreed that considering all of the circumstances existing on the date of this Option Agreement, including the relationship of the sum to the range of harm to Agency that reasonably could be anticipated, including without limitation the potential loss of tax revenue to the City of La Quinta, and the anticipation that proof of actual damages would be costly or inconvenient, the exercise by Agency of Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable), and the payment by Agency of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price (as applicable) and the conveyance of the Site, or applicable portion thereof, by Developer to Agency, is fair and reasonable. Agency and Developer agree that the (discounted) Repurchase Option I Repurchase Price, Repurchase Option II Repurchase Price, or Repurchase Option III Repurchase Price (as applicable) reflect a reasonable estimate of Agency's damages under the provisions of Section 1671 of the California Code of Civil Procedure and shall operate as liquidated damages to Agency if Agency exercises Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable). If Agency does not exercise Repurchase Option I, Repurchase Option II, or Repurchase Option III, then Agency shall retain and may exercise all of its rights and remedies as set forth in any other agreement, including, but not limited to, the DDA. 163 882/015610-0084 774752.05 a06/30/10 -1 l- 6. Notices Demands and Communications Between the Parties Formal notices, demands, and communications between Agency and Developer shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to: To Agency: Notices Delivered by U.S. Mail: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, California 92247 Attn: Assistant Executive Director Notices Delivered Personally or by Courier: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attn: Assistant Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, California 92626 Attn: M. Katherine Jenson, Esq. To Developer: LDD SilverRock, LLC 74-001 Reserve Drive Indian Wells, California 92210 Phone No.: 760-674-2200 Facsimile No.: 760-779-1469 Attention: Theodore R. Lennon, Jr. With a copy to: Manatt, Phelps & Phillips, LLP 11355 W. Olympic Boulevard Los Angeles, California 90064 Phone No.: 310-312-4217 Facsimile No.: 310-312-4224 Attention: Timi A. Hallem 169 882/015610-0084 -12- 774752,05 a06/30/10 and to: Lowe Enterprises, Inc. 11777 San Vicente Blvd., Suite 900 Los Angeles, California 90049 Attn: Corporate Counsel Phone No.: 310-820-6661 Facsimile No.: 310-820-8131 Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed in the manner provided above shall be deemed effective on the second business day following deposit in the United States mail. Such written notices, demands, and communications shall be sent in the same manner to such other addresses as either party may from time to time designate by mail. 7. Applicable Law and Forum; Attorney's Fees The Superior Court of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Option Agreement. This Option Agreement shall be governed by, and construed under, the internal laws of the State of California, without regard to conflict of law principles. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Option Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Option Agreement. The rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Service of process on Agency shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. If either party to this Option Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Option Agreement, the party prevailing in the final judgment in such action or proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable attorney's fees. Attorney's fees shall include reasonable costs for investigating such action, conducting discovery, retaining expert witnesses, and all other necessary costs the court allows which are incurred in such litigation. 8. Nonliability of Agency Officials and Employees No officer, official, employee, agent, or representative of Agency shall be personally liable to Developer or any successor in interest, in the event of any default or breach by Agency, or for any amount which may become due to Developer or its successor, or for breach of any obligation of the terms of this Option Agreement. 882/015610-0084 -13- •�•• •r 1 O 774752.05 a06/30/10 9. Nondiscrimination Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, .or ancestry with respect to this Option Agreement or use of the Site. 10. Interpretation The terms of this Option Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Option Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Option Agreement. II. Entire Agreement This Option Agreement integrates all of the terms and conditions mentioned herein, or incidental hereto, and, with the exception of the DDA, supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Option Agreement must be in writing and signed by the appropriate authorities of the party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of Agency and Developer. 12. Counterparts This Option Agreement may be executed in counterparts, each of which, after all the parties hereto have signed this Option Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 13. Severability In the event any section or portion of this Option Agreement shall be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect, and the parties hereto shall take further actions as may be reasonably necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this Option Agreement. [END - SIGNATURES ON NEXT PAGE] '00." 171 882/015610-0084 -14- 774752 05 a06/30/10 IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first above written. "DEVELOPER" LDD SILVERROCK, LLC, a Delaware limited liability company By: Its: "AGENCY" LA QUINTA REDEVELOPMENT AGENCY a public body, corporate and politic By: Its: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Executive Director 882/015610-0084 17?•,, 77475205 a06/30/10 -15- State of California County of Riverside On before me, (insert name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. State of California County of Riverside On before me, (Seal) (insert name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 882/015610.0084 ,•• 173 774752.05 a06/30/10 -16- EXHIBIT "A" LEGAL DESCRIPTION OF THE SITE [To be inserted] 174 882/015610-0084 EXHIBIT "A" 774752 05 a06/30/10 FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, CA 92247 Attn: Executive Director (SPACE ABOVE THIS LINE FOR RECORDING USE) (EXEMPT FROM RECORDING FEE PER GOV. CODE § 27383) OPTION AGREEMENT (Golf Casitas Parcel/Lake Casitas Parcel/Ranch Villas Parcel) NOTICE: THIS OPTION AGREEMENT CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. This OPTION AGREEMENT ("Option Agreement') is made this day of (the "Effective Date"), by and between LDD SILVERROCK, LLC, a Delaware limited liability company ("Developer"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"). RECITALS A. Developer has entered into a Disposition and Development Agreement dated December 19, 2006, with the Agency, which has been amended on or about October 23, 2008, October 21, 2009, November 20, 2009, and April 21, 2010 (as amended, the "DDA"), pursuant to which Agency conveyed to Developer that certain real property located at the southwest intersection of Avenue 52 and Jefferson Street, in the City of La Quinta, County of Riverside, State of California (the "Site"). All defined terms used herein shall have the same meaning as set forth in the DDA unless otherwise stated. The Site is legally described in Exhibit "A," which is attached hereto and incorporated herein by this reference. B. Pursuant to the DDA, Developer has agreed to construct on the Site a commercial development (the "Project') that consists of one or more "casita buildings" (as that term is defined below) containing _ units designed for overnight occupancy (each, a "Unit," and collectively, the "Units"). As used herein, the term "casita building" means a building that is not a main hotel building. [Note: if the Resort Retail Village Parcel will be developed with units designed for overnight occupancy, this form of Option Agreement shall be recorded against the Resort Retail Village Parcel at the close of escrow.] C. The Project shall be constructed on the Site in accordance with all of the requirements set forth in the DDA. 175 882/015610-0084 790071.05 a06/30/10 D. As a condition to the Agency's conveyance of the Site to Developer, Developer was required to grant to Agency (a) an option to repurchase the Site, or any portion thereof, from Developer, if Developer (i) fails to commence construction of the Project within certain specified time frames, (ii) fails to continuously proceed with construction of the Project or to complete construction of the Project within certain specified time frames, or (iii) transfers the Site, or any portion thereof, in violation of the terms of the DDA; and (b) a right of first offer to purchase the Site, or any portion thereof, if Agency's option under subparagraph (a)(ii) or (a)(iii) above is triggered, Agency does not exercise the applicable option, and the default which gave rise to Agency's option under subparagraph (a)(ii) or (a)(iii) has not been cured, all as further described herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals and all of the terms and conditions contained in the DDA, Developer hereby grants to Agency the following repurchase options: 1. Repurchase Option I - Failure to Commence Construction Subject to Section 5(f), Developer hereby grants to Agency an exclusive option to repurchase the Site, or any portion thereof ("Repurchase Option I"), if Developer fails to commence construction of the Project within sixty (60) days after the Effective Date. For the purposes of this Option Agreement, the term "commence construction" shall mean Developer's commencement of mass grading for the entire Site, subject to Section 5(f) below. In the event of Developer's failure to commence construction of the Project within the time period described above, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of sixty (60) days following the expiration of the time period described above and the cure period described in Sections 5(b) and 5(c) hereof. ("Repurchase Option I Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option I by giving written notice to Developer ("Agency's Notice of Option 1 Exercise"), in accordance with Section 6 of this Option Agreement, prior to the expiration of the Repurchase Option 1 Period. Failure of Agency to exercise Repurchase Option I shall constitute a waiver of Agency's right to exercise the Repurchase Option I, but shall not constitute a waiver by Agency of Developer's breach of its obligation to timely commence construction of the Project or of any remedies Agency may have under the terms of the DDA or under any other agreement for Developer's failure to timely commence construction of the Project. (b) Repurchase Price - Repurchase Option I Agency's repurchase price for the Site, or portion thereof ("Repurchase Option I Repurchase Price"), shall be , which is eighty percent (80%) of Developer's purchase price for the Site, or applicable portion thereof. In the event that there are any outstanding mortgages or deeds of trust recorded against the Site that (i) have been approved by the Agency pursuant to Section 309.1 of the DDA; (ii) meet the requirements for Agency 790007'L609 0630„0 -2- �� " 176 subordination set forth in Section 5(g) herein; and (iii) have been subordinated to by the Agency (any of the foregoing, a "Valid Lien") at the time that Repurchase Option I is exercised, Developer and Agency agree that the Repurchase Option I Repurchase Price shall be paid to the lender on any such Valid Lien, up to the then outstanding balance due under same; provided, however, that the outstanding balance due under a Valid Lien shall not exceed eighty percent (80%) of Developer's purchase price for the Site. Any portion of the Repurchase Option I Repurchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. 2. Repurchase Option II - Failure to Continuously Proceed With or to Complete Construction of the Project . Developer hereby grants to Agency an exclusive option to repurchase the Site, or any portion thereof ("Repurchase Option II") if, after commencement of construction of the Project, Developer fails to continuously proceed with construction of the Project, or to complete the Project within twenty-four (24) months after Developer commences construction of the Project (the "Completion Deadline"). For purposes of this Option Agreement, "continuously proceed with construction" shall be defined as construction that is interrupted, if at all, for periods of no longer than thirty (30) days. In the event of Developer's failure to continuously proceed with construction, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of sixty (60) days following such failure and after expiration of the cure period described in Sections 5(b) and 5(c) hereof ("Repurchase Option II Failure to Continuously Proceed Period"). In the event of Developer's failure to complete construction of the Project by the Completion Deadline, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the completion of the "Cost Audit" (as that term is defined in Section 2(b) below) and after expiration of the cure period described in Sections 5(b) and 5(c) hereof ("Repurchase Option II Failure to Complete Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option II by giving written notice to Developer, in accordance with Section 6 of this Option Agreement, prior to the expiration of the Repurchase Option II Failure to Continuously Proceed Period or the Repurchase Option II Failure to Complete Period (as applicable). Failure of Agency to exercise the Repurchase Option II shall constitute a waiver by Agency of Agency's right to exercise Repurchase Option II only with respect to Developer's specific incidence of failure to continuously proceed with construction that gave rise to Repurchase Option II or of Developer's failure to complete construction of the Project by the Completion Deadline (as applicable), but shall not constitute a waiver by Agency of Developer's breach of its obligation to continuously proceed with construction of the Project or to complete construction of the Project by the Completion.Deadline (as applicable) or of any remedies Agency may have under the terms of the DDA or under any other agreement for Developer's failure to continuously proceed with construction of the Project or to complete construction of the Project by the Completion Deadline (as applicable). (b) Determination of Repurchase Price - Repurchase Option II Agency's repurchase price for the Site, or portion thereof ("Repurchase Option II Repurchase Price"), shall be the sum of (a) Developer's purchase price for the Site, or applicable 882/015610-0084 _3_ ,p' .� 7 �J 790071.05 a06/30/10 / 7 portion thereof, plus one hundred percent (100%) of "Developer's Construction Costs." For purposes of this Option Agreement, the tern "Developer's Construction Costs" shall mean the construction costs actually incurred by Developer for development of the Project from the Effective Date to the date Agency exercises this Repurchase Option II, as determined by an independent audit, performed by an auditor selected by Agency who is reasonably acceptable to Developer (the "Cost Audit"), which costs shall consist only of (i) the amount(s) paid by Developer to the contractor or contractors performing the works of improvement; and (ii) reasonable inspection and testing costs paid by Developer to independent third party engineers or consultants in conjunction with said works of improvement (but not including costs, fees, charges, or profits allocated to Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer). Developer shall promptly provide Agency and the independent auditor with all records and documentation necessary for the auditor to perform the Cost Audit. In the event that there are any Valid Liens at the time that Repurchase Option II is exercised, Developer and Agency agree that the Repurchase Option II Repurchase Price shall be paid to the lender on any such Valid Lien, up to the then outstanding balance due under same. Any portion of the Repurchase Option II Repurchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. 3. Repurchase Option III - Transfer of the Site Prior to Completion of Project Developer hereby grants to Agency an exclusive option to repurchase the Site, or portion thereof, if, prior to the time Developer completes the Project, Developer transfers or suffers an involuntary transfer of the Site in violation of the terms of the DDA ("Repurchase Option III"). In the event of Developer's transfer of the Site in violation of the DDA (an "Unauthorized Transfer"), Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for sixty (60) days following the later of (a) the date of the Unauthorized Transfer that gives rise to Agency's option under this Section, (b) Developer's written notice to Agency of the Unauthorized Transfer that gives rise to Agency's option under this Section, or (c) Agency's discovery of the Unauthorized Transfer that gives rise to Agency's option under this Section ("Repurchase Option III Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option III by giving written notice to Developer ("Agency's Notice of Option III Exercise"), in accordance with Section 6 of this Option Agreement, prior to the expiration of the Repurchase Option III Period. Failure of Agency to exercise the Repurchase Option III shall constitute a waiver by Agency only with respect to the specific Unauthorized Transfer that gave rise to Repurchase Option III, but shall not constitute a waiver by Agency of Developer's breach of the transfer provisions in the DDA pursuant to this Option Agreement or of any remedies Agency may have under the terms of the DDA or under any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Site. (b) Repurchase Price - Repurchase Option III Agency's repurchase price for the Site ("Repurchase Option III Repurchase Price") shall be as follows: 892/015610-0084 " 'f 178 790071.05 a06/30/10 -4- i) In the event Developer has not yet commenced construction of the Project at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III Price shall be the Repurchase Option I Repurchase Price, as set forth in Section I(b) of this Option Agreement. ii) In the event Developer has commenced construction of the Project at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III Repurchase Price shall be ninety percent (90%) of the purchase price paid to Developer in connection with the Unauthorized Transfer that triggered Agency's right to exercise Repurchase Option II. In the event that there are any Valid Liens at the time that Repurchase Option III is exercised, Developer and Agency agree that the Repurchase Option III Repurchase Price shall be paid to the lender on any such Valid Lien, up to the then outstanding balance due under same. Any portion of the Repurchase Option III Repurchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. 4. Agency's Right of First Offer Developer hereby grants to Agency a right of first offer to purchase the Site, or any portion thereof, in accordance with the terms and conditions in this Section 4 ("Agency's Right of First Offer"), in the event that (a) Agency has had the right to exercise Repurchase Option II or Repurchase Option III, and has failed to exercise or has elected not to exercise Repurchase Option II or Repurchase Option III (as applicable) in accordance with the terms of this Option Agreement and Developer's default that gave rise to Repurchase Option II or Repurchase Option III (as applicable) has not been cured; and (b) Developer has determined to sell or otherwise transfer the Site. (a) Developer's Notice to Agency; Agency's Election In the event that the circumstances described in clauses (a) and (b) of the immediately preceding paragraph exist, then prior to entering into any transaction with a third party concerning the sale of the Site, Developer shall provide Agency with written notice of Developer's intent to sell the Site and Developer's proposed sale price for the same ("Developer's Sale Notice"). Agency shall have sixty (60) days after receiving Developer's Sale Notice to notify Developer, in writing, of Agency's election to exercise Agency's Right of First Offer to acquire the Site, or portion thereof, at the price noted in Developer's Sale Notice ("Agency's Election to Exercise"). (b) Agency's Failure to Exercise Agency's failure to deliver to Developer Agency's Election to Exercise within such sixty (60) day period shall be deemed Agency's election not to exercise Agency's Right of First Offer and, except as provided below, Agency's Right of First Offer with respect to the Site shall then terminate and Agency shall have no further right of first offer with respect to the Site. If Agency elects not to exercise (or is deemed to have elected not to exercise) Agency's Right of First Offer then Developer may sell the Site to a third party purchaser; provided, however, that in the event Developer determines to sell the Site at a price that is less than ninety-five percent (95%) of the 882/015610-0084 -5- o . 'l 790071 05 a06/30/10 179 price set forth in Developer's Sale Notice, Developer shall provide Agency with a written notice of Developer's intent to sell the Site with Developer's new proposed sale price for the same ("Developer's Second Sale Notice"), and Agency's Right of First Offer shall again apply with respect to the Site, in accordance with the process outlined in subparagraph (a) above and this subparagraph (b). (c) No Subordination of Agency's Right of First Offer Agency's Right of First Offer shall not be subordinated to any mortgage or deed of trust, including without limitation mortgages or deeds of trust approved by the Agency pursuant to Section 309.1 of the DDA, and, notwithstanding anything herein to the contrary, any subordination by the Agency pursuant to Section 5(g) hereof shall not affect Agency's Right of First Offer, which shall survive any foreclosure by a lender of a mortgage or deed of trust. In the event of any such foreclosure, Agency shall have the right to exercise Agency's Right of First Offer at the time such lender determines to sell the Site, pursuant to the process outlined above. Notwithstanding the foregoing, nothing herein is intended to or shall have the effect of waiving the transfer restrictions set forth in the DDA, and any proposed sale or transfer by Developer shall be effected in accordance with the same. 5. Additional Terms Applicable to the Repurchase Options The following additional terms shall apply to Repurchase Option I, Repurchase Option II, Repurchase Option III, and Agency's Right of First Offer: (a) Successors and Assigns. The Repurchase Option I, Repurchase Option II, Repurchase Option III, and Agency's Right of First Offer created hereby shall be irrevocable by Developer and, subject to any subordination by Agency in accordance with paragraph (g) below, shall be binding upon the successors and assigns of Developer and on the Site. (b) Developer's Right to Cure Certain Defaults. Notwithstanding anything herein to the contrary, Agency shall not be entitled to exercise Repurchase Option I or Repurchase Option II until Agency has provided a written notice to Developer regarding Developer's failure to commence or continuously proceed with construction of the Project, or to complete construction of the Project (with any of the above failures referred to hereinafter as an "Option Triggering Event"), and Developer has not, within sixty (60) days after receipt of such notice, cured, corrected, or remedied such Option Triggering Event, or, for those Option Triggering Events that cannot reasonably be cured, corrected, or remedied within sixty (60) days, commenced to cure, correct or remedy such Option Triggering Event within said sixty (60) day period, and diligently prosecute the same to completion. (c) Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by Developer whenever the Agency may deliver any notice or demand to Developer with respect to an Option Triggering Event, the Agency shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage or deed of trust which has previously requested such notice in writing. Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to 882/015610-0094 _6_ w••''• 180 790071.05 a06/30/10 cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Property (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. (d) No Agency Obligation. Notwithstanding any covenant, term, or provision in this Section 5 to the contrary, Agency shall not be obligated to exercise Repurchase Option I, Repurchase Option II, Repurchase Option 111, or Agency's Right of First Offer. (e) Termination of Option Agreement. In the event Developer commences and completes construction of the Project, as evidenced by Agency's issuance of a Release of Construction Covenants for the Project and Agency has not exercised Repurchase Option I, Repurchase Option II, Repurchase Option 111, or Agency's Right of First Offer, Agency shall execute and record a termination of this Option Agreement within fifteen (15) business days after Agency's issuance of the Release of Construction Covenants for the Project. (f) Enforced Delay Pursuant to DDA. Notwithstanding anything to the contrary herein, in the event performance by Developer under the DDA is extended pursuant to Section 702 of the DDA, such that the time by which Developer is required thereunder to commence construction of the Project or complete construction of the Project is extended, such extensions shall automatically apply hereto to (as applicable) extend the time by which Developer is required to commence construction of the Project or complete construction of the Project by the same time as extended under the DDA. (g) Subordination. The Agency agrees to subordinate Sections 1, 2, and 3 of this Option Agreement to any mortgage or deed of trust that has been approved by the Agency pursuant to Section 309.1 of the DDA, and to execute a subordination agreement evidencing same, to be recorded in the official records of the County Recorder for the County of Riverside, provided all of the following conditions are met: i) Loan Amount. The maximum cumulative principal amount of the construction loan for the Project shall not exceed ninety percent (90%) of the lender's appraised value of the Project, upon completion of the Project, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction; ii) Use of Loan Proceeds. The loan(s) shall obligate Developer to expend loan proceeds for no other purpose than the Project; iii) Disbursement Limitations. The loan shall include provisions which ensure that the loan proceeds disbursed to Developer prior to the time Developer completes the mass grading for the Site shall not exceed eighty percent (80%) of the Developer's purchase price for the Site; �• 181 882/015610-0084 790071.05 a06/30/10 -7- iv) Agency's Opportunity to Bid. The loan shall require the lender to provide Agency with notice of a foreclosure, and shall provide that in the event of a foreclosure the Agency shall have an equal opportunity to bid for the Site; and v) Notice and Agency's Opportunity to Cure. The loan(s) shall provide that any notice of a Developer breach or default shall also be sent to the Agency at the address listed in Section 6 and that upon receipt of such notice, Agency shall have the right to (A) cure the noticed breach or default, (B) negotiate with the lender regarding the noticed breach or default, and (C) purchase the Site from Developer subject to the construction lender's deed of trust, without the consent of Developer or the holder of the construction lender's deed of trust, and that Agency's exercise of the foregoing rights shall not, in and of itself, give rise to any right on the part of the lender to accelerate the amounts due under the loan. (h) Agency's Investigation of Site. Agency shall have forty-five (45) days after the occurrence of an event that triggers Agency's ability to exercise any of Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer, to enter upon the Site (or applicable portion thereof) to conduct any tests, inspections, investigations, or studies of the condition of the Site (or applicable portion thereof). Developer shall permit Agency access to the Site (or applicable portion thereof) for such purposes. Agency's obligation to close "Escrow" (as defined below) shall be subject to Agency's approval of any environmental and other site testing conducted by Agency in Agency's discretion. Agency shall indemnify, defend, and hold harmless Developer and its officers, directors, shareholders, employees, agents, and representatives from and against all claims, liabilities, or damages, and including expert witness fees and reasonable attorney's fees and costs, arising out of any such testing, inspection, or investigatory activity on the Site (or applicable portion thereof). (i) Escrow Provisions. i) Within five (5) business days after Agency has exercised Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer (as applicable), or as soon thereafter as reasonably practicable, an escrow shall be opened ("Escrow") with an escrow company selected by Agency for the reconveyance of the Site (or applicable portion thereof) to Agency ("Escrow Holder"). Escrow shall be deemed opened on the date that a fully executed copy of this Option Agreement and a notice of exercise of option prepared by Agency are delivered to Escrow Holder ("Opening of Escrow"). Escrow Holder shall notify Developer and Agency in writing of the date of the Opening of Escrow promptly following the opening of the Escrow. ii) Escrow shall close on or before the date that is ninety (90) days after the Opening of Escrow ("Close of Escrow" or "Closing Date"). The terms "Close of Escrow" and "Closing Date" shall mean the date the grant deed conveying fee title to Agency ("Agency Grant Deed") is recorded in the Office of the County Recorder of the County of Riverside, State of California. Possession of the Site, or portion thereof, shall be delivered to Agency at the Close of Escrow. iii) This Option Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of Developer and Agency to Escrow 882/015610-0084 ro • 18 2 790071.05 a06/30/10 -g" Holder as well as an agreement between Developer and Agency. In the event of any conflict between the provisions of this Option Agreement and Escrow Holder's standard instructions, this Option Agreement shall prevail. iv) The Escrow shall be subject to Agency's approval of a then -current preliminary title report. Any monetary lien(s) or encumbrance(s) shown on such preliminary title report that is (are) created concurrent with or after the close of escrow that conveyed the Site from Agency to Developer shall be removed by Developer at its sole expense prior to the Close of Escrow pursuant to this Section 5(i) unless such exception(s) is (are) accepted by Agency in its sole discretion; provided, however, that Agency shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title existing on the date of recordation of the Grant Deed to the Site (in the form of Attachment No. 4 to the DDA); and (iii) matters shown as printed exceptions in the standard form ALTA policy of title insurance. In the event the Site is encumbered by a mortgage or deed of trust, Agency shall be permitted to unilaterally instruct Escrow Holder to satisfy the indebtedness secured thereby out of the proceeds payable to Developer through the foregoing Escrow. Any additional amount necessary to satisfy such indebtedness shall be paid by Developer. v) On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Agency shall deposit in Escrow (i) the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, the Repurchase Option III Repurchase Price, or the price noted in Developer's Sale Notice or Developer's Second Sale Notice (as applicable) (the "Right of First Offer Repurchase Price"); (ii) one-half (1/2) of the escrow fees; (iii) the portion of the title insurance premium attributable to any extra or extended coverages, or any additional charge resulting from Agency's request that the amount of insurance be higher than the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option I1 Repurchase Price, the Repurchase Option III Repurchase Price, or the Right of First Offer Repurchase Price; and (iv) any and all additional instruments or other documents required from Agency (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Developer shall deposit in Escrow (i) the Agency Grant Deed, executed and acknowledged; (ii) one-half (1/2) of the escrow fees; and (iii) any and all additional instruments or other documents required from Developer (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. Developer shall also be required to pay for documentary tax stamps, recording fees, and for an ALTA standard form owner's policy of title insurance in the amount of the Repurchase Option I Repurchase Price, the Repurchase Option I1 Repurchase Price, the Repurchase Option III Repurchase Price, or the Right of First Offer Repurchase Price (as applicable), showing title vested in Agency free and clear of all liens and encumbrances except those permitted by paragraph (4) above (the "Title Policy"). Agency's receipt of the Title Policy shall be a condition to the Close of Escrow. Any other costs and expenses shall be allocated between the parties in the manner customary for a commercial property conveyance in Riverside County. vi) If, on or before the Closing Date, Escrow Holder has received all of the documents and funds listed in paragraph (v) above, and Escrow Holder is in a position to cause the Title Policy to be issued to Agency, and provided Agency has approved of the 882/015610-0084 , ...P 183 790071.05 a0630/10 -9- condition of the Site, or applicable portion thereof, Escrow Holder shall close the Escrow by taking the following actions: (i) recording the Agency Grant Deed in the office of the County Recorder of the County of Riverside, California, and delivering the recorded Agency Grant Deed to Agency; (ii) causing the Title Policy to be issued to Agency; and (iii) delivering the portion of the applicable of the Option I Repurchase Price, the Option II Repurchase Price, the Option III Repurchase Price, or the Right of First Offer Repurchase Price remaining after payment of all Valid Liens, to Developer. 0) Agency's Right to Acquire the Site. Notwithstanding anything herein to the contrary, upon Agency's exercise of Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer, Developer's commencement to cure the default that led to Agency's exercise shall not affect Agency's right to close the Escrow and acquire the Site (or applicable portion thereof). (k) Agency's Repurchase of Uncompleted Portions of the Property. Notwithstanding anything herein to the contrary, in the event that as a result of Agency exercising Repurchase Option II or Repurchase Option III Agency acquires the Site, or portion thereof, if Developer has obtained from the City a certificate of occupancy and has sold to third parties one or more of the Units developed thereon, the provisions of this Option Agreement shall apply only to those portions of the Site which have not been sold to third parties ("Uncompleted Portion of the Repurchase Property") and any calculations for determining the Repurchase Option II Repurchase Price or the Repurchase Option III Repurchase Price (as applicable) shall be based solely upon the Uncompleted Portion of the Repurchase Property. (1) Agency's Right to Purchase Plans. At the time Agency exercises any of Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer, Agency shall also have the right, which Agency may exercise in its sole and absolute discretion, to purchase from Developer for the actual cost Developer incurred in preparing the same, all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to the construction of the Project on the Site (the "Plans"), together with copies of all of the Plans, as have been prepared for the development of the Site to date of the Agency's exercise of Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer (as applicable). Notwithstanding the foregoing, however, Developer does not covenant to convey to the Agency the copyright or other ownership rights of third parties. Agency's acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall assume all risks in the use of the Plans. (m) Agency's Purchase Price Reflects Reasonable Approximation of Damages. Agency and Developer agree that Agency has the right to either proceed with its remedies under the DDA or to exercise Repurchase Option I, Repurchase Option II, or Repurchase Option III. Notwithstanding anything to the contrary herein or in the DDA, in the event Agency exercises any of Repurchase Option I, Repurchase Option 1I, or Repurchase Option III (as applicable), to acquire the Site, or a portion thereof, Agency shall be deemed to have elected to waive the remedies to which it would otherwise be entitled under the DDA. Agency and Developer agree that Agency will incur damages by reason of the default that gave 882/0I5610-0084 ' 184 790071 05 a06/30/10 - 1 0- rise to Agency's ability to exercise Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable), which damages shall be impractical and extremely difficult, if not impossible, to ascertain. Agency and Developer, in a reasonable effort to ascertain what Agency's damages would be in the event of such default by Developer, have agreed that considering all of the circumstances existing on the date of this Option Agreement, including the relationship of the sum to the range of harm to Agency that reasonably could be anticipated, including without limitation the potential loss of tax revenue to the City of La Quinta, and the anticipation that proof of actual damages would be costly or inconvenient, the exercise by Agency of Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable), and the payment by Agency of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, or the Repurchase Option III Repurchase Price (as applicable) and the conveyance of the Site, or applicable portion thereof, by Developer to Agency, is fair and reasonable. Agency and Developer agree that the (discounted) Repurchase Option I Repurchase Price, Repurchase Option II Repurchase Price, or Repurchase Option III Repurchase Price (as applicable) reflect a reasonable estimate of Agency's damages under the provisions of Section 1671 of the California Code of Civil Procedure and shall operate as liquidated damages to Agency if Agency exercises Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable). If Agency does not exercise Repurchase Option I, Repurchase Option I1, or Repurchase Option III, then Agency shall retain and may exercise all of its rights and remedies as set forth in any other agreement, including, but not limited to, the DDA. 6. Notices Demands and Communications Between the Parties Formal notices, demands, and communications between Agency and Developer shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to: To Agency: Notices Delivered by U.S. Mail: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, California 92247 Attn: Assistant Executive Director Notices Delivered Personally or by Courier: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attn: Assistant Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, California 92626 Attn: M. Katherine Jenson, Esq. '82/015610-0084 790071.05 OWN/10 To Developer: LDD SilverRock, LLC 74-001 Reserve Drive Indian Wells, California 92210 Phone No.: 760-674-2200 Facsimile No.: 760-779-1469 Attention: Theodore R. Lennon, Jr. With a copy to: Manatt, Phelps & Phillips, LLP 11355 W. Olympic Boulevard Los Angeles, California 90064 Phone No.: 310-312-4217 Facsimile No.: 310-312-4224 Attention: Timi A. Hallem and to: Lowe Enterprises, Inc. 11777 San Vicente Blvd., Suite 900 Los Angeles, California 90049 Attn: Corporate Counsel Phone No.: 310-820-6661 Facsimile No.: 310-820-8131 Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed in the manner provided above shall be deemed effective on the second business day following deposit in the United States mail. Such written notices, demands, and communications shall be sent in the same manner to such other addresses as either party may from time to time designate by mail. 7. Applicable Law and Forum; Attorne 's Fees The Superior Court of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Option Agreement. This Option Agreement shall be governed by, and construed under, the internal laws of the State of California, without regard to conflict of law principles. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Option Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Option Agreement. The rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Service of process on Agency shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. .. f.,186 882/015610-0084 790071.05 a06130/10 -12- If either party to this Option Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Option Agreement, the party prevailing in the final judgment in such action or proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable attorney's fees. Attorney's fees shall include reasonable costs for investigating such action, conducting discovery, retaining expert witnesses, and all other necessary costs the court allows which are incurred in such litigation. 8. Nonliability of Agency Officials and Employees No officer, official, employee, agent, or representative of Agency shall be personally liable to Developer or any successor in interest, in the event of any default or breach by Agency, or for any amount which may become due to Developer or its successor, or for breach of any obligation of the terms of this Option Agreement. 9. Nondiscrimination Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, or ancestry with respect to this Option Agreement or use of the Site. 10. Interpretation The terms of this Option Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Option Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Option Agreement. 11. Entire Agreement This Option Agreement integrates all of the terms and conditions mentioned herein, or incidental hereto, and, with the exception of the DDA, supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Option Agreement must be in writing and signed by the appropriate authorities of the party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of Agency and Developer. 12. Counterparts This Option Agreement may be executed in counterparts, each of which, after all the parties hereto have signed this Option Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 882/015610-0084 _13_ 'n,,.r 187 790071 05 a06/30/10 13. Severability In the event any section or portion of this Option Agreement shall be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect, and the parties hereto shall take further actions as may be reasonably necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this Option Agreement. [END - SIGNATURES ON NEXT PAGE] 882/015610-0094 -14- 790071 05.06/30/10 IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first above written. "DEVELOPER" LDD SILVERROCK, LLC, a Delaware limited liability company By: Its: "AGENCY" LA QUINTA REDEVELOPMENT AGENCY a public body, corporate and politic By: Its: Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency 882/015610-0084 790071,05 a06/30/10 -15- STATE OF CALIFORNIA ) ss COUNTY OF 1 State of California County of Riverside On before me, (insert name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the persons) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California County of Riverside On before me, (insert name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the persons) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) 190 882/015610-0084 790071.05 a06/30/10 -16- EXHIBIT "A" LEGAL DESCRIPTION OF THE SITE [To be inserted] 191 79007 .05 a06 3 EXHIBIT "A" 790071.05 a06/30/10 FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, CA 92247 Attn: Executive Director (SPACE ABOVE THIS LINE FOR RECORDING USE) (EXEMPT FROM RECORDING FEE PER GOV. CODE § 27383) OPTION AGREEMENT (Black Box Parcel/Resort Retail Village Parcel) NOTICE: THIS OPTION AGREEMENT CONTAINS A SUBORDINATION CLAUSE WHICH MAY RESULT IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. This OPTION AGREEMENT ("Option Agreement') is made this day of (the "Effective Date"), by and between LDD SILVERROCK, LLC, a Delaware limited liability company ("Developer"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"). RECITALS A. Developer has entered into a Disposition and Development Agreement dated December 19, 2006, with the Agency, which has been amended on or about October 23, 2008, October 21, 2009, November 20, 2009, and April 21, 2010 (as amended, the "DDA"), pursuant to which Agency conveyed to Developer that certain real property located at the southwest intersection of Avenue 52 and Jefferson Street, in the City of La Quinta, County of Riverside, State of California (the "Site"). All defined terms used herein shall have the same meaning as set forth in the DDA unless otherwise stated. The Site is legally described in Exhibit "A," which is attached hereto and incorporated herein by this reference. B. Pursuant to the DDA, Developer has agreed to construct on the Site a commercial development that consists of (the "Project'). [Note: if the Resort Retail Village Parcel will be developed with units designed for overnight occupancy, the form of Option Agreement designated for use with the Golf Casitas Parcel and the Lake Casitas Parcel shall be recorded against the Resort Retail Village Parcel at the close of escrow.] C. The Project shall be constructed on the Site in accordance with all of the requirements set forth in the DDA. 192 882/015610-0084 790218 03 a06/30/10 D. As a condition to the Agency's conveyance of the Site to Developer, Developer was required to grant to Agency (a) an option to repurchase the Site, or any portion thereof, from Developer, if Developer (i) fails to commence construction of the Project within certain specified time frames, (ii) fails to continuously proceed with construction of the Project or to complete construction of the Project within certain specified time frames, or (iii) transfers the Site, or any portion thereof, in violation of the terms of the DDA; and (b) a right of first offer to purchase the Site, or any portion thereof, if Agency's option under subparagraph (a)(ii) or (a)(iii) above is triggered, Agency does not exercise the applicable option, and the default which gave rise to Agency's option under subparagraph (a)(ii) or (a)(iii) has not been cured, all as further described herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and incorporating the above recitals and all of the terms and conditions contained in the DDA, Developer hereby grants to Agency the following repurchase options: 1. Repurchase Option I - Failure to Commence Construction Subject to Section 5(f), Developer hereby grants to Agency an exclusive option to repurchase the Site, or any portion thereof ("Repurchase Option I"), if Developer fails to commence construction of the Project within sixty (60) days after the Effective Date. For the purposes of this Option Agreement, the term "commence construction" shall mean Developer's commencement of mass grading for the entire Site, subject to Section 5(f) below. In the event of Developer's failure to commence construction of the Project within the time period described above, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of sixty (60) days following the expiration of the time period described above and the cure period described in Sections 5(b) and 5(c) hereof. ("Repurchase Option I Period"). (a) Exercise of Oxon Agency shall exercise the Repurchase Option I by giving written notice to Developer ("Agency's Notice of Option I Exercise"), in accordance with Section 6 of this Option Agreement, prior to the expiration of the Repurchase Option I Period. Failure of Agency to exercise Repurchase Option I shall constitute a waiver of Agency's right to exercise the Repurchase Option I, but shall not constitute a waiver by Agency of Developer's breach of its obligation to timely commence construction of the Project or of any remedies Agency may have under the terms of the DDA or under any other agreement for Developer's failure to timely commence construction of the Project. (b) Repurchase Price - Repurchase Option I Agency's repurchase price for the Site, or portion thereof ("Repurchase Option I Repurchase Price"), shall be which is eighty percent (80%) of Developer's purchase price for the Site, or applicable portion thereof. In the event that there are any outstanding mortgages or deeds of trust recorded against the Site that (i) have been approved by the Agency pursuant to Section 309.1 of the DDA; (ii) meet the requirements for Agency 882/015610-0084 - _2- I •,ep 19 3 790218.03 a06/30/10 subordination set forth in Section 5(g) herein; and (iii) have been subordinated to by the Agency (any of the foregoing, a "Valid Lien") at the time that Repurchase Option I is exercised, Developer and Agency agree that the Repurchase Option I Repurchase Price shall be paid to the lender on any such Valid Lien, up to the then outstanding balance due under same; provided, however, that the outstanding balance due under a Valid Lien shall not exceed eighty percent (80%) of Developer's purchase price for the Site. Any portion of the Repurchase Option I Repurchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. 2. Repurchase Option II - Failure to Continuously Proceed With or to Complete Construction of the Proiect Developer hereby grants to Agency an exclusive option to repurchase the Site, or any portion thereof ("Repurchase Option II") if, after commencement of construction of the Project, Developer fails to continuously proceed with construction of the Project, or to complete the Project within twenty-four (24) months after Developer commences construction of the Project (the "Completion Deadline"). For purposes of this Option Agreement, "continuously proceed with construction" shall be defined as construction that is interrupted, if at all, for periods of no longer than thirty (30) days. In the event of Developer's failure to continuously proceed with construction, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of sixty (60) days following such failure and after expiration of the cure period described in Sections 5(b) and 5(c) hereof ("Repurchase Option II Failure to Continuously Proceed Period"). In the event of Developer's failure to complete construction of the Project by the Completion Deadline, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days following the completion of the "Cost Audit" (as that term is defined in Section 2(b) below) and after expiration of the cure period described in Sections 5(b) and 5(c) hereof ("Repurchase Option II Failure to Complete Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option II by giving written notice to Developer, in accordance with Section 6 of this Option Agreement, prior to the expiration of the Repurchase Option II Failure to Continuously Proceed Period or the Repurchase Option II Failure to Complete Period (as applicable). Failure of Agency to exercise the -Repurchase Option II shall constitute a waiver by Agency of Agency's right to exercise Repurchase Option II only with respect to Developer's specific incidence of failure to continuously proceed with construction that gave rise to Repurchase Option II or of Developer's failure to complete construction of the Project by the Completion Deadline (as applicable), but shall not constitute a waiver by Agency of Developer's breach of its obligation to continuously proceed with construction of the Project or to complete construction of the Project by the Completion Deadline (as applicable) or of any remedies Agency may have under the terms of the DDA or under any other agreement for Developer's failure to continuously proceed with construction of the Project or to complete construction of the Project by the Completion Deadline (as applicable). (b) Determination of Repurchase Price - Repurchase Option II Agency's repurchase price for the Site, or portion thereof ("Repurchase Option II Repurchase Price"), shall be the sum of (a) Developer's purchase price for the Site, or applicable 882/01561M084 790218.03 a06/30/10 -3- a„ portion thereof, plus one hundred percent (100%) of "Developer's Construction Costs." For purposes of this Option Agreement, the term "Developer's Construction Costs" shall mean the construction costs actually incurred by Developer for development of the Project from the Effective Date to the date Agency exercises this Repurchase Option II, as determined by an independent audit, performed by an auditor selected by Agency who is reasonably acceptable to Developer (the "Cost Audit"), which costs shall consist only of (i) the amount(s) paid by Developer to the contractor or contractors performing the works of improvement; and (ii) reasonable inspection and testing costs paid by Developer to independent third party engineers or consultants in conjunction with said works of improvement (but not including costs, fees, charges, or profits allocated to Developer's own internal administrative, payroll, or overhead expenses or to any person or entity affiliated with Developer). Developer shall promptly provide Agency and the independent auditor with all records and documentation necessary for the auditor to perform the Cost Audit. In the event that there are any Valid Liens at the time that Repurchase Option II is exercised, Developer and Agency agree that the Repurchase Option II Repurchase Price shall be paid to the lender on any such Valid Lien, up to the then outstanding balance due under same. Any portion of the Repurchase Option II Repurchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. 3. Repurchase Option III - Transfer of the Site Prior to Completion of Project Developer hereby grants to Agency an exclusive option to repurchase the Site, or portion thereof, if, prior to the time Developer completes the Project, Developer transfers or suffers an involuntary transfer of the Site in violation of the terms of the DDA ("Repurchase Option III"). In the event of Developer's transfer of the Site in violation of the DDA (an "Unauthorized Transfer"), Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing option for sixty (60) days following the later of (a) the date of the Unauthorized Transfer that gives rise to Agency's option under this Section, (b) Developer's written notice to Agency of the Unauthorized Transfer that gives rise to Agency's option under this Section, or (c) Agency's discovery of the Unauthorized Transfer that gives rise to Agency's option under this Section ("Repurchase Option III Period"). (a) Exercise of Option Agency shall exercise the Repurchase Option III by giving written notice to Developer ("Agency's Notice of Option III Exercise"), in accordance with Section 6 of this Option Agreement, prior to the expiration of the Repurchase Option III Period. Failure of Agency to exercise the Repurchase Option III shall constitute a waiver by Agency only with respect to the specific Unauthorized Transfer that gave rise to Repurchase Option III, but shall not constitute a waiver by Agency of Developer's breach of the transfer provisions in the DDA pursuant to this Option Agreement or of any remedies Agency may have under the terms of the DDA or under any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Site. (b) Repurchase Price - Repurchase Option III Agency's repurchase price for the Site ("Repurchase Option III Repurchase Price") shall be as follows: 882/016610-0084 195 " 790218.03 a06/30/10 -4- i) In the event Developer has not yet commenced construction of the Project at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III Price shall be the Repurchase Option I Repurchase Price, as set forth in Section 1(b) of this Option Agreement. ii) In the event Developer has commenced construction of the Project at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III Repurchase Price shall be ninety percent (90%) of the purchase price paid to Developer in connection with the Unauthorized Transfer that triggered Agency's right to exercise Repurchase Option II. In the event that there are any Valid Liens at the time that Repurchase Option III is exercised, Developer and Agency agree that the Repurchase Option III Repurchase Price shall be paid to the lender on any such Valid Lien, up to the then outstanding balance due under same. Any portion of the Repurchase Option III Repurchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. 4. Agency's Right of First Offer Developer hereby grants to Agency a right of first offer to purchase the Site, or any portion thereof, in accordance with the terms and conditions in this Section 4 ("Agency's Right of First Offer"), in the event that (a) Agency has had the right to exercise Repurchase Option II or Repurchase Option III, and has failed to exercise or has elected not to exercise Repurchase Option II or Repurchase Option III (as applicable) in accordance with the terms of this Option Agreement and Developer's default that gave rise to Repurchase Option II or Repurchase Option III (as applicable) has not been cured; and (b) Developer has determined to sell or otherwise transfer the Site. (a) Developer's Notice to Agency; Agency's Election In the event that the circumstances described in clauses (a) and (b) of the immediately preceding paragraph exist, then prior to entering into any transaction with a third party concerning the sale of the Site, Developer shall provide Agency with written notice of Developer's intent to sell the Site and Developer's proposed sale price for the same ("Developer's Sale Notice"). Agency shall have sixty (60) days after receiving Developer's Sale Notice to notify Developer, in writing, of Agency's election to exercise Agency's Right of First Offer to acquire the Site, or portion thereof, at the price noted in Developer's Sale Notice ("Agency's Election to Exercise"). (b) Agency's Failure to Exercise Agency's failure to deliver to Developer Agency's Election to Exercise within such sixty (60) day period shall be deemed Agency's election not to exercise Agency's Right of First Offer and, except as provided below, Agency's Right of First Offer with respect to the Site shall then terminate and Agency shall have no further right of first offer with respect to the Site. If Agency elects not to exercise (or is deemed to have elected not to exercise) Agency's Right of First Offer then Developer may sell the Site to a third party purchaser; provided, however, that in the event Developer determines to sell the Site at a price that is less than ninety-five percent (95%) of the 882/015610-0084 790218 03.06/30/10 -5- price set forth in Developer's Sale Notice, Developer shall provide Agency with a written notice of Developer's intent to sell the Site with Developer's new proposed sale price for the same ("Developer's Second Sale Notice"), and Agency's Right of First Offer shall again apply with respect to the Site, in accordance with the process outlined in subparagraph (a) above and this subparagraph (b). (c) No Subordination of Agency's Right of First Offer Agency's Right of First Offer shall not be subordinated to any mortgage or deed of trust, including without limitation mortgages or deeds of trust approved by the Agency pursuant to Section 309.1 of the DDA, and, notwithstanding anything herein to the contrary, any subordination by the Agency pursuant to Section 5(g) hereof shall not affect Agency's Right of First Offer, which shall survive any foreclosure by a lender of a mortgage or deed of trust. In the event of any such foreclosure, Agency shall have the right to exercise Agency's Right of First Offer at the time such lender determines to sell the Site, pursuant to the process outlined above. Notwithstanding the foregoing, nothing herein is intended to or shall have the effect of waiving the transfer restrictions set forth in the DDA, and any proposed sale or transfer by Developer shall be effected in accordance with the same. 5. Additional Terms Applicable to the Repurchase Options The following additional terms shall apply to Repurchase Option I, Repurchase Option II, Repurchase Option III, and Agency's Right of First Offer: (a) Successors and Assigns. The Repurchase Option I, Repurchase Option II, Repurchase Option III, and Agency's Right of First Offer created hereby shall be irrevocable by Developer and, subject to any subordination by Agency in accordance with paragraph (g) below, shall be binding upon the successors and assigns of Developer and on the Site. (b) Developer's Right to Cure Certain Defaults. Notwithstanding anything herein to the contrary, Agency shall not be entitled to exercise Repurchase Option I or Repurchase Option II until Agency has provided a written notice to Developer regarding Developer's failure to commence or continuously proceed with construction of the Project, or to complete construction of the Project (with any of the above failures referred to hereinafter as an "Option Triggering Event"), and Developer has not, within sixty (60) days after receipt of such notice, cured, corrected, or remedied such Option Triggering Event, or, for those Option Triggering Events that cannot reasonably be cured, corrected, or remedied within sixty (60) days, commenced to cure, correct or remedy such Option Triggering Event within said sixty (60) day period, and diligently prosecute the same to completion. (c) Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by Developer whenever the Agency may deliver any notice or demand to Developer with respect to an Option Triggering Event, the Agency shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage or deed of trust which has previously requested such notice in writing. Each such holder shall (insofar as the rights granted by the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to 882/015610-0094 0...O 1 9 1 790218.03 a06130/10 -6- cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Property (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. (d) No Agency Obligation. Notwithstanding any covenant, term, or provision in this Section 5 to the contrary, Agency shall not be obligated to exercise Repurchase Option I, Repurchase Option Il, Repurchase Option III, or Agency's Right of First Offer. (e) Termination of Option Agreement. In the event Developer commences and completes construction of the Project, as evidenced by Agency's issuance of a Release of Construction Covenants for the Project and Agency has not exercised Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer, Agency shall execute and record a termination of this Option Agreement within fifteen (15) business days after Agency's issuance of the Release of Construction Covenants for the Project. (f) Enforced Delay Pursuant to DDA. Notwithstanding anything to the contrary herein, in the event performance by Developer under the DDA is extended pursuant to Section 702 of the DDA, such that the time by which Developer is required thereunder to commence construction of the Project or complete construction of the Project is extended, such extensions shall automatically apply hereto to (as applicable) extend the time by which Developer is required to commence construction of the Project or complete construction of the Project by the same time as extended under the DDA. (g) Subordination. The Agency agrees to subordinate Sections 1, 2, and 3 of this Option Agreement to any mortgage or deed of trust that has been approved by the Agency pursuant to Section 309.1 of the DDA, and to execute a subordination agreement evidencing same, to be recorded in the official records of the County Recorder for the County of Riverside, provided all of the following conditions are met: i) Loan Amount. The maximum cumulative principal amount of the construction loan for the Project shall not exceed ninety percent (90%) of the lender's appraised value of the Project, upon completion of the Project, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction; ii) Use of Loan Proceeds. The loan(s) shall obligate Developer to expend loan proceeds for no other purpose than the Project; iii) Disbursement Limitations. The loan shall include provisions which ensure that the loan proceeds disbursed to Developer prior to the time Developer completes the mass grading for the Site shall not exceed eighty percent (80%) of the Developer's purchase price for the Site; 198 882/015610-0084 _7_ 790218.03 a06130/10 iv) Agency's Opportunity to Bid. The loan shall require the lender to provide Agency with notice of a foreclosure, and shall provide that in the event of a foreclosure the Agency shall have an equal opportunity to bid for the Site; and v) Notice and Agency's Opportunity to Cure. The loan(s) shall provide that any notice of a Developer breach or default shall also be sent to the Agency at the address listed in Section 6 and that upon receipt of such notice, Agency shall have the right to (A) cure the noticed breach or default, (B) negotiate with the lender regarding the noticed breach or default, and (C) purchase the Site from Developer subject to the construction lender's deed of trust, without the consent of Developer or the holder of the construction lender's deed of trust, and that Agency's exercise of the foregoing rights shall not, in and of itself, give rise to any right on the part of the lender to accelerate the amounts due under the loan. (h) Agency's Investigation of Site. Agency shall have forty-five (45) days after the occurrence of an event that triggers Agency's ability to exercise any of Repurchase Option 1, Repurchase Option 1I, Repurchase Option 111, or Agency's Right of First Offer, to enter upon the Site (or applicable portion thereof) to conduct any tests, inspections, investigations, or studies of the condition of the Site (or applicable portion thereof). Developer shall permit Agency access to the Site (or applicable portion thereof) for such purposes. Agency's obligation to close "Escrow" (as defined below) shall be subject to Agency's approval of any environmental and other site testing conducted by Agency in Agency's discretion. Agency shall indemnify, defend, and hold harmless Developer and its officers, directors, shareholders, employees, agents, and representatives from and against all claims, liabilities, or damages, and including expert witness fees and reasonable attorney's fees and costs, arising out of any such testing, inspection, or investigatory activity on the Site (or applicable portion thereof). (i) Escrow Provisions. i) Within five (5) business days after Agency has exercised Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer (as applicable), or as soon thereafter as reasonably practicable, an escrow shall be opened ("Escrow") with an escrow company selected by Agency for the reconveyance of the Site (or applicable portion thereof) to Agency ("Escrow Holder"). Escrow shall be deemed opened on the date that a fully executed copy of this Option Agreement and a notice of exercise of option prepared by Agency are delivered to Escrow Holder ("Opening of Escrow"). Escrow Holder shall notify Developer and Agency in writing of the date of the Opening of Escrow promptly following the opening of the Escrow. ii) Escrow shall close on or before the date that is,ninety (90) days after the Opening of Escrow ("Close of Escrow" or "Closing Date"). The terms "Close of Escrow" and "Closing Date" shall mean the date the grant deed conveying fee title to Agency ("Agency Grant Deed") is recorded in the Office of the County Recorder of the County of Riverside, State of California. Possession of the Site, or portion thereof, shall be delivered to Agency at the Close of Escrow. iii) This Option Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of Developer and Agency to Escrow 882/015610-0084 _ _ ,per 199 790219 03 a06130/10 -g Holder as well as an agreement between Developer and Agency. In the event of any conflict between the provisions of this Option Agreement and Escrow Holder's standard instructions, this Option Agreement shall prevail. iv). The Escrow shall be subject to Agency's approval of a then -current preliminary title report. Any monetary lien(s) or encumbrance(s) shown on such preliminary title report that is (are) created concurrent with or after the close of escrow that conveyed the Site from Agency to Developer shall be removed by Developer at its sole expense prior to the Close of Escrow pursuant to this Section 5(i) unless such exception(s) is (are) accepted by Agency in its sole discretion; provided, however, that Agency shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title existing on the date of recordation of the Grant Deed to the Site (in the form of Attachment No. 4 to the DDA); and (iii) matters shown as printed exceptions in the standard form ALTA policy of title insurance. In the event the Site is encumbered by a mortgage or deed of trust, Agency shall be permitted to unilaterally instruct Escrow Holder to satisfy the indebtedness secured thereby out of the proceeds payable to Developer through the foregoing Escrow. Any additional amount necessary to satisfy such indebtedness shall be paid by Developer. v) On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Agency shall deposit in Escrow (i) the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, the Repurchase Option III Repurchase Price, or the price noted in Developer's Sale Notice or Developer's Second Sale Notice (as applicable) (the "Right of First Offer Repurchase Price"); (ii) one-half (1/2) of the escrow fees; (iii) the portion of the title insurance premium attributable to any extra or extended coverages, or any additional charge resulting from Agency's request that the amount of insurance be higher than the applicable of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, the Repurchase Option III Repurchase Price, or the Right of First Offer Repurchase Price; and (iv) any and all additional instruments or other documents required from Agency (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Developer shall deposit in Escrow (i) the Agency Grant Deed, executed and acknowledged; (ii) one-half (1/2) of the escrow fees; and (iii) any and all additional instruments or other documents required from Developer (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Site, or applicable portion thereof, to Agency. Developer shall also be required to pay for documentary tax stamps, recording fees, and for an ALTA standard form owner's policy of title insurance in the amount of the Repurchase Option I Repurchase Price, the Repurchase Option II Repurchase Price, the Repurchase Option III Repurchase Price, or the Right of First Offer Repurchase Price (as applicable), showing title vested in Agency free and clear of all liens and encumbrances except those permitted by paragraph (4) above (the "Title Policy"). Agency's receipt of the Title Policy shall be a condition to the Close of Escrow. Any other costs and expenses shall be allocated between the parties in the manner customary for a commercial property conveyance in Riverside County. vi) If, on or before the Closing Date, Escrow Holder has received all of the documents and funds listed in paragraph (v) above, and Escrow Holder is in a position to cause the Title Policy to be issued to Agency, and provided Agency has approved of the 882/015610-0084 ^/ O 790218.03 a06/30/10 -9- e„ • �-• O condition of the Site, or applicable portion thereof, Escrow Holder shall close the Escrow by taking the following actions: (i) recording the Agency Grant Deed in the office of the County Recorder of the County of Riverside, California, and delivering the recorded Agency Grant Deed to Agency; (ii) causing the Title Policy to be issued to Agency; and (iii) delivering the portion of the applicable of the Option I Repurchase Price, the Option II Repurchase Price, the Option III Repurchase Price, or the Right of First Offer Repurchase Price remaining after payment of all Valid Liens, to Developer. 0) Agency's Right to Acquire the Site. Notwithstanding anything herein to the contrary, upon Agency's exercise of Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer, Developer's commencement to cure the default that led to Agency's exercise shall not affect Agency's right to close the Escrow and acquire the Site (or applicable portion thereof). (k) Agency's Right to Purchase Plans. At the time Agency exercises any of Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer, Agency shall also have the right, which Agency may exercise in its sole and absolute discretion, to purchase from Developer for the actual cost Developer incurred in preparing the same, all plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps, landscape plans, utilities plans, soils reports, noise studies, environmental assessment reports, grading plans and any other materials relating to the construction of the Project on the Site (the "Plans"), together with copies of all of the Plans, as have been prepared for the development of the Site to date of the Agency's exercise of Repurchase Option I, Repurchase Option II, Repurchase Option III, or Agency's Right of First Offer (as applicable). Notwithstanding the foregoing, however, Developer does not covenant to convey to the Agency the copyright or other ownership rights of third parties. Agency's acquisition or use of the Plans or any of them shall be without any representation or warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall assume all risks in the use of the Plans. (1) Agency's Purchase Price Reflects Reasonable Approximation of Damages. Agency and Developer agree that Agency has the right to either proceed with its remedies under the DDA or to exercise Repurchase Option I, Repurchase Option II, or Repurchase Option III. Notwithstanding anything to the contrary herein or in the DDA, in the event Agency exercises any of Repurchase Option 1, Repurchase Option II, or Repurchase Option III (as applicable), to acquire the Site, or a portion thereof, Agency shall be deemed to have elected to waive the remedies to which it would otherwise be entitled under the DDA. Agency and Developer agree that Agency will incur damages by reason of the default that gave rise to Agency's ability to exercise Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable), which damages shall be impractical and extremely difficult, if not impossible, to ascertain. Agency and Developer, in a reasonable effort to ascertain what Agency's damages would be in the event of such default by Developer, have agreed that considering all of the circumstances existing on the date of this Option Agreement, including the relationship of the sum to the range of harm to Agency that reasonably could be anticipated, including without limitation the potential loss of tax revenue to the City of La Quinta, and the anticipation that proof of actual damages would be costly or inconvenient, the exercise by Agency of Repurchase Option I, Repurchase Option II, or Repurchase Option III (as applicable), and the payment by Agency of the Repurchase Option I Repurchase Price, the Repurchase Zr1 882/015610-0084 _ 1 Q_ 790218.03 a06/30/10 Option II Repurchase Price, or the Repurchase Option III Repurchase Price (as applicable) and the conveyance of the Site, or applicable portion thereof, by Developer to Agency, is fair and reasonable. Agency and Developer agree that the (discounted) Repurchase Option I Repurchase Price, Repurchase Option II Repurchase Price, or Repurchase Option III Repurchase Price (as applicable) reflect a reasonable estimate of Agency's damages under the provisions of Section 1671 of the California Code of Civil Procedure and shall operate as liquidated damages to Agency if Agency exercises Repurchase Option 1, Repurchase Option II, or Repurchase Option III (as applicable). If Agency does not exercise Repurchase Option I, Repurchase Option II, or Repurchase Option III, then Agency shall retain and may exercise all of its rights and remedies as set forth in any other agreement, including, but not limited to, the DDA. 6. Notices Demands and Communications Between the Parties Formal notices, demands, and communications between Agency and Developer shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to: To Agency: Notices Delivered by U.S. Mail: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, California 92247 Attn: Assistant Executive Director Notices Delivered Personally or by Courier: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attn: Assistant Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, California 92626 Attn: M. Katherine Jenson, Esq. To Developer: LDD SilverRock, LLC 74-001 Reserve Drive Indian Wells, California 92210 Phone No.: 760-674-2200 Facsimile No.: 760-779-1469 Attention: Theodore R. Lennon, Jr. w 'r' 202 882/015610-0084 -11- 790218.03 a06/30/10 With a copy to: Manatt, Phelps & Phillips, LLP 11355 W. Olympic Boulevard Los Angeles, California 90064 Phone No.: 310-312-4217 Facsimile No.: 310-312-4224 Attention: Timi A. Hallem and to: Lowe Enterprises, Inc. 11777 San Vicente Blvd., Suite 900 Los Angeles, California 90049 Attn: Corporate Counsel Phone No.: 310-820-6661 Facsimile No.: 310-820-8131 Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed in the manner provided above shall be deemed effective on the second business day following deposit in the United States mail. Such written notices, demands, and communications shall be sent in the same manner to such other addresses as either party may from time to time designate by mail. 7. Applicable Law and Forum; Attorneys Fees The Superior Court of the State of California in the County of Riverside shall have the exclusive jurisdiction of any litigation between the parties arising out of this Option Agreement. This Option Agreement shall be governed by, and construed under, the internal laws of the State of California, without regard to conflict of law principles. In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for any default, to compel specific performance of this Option Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Option Agreement. The rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Service of process on Agency shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. If either party to this Option Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Option Agreement, the party prevailing in the final judgment in such action or proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable attorney's fees. Attorney's fees shall include reasonable costs for investigating such action, conducting discovery, retaining expert witnesses, and all other necessary costs the court allows which are incurred in such litigation. n� 203 882/015610-0084 790218.03 a06/30/10 -12- 8. Nonliability of Agency Officials and Employees No officer, official, employee, agent, or representative of Agency shall be personally liable to Developer or any successor in interest, in the event of any default or breach by Agency, or for any amount which may become due to Developer or its successor, or for breach of any obligation of the terms of this Option Agreement. 9. Nondiscrimination Developer covenants for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against any person on account of race, color, creed, religion, sex, marital status, national origin, or ancestry with respect to this Option Agreement or use of the Site. 10. Interpretation The terms of this Option Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Option Agreement or any other rule of construction which might otherwise apply. The Section headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Option Agreement. 11. Entire Agreement This Option Agreement integrates all of the terms and conditions mentioned herein, or incidental hereto, and, with the exception of the DDA, supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Option Agreement must be in writing and signed by the appropriate authorities of the party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of Agency and Developer. 12. Counterparts This Option Agreement may be executed in counterparts, each of which, after all the parties hereto have signed this Option Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 13. Severability In the event any section or portion of this Option Agreement shall be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect, and the parties hereto shall take further actions as may be reasonably necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this Option Agreement. [END - SIGNATURES ON NEXT PAGE] 882/015610-0084 13 O 790218,03 a06/30/10 IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date first above written. "DEVELOPER" LDD SILVERROCK, LLC, a Delaware limited liability company By: Its: "AGENCY" LA QUINTA REDEVELOPMENT AGENCY a public body, corporate and politic By: Its: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quinta Redevelopment Agency Executive Director -H..' 205 882/015610-0084 -I4- 790218.03 a06/30/10 State of California County of Riverside On before me, (insert name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. State of California County of Riverside On before me, (Seal) name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) 206 882/015610-0084 -15- 790218 03 a06/30/10 EXHIBIT "A" LEGAL DESCRIPTION OF THE SITE [To be inserted] 207 982/015610-0084 EXHIBIT "A" 790218.03 a06/30/10 ATTACHMENT NO. 6 RELEASE OF CONSTRUCTION COVENANTS [See Following Document] 208 0 00 106 ATTACHMENT NO. 6 1063073 73.06 06 e07/01/10 RECORDING REQUESTED BY, AND WHEN RECORDED MAIL TO: LDD SilverRock, LLC 74-001 Reserve Drive Indian Wells, CA 92210 Attn: Theodore R. Lennon, Jr. This document is exempt from the payment of a recording fee pursuant to Government Code Section 27383 RELEASE OF CONSTRUCTION COVENANTS THIS RELEASE OF CONSTRUCTION COVENANTS (the "Release") is made by the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), in favor of LLC, a Delaware limited liability company (the "Developer"), as of ) _• RECITALS A. The Agency and LDD Silverrock, LLC, a Delaware limited liability company ("LDD"), have entered into that certain Amended and Restated Disposition and Development Agreement (the "DDA") dated December 18, 2006 concerning the redevelopment of certain real property situated in the City of La Quinta, California, a portion of which is more fully described in Exhibit "A" attached hereto and made a part hereof (the "Property"). B. As referenced in Section 308 of the DDA, the Agency is required to furnish LDD or its successors with a Release of Construction Covenants upon LDD's completion of construction of the [Insert applicable Phase of Development, as that term is described in Section 100 of the DDA] (as defined in Section 100 of the DDA), which Release is required to be in such form as to permit it to be recorded in the Recorder's office of Riverside County. This Release is conclusive determination of satisfactory completion of the construction and development required by the DDA. C. The Agency has conclusively determined that such construction and development has been satisfactorily completed. NOW, THEREFORE, the Agency hereby certifies as follows 1. The [Insert applicable Phase of Development, as that term is described in Section 100 of the DDAlto be constructed by LDD has been fully and satisfactorily completed in conformance with the DDA. Any operating requirements and all use, maintenance or nondiscrimination covenants contained in the DDA and other documents executed and recorded pursuant to the DDA shall remain in effect and enforceable according to their terms. 882/015610-0084 1063073,06 a07/01/10 2. This Release of Construction Covenants does not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage or any insurer of a mortgage security money loaned to finance the work of construction if improvements and development of the Property, or any part hereof. 3. This Release of Construction Covenants does not denote completion of any work required to be completed, other than on the Property. 4. This Release of Construction Covenants is not a notice of completion as referred to in Section 3093 of the California Civil Code. 5. Nothing contained in this instrument shall modify in any other way any other provisions of the DDA. [End — Signature page follows] 210 882/015610-0084 _2_ 1063073.06 e07/01/10 IN WITNESS WHEREOF, the Agency has executed this Release as of the date set forth above. ATTEST: Agency Secretary LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Its: APPROVED BY Developer: , LLC, a Delaware limited liability company Its: �., r, 2.11 882/015610-0084 _3_ 1063073.06 a07/01/10 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY [TO BE ATTACHED] 182/015610-0084 1063073.06 a07/01/10 -4- State of California County of Riverside On , before me, name and title of the officer) Notary Public, personally appeared > who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature State of California County of Riverside On before me, (Seal) (insert name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) ".. P 213 882/015610-0084 _ 1063073 06 07/01/10 _5 ATTACHMENT NO. 7 SCHEDULE OF PERFORMANCE' [See attached individual schedules for each of the (i) Boutique Hotel, (ii) Ranch Development, (iii) Resort Hotel, (iv) Resort Retail Village Development, (v) Black Box, (vi) Lake Casitas Development, and (vi) Golf Casitas Development] This Schedule of Performance describes each of the Ranch Development, Resort Retail Village Development, Black Box, Lake Casitas Development, and Golf Casitas Development as constructed in a single phase. In the event Developer desires to construct the foregoing Phases of Development in more than one phase, Developer shall submit to the Executive Director and obtain his or her approval of, a Phasing Plan. Nothing in the foregoing schedules shall be construed to limit the City's legislative authority, which the City may exercise, in its sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause the City to take such action in the time prescribed herein. 1 All days are calendar days in this Schedule of Performance. 882/015610-0084 ATTACHMENT NO. 7 ' Leo„ n 214 1063073 06.07/01/10 SCHEDULE OF PERFORMANCE FOR BOUTIQUE HOTEL Item of Performance Time for Completion 1. Escrow Agent releases Remaining Received Within 5 days after Effective Date. Deposit Payment Funds to Agency. 2. Developer deposits Escrow Deposit for Within 5 days after Effective Date. Boutique Hotel Parcel with Escrow Agent. 3. $100,000 of Remaining Received Deposit Upon Agency's receipt of Remaining Payment Funds permanently released to Received Deposit Payment Funds from Agency. Escrow Agent. 4. Developer submits Quarterly Report for Not later than September 1, 2010, and every Boutique Hotel. 3 months thereafter until Developer has submitted and Agency has approved a Letter of Commitment for the Boutique Hotel. 5. Developer submits Quarterly Equity Update. Not later than September 1, 2010, and every 3 months thereafter. 6. Developer submits Progress Report. Not later than October 1, 2010, and every 6 months thereafter. 7. $100,000 of Remaining Received Deposit On the 1-year anniversary of the Effective Payment Funds permanently released to Date. Agency. 8. mmitment for Developer submiElCo Not later than December 30, 2011. Boutique Hotel to 9. Agency reviews s to Letter of Within 30 days of receipt thereof.Commitment for otel. 10. Developer revises Letter of Commitment for Within 30 days after receipt of Agency Boutique Hotel (if necessary) and obtains comments. Agency's approval thereof. 11. Agency and Developer determine Purchase Within 30 days after Agency approves the Price of Boutique Hotel Parcel via appraisal Letter of Commitment for the Boutique pursuant to Section 201. Hotel. 12. Developer submits complete Site Development Not later than the later of (i) May 1, 2012, Permit Application "SDPA" for Boutique or (ii) 90 days after completion of Item 11. Hotel, which shall include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping 882/015610-0084 _ 1 _ eo„ r '" 1063073.06 a07/01 /10 • Preliminary Grading Plan 13. Developer approves or disapproves of the Not later than June 29, 2012. condition of the Property pursuant to Section 206.1. 14. City processes SDPA for Boutique Hotel; Planning Commission Public Hearing and City Agency will use reasonable efforts to cause such actions to occur not later than August Council Public Hearing on SDPA for Boutique 31, 2012. Hotel; City's issuance of SDPA for Boutique Hotel and conditions. 15. Developer prepares and obtains Agency's approval of final grading plans and Not later than the later of (i) October 1, 2012, or (ii) nine months after completion Design/Construction Development Drawings of Item 14. for Boutique Hotel. 16. Developer submits Evidence of Financial Not later than 30 days after completion of Capability for Boutique Hotel. Item 15. 17. Agency and Developer deposit funds and closing documents for Boutique Hotel Parcel Not later than 30 days after completion of Item 16. into Escrow pursuant to Section 202. 18. Escrow closes and Developer acquires fee title to Boutique Hotel Parcel. Not later than 7 days after completion of Item 17; however, the Agency Executive Director may extend such date by up to 6 additional months pursuant to Section 202.5. 19. Developer commences construction of Boutique Hotel. Within 30 days after Developer acquires fee title to the Boutique Hotel Parcel. 20. Developer submits Developer CC&Rs for the Boutique Hotel to Agency for approval. Within 90 days prior to anticipated date for City's issuance of temporary or final certificate of occupancy. 21. Agency reviews and responds to Developer Within 30 days after submittal. CC&Rs for the Boutique Hotel. 22. Developer revises Developer CC&Rs for the Within 30 days after receipt of Agency's Boutique Hotel (if necessary) and obtains comments. Agency's approval thereof 23. $100,000 of Remaining Received Deposit On the 2-year anniversary of the Effective Payment Funds permanently released to Date. Agency. 24. Developer completes Phase One of Boutique Hotel. Within 2 years after Developer commences construction of the Boutique Hotel. 25. Developer completes Boutique Hotel. Within 3 years after Developer commences construction of the Boutique Hotel. 182/015610-0084 _2- • eo„ . „ 216 1063073.06 a07/01/10 SCHEDULE OF PERFORMANCE FOR RANCH DEVELOPMENT Item of Performance Time for Completion 1. Developer submits Quarterly Report for Ranch Not later than January 1, 2012, and every 3 Development to Agency and deposits Escrow months thereafter until Developer has Deposit for Ranch Development Parcel with submitted and Agency has approved a Letter Escrow Agent. of Commitment for the Ranch Development. 2. Developer submits Letter of Commitment for By the later of: (i) within 2 months after Ranch Development to Agency. City provides Developer with Agency's Ranch Development Parcel Vacation Notice; and (ii) within 3 months after Close of Escrow for the Boutique Hotel Parcel. 3. Agency reviews and responds to Letter of Within 30 days of receipt thereof. Commitment for Ranch Development. 4. Developer revises Letter of Commitment for Within 30 days after receipt of Agency Ranch Development (if necessary) and obtains comments. Agency's approval thereof. 5. Agency and Developer determine Purchase Within 30 days after Agency approves the Price of Ranch Development Parcel via Letter of Commitment for the Ranch appraisal pursuant to Section 201. Development. 6. Developer submits complete Site Development Permit Application "SDPA" for Ranch Development, which shall include: Within 4 months after Developer submits Letter of Commitment for Ranch Development to Agency. • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Preliminary Grading Plan 7. City processes SDPA for Ranch Development; Agency will use reasonable efforts to cause Planning Commission Public Hearing and City such actions to occur within 4 months of Council Public Hearing on SDPA for Ranch Developer's submittal of SDPA for Ranch Development; City's issuance of SDPA for Development. Ranch Development and conditions. 8. Developer prepares and obtains Agency's Within 30 days after City's issuance of approval of final grading plans and SDPA. Design/Construction Development Drawings for Ranch Development. 9. Developer submits Evidence of Financial Not later than 30 days before scheduled Capability for the Ranch Development. Closing Date for Ranch Development Parcel. 882/015610-0084 'io•..0 217 1063073.06 a07/01/10 -3- Item of Performance Time for Completion 10. Developer and Agency deposit funds and closing documents for Ranch Development Five (5) days prior to the scheduled Closing Date for Ranch Development Parcel. Parcel into Escrow pursuant to Section 202. 11. Escrow closes and Developer acquires fee title to Ranch Development Parcel. Not later than 12 months after the Closing for the Boutique Hotel Parcel; however, the Agency Executive Director may extend such date by up to 6 additional months pursuant to Section 202.5. 12. Developer commences construction of Ranch Development. Within 30 days after Close of Escrow for the Ranch Development Parcel. 13. Developer submits Developer CC&Rs for Ranch Development to Agency for approval. Within 90 days prior to anticipated date for City's issuance of temporary or final certificate of occupancy for Ranch Development. 14. Agency reviews and responds to Developer CC&Rs for Ranch Development. Within 30 days after submittal. 15. Developer revises Developer CC&Rs for Ranch Development (if necessary) and obtains Within 30 days after receipt of Agency comments. Agency's approval thereof. 16. Developer completes Ranch Development. Within 24 months after Developer commences construction of Ranch Development. <i...1 218 882/015610-0084 _4_ 1063073 06 a07/0Ill 0 SCHEDULE OF PERFORMANCE FOR RESORT HOTEL Item of Performance Time for Completion 1. Developer submits Quarterly Report for Not later than the first day of the 6`h full Resort Hotel to Agency and deposits Escrow month following the Closing for the Boutique Deposit for the Resort Hotel Parcel with Hotel Parcel, and every 3 months thereafter Escrow Agent. until Developer has submitted and Agency has approved a Letter of Commitment for the Resort Hotel. 2. Developer submits Letter of Commitment for Not later than 18 months after Close of Resort Hotel to Agency. Escrow for the Boutique Hotel Parcel. 3. Agency reviews and responds to Letter of Within 30 days of receipt thereof. Commitment for Resort Hotel. 4. Developer revises Letter of Commitment for Within 30 days after receipt of Agency Resort Hotel (if necessary) and obtains comments. Agency's approval thereof. 5. Agency and Developer determine Purchase Within 30 days after Agency approves the Price of the Resort Hotel Parcel via appraisal Letter of Commitment for the Resort Hotel. pursuant to Section 201. 6• Developer submits complete Site Development Permit Application "SDPA" for Resort Hotel, which shall include: Within 4 months after Developer submits Letter of Commitment for Resort Hotel to Agency. • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Preliminary Grading Plan 7. City processes SDPA for Resort Hotel; Agency will use reasonable efforts to cause Planning Commission Public Hearing and such actions to occur within 4 months of City Council Public Hearing on SDPA for Developer's submittal of SDPA for Resort Resort Hotel; City's issuance of SDPA for Hotel. Resort Hotel and conditions. 8. Developer prepares and obtains Agency's Within 30 days after City's issuance of SDPA approval of final grading plans and for Resort Hotel. Design/Construction Development Drawings for Resort Hotel. 9. Developer submits Evidence of Financial Not later than 30 days before scheduled Capability for Resort Hotel. 1 Closing Date for the Resort Hotel Parcel. 106 0 73.06 00 /0 f*.!) 219 1063073 O6 a07/Ol/10 -5- Item of Performance Time for Completion 10. Developer and Agency deposit funds and closing documents for the Resort Hotel Parcel Five (5) days prior to the scheduled Closing Date for the Resort Hotel Parcel. into Escrow pursuant to Section 202. 11. Escrow closes and Developer acquires fee title to the Resort Hotel Parcel. Not later than 30 months after the Closing for the Boutique Hotel Parcel; however, the Agency Executive Director may extend such date by up to 6 additional months pursuant to Section 202.5. 12. Developer commences construction of Resort Hotel. Within 30 days after Close of Escrow for the Resort Hotel Parcel. 13. Developer submits Developer CC&Rs for Resort Hotel to Agency for approval. Within 90 days prior to anticipated date for City's issuance of temporary or final certificate of occupancy for Resort Hotel. 14. Agency reviews and responds to Developer Within 30 days after submittal. CC&Rs for Resort Hotel. 15. Developer revises Developer CC&Rs for Resort Hotel (if necessary) and obtains Within 30 days after receipt of Agency comments. Agency's approval thereof. 16. Developer completes Phase One of Resort Hotel. Within 24 months after Developer commences construction of Resort Hotel. 17. Developer completes Resort Hotel. Within 36 months after Developer commences construction of Resort Hotel. 220 882/015610-0084 1063073 06 a07/01/10 SCHEDULE OF PERFORMANCE FOR RESORT RETAIL VILLAGE DEVELOPMENT Item of Performance Time for Completion 1. Developer submits Quarterly Report for Not later than the first day of the 18`h full Resort Retail Village Development to Agency month following the Closing for the and deposits Escrow Deposit for the Resort Boutique Hotel Parcel, and every 3 months Retail Village Parcel with Escrow Agent. thereafter until Developer has submitted and Agency has approved a Letter of Commitment for the Resort Retail Village Development. 2. Developer submits Letter of Commitment for Not later than 30 months after Close of Resort Retail Village Development to Escrow for the Boutique Hotel Parcel. Agency. 3. Agency reviews and responds to Letter of Within 30 days of receipt thereof. Commitment for Resort Retail Village Development. 4. Developer revises Letter of Commitment for Within 30 days after receipt of Agency Resort Retail Village Development (if comments. necessary) and obtains Agency's approval thereof. 5. Agency and Developer determine Purchase Within 30 days after Agency approves the Price of the Resort Retail Village Parcel via Letter of Commitment for the Resort Retail appraisal pursuant to Section 201. Village Development. 6. Developer submits complete Site Within 4 months after Developer submits Letter of Commitment for Resort Retail Development Permit Application "SDPA" for Resort Retail Village Development, which Village Development to Agency. shall include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Preliminary Grading Plan 7. City processes SDPA for Resort Retail Agency will use reasonable efforts to cause Village Development; Planning Commission such actions to occur within 4 months of Public Hearing and City Council Public Developer's submittal of SDPA for Resort Hearing on SDPA for Resort Retail Village Retail Village Development. Development; City's issuance of SDPA for Resort Retail Village Development and conditions. 882/015610-0084 _7_ 221 1063073.06 a07/01/10 Item of Performance Completion Time fo=Village 8. Developer prepares and obtains Agency's approval of final grading plans and Development Drawings Within 3ce of SDPA foDesign/Construction Develop for Resort Retail Village Development. 9. Developer submits Evidence of Financial Capability for Resort Retail Village Development. Not later than 30 days before the scheduled Closing Date for the Resort Retail Village Parcel. 10. Developer and Agency deposit funds and closing documents for the Resort Retail Five (5) days prior to the scheduled Closing Date for the Resort Retail Village Parcel. Village Parcel into Escrow pursuant to Section 202. 11. Escrow closes and Developer acquires fee title to the Resort Retail Village Parcel. Not later than 42 months after the Closing for the Boutique Hotel Parcel; however, the Agency Executive Director may extend such date by up to 6 additional months pursuant to Section 202.5. 12. Developer commences construction of Resort Retail Village Development. Within 30 days after Close of Escrow for the Resort Retail Village Parcel. 13. Developer submits Developer CC&Rs for Resort Retail Village Development to Agency for approval. Within 90 days prior to anticipated date for City's issuance of temporary or final certificate of occupancy for Resort Hotel. 14. Agency reviews Developer CC&Rs for Resort Within 30 days after submittal. Retail Village Development. 15. Developer revises Developer CC&Rs for Resort Retail Village Development (if Within 30 days after receipt of Agency comments. necessary) and obtains Agency's approval thereof. 16. Developer completes Resort Retail Village Development. Within 24 months after Developer commences construction of Resort Retail Village Development. 882/0156I0-0084 222 1063073.06 a07/01/10 _8 SCHEDULE OF PERFORMANCE FOR BLACK BOX Item of Performance Time for Completion l . Developer submits funding development and Within 8 months after Closing for the operation plan for Black Box ("Black Box Boutique Hotel Parcel. Plan") to Agency and deposits Escrow Deposit for Black Box with Escrow Agent. 2. Review of Black Box Plan by City and Agency will review and will use reasonable Agency. efforts to cause City to review within 30 days of Developer's submittal of Black Box Plan. 3. Developer revises Black Box Plan (if Within 30 days after receipt of comments necessary) and obtains Agency's and City's from City and/or Agency. approval thereof. 4. Agency and Developer determine Purchase Within 30 days after Agency and City Price of Black Box Parcel via appraisal approve the Black Box Plan. pursuant to Section 201. 5. Developer submits complete Site Within 6 months after completion of Item 4. Development Permit Application "SDPA" for Black Box, which shall include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Preliminary Grading Plan 6. City processes SDPA for Black Box; Agency will use reasonable efforts to cause Planning Commission Public Hearing and such actions to occur within 4 months of City Council Public Hearing on SDPA for Developer's submittal of SDPA for Black Black Box; City's issuance of SDPA for Box. Black Box and conditions. 7. Developer prepares and obtains Agency's Within 240 days after City's issuance of approval of final grading plans and SDPA for Black Box. Design/Construction Development Drawings for Black Box. 8. Developer submits (i) Evidence of Financial Within 20 days after Agency's approval of Capability for Black Box and (ii) Design/Construction Development Drawings management and operation plan, including for Black Box. proposed transfer of Black Box to the City or a non-profit public benefit corporation approved by the City. 882/015610-0084 _ .r} 223 1063073 06 a07/01 /10 -9 ance Time for Completion and responds to Developer's cial Capability and =operation Within 30 days after Agency's receipt thereof. operation plan for Black 10. Developer revises management and operation plan (if necessary) and obtains Within 30 days after receipt of Agency's comments. approval thereof. 11. -Agency's Developer and Agency deposit funds and closing documents for Black Box into Five (5) days prior to the scheduled Closing Date for the Black Box Parcel. Escrow pursuant to Section 202. 12. Escrow closes and Developer acquires fee title to the Black Box Parcel. Not later than 30 months after the Closing for the Boutique Hotel Parcel; however, the Agency Executive Director may extend such date by up to 6 additional months pursuant to Section 202.5. 13. Developer commences construction of Black Box. Within 30 days after Close of Escrow for the Black Box Parcel. 14. Developer completes Black Box. Within 24 months after Developer commences construction of Black Box. 224 882/015610-0084 _ 1 Q_ 1063073.06 a07/01/10 SCHEDULE OF PERFORMANCE FOR LAKE CASITAS DEVELOPMENT Item of Performance Time for Completion 1. Developer submits Quarterly Report for Lake Not later than the first day of the 18`h full Casitas Development to Agency and deposits month following the Closing for the Escrow Deposit for Lake Casitas Parcel with Boutique Hotel Parcel, and every 3 months Escrow Agent. thereafter until Developer has submitted and Agency has approved a Letter of Commitment for the Lake Casitas Development. 2. Developer submits Letter of Commitment for Not later than 30 months after Close of Lake Casitas Development to Agency. Escrow for the Boutique Hotel Parcel. 3. Agency reviews and responds to Letter of Within 30 days of receipt thereof. Commitment for Lake Casitas Development. 4. Developer revises Letter of Commitment for Within 30 days after receipt of Agency Lake Casitas Development (if necessary) and comments. obtains Agency's approval thereof. 5. Agency and Developer determine Purchase Within 30 days after Agency approves the Price of Lake Casitas Parcel via appraisal Letter of Commitment for the Lake Casitas pursuant to Section 201. Development. 6. Developer submits complete Site Within 4 months after Developer submits Development Permit Application "SDPA" for Letter of Commitment for Lake Casitas Lake Casitas Development, which shall Development to Agency. include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Preliminary Grading Plan 7. City processes SDPA for Lake Casitas Agency will use reasonable efforts to cause Development; Planning Commission Public such actions to occur within 4 months of Hearing and City Council Public Hearing on Developer's submittal of SDPA for Lake SDPA for Lake Casitas Development; City's Casitas Development. issuance of SDPA for Lake Casitas Development and conditions. 8. Developer prepares and obtains Agency's Within 30 days after City's issuance of approval of final grading plans and SDPA for Lake Casitas Development. Design/Construction Development Drawings for Lake Casitas Development. 882/015610-0084 225 1063073.06 a07/01/10 -11 Item of Performance Time for Completion 9. Developer submits Evidence of Financial Capability for the Lake Casitas Development. Not later than 30 days before scheduled Closing Date for the Lake Casitas Parcel. 10. Developer and Agency deposit funds and closing documents for Lake Casitas Five (5) days prior to the scheduled Closing Date for the Lake Casitas Parcel. Development into Escrow pursuant to Section 202. 11. Escrow closes and Developer acquires fee title to the Lake Casitas Parcel. Not later than 42 months after the Closing for the Boutique Hotel Parcel; however, the Agency Executive Director may extend such date by up to 6 additional months pursuant to Section 202.5. 12. Developer commences construction of Lake Casitas Development. Within 30 days after Close of Escrow for the Lake Casitas Parcel. 13. Developer submits Developer CC&Rs for Lake Casitas Development to Agency for approval. Within 90 days prior to anticipated date for City's issuance of temporary or final certificate of occupancy for Lake Casitas Development. 14. Agency reviews and responds to Developer Within 30 days after submittal. CC&Rs for Lake Casitas Development. 15. Developer revises Developer CC&Rs for Lake Casitas Development (if necessary) and Within 30 days after receipt of Agency comments. obtains Agency's approval thereof. 16. Developer completes Lake Casitas Development. Within 24 months after Developer commences construction of Lake Casitas Development. 226 982/015610-0084 -12- 1063073.06 a07/01/10 SCHEDULE OF PERFORMANCE FOR GOLF CASITAS DEVELOPMENT Item of Performance Time for Completion 1. Developer submits Quarterly Report for Golf Not later than the first day of the 241h full Casitas Development to Agency and deposits month following the Closing for the Escrow Deposit for the Golf Casitas Parcel Boutique Hotel Parcel, and every 3 months with Escrow Agent. thereafter until Developer has submitted and Agency has approved a Letter of Commitment for the Golf Casitas Development. 2. Developer submits Letter of Commitment for Not later than 36 months after Close of Golf Casitas Development to Agency. Escrow for the Boutique Hotel Parcel. 3. Agency reviews and responds to Letter of Within 30 days of receipt thereof. Commitment for Golf Casitas Development. 4. Developer revises Letter of Commitment for Within 30 days after receipt of Agency Golf Casitas Development (if necessary) and comments. obtains Agency's approval thereof. 5. Agency and Developer determine Purchase Within 30 days after Agency approves the Price of Golf Casitas Parcel via appraisal Letter of Commitment for the Golf Casitas pursuant to Section 201. Development. 6. Developer submits complete Site Within 4 months after Developer submits Development Permit Application "SDPA" for Letter of Commitment for Golf Casitas Golf Casitas Development, which shall Development to Agency. include: • Detailed Site Plan • Floor Plans and Layout • Elevations • Conceptual Landscaping • Preliminary Grading Plan 7. City processes SDPA for Golf Casitas Agency will use reasonable efforts to cause Development; Planning Commission Public such actions to occur within 4 months of Hearing and City Council Public Hearing on Developer's submittal of SDPA for Golf SDPA for Golf Casitas Development; City's Casitas Development. issuance of SDPA for Golf Casitas Development and conditions. 8. Developer prepares and obtains Agency's Within 30 days after City's issuance of approval of final grading plans and SDPA for Golf Casitas Development. Design/Construction Development Drawings for Golf Casitas Development. 227 882/015610-0084 -13- 1063073,06.07/01/10 of Performance Time for Completion 9. Developer submits Evidence of Financial Not later than 30 days before scheduled rItem for Golf Casitas Development. Closing Date for the Golf Casitas Parcel. 10. -Capability Developer and Agency deposit funds and Five (5) days prior to the scheduled Closing closing documents for the Golf Casitas Parcel Date for the Golf Casitas Parcel. into Escrow pursuant to Section 202. 11. Escrow closes and Developer acquires fee Not later than 48 months after the Closing title to the Golf Casitas Parcel. for the Boutique Hotel Parcel; however, the Agency Executive Director may extend such date by up to 6 additional months pursuant to Section 202.5. 12. Developer commences construction of Golf Within 30 days after Close of Escrow for Casitas Development. the Golf Casitas Parcel. 13. Developer submits Developer CC&Rs for Within 90 days prior to anticipated date for Golf Casitas Development to Agency for City's issuance of temporary or final approval. certificate of occupancy for Golf Casitas Development. 14. Agency reviews and responds to Developer Within 30 days after submittal. CC&Rs for Golf Casitas Development. 15. Developer revises Developer CC&Rs for Golf Within 30 days after receipt of Agency Casitas Development (if necessary) and comments. obtains Agency's approval thereof. 16. Developer completes Golf Casitas Within 24 months after Developer Development. commences construction of Golf Casitas Development. 228 882/015610-0084 -14- 1063073 06 a07/01/10 ATTACHMENT NO.8 MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT [See Following Document] 882/015610-0084 ATTACHMENT NO. 8 " 229 1063073.06.07/01/10 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, CA 92247 Attn: Executive Director (Space Above For Recorder's Use) This Memorandum of Disposition and Development Agreement is recorded at the request and for the benefit of the La Quinta Redevelopment Agency and is exempt from the payment of a recording fee pursuant to Government Code § 27383. MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT This MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT ("Memorandum") is entered into this day of , _, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and a Delaware limited liability company (jointly, collectively, and severally, the "Developer"). This Memorandum is made with reference to the following: 1. On or about 2010, Agency and LDD SilverRock, LLC, a Delaware limited liability company ("LDD") entered into that certain Amended and Restated Disposition and Development Agreement (the "Agreement") which provides for (i) Agency to sell to LDD that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference (the "Property"), and (ii) LDD to develop and operate on the Property a luxury hotel with related amenities. The definitions of all terms contained in the Agreement shall apply to this Memorandum. 2. On or about the date of this Memorandum, Developer acquired from Agency fee title to a portion of the Property. 3. The Agreement provides for Agency and LDD or LDD's successor to enter into this Memorandum and to record the same in the Official Records of the County of Riverside to provide notice to all persons of the existence of said Agreement and to cause the Agreement to run with the Property and be binding on LDD and LDD's successors -in -interest as to the Property. 4. This Memorandum may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart. 882/015610-0084 230 1063073,06 a07/01/10 IN WITNESS WHEREOF, Agency and Developer have entered into this Memorandum as of the date first set forth above. ATTEST: Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Attorneys for the La Quints Redevelopment Agency "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Bn Its: Executive Director "Developer" liability company By: Its: LLC, a Delaware limited 882/015610-0084 _2_ •• 231 1063073,06 a07/01 /10 State of California County of Riverside On before me, (insert name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the. foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California County of Riverside On before me, (insert name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 882/015610-0084 _3_ 232 1063073.06 a07/0I/10 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY 882/015610-0094 ..... 2 3 3 1063073.06 a07/01/10 -4 ATTACHMENT NO.9 PARCEL MAP [See following page] 234 882/015610-0084 ATTACHMENT NO. 9 1063073.06 a07/01/10 slur ' —•.P� cur / �' 4 � ' _ _ _ --- r I A �I1}.J,1M,• I I 41 I , I • p r� ,'_lf �^r. 5-. IIiG, ■ I■1119 .�;b' (...IW�J� `` 1 •°-� I. I I Iig or THE HIDEAWAY ' P► P► P P P P►►PPPP P P ►PPPP®PPPP►PP P xl ulA��l I liir'i'i ;i! h !I�i�i ii'i�rii l•Iri� Illla�'I !I;A ,1 Ij L •a � R I � li�l 1 , 1°!' 5�;,, i I1 11 I II ill I C af� Illl�iii"II! �i ;ill II �I�i�,e II!hi••i�i� Ills I ell � i 51 11 1 -I •I B I it 5I I :I . , , u x i' ill I I I I '�Ci � m I i'lil ' ii t 4 C/) Ilhj�� illiitili�si; Ijjl`sIIII Ji I@IIjI t-31 � s "0 P-3 � CrJ a !` �' �, I,=5g955f5G5a559555555551{G55GiGf[ 1g I '1 {III IIIfilill �Il l�il�f G a l' I ®Rml j Si •i'I p4j'; S 9 �3!3lil� If, II, la I F 19 p o--3 m i1 8 89 iliielleeegl5liiil" f I, a; I, 5 I I 1 a , I 0 ! Ilil ;1� wmlllll°1ii°eE••ullij�lSlll �' ,� j{j 3 II it !iS IS Il I I I ('W� 4 � � I II B I ,5 1 i N Iflll jll l llllii i1 I � 113�4� • � 1 ¢ff Ipi1 S 11 !! 33 a x x W 11110iHIM iiRoillii@IIIBIII@ �` I �� II ,`�, 11v • ` l I � 882/015610-0084 _ _ .. - 235 1063073 06 a07/01 /10 ATTACHMENT NO. 10 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. Except as provided in the following two paragraphs, the detailed characteristics list below applies in its entirety to all components of the Project, including, without limitation, all of the Units and all other facilities and amenities (including the spa, fitness facility, restaurants, etc.) to be developed on the Property. Certain of the detailed characteristics shall not apply to Condominium Hotel Units or Fractional Units located in "casita" buildings, and such characteristics are preceded by an asterisk (*). For purposes of this Agreement, the term "casita" building shall refer to a hotel building that is not the main hotel building on the Boutique Hotel Parcel or the Resort Hotel Parcel. Subject to the immediately following paragraph, Condominium Hotel Units and Fractional Units in casita buildings shall be required to comply with all of the detailed characteristics other than those characteristics preceded by an asterisk. Certain of the detailed characteristics shall not apply to Fractional Units, and such characteristics are preceded by a double asterisk (**). Fractional Units shall be required to comply with all of the detailed characteristics other than those characteristics preceded by a single or double asterisk. 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. ATTACHMENT NO. 10 236 882/015610-0084 _ 1 _ " 1063073,06 a07/01/10 • 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. (*)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. • 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. 882/015610-0084 ATTACHMENT NO. 10 237 1063073.06 a07/01/10 (**)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. 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 are 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) (exemption only applies to Units in Lock -Off suites specifically designed as smaller sleeping quarters; otherwise this item is required in all accommodations designed as single hotel rooms and hotel room Lock - Off Units). • 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). ATTACHMENT NO. 10 2 3 882/015610-0084 1063073 06 a07/01/10 • 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. 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 Poo1/beach furniture is clean, hygienic and well -maintained. Pool deck or beach/sand is clean and free of excessive debris. 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. ATTACHMENT NO. 10 239 882/015610-0084 1063073 06 a07/01/10 (**)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. • 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. ATTACHMENT NO. 10 240 106 0 73.06 a0 /0 1063073.06 a07/Ol/10 ATTACHMENT NO. 11 DEPICTION OF PUBLIC IMPROVEMENTS [See following pages] 892/015610-0084 ATTACHMENT NO. 11 241 1063073.06 a07/01/10 14 thl Cry 01 4 uJh'1A a&t," 0 "JISV— WAIL (W MICMA REVISED TENTATIVE PARCEL MAP NO. 33367 O W7 EXHIBIT "B' UST OF PVBUC IMPROVEMENTS The fo&owing areas depicted on Exhibit'B" &hall be subject to a Maintenance Agreement: 1. The north and south areas adjacent to Lot 'F' (main entry roadway) between Jefferson Street and the intersection of Lot$ "G' end 'H'. 2. The west portion of Lot "H", south of the main entry and adjacent to tots 3. 4, and 5. 3. Both aides of Lot 'G' adjacent to Las 3. 11. and 23. 4. The entirety of Lot'I' adjacent to Lot 11 5. All lake frontage adjacent to Lots 3, 5, 11. 19, and 23, 882/015610-0084 _ •• 2 4 2 1063073.06 a07/01/10 _ ATTACHMENT NO. 12 LIST OF AUTHORIZED MANAGERS 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 106 0 73,06 a0 / ATTACHMENT NO. 12 r 243 1063073 06 a07/Ol /10 ATTACHMENT NO. 13 FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT [See Following Document] 10630 73.06 a07/ ATTACHMENT NO. 13 ^ 244 1063073.06 a07/01/10 ' w , . ASSIGNMENT AND ASSUMPTION OF DISPOSITION AND DEVELOPMENT AGREEMENT This Assignment and Assumption of Disposition and Development Agreement (this "Assignment") is executed by LDD SILVER ROCK, LLC, a Delaware limited liability company ("Owner"), in favor of , a ("Assignee") as of the day of , 200_1 with reference to the following facts: Owner and the La Quinta Redevelopment Agency, a public body, corporate and politic, have entered into that certain Disposition and Development Agreement dated as of (the "DDA"). Owner now desires to assign and transfer to Assignee, and Assignee desires to accept from Owner all of Owner's rights and obligations in, under and to the DDA with respect to (but only with respect to) the real property described on Exhibit A attached hereto. THEREFORE, Owner and Assignee agree as follows: Assignment. Owner hereby assigns and transfers to Assignee all of Owner's rights in, under and to the DDA and all of Owner'sobligations arising under the DDA with respect to (but only with respect to) the real property described on Exhibit A attached hereto from and after the date hereof. Acceptance and Assumption. Assignee hereby accepts from Owner all of Owner's rights in, under and to the DDA and agrees to assume all of Owner's obligations arising under the DDA with respect to (but only with respect to) the real property described on Exhibit A attached hereto from and after the date hereof. Further Assurances. Each party hereto hereby agrees to execute any additional documents, and take any further actions necessary to effect or evidence the assignment and assumption set forth in Sections 1 and 2 above. Counterparts. This Assignment may be executed in counterparts, each of which shall be deemed an original, and both of which together shall constitute one and the same instrument. Miscellaneous. This Assignment shall be binding on and inure to the benefit of the parties and their respective successors and assigns. The paragraph headings of this Assignment are for convenient reference only and shall not be used in interpreting this Assignment. California Law. This Assignment shall be governed by and interpreted in accordance with the internal laws of the State of California, without regard to conflict of law principles. Costs of Dispute Resolution. In the event of any action or proceeding brought by any party against any other parties under this Assignment, the prevailing parties shall be entitled to recover from the non -prevailing parties all costs and expenses, including attorneys' 882/015610-0084 _ 1063077 06 a07/OI/10 -] 245 and experts' fees and expenses, in such action and proceeding in such amount as the court may adjudge reasonable. The prevailing parties shall be determined by the court based upon an assessment of which party's major arguments made or positions taken in the proceedings could fairly be said to have prevailed over the other parties' major arguments or positions on major disputed issues. IN WITNESS WHEREOF, Owner and Assignee have executed this Assignment as of the date and year first above written. "OWNER" LDD SILVERROCK, LLC, a Delaware limited liability company By: Its: "ASSIGNEE" a By: Its: 882/015610-0084 _2_ n 1063073.06 a07/01/10 240 Exhibit A Legal Description of Real Property Affected by Assignment and Assumption [See Attached] If.. •ri 247 882/015610-0084 1063073.06 a07/01/10 -3- cealf ot 4 a" COUNCIL/RDA MEETING DATE: July 6, 2010 ITEM TITLE: Consideration of a Resolution Approving the Owner Participation Agreement Between the La Quinta Redevelopment Agency and Garff Properties -La Quinta, LLC, for the Property Located at the Southwest Corner of Highway 111 and La Quinta Drive and the Appropriation and Transfer of Funds RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Adopt a Resolution approving the Owner Participation Agreement (Attachment 1) between the La Quinta Redevelopment Agency and Garff Properties, LLC; authorize the Executive Director to make final changes to and execute the document, appropriate the $2,300,000 from the unappropriated reserves in the Redevelopment Project Area No. 2 (PA2) Capital Projects Funds, and transfer $2,300,000 from PA2 Debt Service Fund to PA2 Capital Projects Fund. FISCAL IMPLICATIONS: The Agency will invest $2.3 million to partially fund site and building rehabilitation and the construction of a new building. The Agency's investment will be structured as a loan secured by a deed of trust. The loan will be "repaid" by crediting future sales tax and property tax increment revenue the dealership generates towards this investment. (The sales tax and tax increment revenue would not directly pay the principal and interest on this loan, but instead these receipts would be credited against this loan, and when the cumulative sales tax and property tax increment receipts equaled the loan principal and accrued interest, the loan would be forgiven.) In order to fund this appropriation from PA 2 Capital Projects Fund available reserves, account number 405 0000 290 00.00 a transfer of $2,300,000 in available tax increment funding in PA2 Debt Service Fund, account number 302 0000 290 00.00 will be necessary. " 24T BACKGROUND AND OVERVIEW: The Agency has been negotiating with Garff Properties -La Quinta LLC ("Garff") to retain, relocate and expand the Garff Chevrolet/Cadillac franchises. Garff was scheduled to relocate the Chevrolet/Cadillac franchises to the 1-10 Auto Mall; however, the realignment of the motorcar industry surfaced the possibility of Garff remaining in La Quinta. Garff subsequently purchased the former La Quinta Kia dealership (Attachment 2) to reserve a La Quinta location. The dealership would move the Chevrolet and Cadillac franchises from their current Highway 111 location to the former Kia dealership facility within the La Quinta Auto Center. The site contains approximately 3.58 acres and is improved with a 14,398 square foot building. In order to accommodate the Chevrolet and Cadillac franchises, Garff must implement the following improvements: 1. Increase the service facility from the current 12 bays to 21 bays; 2. Increase the size of the parts department from the current 1,850 square feet to 3,750 square feet; 3. Increase the showroom display area by 1,500 square feet; 4. Build a new, exclusive 3,400 square foot showroom and service drive for the Cadillac franchise: and The City's Economic Development Plan contains the following investment policies that were used to structure this transaction: • The City or Agency should invest in retaining, refurbishing and repositioning auto dealership and retail facilities in the Highway 111 corridor. (This is also one of the Fiscal Year 2010-2011 City Council goals.) • City/Agency investment must achieve a 10 to 15 percent return on investment by the fifth year of operation, with the full investment repaid (through project - generated sales tax and tax increment revenue) within five to eight years. Due to General Motors' reorganization, it is difficult to forecast the sales tax revenue this dealership may generate five years from now; however, revenue projections prepared by Garff and reviewed by the City's economic development consultant indicate that the Chevrolet/Cadillac stores' 5t' year (2015) combined sales tax and tax increment revenue would be approximately $310,595; this represents a 13.5 percent return on the $2,300,000 Agency investment. Based upon these sales tax projections, a $2.3 million Agency investment would be repaid in eight years (from the combined sales tax and tax increment revenue). to 249 N OPERATING COVENANT: As a condition to the Agency's obligation to provide the Agency's financial assistance, Garff is required to execute and record against the property an Operating Covenant that requires Garff to operate the dealerships on the property for a period of 10 years. The Operating Covenant will automatically terminate at the earliest to occur of: (i) at the end of the 10-year operating period, (ii) at any time General Motors, LLC ceases to exist, or (iii) upon General Motors, LLC's termination of either or both of the franchise agreements, through no fault of Garff. Upon termination of the Operating Covenant, any amounts then owed under the promissory note executed by Garff in favor of the Agency would be forgiven. In connection with Garff's purchase of the property, Garff obtained a loan from Kornerstone Guaranty Insurance Company. The Operating Covenant and the Agency's deed of trust will be in a subordinate position to the deed of trust securing such loan. FINDINGS AND ALTERNATIVES: The alternatives available to the Agency Board include: 1. Adopt a Resolution approving the Owner Participation Agreement between the La Quinta Redevelopment Agency and Garff Properties, LLC; authorize the Executive Director to make final changes to and execute the document, and appropriate and transfer the necessary funds; or 2. Do not adopt a Resolution approving the Owner Participation Agreement; or 3. Provide staff with alternative direction. Respectfully submitted, Douglas . Evans Assistant City Manager -Development Services Approved for submission by: Thomas . Genovese, Epp cutive Director Attachments: 1 . Owner Participation Agreement 2. Location map 250 3 RESOLUTION RA 2010- A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY APPROVING AN OWNER PARTICIPATION AGREEMENT BETWEEN THE AGENCY AND GARFF PROPERTIES -LA QUINTA, LLC, FOR THE PROPERTY LOCATED AT THE SOUTHWEST CORNER OF HIGHWAY 111 AND LA QUINTA DRIVE OWNER PARTICIPATION AGREEMENT GARFF PROPERTIES -LA QUINTA, LLC WHEREAS, the La Quinta Redevelopment Agency ("Agency") is a Community Redevelopment Agency organized and existing under the California Community Redevelopment Law ("Health & Safety Code § 33000 etseq.) ("CRL") and has been authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council of the City of La Quinta (the "City Council"); and WHEREAS, The City Council, acting pursuant to the provisions of the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.) has adopted Ordinance 139 approving the Redevelopment Plan (the "Plan") for the La Quinta Redevelopment Project No. 2 (the "Project Area"); and WHEREAS, in order to carry out and implement such Redevelopment Plan the Agency desires to encourage and promote the rehabilitation and redevelopment of a certain approximately 3.58 acre portion of Project Area 2 (the "Site") which is improved with the building and facilities previously operated as a Kia automobile dealership; and WHEREAS, the Agency staff has negotiated an Owner Participation Agreement ("Agreement") with Garff Properties -La Quinta, LLC, a Utah limited liability company ("Developer"), pursuant to which the Agency will provide financial assistance towards the costs incurred by Developer to expand the existing facilities for use as a Chevrolet automobile dealership and construct new facilities for use as a Cadillac automobile dealership, all as more particularly described in the Agreement (collectively, the "Project"); and WHEREAS, such uses are consistent with City zoning applicable to the Site and with the Redevelopment Plan; and WHEREAS, the Community Development Department of the City prepared an Environmental Impact Report (State Clearinghouse No. 97011055) (the "EIR") 251 Resolution RA 2010- Owner Participation Agreement Garff Properties -La Quints, LLC Adopted: July 6, 2010 Page 2 of 3 under Environmental Assessment 97-337 for, among other approvals, Specific Plan No. 97-029, which provided for the development of an 87 acre multi -phased mixed use project consisting of an auto sale/service mall and retail complex. The City Council certified the EIR on July 15, 1997. Staff recommends the Agency determine that no subsequent or supplemental EIR is required because the Project is consistent with, and contemplated by, the EIR, and none of the events listed in Public Resources Code Section 21166 have occurred; and WHEREAS, the Redevelopment Agency hereby determines that the Agency's financial assistance pursuant to the Agreement is necessary to effectuate the purposes of the Redevelopment Plan. NOW, THEREFORE, BE IT RESOLVED BY THE LA QUINTA REDEVELOPMENT AGENCY AS FOLLOWS: 1. That the above recitals are true and correct and incorporated herein. 2. That the La Quinta Redevelopment Agency hereby resolves as follows: a. The Agreement effectuates the purposes of the Community Redevelopment Law (Health & Safety Code § 33000 et seq.) and of the Redevelopment Plan and is in the best interests of the citizens of the City of La Quinta. b. The Agency's financial assistance will eliminate blight and is consistent with the Agency's Five -Year Implementation Plan, based on the findings and conclusions therein, which are incorporated herein. The Agreement, a copy of which is on file with the Agency Secretary, is hereby approved. The Agency authorizes and directs its Executive Director and Agency Counsel to (i) make final modifications to the Agreement that are consistent with the substantive terms of the Agreement approved hereby, and to thereafter sign the Agreement on behalf of the Agency,(ii) sign such other and further documents, including but not limited to Subordination Agreements and escrow instructions that require the Agency's signature, and (iii) take such other and further actions, as may be necessary and proper to carry out the terms of the Agreement. Po. 252 Resolution RA 2010- Owner Participation Agreement Gartf Properties -La Quints, LLC Adopted: July 6, 2010 Page 3 of 3 PASSED, APPROVED, AND ADOPTED at a regular meeting of the La Quinta Redevelopment Agency held this 6th day of July, 2010, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: VERONICA J. MONTECINO, CMC, Secretary La Quinta Redevelopment Agency (SEAL) APPROVED AS TO FORM: M. KATHERINE JENSON, Agency Counsel La Quinta Redevelopment Agency LINDA EVANS, Chairperson La Quinta Redevelopment Agency „ 1 253 NT 2 254 ATTACHMENT 1 OWNER PARTICIPATION AGREEMENT by and between LA QUINTA REDEVELOPMENT AGENCY a public body, corporate and politic GARFF PROPERTIES -LA QUINTA, LLC, a Utah limited liability company 182/015610-0057 .. 255 1102564,05 a07/02/10 TABLE OF CONTENTS Page 1. RECITALS INCORPORATED.......................................................................................2 2. DEVELOPMENT OF THE SITE....................................................................................2 2.1 Description of the Project.....................................................................................2 2.2 Project Entitlements..............................................................................................2 2.3 Entitlement Process; Processing...........................................................................3 2.4 Schedule of Performance......................................................................................3 2.5 Cost of Construction.............................................................................................4 2.6 Rights of Access................................................................................................... 4 2.7 Miscellaneous Rules and Regulations Applicable to Development of theProject.............................................................................................................4 2.8 Release of Construction Covenants...................................................................... 6 3. AGENCY LOAN.............................................................................................................. 7 3.1 Agency Loan for Rehabilitation Improvements................................................... 7 3.2 Conditions Precedent to Agency Loan Obligation ............................................... 8 4. OPERATION OF THE PROJECT AND COVENANTS, CONDITIONS AND RESTRICTIONS APPLICABLE TO THE SITE AFTER COMPLETION OF CONSTRUCTION OF THE PROJECT.........................................................................10 5. DEFAULTS AND REMEDIES.....................................................................................10 5.1 Default...............................................................................................................10 5.2 Institution of Legal Actions; Remedies.............................................................. 11 5.3 Acceptance of Service of Process.......................................................................11 5.4 Rights and Remedies Are Cumulative................................................................11 5.5 Inaction Not a Waiver of Default....................................................................... 11 5.6 No Waiver........................................................................................................... 11 5.7 Applicable Law................................................................................................... I I 6. INSURANCE REQUIREMENTS; REPAIR AND RESTORATION OF PROJECT.......................................................................................................................12 6.1 Insurance Requirements......................................................................................12 6.2 Remedies for Defaults Re: Insurance.................................................................14 6.3 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance............................................................................................................. 14 7. TRANSFER RESTRICTIONS.......................................................................................14 7.1 Prohibition.......................................................................................................... 14 7.2 Permitted Transfers............................................................................................. 15 7.3 Agency Consideration of Proposed Transfer; Release of Transferor Upon Permitted or Approved Transfer...............................................................15 7.4 Successors and Assigns......................................................................................16 7.5 Subordination......................................................................................................16 882/015610-0057 256 1102564.05 a07/02/10 -r Page 8. INDEMNIFICATION OF AGENCY.............................................................................16 9. GENERAL PROVISIONS.............................................................................................17 9.2 Enforced Delay; Extension of Times of Performance ........................................ 18 9.3 Non -Liability of Officials and Employees of Agency to the Developer ............ 18 9.4 Relationship Between Agency and Developer...................................................19 9.5 Agency Approvals and Actions..........................................................................19 9.6 Counterparts........................................................................................................19 9.7 Integration...........................................................................................................19 9.8 Attorneys' Fees...................................................................................................19 9.9 Titles and Captions.............................................................................................19 9.10 Interpretation....................................................................................................... 19 9.11 Modifications......................................................................................................20 9.12 Severability.........................................................................................................20 9.13 Computation of Time.......................................................................................... 20 9.14 Legal Advice.......................................................................................................20 9.15 Time of Essence.................................................................................................. 20 9.16 Conflicts of Interest............................................................................................20 9.17 Third Party Beneficiaries ....................................................................................20 9.19 Covenant to Not Cause Violation of Statutes Relating to Relocation of VehicleDealerships............................................................................................21 9.20 Covenant to Not Cause Violation of Statutes Relating to Direct Assistanceby Agency.........................................................................................21 9.21 General Motors Consent.....................................................................................21 it r. 251 882/015610-0057 1102564.05 a07/02/10 -11- OWNER PARTICIPATION AGREEMENT This OWNER PARTICIPATION AGREEMENT (this "Agreement') dated as of , 2010 (the "Effective Date"), is made by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and GARFF PROPERTIES -LA QUINTA, LLC, a Utah limited liability company (the "Developer"). RECITALS The following recitals are a substantive part of this Agreement: A. On May 19, 1989, pursuant to Health & Safety Code sections 33330 et seq., the City Council (the "City Council") of the City of La Quinta (the "City") adopted Ordinance No. 139 approving the Redevelopment Plan (the "Plan") for Redevelopment Project Area 2 ("Project Area 2"). B. The Agency is authorized and empowered by the Community Redevelopment Law (Health and Safety Code Sections 33000, et seq. (the "CRL")), to enter into agreements for the development of real property and otherwise to assist in the redevelopment of real property within Project Area 2 in conformity with the Plan, to acquire real and personal property in redevelopment project areas, to receive consideration for the provision by Agency of redevelopment assistance, to make and execute contracts and other instruments necessary or convenient to the exercise of its powers, and to incur indebtedness to finance or refinance redevelopment projects. C. In furtherance of the objectives of the CRL, Agency desires to encourage and promote the rehabilitation and redevelopment of a certain approximately 3.58 acre portion of Project Area 2 located at 79225 Highway I I I (also designated as Assessor Parcel No. 600-020- 014) (the "Site"), which is improved with the building and facilities previously operated as a Kia automobile dealership. The Site has been vacant since November 2008, and is currently in a state of disrepair. D. Developer has recently acquired fee title to the Site and improvements thereon. The Site is more particularly described on Attachment 1, which is attached hereto and incorporated herein by this reference. E. Subject to and as provided by this Agreement, the parties contemplate that (i) Developer will rehabilitate the Site so that it may be operated with Chevrolet and Cadillac motorcar automobile dealerships (the "Project') as further defined herein, and (ii) the Agency will provide financial assistance towards the costs incurred by Developer to construct the Project. F. The Community Development Department of the City prepared an Environmental Impact Report (State Clearinghouse No. 97011055) (the "EIR") under Environmental Assessment 97-337 for, among other approvals, Specific Plan No. 97-029 (The Centre at La Quinta Specific Plan), which provided for the development of an 87 acre multi -phased mixed use project consistent of an auto sale/service mall and retail complex. The City Council certified the 882/0I56I0A057 " 253 1102564.05 a07/02/10 -� - EIR on July 15, 1997. No subsequent or supplemental EIR is required because the Project is consistent with, and contemplated by, the EIR, and none of the events listed in Public Resources Code Section 21166 have occurred. G. This Agreement and the Developer's development of the Project are in the vital and best interest of the City and the Agency and the health, safety, morals and welfare of its residents, and in accord with the goals, objectives and public purposes and provisions of applicable state and local laws and requirements under which the redevelopment of Project Area 2 has been undertaken. NOW, THEREFORE, for and in consideration of the mutual promises, covenants and conditions contained herein, the Agency and the Developer agree as follows: 1. RECITALS INCORPORATED. The recitals are hereby incorporated by reference into this Agreement and are a material part of this Agreement. 2. DEVELOPMENT OF THE SITE 2.1 Description of the Project. The Project shall consist of Developer's rehabilitation of the Site to (a) refurbish, renovate, remodel, and expand the existing dealership facilities for use as a Chevrolet automobile dealership, (b) construct (1) a new showroom, (2) not less than nine (9) new service bays, and (3) sales offices for use as a Cadillac automobile dealership, and (c) relocate the existing Chevrolet and Cadillac automobile dealerships from their current locations in the City to the Site, all as further described in the Scope of Development attached hereto and incorporated herein as Attachment 2 (the "Scope of Development"). Developer shall construct the Project in strict compliance with (i) the terms and conditions of this Agreement, (ii) the "Project Entitlements" (as that term is defined in Section 2.2 below), (iii) current factory standards for General Motors, LLC, a Delaware limited liability company ("General Motors"), automobile dealerships, as determined by the Dealer Development division of General Motors ("General Motors Standards"), (iv) all plans and permits approved by the City and/or Agency with respect to the Project, and (v) the Schedule of Performance attached hereto and incorporated herein as Attachment 3. Developer shall thereafter operate the Project as provided in Section 4 below. Developer shall ensure that all designs prepared for the Project shall be (1) in compliance with General Motors Standards, (2) prepared by an architect and development team that is recognized by General Motors as having the expertise and ability to prepare and implement plans that meet General Motors Standards, and (3) approved by General Motors as being compliant with General Motors Standards. 2.2 Project Entitlements. As a condition precedent to Developer's obligations to construct the Project under this Agreement, Developer shall obtain from the City all entitlements necessary for the Project as required in this Agreement, by applicable State law, by City code, and all other applicable laws, including but not limited to a Site Development Permit (pursuant to La Quinta Municipal Code sections 9.200 and 9.210.010), any conditional use permit, any General Plan or zone change, any amendment to The Centre at La Quinta Specific Plan, any p.. ^ 259 882/015610-0057 1102564,05 a07/02/10 -2- variance, any vacation of public rights of way, and any approvals or certifications as required by the California Environmental Quality Act (California Public Resources Code § 21000 et seq.), the approval of which is subject to the City's legislative discretion (all of the foregoing, the "Project Entitlements"). Agency staff shall use reasonable efforts to assist the Developer in coordinating the expeditious processing and consideration of all necessary permits, Project Entitlements, and approvals. However, the execution of this Agreement does not constitute the granting of or a commitment to obtain any required permits, Project Entitlements, or approvals required by the City, nor does such execution obligate the City to incur any expense in assisting the Developer in the acquisition of permits and Project Entitlements. In the event of a conflict between General Motors Standards and Project Entitlements, the Project Entitlements shall control. 2.3 Entitlement Process; Processing. Developer acknowledges that the requirements set forth in this Article 2, including, without limitation the Developer's construction and completion of the Project, are material considerations for the participation by the Agency in this Agreement, and that but for such requirements, the Agency would not have entered into this Agreement. Developer acknowledges and agrees that in reviewing and approving documents under this Section 2.3, the Agency is not acting on behalf of the City. Further, Developer understands that the City shall conduct its typical governmental functions and exercise of its police powers in its capacity as the jurisdiction responsible for land use and building permit approvals. 2.3.1 Submittal of Developer's Applications. The Developer shall submit relevant development applications and supporting documentation, and all other applications necessary to obtain the Project Entitlements (collectively, the "Developer's Applications"). These submittals shall be provided in the time period designated in the Schedule of Performance. 2.3.2 Defects in Plans. The City and Agency shall not be responsible to the Developer or to third parties in any way for any defects in the Developer's Applications nor for any structural or other defects in any work done according to the Developer's Applications, nor shall the City or Agency be responsible for any delays caused by the review and approval processes established by this Article 2 or the reviews conducted by the City in the Schedule of Performance. 2.4 Schedule of Performance. The Developer shall submit or cause to be submitted all Developer's Applications, shall commence and complete construction of the Project, and shall satisfy all other obligations and conditions of this Agreement within the times established therefor in the Schedule of Performance. The Agency's Executive Director is permitted to modify or extend the Schedule of Performance without further authorization by the Agency Board provided the following conditions are satisfied: (i) the modification does not extend any completion time in the Schedule of Performance by more than a total of one hundred eighty (180) days, (ii) the Executive Director and Developer agree to the modification or extension in a writing executed by both Developer and the Executive Director, (iii) Developer is not otherwise in default under this Agreement, and (iv) such modification or extension does not increase the Agency's obligations or costs under this Agreement. '...0 260 882/015610-0057 1102564.05 a0W02110 -3- 2.5 Cost of Construction. Except as provided in Section 3.1 below, all of the cost of planning, designing, developing and constructing the Project, site preparation and grading shall be borne solely by the Developer. 2.6 Rights of Access. For purposes of assuring compliance with this Agreement, representatives of the Agency shall have the right of access to the Site at normal construction hours during the period of construction and upon reasonable prior notice to Developer, including but not limited to, the inspection of the work being performed in the construction of the Project. Agency shall indemnify, defend and hold Developer harmless from any loss, damage, injury, accident, casualty, liability, claim, cost or expense (including, but not limited to, reasonable attorneys' fees) of any kind or character to any person or property (collectively, "Claims") arising from or related to the Agency's inspection of the Project as permitted by this Section 2.6. Notwithstanding the prior sentence, the Agency shall not be liable for such Claims to the extent and in the proportion that the same is ultimately determined to be attributable to the negligence or misconduct of Developer or its agents, representatives, employees, directors, officers or consultants. This section does not apply to, limit or otherwise restrict or impose conditions on any inspection or entry right the City has pursuant to State law or the La Quinta Municipal Code. 2.7 Miscellaneous Rules and Regulations Applicable to Development of the Project. 2.7.1 Compliance With Laws and General Motors Standards. Developer shall carry out the design and construction of the Project in conformity with General Motors Standards, all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City of La Quinta Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section It 135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq. 2.7.2 Nondiscrimination in Employment. Developer certifies and agrees that all persons employed or applying for employment by it (including all contractors and subcontractors used by Developer) in constructing the Project on the Site (collectively, the "Construction Personnel") are and will be treated equally without regard to, or because of, race, color, religion, ancestry, national origin, sex, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621, et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, Cal. Government Code Section 12900, et seq., the California Equal Pay Law, Cal. Labor Code Section 1197.5, Cal. Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq, and all other antidiscrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. Subject to any privacy rights of the affected individuals, upon the reasonable request by Agency, Developer shall allow representatives of the Agency access to Construction Personnel records during regular business hours to verify compliance with these provisions in connection with the Project 8821015610-0057 Fi / 6 1 1102564.05 a07/02/10 -4- "' " and construction thereof. Any contract or agreement entered by Developer with Construction Personnel shall specifically incorporate this section and shall include a provision providing Agency access to the Construction Personnel's records referenced in the prior sentence. 2.7.3 Levies and Attachments on Site. As a condition precedent to the Agency's obligation to issue a Release of Construction Covenants pursuant to Section 2.8 of this Agreement, Developer shall remove or have removed any levy or attachment made on the Site or any part thereof, or assure the satisfaction thereof within a reasonable time. Nothing herein shall be deemed to prohibit Developer from contesting the validity or amount of any levy or attachment nor to limit the remedies available to Developer with respect thereto. 2.7.4 Mechanics Liens and Stop Notices. As a condition precedent to the Agency's obligation to issue a Release of Construction Covenants pursuant to Section 2.8 of this Agreement or to make any disbursements of the Agency Loan as to a particular Disbursement Milestones (defined in Section 3.1), Developer shall remove or have removed any mechanics lien or stop notice made on the Site or any part thereof, or assure the satisfaction thereof as provided herein. If a claim of a lien or stop notice is given or recorded affecting the Project, Developer shall within thirty (30) days of such recording or service or within thirty (30) days of the Agency's demand, whichever last occurs: (a) pay and discharge the same; or (b) affect the release thereof by recording and delivering to the Agency a surety bond in sufficient form and amount; or (c) provide the Agency with other assurance which the Agency deems, in its reasonable discretion (including, without limit, Conditional Waiver and Release Upon Progress Payment (Cal. Civ. Code Section 3252(d)(1) or Unconditional Waiver and Release Upon Progress Payment (Cal. Civ. Code Section 3262(d)(1)) or Unconditional Waiver and Release Upon Final Payment (Cal. Civ. Code Section 3262(d)(4)), to be satisfactory for the payment of such lien or stop notice. 2.7.5 Prevailing Wages. The Developer acknowledges and agrees that the provision of the "Agency Loan" (as that term is defined in Section 3.1 below) constitutes financial assistance that will cause the Project to be a "public work" as defined in Labor Code Section 1720(a) or (b) and thus require Developer to comply with California's prevailing wage laws because the Project may be "paid for in whole or in part out of public funds," within the meaning of Labor Code Section 1720(a) or (b). Nothing in this Agreement constitutes a representation or warranty by the Agency that the construction of the Project is not subject to Chapter 1 of Part 7 of the California Labor Code (connecting with section 1720), and all applicable statutory regulatory provisions related thereto, and the Developer expressly waives any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to the Project or Site. Further, the Developer agrees that the Agency has not previously affirmatively represented or guaranteed to Developer, or its contractor(s) for the construction or development of the Project, in writing or otherwise, in a call for bids or otherwise, that the work to be covered by this Agreement is not a "public work," as defined in 882/015610-0057 p•• "' 262 1102564.05 a07/02/10 -5- Section 1720 of the Labor Code. Developer shall indemnify, protect, defend and hold harmless Agency, City, and their respective officers, employees, contractors and agents, with counsel reasonably acceptable to the Agency and City, from and against any and all loss, liability, damage, claim, cost, expense and/or "increased costs" (including reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, or construction (as defined by applicable law) of the Project, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (1) the noncompliance by Developer with respect to any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages); (2) the implementation of Senate Bill 966 of 2003; (3) the implementation of Section 1781 of the Labor Code, as the same may be amended from time to time, or any other similar law; and/or (4) failure by Developer to provide any required disclosure or identification as required by Labor Code Section 1781, as the same may be amended from time to time, or any other similar law. It is agreed by the parties that, in connection with the development and construction (as defined by applicable law) of the Project, Developer shall bear all risks of payment or non-payment of prevailing wages under California law and/or the implementation of Senate Bill 966 and/or Labor Code Section 1781, as the same may be amended from time to time, and/or any other similar law. "Increased costs," as used in this Section 2.7.5, shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be amended from time to time. 2.7.6 Insurance. The Developer shall maintain insurance as provided by Section 6 of this Agreement. 2.8 Release of Construction Covenants. 2.8.1 Promptly after completion of construction of the Project in conformity with this Agreement, the Agency shall promptly deliver to the Developer a Release of Construction Covenants, executed and acknowledged by the Agency substantially in the form provided on Attachment 4, which is attached hereto and incorporated herein by this reference. The Release of Construction Covenants shall be a conclusive determination of satisfactory completion of the construction of the Project, and the Release of Construction Covenants shall so state. Following the issuance of a Release of Construction Covenants, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement with respect to development of the Site or construction of the Project; however, any such party shall be subject to those continuing covenants described in Section 4 of this Agreement. 2.8.2 If Agency refuses or fails to furnish a Release of Construction Covenants in accordance with the preceding paragraph, and after written request from the Developer, the Agency shall, within thirty (30) days after receipt of such written request therefor, provide the Developer with a written statement of the reasons the Agency refused or failed to furnish the Release of Construction Covenants. The statement shall also contain the Agency's opinion of the actions the Developer must take or cause to be taken to obtain the Release of Construction Covenants. The Release of Construction Covenants shall not constitute evidence of compliance 882/015610.0057 'oc. •� 263 1102564.05 a07/02/10 -6- with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the Project, or any part thereof. The Release of Construction Covenants is not a notice of completion as referred to in Section 3093 of the California Civil Code. 3. AGENCY LOAN 3.1 Agency Loan for Rehabilitation Improvements. The Agency shall, subject to the satisfaction of the conditions precedent identified in Section 3.2, loan to the Developer an amount up to, but not exceeding, TWO MILLION THREE HUNDRED THOUSAND DOLLARS ($2,300,000) (the "Agency Loan") for the sole and exclusive purpose of constructing the Project on the Site. The Agency Loan shall only be used to reimburse Developer for costs Developer incurs in planning, designing, and constructing the Project (collectively, "Eligible Project Costs"). Eligible Project Costs shall be allocated into the following three (3) general categories, in the following not to exceed amounts: (i) costs to prepare design and development plans, in an amount not to exceed Four Hundred Fifty Thousand Dollars ($450,000) (collectively, the "Design Costs"); (ii) costs to remodel and rehabilitate the existing facilities, in an amount not to exceed One Million Two Hundred Thousand Dollars ($1,200,000) (collectively, the "Rehabilitation Costs"); and (iii) costs to construct the new Cadillac automobile showroom, in an amount not to exceed Six Hundred Fifty Thousand Dollars ($650,000) (the "Cadillac Construction Costs"). As of the Effective Date, Developer does not have a detailed breakdown of the tasks and costs associated with each such task for the foregoing categories. Within the time set forth in the Schedule of Performance, Developer shall prepare, submit to Agency's Executive Director, and obtain Agency's Executive Director's approval of, a detailed list of Developer's proposed Eligible Project Costs for each of the foregoing categories with the total amount for each such category not to exceed the amounts listed above. In the event Agency's Executive Director disapproves or conditionally approves Developer's proposed list of Eligible Project Costs, Developer shall promptly revise said list to address the issues and concerns raised by the Agency's Executive Director. Upon the Agency Executive Director's approval thereof, the parties shall insert the approved list of Eligible Project Costs into this Agreement as Attachment 5, and thereafter such list shall be incorporated in and become a part of this Agreement. The Agency's Executive Director shall have the authority to approve one or more shifts of funding between the aforementioned categories, provided that (i) the cumulative amount shifted into the Design Costs category shall not exceed fifteen percent (15%) of the original not to exceed amount for that category, as listed above, and (ii) the cumulative amount shifted into either the Rehabilitation Costs or the Cadillac Construction Costs categories shall not exceed twenty-five percent (25%) of the original not to exceed amount for the applicable category, as listed above. Until the Agency Executive Director approves said list, Developer shall only be entitled to disbursements of the Agency Loan for Design Costs, in the not to exceed amount listed above for Design Costs. If actual costs for which Developer is entitled to reimbursement hereunder are less than the amounts set forth in Attachment 5, the Agency Loan obligation shall be reduced by such difference; however, if actual costs for which Developer is entitled to reimbursement exceed the estimates in Attachment 5, the Agency Loan obligation shall nevertheless not exceed $2,300,000. 264 882/01561 M057 1102564.05 a07/02/10 -7- 3.2 Conditions Precedent to Agency Loan Obligation. Prior to and as a condition precedent to the Agency's obligation to fund or disburse any portion of the Agency Loan, the following conditions precedent, which are for the sole and exclusive benefit of the Agency, and shall be completed to the satisfaction of, or valued by, the Agency. 3.2.1 Developer shall have executed, with signatures notarized, the "Operating Covenant" (as that term is defined in Section 4 below) and the "Deed of Trust" (as that term is defined in Section 3.4 below) and the Operating Covenant and Deed of Trust shall have been recorded against the Site, subject only to (a) matters of record listed in the CLTA Owner's policy of title insurance issued by Orange Coast Title Company on March 1, 2010, as its Order No. 140- 1129509-66, and (b) that certain Deed of Trust dated March 26, 2010, with Developer as "Trustor" and Komerstone Guaranty Insurance Company as `Beneficiary," which Deed of Trust was recorded on April 5, 2010 as Instrument No. 2010-0153994 in the Official Records of the County of Riverside. 3.2.2 The Developer shall have executed the "Note" (as that term is defined in Section 3.4 below), and shall have delivered the Note to Agency. 3.2.3 All Project Entitlements shall have been approved by all applicable government or regulatory entities, and shall be final, and any applicable statute of limitations to challenge such Project Entitlements shall have passed without the commencement of a challenge (including a referendum) or, if a timely challenge has been made, such challenge shall be resolved in a manner that is acceptable to the Agency. 3.2.4 The Developer shall have provided "Evidence of Financing" (as that term is defined in Section 3.4.1 below) to Agency and Agency shall have approved the same. 3.2.5 Developer shall have provided evidence to Agency that Developer has procured insurance as required by Section 6.1 hereof. 3.2.6 Developer shall have provided evidence to Agency's Executive Director that Developer has obtained approval from General Motors for the Project, including Developer's site plan and all construction plans and drawings. 3.2.7 Developer shall have provided to Agency's Executive Director copies of Developer's franchise agreements and any other agreement(s) entered into with General Motors with respect to the Developer's construction of the Project and subsequent operation of Cadillac and Chevrolet automobile dealerships on the Site (collectively, the "General Motors Agreements"). 3.2.8 Developer shall not be in breach of its obligations under this Agreement, the Operating Covenant, and/or any of the General Motors Agreements. 3.3 Disbursement of Agency Loan. Agency shall disburse the Agency Loan to the Developer in accordance with the provisions of this Section 3.3. All of Developer's requests for disbursements for Eligible Project Costs shall be made to the Agency in writing and shall be subject to Agency review and approval prior to disbursement. Each written request for 182/015610-0057 .J 265 1102564 05 a07/02/10 -8- disbursement of a portion of the Agency Loan shall include such evidence reasonably required by the Agency to demonstrate that such Eligible Project Costs have been actually paid (including, without limitation, invoices, purchase orders, cancelled checks and fully executed and notarized lien releases, if applicable) and that Developer has satisfied all conditions for disbursement. Agency shall have fifteen (15) days to review and verify the requested expenses and documentation, and upon verification that the requested reimbursement is an allowable Eligible Project Cost, Agency shall make disbursements to the Developer within fifteen (15) days after receipt of such verification. 3.4 Repayment of Agency Loan. Developer shall repay the Agency Loan in accordance with the terms of a Promissory Note substantially in the form attached hereto and incorporated herein as Attachment 6 (the "Note"). Developer's repayment of the Promissory Note shall be secured by a Deed of Trust with Assignment of Rents and Rider Attached Hereto substantially in the form attached hereto and incorporated herein as Attachment 7 (the "Deed of Trust"). 3.4.1 Evidence of Financing. Within the time set forth in the Schedule of Performance and as a condition precedent to the Agency's obligation to disburse any portion of the Agency Loan, Developer shall submit to the Agency evidence that Developer has obtained sufficient equity capital and/or has obtained firm and binding commitments for construction financing which together with equity financing is sufficient to pay for the construction of the Project in accordance with this Agreement. Such evidence of financing shall include the following: (a) a copy of a legally binding, firm and enforceable loan commitment(s) obtained by Developer from one or more Institutional Lenders (defined below) for the mortgage loan or loans for construction financing for the construction of the Project subject to such lenders' reasonable, customary and normal conditions and terms, and/or (b) other documentation satisfactory to the Agency as evidence of other sources of capital sufficient to demonstrate to the Agency that Developer has adequate funds to cover the difference between the total cost of construction and completion of the Project, less financing authorized by those loans set forth in (a) above (collectively "Evidence of Financing"). The Agency shall approve or disapprove such Evidence of Financing within ten (10) days after receipt of a complete submission. If not approved in writing, then Developer's request shall be deemed to have been disapproved. If the Agency shall disapprove or be deemed to disapprove any such Evidence of Financing, then, upon request of the Developer the Agency shall, within ten (10) days, state the reasons for such disapproval. If the Agency disapproves of the Evidence of Financing then the Developer shall promptly endeavor to promptly obtain and submit to the Agency new Evidence of Financing. As used herein, the term "Institutional Lender" shall mean any of the following institutions having assets or deposits in the aggregate of not less than One Hundred Million Dollars ($100,000,000): a California chartered bank; a bank created and operated under and pursuant to the laws of the United States of America; an "incorporated admitted insurer" (as that term is used in Section 1100.1 of the California Insurance Code); a "foreign (other state) bank" (as that term is defined in Section 1700(1) of the California Financial Code); a federal savings and loan association (Cal. Fin. Code Section 8600); a commercial finance lender (within the meaning of Sections 2600 et seq. of the California Financial Code); a "foreign (other nation) bank" provided it is licensed to maintain an office in California, is licensed or otherwise 882/015610-0057 rl 1102564 05 a07/02/10 -9- �� authorized by another state to maintain an agency or branch office in that state, or maintains a federal agency or federal branch in any state (Section 1716 of the California Financial Code); a bank holding company or a subsidiary of a bank holding company which is not a bank (Section 3707 of the California Financial Code); a trust company, savings and loan association, insurance company, investment banker; college or university; pension or retirement fund or system, either governmental or private, or any pension or retirement fund or system of which any of the foregoing shall be trustee, provided the same be organized under the laws of the United States or of any state thereof, and a Real Estate Investment Trust, as defined in Section 856 of the Internal Revenue Code of 1986, as amended, provided such trust is listed on either the American Stock Exchange or the New York Stock Exchange. 4. OPERATION OF THE PROJECT AND COVENANTS, CONDITIONS AND RESTRICTIONS APPLICABLE TO THE SITE AFTER COMPLETION OF CONSTRUCTION OF THE PROJECT Concurrently with Developer's execution of this Agreement, Developer shall execute and acknowledge an Operating Covenant substantially in the form attached hereto and incorporated herein as Attachment 8 (the "Operating Covenant"). The Operating Covenant shall be recorded within five (5) days after the Effective Date. The Developer's execution of the Operating Covenant shall be a material component of this Agreement and a condition precedent to all of the Agency's obligations in this Agreement. The Operating Covenant shall obligate the Developer to construct the Project and shall obligate the Developer to operate the Project for a minimum period of ten (10) years, commencing on the date the Agency issues a Release of Construction Covenants for the Project. 5. DEFAULTS AND REMEDIES 5.1 Default. Subject to the extensions of time set forth in Section 9.2 of this Agreement, failure by any party to perform any action or adhere to any covenant or representation or warranty required by this .Agreement, including in any of the attachments hereto, within the time periods provided herein following notice and an opportunity to cure as described in this Section 5.1, constitutes a "Default" under this Agreement. Additionally, a default under the General Motors Agreements shall constitute a "Default" under this Agreement. The breach or falsity of any representation or warranty by a party as set forth in this Agreement also constitutes a "Default" under this Agreement following notice and an opportunity to cure as described hereafter. A party claiming a Default shall give written notice of Default to the other party specifying the Default complained of. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other parry shall not be in Default as to non -monetary Defaults if such party within thirty (30) days from receipt of such notice promptly, with due diligence, commences to cure, correct or remedy such failure or delay and thereafter completes such cure, correction or remedy with due diligence. As to monetary Defaults, a care period of ten (10) days upon written notice shall apply. 882/015610-0057 �....r! 267 1102564.05 a07/02/10 _10- Notwithstanding anything to the contrary in this Agreement, no notice of Default shall be necessary nor shall the Developer have a right to cure a Default resulting from a Transfer, as that term is defined below, that has not been approved by the Agency. 5.2 Institution of Legal Actions; Remedies. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, either party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, or to obtain any other remedy consistent with the purpose of this Agreement. Agency shall also have the right to pursue damages for Developer's defaults, but in no event shall Developer be entitled to damages of any kind from Agency, including, without limitation, damages for economic loss, lost profits, or any other economic or consequential damages of any kind. Such legal actions must be instituted in the Superior Court of the County of Riverside, State of California, or in the Federal District Court in the Central District of California. 5.3 Acceptance of Service of Process. In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director of the Agency in addition to such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service upon any officer or director of Developer, whether made within or outside the State of California, or in such other manner as may be provided by law. 5.4 Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same Default or any other Default by the other party. 5.5 Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 5.6 No Waiver. A waiver by either party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. 5.7 Applicable Law. The internal laws of the State of California shall govern the interpretation and enforcement of this Agreement, without regard to conflict of law principles. ro...^ 263 882/015610-0057 1102564.05 a07/02/10 6. INSURANCE REQUIREMENTS• REPAIR AND RESTORATION OF PROJECT 6.1 Insurance Requirements. 6.1.1 Commencing on the Effective Date and continuing throughout the term of the Operating Covenant, the Developer shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to the Agency's Executive Director, the following policies of insurance: (a) Commercial General Liability Insurance covering bodily injury, property damage, personal injury and advertising injury written on a per -occurrence and not a claims -made basis containing the following minimum limits: (i) general aggregate limit of Three Million Dollars ($3,000,000.00); (ii) products -completed operations aggregate limit of Three Million Dollars ($3,000,000.00); (iii) personal and advertising injury limit of One Million Dollars ($1,000,000.00); and (iv) each occurrence limit of One Million Dollars ($1,000,000.00). Said policy shall include the following coverages: (i) blanket contractual liability (specifically covering the indemnification clause contained in Section 8 below); (ii) products and completed operations; (iii) independent contractors; (iv) Owner's broad form property damage; (v) severability of interest; (vi) cross liability; and (vii) property damage liability arising out of the so-called "XCU" hazards (explosion, collapse and underground hazards). The policy shall not have a deductible in excess of Ten Thousand Dollars ($10,000.00). The policy shall be endorsed to have the general aggregate apply to this Project only. (b) A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for the Agency and the Developer against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the Developer in the course of carrying out the work or services contemplated in this Agreement, and Employers Liability Insurance in an amount not less than One Million Dollars ($1,000,000) combined single limit for all damages arising from each accident or occupational disease. (c) A policy of comprehensive automobile liability insurance written on a per -occurrence basis in an amount not less than Three Million Dollars ($3,000,000.00) combined single limit with a deductible not in excess of Ten Thousand Dollars ($10,000.00) covering all owned, non -owned, leased and hired vehicles used in connection with the Work. (d) With respect to the improvements and any fixtures and furnishings to be owned by Developer on the Site, insurance against fire, extended coverage, vandalism, and malicious mischief, and such other additional perils, hazards, and risks as now are or may be included in the standard "all risk" form in general use in Riverside County, California, with the standard form fire insurance coverage in an amount equal to full actual replacement cost thereof, as the same may change from time to time. The above insurance policy or policies shall include coverage for earthquakes to the extent generally and commercially available at commercially reasonable rates, if such insurance is generally obtained for automobile dealerships in the counties of Los Angeles, Orange County, Riverside, and San Bernardino. Agency shall be a loss 269 882/015610-0057 1102564,05.07/02/10 -12- payee under such policy or policies and such insurance shall contain a replacement cost endorsement. 6.1.2 Commencing on the Effective Date and continuing until the Agency issues a Release of Construction Covenants for the Project, the Developer shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to the Agency's Executive Director, Builder's Risk (course of construction) insurance coverage in an amount equal to the full cost of the hard construction costs of the Project. Such insurance shall cover, at a minimum: all work, materials, and equipment to be incorporated into the Project; the Project during construction; the completed Project until such time as the City issues a final certificate of occupancy for the Project, and storage and transportation risks. Such insurance shall protect/insure the interests of Developer/owner and all of Developer's contractor(s), and subcontractors, as each of their interests may appear. If such insurance includes an exclusion for "design error," such exclusion shall only be for the object or portion which failed. Agency shall be a loss payee under such policy or policies and such insurance shall contain a replacement cost endorsement 6.1.3 Developer shall cause any general contractor with whom it has contracted for the performance of work on the Site to secure, prior to commencing any activities hereunder and maintain insurance that satisfies all of the requirements of this Section 6.1. 6.1.4 The following additional requirements shall apply to all of the above policies of insurance: (a) All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation and Employer Liability insurance, shall name the Agency, City and their respective officers, officials, members, employees, agents, and representatives (collectively, "Agency and City and Agency and City Personnel") as additional insureds on an ISO Form CG 20:10 (current version) or substantially similar form and not an ISO Form CG 20:09. The insurer shall waive all rights of subrogation and contribution it may have against Agency and City and Agency and City Personnel and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to the 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 Executive Director. Not later than the Effective, the Developer shall provide the Executive Director with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the Executive Director. (b) The policies of insurance required by this Agreement shall be satisfactory only if issued by companies of recognized good standing 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 Register, and only if they are of a financial category Class VII or better, unless such requirements are waived by the Risk Manager of the City ("Risk Manager") due to unique circumstances. 270 882/015610-0057 1102564 05 a07/02/10 -13- (c) The Executive Director, with the consent of the City's Risk Manager, is hereby authorized to reduce or otherwise modify Developer's insurance requirements set forth herein in the event they collectively determine, in their sole and absolute discretion, that such reduction or modification is consistent with reasonable commercial practices. 6.1.5 The Developer agrees that the provisions of this Section shall not be construed as limiting in any way the Agency's right to indemnification or the extent to which the 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. 6.2 Remedies for Defaults Re: Insurance. In addition to any other remedies the Agency may have if Developer commits a Default hereunder by failing to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, the Agency may at its sole option obtain such insurance and deduct the amount of the premium for such insurance from any sums due to Developer by the Agency from the Agency Loan. Exercise of such remedy, however, is an alternative to other remedies the Agency may have and is not the exclusive remedy for Developer's failure to maintain insurance or secure appropriate endorsements. 6.3 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance. If the Project shall be totally or partially destroyed or rendered uninhabitable by fire or other casualty required to be insured against by Developer, Developer shall promptly proceed to obtain all available insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Project to substantially the same condition as they existed prior to the casualty and Developer shall complete or cause to be completed the same as soon as possible thereafter so that the Project can be operated in accordance with this Agreement. The Agency shall cooperate with Developer, at no expense to the Agency, in obtaining any governmental permits required for the repair, replacement, or restoration. 7. TRANSFER RESTRICTIONS 7.1 Prohibition. The qualifications and identity of Developer are of particular concern to the Agency. It is because of these qualifications and identity that the Agency has entered into this Agreement with the Developer. Accordingly, commencing upon the Effective Date and continuing throughout the term of the Operating Covenant: (i) no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement, (ii) the Developer shall not make any total or partial sale, transfer, conveyance, assignment, subdivision, further encumbrance, refinancing, or lease of the whole or any part of the Site or the Project thereon, (iii) no changes shall occur with respect to the ownership and/or control of Developer or GL CCC, LLC, a Delaware limited liability company ("GL CCU), including, without limitation, stock transfers, sales of issuances, or transfers, sales or issuances of membership or ownership interests, or statutory conversions (with each the actions in clauses in clauses (i), (ii), and (iii) above referred to herein as a "Transfer"), without the prior written 8821015610-0057 '•• r % 7 1102564.05 a07/02/10 -14- approval of the Agency, which approval shall not be unreasonably withheld or delayed. Any purported Transfer, voluntarily or by operation of law, except with the prior written consent of the Agency, shall be null and void and shall confer no rights whatsoever upon any purported assignee or transferee. 7.2 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, the Agency's approval of a Transfer shall not be required in connection with any of the following: (a) Any Transfer by the Developer or GL CCC to a "Related Person or Entity" (as defined below). (b) A Transfer consisting of the conveyance or dedication of any portion of the Site to the City or other appropriate governmental agency, including public utilities, where the granting of such easements permits or facilitates the development of the Site and the Project. (c) Any Transfer for (i) financing purposes to the holder of a mortgage; (ii) any refinancing or permanent financing of the mortgage; (iii) any Transfer to any person or entity pursuant to foreclosure or deed in lieu of foreclosure of any such mortgage referred to in clauses (i) or (ii). In the event of a Transfer by Developer not requiring the Agency's prior approval, Developer nevertheless agrees that at least thirty (30) days prior to such Transfer, Developer shall give written notice to the Agency of such Transfer. In the case of a Transfer pursuant to subparagraph (a) above, Developer agrees that at least thirty (30) days prior to such Transfer it shall provide satisfactory evidence that the transferee has assumed or upon the effective date of transfer will assume in writing through an assignment and assumption agreement, in form reasonably acceptable to the Agency, all of the obligations of the Developer under this Agreement which remain unperformed as of such Transfer or which arise from and after the date of Transfer. As used in this Agreement, a "Related Person or Entity" shall mean an entity in which Developer, or an entity in which Garff Enterprises, Inc., John Garff, or a majority of Garff Enterprises; Inc.'s shareholders, own a greater than fifty percent (50%) ownership and management interest, has a greater than fifty percent (50%) ownership and management interest; provided, however, that in the event of a Transfer by GL CCC, such Related Person or Entity shall demonstrate that such person or entity has been approved in writing by General Motors to operate the Project thereon. 7.3 Agency Consideration of Proposed Transfer• Release of Transferor Upon Permitted or Approved Transfer. If the Developer desires to cause a Transfer of any of its interests in this Agreement or the Site and such Transfer requires the Agency's approval under Section 7.1, Developer shall request in writing to the Agency that it consent to such Transfer, which consent shall not be unreasonably delayed or withheld. A Transfer shall be conditioned upon: (i) the proposed assignee expressly assuming, in writing, the unexecuted obligations 882/015610-0057 _15- 272 1102564.05 a07/02110 hereunder of the transferor/assignor, as applicable, as to times following the effective date of the assignment and (ii) the proposed assignee demonstrating to the reasonable satisfaction of the Agency that such person or entity has adequate financial capacity to complete the development and/or operation of the Project on the Site and that such person or entity has been approved in writing by General Motors to operate the Project thereon. Notwithstanding any other provision set forth in this Agreement to the contrary, upon the effective date of a permitted or approved Transfer, and provided that the transferor/assignor shall have delivered to the Agency an executed assignment and assumption agreement in form reasonably acceptable to Agency legal counsel, the transferor/assignor shall be released from all further liabilities and obligations hereunder and the Operating Covenant that have been so transferred and assigned. 7.4 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall run with the Site and be binding upon the Developer and the Agency and their permitted successors and assigns. Whenever the term "Developer" or "Agency" is used in this Agreement, such term shall include any other permitted successors and assigns. 7.5 Subordination. The Agency acknowledges and agrees that the Agency's Deed of Trust is and shall be subject and subordinate to the Komerstone Deed of Trust and to all renewals, modifications, consolidations, replacements, and extensions thereof, provided the maximum cumulative principal amount of the loan secured by any such renewal, modification, consolidation, replacement, or extension, when added to the outstanding principal balance due under the Agency Note, shall not exceed ninety percent (90%) of the lender's appraised value of the Site upon completion of the Project, which amount shall be verified in writing to Agency Executive Director's reasonable satisfaction. In addition, notwithstanding anything in this Agreement to the contrary, Agency agrees to subordinate the Agency's Deed of Trust to any subsequent deed of trust recorded against the Site relating to any take-out or permanent financing or refinancing thereof obtained by Developer, provided the maximum cumulative principal amount of the loan secured by any such take-out or permanent financing, when added to the outstanding principal balance due under the Agency Note, shall not exceed ninety percent (90%) of the lender's appraised value of the Site. 8. INDEMNIFICATION OF AGENCY The Developer shall indemnify, defend, and hold harmless the Agency and City and Agency and City Personnel from and against any and all claims, liabilities, damages, and losses, including without limitation reasonable attorneys' fees and litigation expenses, including court courts and expert witness fees (collectively, "Claims"), due to the death or personal injury of any person, or physical damage to any person's real or personal property, caused by the construction of improvements by, or construction -related activities of, the Developer on the Site, or for any construction defects in any improvements constructed by the Developer on the Site, or the approval or operation of the Project on the Site; provided, however, that the foregoing indemnification shall not apply to the extent such Claims are caused by the negligence or willful misconduct of the Agency or City, subject to any immunities which may apply to the Agency or 882/015610-0057 '00 • 0 2 � 3 1102564.05 a07/02/10 -16- City with respect to such Claims. The foregoing indemnification provision shall survive the termination of this Agreement. 9. GENERAL PROVISIONS 9.1 Notices. All notices under this Agreement shall be effective (i) upon personal delivery, (ii) upon delivery by reputable overnight courier that provides a receipt with the date and time of delivery, (iii) via facsimile, so long as the sender receives confirmation of successful transmission from the sending machine, or (iv) three (3) business days after deposit in the United States mail, registered or certified, postage fully prepaid, and addressed to the respective parties as set forth below or as to such other address as the parties may from time to time designate in writing: To Agency: Notices Delivered by U.S. Mail: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, CA 92247 Phone No.: 760-777-7031 Facsimile No.: 760-777-7101 Attention: Executive Director Notices Delivered Personally or by Courier: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Phone No.: 760-777-7031 Facsimile No.: 760-777-7101 Attention: Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton, Suite 1400 Costa Mesa, CA 92626 Phone No.: 714-641-5100 Facsimile No.: 714-546-9035 Attention: M. Katherine Jenson, Esq. ° 27q 882/015610-0057 1102564,05.07/02/10 -17- To Developer: Garff Properties -La Quinta, LLC 405 South Main Street, Suite 1200 Salt Lake City, UT 84111 Phone No.: 801-257-3402 Facsimile No.: 801-257-3460 Attention: John Garff "ITI Garff Enterprises, Inc. 405 South Main Street, Suite 1100 Salt Lake City, UT 84111 Phone No.: 801-257-3412 Facsimile No.: 801-257-3400 Attention: Tony Kraatz With a copy to: Garff Enterprises, Inc. 405 South Main Street, Suite 1200 Salt Lake City, UT 84111 Phone No.: 801-257-3468 Facsimile No.: 801-428-1968 Attention: Michael D. Creer, Esq. 9.2 Enforced Delay Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; or acts or failures to act of the City or Agency or any other public or governmental agency or entity. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within ten (10) days of the commencement of the cause. Subject to the second sentence of Section 2.4, times of performance under this Agreement may also be extended in writing by the mutual agreement of the Agency and Developer. Notwithstanding any provision of this Agreement to the contrary, the lack of funding or difficulty obtaining financing to complete the Project shall not constitute grounds of enforced delay pursuant to this Section 9.2. 9.3 Non -Liability of Officials and Employees of Agency to the Developer. No member, official, director, officer, agent, or employee of Agency shall be personally liable to the Developer, or any successor in interest of the Developer, in the event of any Default or 882i015e10-0057 275 1102564,05 a07/02/10 -� 8- breach by Agency or for any amount which may become due to the Developer or Developer's successors, or on any obligations under the terms of this Agreement. 9.4 Relationship_ Between Agency and Developer. It is hereby acknowledged that the relationship between the Agency and Developer is not that of a partnership or joint venture and that the Agency and the Developer shall not be deemed or construed for any purpose to be the agent of the other. 9.5 Agency Approvals and Actions. The Agency shall maintain the authority to implement this Agreement on behalf of the Agency through the Agency Executive Director (or his or her duly authorized representative). The Agency Executive Director shall have the authority to issue interpretations, waive provisions, and/or enter into certain amendments of this Agreement on behalf of the Agency so long as such actions do not materially or substantially change the uses or development permitted on the Site, or add to the costs incurred or to be incurred by the Agency. All other material and/or substantive interpretations, waivers, or amendments shall require the consideration, action and written consent of the Agency Board. 9.6 Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. 9.7 Integration. This Agreement, including the Attachments hereto, contains the entire understanding between the parties relating to the transaction contemplated by this Agreement, notwithstanding any previous negotiations or agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. 9.8 Attorneys' Fees. In any action between the parties to interpret, enforce, reform, modify, rescind, or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled to its reasonable costs and expenses including, without limitation, litigation costs and reasonable attorneys' fees. 9.9 Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. Reference to section numbers are to sections in this Agreement, unless expressly stated otherwise. 9.10 Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by both parties. 276 882/015610-0057 1102564.05 a07/02/10 -19- 9.11 Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party. 9.12 Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law and consistent with the mutual intent of the parties as expressed herein. 9.13 Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day, and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be the applicable time of day in the Pacific Time Zone. 9.14 Legal Advice. Each party represents and warrants to the other the following: it has carefully read this Agreement, and in signing this Agreement, it does so with full knowledge of any right which it may have; it has received independent legal advice from its legal counsel as to the matters set forth in this Agreement, or has knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, it has freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or its agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 9.15 Time of Essence. Time is expressly made of the essence with respect to the performance by the Agency and Developer of each and every obligation and condition of this Agreement. 9.16 Conflicts of Interest. No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. 9.17 Third Party Beneficiaries. With the exception of the provisions in Sections 2.7.5, 6.1, 8, 9.19 and 9.20 which benefit, and are enforceable by, the City, there are no intended third party beneficiaries to this Agreement. 9.18 Corporate Authority. The person(s) executing this Agreement on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement such party is formally bound to the provisions of this Agreement, and 271 882/015610-0057 1102564 05 a07/02n0 -20- (iv) the entering into this Agreement does not violate any provision of any other agreement to which such party is bound. 9.19 Covenant to Not Cause Violation of Statutes Relating to Relocation of Vehicle Dealerships. From the Date of Agreement until the Operating Covenant Termination Date (as defined in the Operating Covenant), Developer shall not take any action that would result in a violation by the Agency and/or City of California Government Code Section 53084 or Health & Safety Code Section 33426.7. Developer further agrees to indemnify, defend, and hold harmless the Agency and City from and against any claims, proceedings, losses, costs, or expenses incurred as a result of any such violation arising out of actions by Developer. 9.20 Covenant to Not Cause Violation of Statutes Relating to Direct Assistance by Ate. Developer represents and warrants that it is using the Agency Loan for the sole and exclusive purpose of causing the construction of the Project and for no other purpose and that the Agency Loan shall not be used in a manner that would constitute a violation of Health & Safety Code Section 33426.5. Developer further agrees to indemnify, defend, and hold harmless the Agency and City from and against any claims, proceedings, losses, costs, or expenses incurred as a result of any such violation arising out of actions by Developer. 9.21 General Motors Consent. Developer shall provide written evidence from General Motors that General Motors has approved the Site for the operation of Chevrolet and Cadillac franchises. [Remainder of Page Left Blank; Signatures on Following Page] It.. �' 2 13 88M15610-0057 1102564.05 a07/02/10 -2 t - IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read this Agreement, understands it, and hereby executes this Agreement to be effective as of the day and year first written above. Date: Date: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Agency Counsel "Developer" GARFF PROPERTIES -LA QUINTA, LLC, a Utah limited liability company 2010 By: Its: "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic 2010 By: Executive Director 882/015610-0057 1". ' , 1102564.05 a07/02/1 0 -22- 279 ATTACHMENT "I" LEGAL DESCRIPTION OF SITE PARCEL 3 OF PARCEL MAP 28525-1, AS SHOWN BY MAP ON FILE IN BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. ASSESSOR'S PARCEL NUMBER 600-020-014. 882/015610-0057 ..... . ri 280 110256405 a07/02/10 ATTACHMENT 1 ATTACHMENT "2" SCOPE OF DEVELOPMENT The Project shall consist of Developer obtaining approval from General Motors to move and operate, and thereafter moving and operating, Chevrolet and Cadillac franchises on the Site. The Project shall include the following construction and related tasks: a. Increase the existing service facility on the Site from the current 12 service bays to no less than 21 bays. b. Increase the parts department in size from the current 1850 square feet to approximately 3750 square feet. C. Add an additional, approximately1500 square feet to the existing showroom, which will then be used as the Chevrolet showroom. d. Construct a separate, new exclusive Cadillac showroom containing approximately 3400 square feet. C. Construct a separate, new service drive exclusive for Cadillac customers that contains approximately 1200 square feet. to...rl 281 882/015610-0057 1102564.05 a07/02/10 ATTACHMENT 2 ATTACHMENT "3" SCHEDULE OF PERFORMANCE Item of Performance Time for Completion 1. Developer's execution and acknowledgement Concurrently with Developer's execution of of the Operating Covenant. Agreement. 2. Agency recordation of the Operating Within five (5) days after Effective Date. Covenant. 3. Developer's preparation and submission of During the week of July 12-16, 2010. Developer Applications, including a complete application for a Site Development Permit (SDPA), which shall include: • Detailed Site Plans • Revised Site Plans • Lighting Plans (photometric) • "Conceptual" Landscaping Plans • Preliminary Grading Plans • "Conceptual" Floor Plans • "Conceptual" Elevations 4. Review of Developer Applications by Agency will use reasonable efforts to cause such applicable City departments and provision of review, and to obtain and provide to Developer any comments to Developer. any comments, during the week of July 19-23, 2010. 5. Developer to revise and resubmit (as During the week of July 30-August 3, 2010. necessary to address City comments) Developer Applications. 6. Re -review of Developer Applications by During the period of August 2-6, 2010. applicable City departments and preparation of conditions of approval. 7. Architectural and Landscape Review Agency will use reasonable efforts to cause such Committee to review Developer Applications review and comment, and shall use reasonable and provide any comment; Agency prepares efforts to cause City to prepare such report, during staff report. the period of August 2-6, 2010. 8. Planning Commission hearing and During the week of August 23-27, 2010. consideration of Developer Applications. 9. Developer's submission of application for During the week of August 23-27, 2010. building permits. 10. Plan check review by applicable City Agency will use reasonable efforts to cause such departments and preparation of any review, and to obtain and provide to Developer corrections to Developer. any corrections, during the period September 1- 13, 2010. 882/015610-0057 ATTACHMENT 1102564.05 a07102110 Item of Performance Time for Completion 11. Developer to correct and resubmit (as During the period September 13-27, 2010. necessary to address City comments) plans, 12. Developer to submit to Agency proposed list No later than September 1, 2010. of Eligible Project Costs 13. Review of Developer's proposed list of Within 10 days after Agency's receipt. Eligible Project Costs by Agency 14. Developer to revise and resubmit (if Within 10 days after receipt of Agency comments. necessary) and obtain Agency approval of list of Eligible Project Costs 15. Plan check re -review by applicable City Agency will use reasonable efforts to cause such departments; Developer obtains issuance of re -review and the issuance of building permits (if building permits (if Developer entitled to Developer is entitled to issuance) during the issuance). period September 15-27, 2010. 16. Developer performs demolition portion of During the period of September 15—October I, Project. 2010. 17. Developer constructs Project. During the period of September 15, 2010—January 14, 2011. 18. Developer obtains certificate of occupancy for During the week of January 17-21, 2011. Project. This Schedule of Performance represents the parties' target dates. However, subject to Section 2.4 of the Agreement, this Schedule of Performance may be adjusted by the Agency Executive Director so long as Developer moves the Project forward and obtains a certificate of occupancy for the Project by no later than twelve (12) months from the Effective Date. This Schedule of Performance does not include the time of performance for all obligations arising under the Agreement; rather this schedule focuses only on the development schedule of the Project. The parties are referred to the Agreement for the total description of the parties' obligations and times for performance of matters not identified in this Schedule. The Developer understands that obligations contained in the Agreement may be conditions precedent to the Agency's obligations under this schedule. Nothing herein shall be construed to limit the City's legislative authority, which City may exercise, in City's sole and absolute discretion. In all cases where City action is required, Agency shall use reasonable efforts to cause City to take such action in the time prescribed herein. 882/015610-0057 ATTACHMENT 3 .. r 283 1102564 05 a07/02/10 -2- ATTACHMENT "4" RELEASE OF CONSTRUCTION COVENANTS [See Following Document] 882/015610-0057^.. -f 284 1102564,05.07/02/10 ATTACHMENT 4 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Garff Enterprises, Inc. 405 South Main Street, Ste. 1200 Salt Lake City, UT 84111 Attention: Mr. John Garff [Space above for Recorder.]This document is exempt from the payment of a recording fee pursuant to Government Code Section 27383. RELEASE OF CONSTRUCTION COVENANTS This RELEASE OF CONSTRUCTION COVENANTS (the "Release") is made by the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), in favor of GARFF PROPERTIES -LA QUINTA, LLC, a Utah limited liability company (the "Developer"), as of the date set forth below. RECITALS A. The Agency and Developer have entered into that certain Owner Participation Agreement (the "OPA") dated 2010 concerning the redevelopment of certain real property situated in the City of La Quinta, California, as more fully described in Exhibit "A" attached hereto and made a part hereof (the "Site"). B. As referenced in Section 2.8 of the OPA, the Agency is authorized and required to furnish the Developer or its successors with a Release of Construction Covenants upon completion of construction of the "Project" (as defined in the OPA), which Release is required to be in such form as to permit it to be recorded in the Recorder's office of Riverside County. This Release is conclusive determination of satisfactory completion of the construction and development of the Project. C. The Agency has conclusively determined that construction and development of the Project has been satisfactorily completed. NOW, THEREFORE, the Agency hereby certifies as follows: i. The Project to be constructed by the Developer has been satisfactorily completed in accordance with the provisions of said OPA. 2. This Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage or any insurer of a mortgage, securing money loaned to finance the Project or any part thereof. 3. This Release of Construction Covenants is the release of construction covenants referred to in, and satisfies the requirements of, Section 2.8 of the OPA for construction of the Project. 882/015610-0057,•... 285 1102564,05 a07/02/10 -]- 4. This Release of Construction Covenants is not a Notice of Completion as referred to in California Civil Code Section 3093. 5. Except as stated herein, nothing contained in this instrument shall modify in any way any other provisions of the OPA or any other provisions any other documents executed pursuant to the OPA, all of which shall remain enforceable according to their terms of the documents incorporated therein. BY WITNESS WHEREOF, the Agency and the Developer have signed this Release of Construction Covenants as of the respective dates set forth below. "Developer" GARFF PROPERTIES -LA QUINTA, LLC, a Utah limited liability company Date: 2010 By: Its: "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic 2010 By: ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Agency Counsel Executive Director r 882/015610-0057 286 1102564,05 a07/02/10 -2- State of California County of Riverside On before me, (insert name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of California County of Riverside On before me, (insert name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 287 882/015610-0057 1102564,05 .07/02/10 -3- EXHIBIT "A" LEGAL DESCRIPTION OF SITE All that property located in the City of La Quinta, County of Riverside, State of California, described as follows: PARCEL 3 OF PARCEL MAP 28525-1, AS SHOWN BY MAP ON FILE IN BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. ASSESSOR'S PARCEL NUMBER 600-020-014. 882/015610-0057 1102564 05 a07/02/10 -4- ATTACHMENT "5" LIST OF ELIGIBLE COSTS [To be inserted pursuant to Section 3.1 after Developer submits to Agency's Executive Director and Agency's Executive Director approves the same] 289 882/015610-0057 ATTACHMENT 5 1102564 05 OVUM ATTACHMENT "6" PROMISSORY NOTE [See Following Document] 882/015610-0057 ATTACHMENT 6 �� 290 0 1102564.05 a07/02/10 J PROMISSORY NOTE SECURED BY DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO 2010 ("Note Date") FOR VALUE RECEIVED, the undersigned, GARFF PROPERTIES -LA QUINTA, LLC, hereinafter referred to as `Borrower," promises to pay to the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, hereinafter referred to as "Agency," so much principal as may be outstanding in accordance with the terms of this Note, not exceeding TWO MILLION THREE HUNDRED THOUSAND DOLLARS ($2,300,000), plus accrued interest on the unpaid principal, plus such other costs, charges, and fees which may be owing from time to time, all subject to the terms, conditions, and provisions hereinafter set forth. Reference is made to: (i) The Redevelopment Plan for Project Area 2, which is incorporated herein by reference as though fully set forth. (ii) That certain Owner Participation Agreement by and between Borrower and Agency, dated on or about June _, 2010 ("OPA") which sets forth terns and conditions for Borrower's redevelopment of a site within the Project Area and the City of La Quinta addressed as 79225 Highway 111, as more particularly described in the legal description attached as Attachment 1 to the OPA (the "Site"). The OPA is incorporated herein by reference as though fully set forth herein. (iii) That certain Operating Covenant in the form attached to the OPA as Attachment 8 to be executed by and between Agency and Borrower concurrently with the execution hereof and recorded against the Site (the "Operating Covenant"). The Operating Covenant is incorporated herein by this reference as though fully set forth herein. (iv) That certain Deed of Trust With Assignment of Rents and Rider Attached Hereto in the form attached to the OPA as Attachment 7 to be executed by Borrower concurrently with the execution hereof and recorded against the Site (the "Deed of Trust"). The Deed of Trust is incorporated herein by this reference as though fully set forth herein. The Deed of Trust will secure Borrower's repayment of the "Agency Loan" (as defined in Section 1 below). 1. Principal Amount' Interest Amount. The principal amount of the Agency's loan to Borrower (the "Agency Loan") is up to TWO MILLION THREE HUNDRED THOUSAND DOLLARS ($2,300,000) ("Loan Amount"), which Agency shall disburse to Borrower in accordance with the provisions of Section 3 of the OPA. Interest shall accrue on the outstanding principal balance at the 1-year LIBOR Rate, adjusted annually, on each June 30 (or, if June 30 is not a business day, on the first business day thereafter) during the term hereof. Interest shall accrue as set forth in Paragraph 4 in the event of a Borrower default. 662/015610-0057 - j - °0 ' ' 291 1102564.05 a07/02/10 2. Term of Note. Subject to the provisions of Paragraph 4 herein which provide for acceleration of the then outstanding principal and accrued interest and immediate payment thereof in the event of a default by Borrower, the term of this Note shall commence on the date hereof and continue until the date the Operating Covenant terminates. 3. Repayment. Within one hundred twenty (120) days after the end of each of the ten (10) fiscal years commencing with the July 1, 2011-June 30, 2012 fiscal year, each of which fiscal year shall be referred to herein as an "Operating Year," Agency shall forgive first accrued interest, and then principal, on the Agency Loan, in an amount equal to the "Site Taxes" (as that term is defined below) generated on the Site during the applicable Operating Year. In addition, upon expiration or earlier termination of the Operating Covenant, the outstanding balance owed on the Agency Loan shall be forgiven, and this Note shall be cancelled. As used herein, the term "Site Taxes" shall mean the sum of (i) the "Sales Taxes From the Site," and (ii) the "Net Property Tax Increment From the Site" (all as defined below). a. As used herein, the term "Sales Taxes From the Site" means the amount equal to the sales and use taxes that are generated from sales occurring on the Site on which sales or use taxes are imposed pursuant to applicable California law in each Operating Year which are actually received by the City from the State Board of Equalization. In connection therewith: (i) Borrower shall timely report, and shall cause its tenants (if any) to report, all sales and use taxes from the Site to the State Board of Equalization in accordance with the laws, rules, and regulations applicable to such reporting. (ii) Sales Taxes from the Site shall be deemed to have been paid by the State Board of Equalization to the City if and to the extent the State Board of Equalization elects to offset the payment of any such Sales Taxes From the Site against any other obligation of the City. (iii) Borrower acknowledges that the State Board of Equalization makes payments to the City based on both actual and anticipated sales and use tax revenues and that the State Board of Equalization makes periodic reconciliations. The determination of Sales Taxes from the Site for any annual, quarterly, or other period shall be subject to the timing and reconciliation process related to the processing by the State Board of Equalization of payments of such Sales Taxes From the Site to the City. Any adjustments resulting from any interim or estimated determination of Sales Taxes From the Site for any annual, quarterly, or other period shall be reconciled by the parties as soon as practicable without inclusion of, or any obligation to pay, interest. (iv) Sales Taxes From the Site shall be determined based on actual amounts received by the City based only on the City's share of the State sales and use tax applicable to the Site (which, as of the Effective Date, is 1% of the taxable amount). Sales Taxes From the Site shall not include amounts paid to the City by the State Board of Equalization derived from any sales tax overrides or special tax amounts received by the City, nor shall include any administrative fees or charges imposed by the State Board of Equalization that reduce the actual amounts of sales and use taxes received by the City. 882/015610-0057 -2- •qe •�• 2 Q 2 1102564.05 a07/02/10 v (v) Borrower shall, and shall cause its tenants (if any) to, keep full and accurate books of account, records, and other pertinent data showing all gross income earned upon the Site that is reportable for California sales and use tax purposes, including all documents required to be maintained by the State of California for sales and use tax purposes. (vi) Borrower shall furnish, and shall cause its tenants (if any) to furnish, to Agency true and correct photocopies of its quarterly California sales and use tax returns at the time each is filed with the State of California, together with a copy of all checks or wire transfers or other forms of transfer of funds sent for such payment of sales and use taxes. b. As used herein, the term "Net Property Tax Increment From the Site" shall mean "New Gross Property Tax Increment From the Site" (as defined below) less "Old Gross Property Tax Increment From the Site" (as defined below). As used herein, New Gross Property Tax Increment From the Site means the amount equal to the property tax increment pursuant to Health and Safety Code Section 33670(b) that was allocated to, paid to and received by the Agency by reason of Borrower's ownership of the Site in each Operating Year. As used herein, "Old Gross Property Tax Increment From the Site" means the amount of gross tax increment pursuant to Health and Safety Code Section 33670(b) attributable to the Site that was allocated to, paid to and received by the Agency in the July 1, 2009-June 30, 2010 fiscal year. Borrower and Agency hereby acknowledge that the assessed value of the Site in the July 1, 2009-June 30, 2010 fiscal year was Four Thousand Five Hundred Eighty -One Thousand Nine Hundred Thirty -One Dollars ($4,581,931). In connection therewith, Borrower covenants to pay, prior to delinquency, all real property taxes and assessments that are levied on or against the Site. C. Borrower shall have the right to prepay all or any portion of this Note at any time without penalty. 3. Default Acceleration: Cross -Default. In the event Borrower is in default of any of the covenants, terms, or provisions of this Note, the Deed of Trust, the OPA, or the Operating Covenant, and Borrower fails to timely cure such default under the terms of the applicable agreement, it being understood and agreed by Borrower that a default of this Note, or of the Deed of Trust, or of the OPA, or of the Operating Covenant, shall be a default of all of the foregoing listed documents, then Borrower shall be in default of this Note and the Loan Amount and all accrued interest thereon (less the amount of Site Taxes generated prior to such time) shall become immediately due and payable. The rate of interest applicable to periods of default for the defaults set forth in this Paragraph 4 shall be calculated at the lesser of ten percent (10%) per annum or the maximum legal rate, and shall accrue as of the date such payment was originally due. 882ro15610-0057 -3- 293 1102564.05 a07102/10 4. Additional Terms. a. All payments shall be first credited to accrued interest, next to costs, charges, and fees which may be owing from time to time, and then to principal. All payment shall be made in lawful money of the United States. Payments shall be made to Agency at the address set forth in Paragraph 7 herein or at such other address as Agency or the holder of this Note may direct pursuant to notice delivered to Borrower in accordance with Paragraph 7. b. Borrower agrees to pay the following costs, expenses, and reasonable attorney's fees paid or incurred by Agency, or adjudged by the court, in the collection of amounts in default or other costs incurred as a result of a default by Borrower: (i) reasonable costs of collections, costs and expenses and attorney's fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed, and (ii) costs of suit and such sums as the court may adjudge as attorney's fees in any action to enforce payment of this Note or any part of it if Agency prevails in such suit. 5. Nonassumability. This Note shall not be assumable without the prior, express, written consent of Agency's Executive Director, which shall not be unreasonably withheld or delayed. 6. Presentment, Etc. Notwithstanding any other provision herein to the contrary, to the extent permitted by law Borrower hereby waives the following: (a) notice of default or delinquency, (b) notice of acceleration, (c) notice of nonpayment, (d) notice of costs, expenses and losses and interest thereon, (e) notice of interest on interest and late charges, (f) diligence in taking any action to collect any sums owing under this Note or in proceeding against any of the rights and presentment for payment, demand, protest, and notices of dishonor and/or protest; (g) the benefits of all waivable exemptions; and (h) all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. 7. Notices. Any notices required by law or this Note shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return receipt requested. To Agency: Notices Delivered by U.S. Mail: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, CA 92247 Phone No.: 760-777-7031 Facsimile No.: 760-777-7101 Attention: Executive Director 882/015610-0057 _q_ '"• •r1 294 1102564 05 a07/02/10 Notices Delivered Personally or by Courier: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Phone No.: 760-777-7031 Facsimile No.: 760-777-7101 Attention: Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton, Suite 1400 Costa Mesa, CA 92626 Phone No.: 714-641-5100 Facsimile No.: 714-546-9035 Attention: M. Katherine Jenson, Esq. To Borrower: Garff Properties -La Quinta, LLC 405 South Main Street, Suite 1200 Salt Lake City, UT 84111 Phone No.: 801-257-3402 Facsimile No.: 801-257-3460 Attention: John Garff oil Garff Enterprises, Inc. 405 South Main Street, Suite 1100 Salt Lake City, UT 84111 Phone No.: 801-257-3412 Facsimile No.: 801-257-3400 Attention: Tony Kraatz With a copy to: Garff Enterprises, Inc. 405 South Main Street, Suite 1200 Salt Lake City, UT 84111 Phone No.: 801-257-3468 Facsimile No.: 801-428-1968 Attention: Michael D. Creer, Esq. Notices personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices mailed shall be deemed effective on the second business day following deposit in the United States mail. Either party may designate that notices be sent to other or additional addresses by complying with the requirements of this section. 882/015610-0057 -5- °. •1 295 1102564 05 a07/02/10 8. Litigation. This Note shall be governed by and construed under the internal laws of the State of California without regard to conflicts of law. The parties agree that in any litigation between the parties arising out of this Note, the Superior Court of the State of California in and for the County of Riverside shall have exclusive jurisdiction. The prevailing party in any litigation between the parties arising out of or connected to this Note, in addition to whatever other relief to which the prevailing party is entitled, shall also be entitled to reasonable attorney's fees, including fees and costs for discovery, and any fees and costs for appeal. In the event of such legal action, service of process on Agency shall be made in such manner as provided by law for service on a California public entity; service of process on Borrower shall be made in such manner as may be provided for by law, and shall be valid whether made within or without the State of California. 9. Waiver. No waiver of any breach, default, or failure of condition under the terms of this Note, or the obligations secured hereby, shall be implied from any failure of Agency to take, or any delay by the Agency in taking, action with respect to such breach, default, or failure from any previous waiver or any similar or unrelated breach, default, or failure; and a waiver of any term of this Note must be made in writing and shall be limited to the express written terms of such waiver. 10. Time of Essence. Time is of the essence in this Note. 11. Severability. In the event that any term or provision of this Note is held to be unenforceable, the remainder of this Note shall remain in full force and effect to the fullest extent without inclusion of the unenforceable term or provision. 12. Interpretation. In the event of any conflict between this Note and the OPA, this Note shall apply. The terms of this Note 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 Note or any other rule of construction which might otherwise apply. The paragraph headings are for purposes of convenience only, and shall not be construed to limit or extend the meaning of this Note. 13. Security for Note. This Note shall be secured by the Deed of Trust. 14. Assignment. Agency, at its option, may assign its right to receive payment under this Note without obtaining the consent of the Borrower or the holder or beneficiary of the lien of any deed of trust or other security instrument, whether recorded or unrecorded. Borrower shall not be permitted to assign or transfer this Note or any portion thereof without the prior express written consent of the Agency Executive Director, which shall not be unreasonably withheld or delayed. [signatures on next page] 882/015610-0057 -6- „ 296 1102564,05 a07/02/10 IN WITNESS WHEREOF, Borrower has executed this Note as of the Note Date. "Borrower" GARFF PROPERTIES -LA QUINTA, LLC, a Utah limited liability company Date: 2010 By: Its: 882/015610-0057 297 1102564.05 a07/02/10 ATTACHMENT "7" DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO [See Following Document] 882/015610-0057 ATTACHMENT 7•• . • 2 J 8 1102564,05 a07/02/10 Recording Requested by and When recorded mail to: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, CA 92247 Attn: Executive Director SPACE ABOVE THIS LINE FOR REUOKULK's usn EXEMPT FROM RECORDING FEE PER GOV. CODE SECTION 27383 DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO NOTE: RIDER ATTACHED TO THIS DEED OF TRUST This DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO ("Deed of Trust"), is made , 2010, between GARFF PROPERTIES -LA QUINTA, LLC, a Utah limited liability company, herein called TRUSTOR, whose address is 405 South Main Street, Suite 1200, Salt Lake City, UT 84111, a corporation, herein called TRUSTEE, whose address is , and LA QUINTA REDEVELOPMENT AGENCY, 78-495 Calle Tampico, La Quinta, California 92253, a public body, corporate and politic, herein called BENEFICIARY. WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, Trustor's fee interest in that property in the City of La Quinta, County of Riverside, State of California, described as: PARCEL 3 OF PARCEL MAP 28525-1, AS SHOWN BY MAP ON FILE IN BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. ASSESSOR'S PARCEL NUMBER 600-020-014. together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of up to TWO MILLION THREE HUNDRED THOUSAND DOLLARS ($2,300,000) with interest thereon according to the terms of a promissory note or notes of even date herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof; (2) the performance of each agreement of Trustor incorporated by reference or contained herein; and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Deed of Trust, and with respect to the Property above described, Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be 299 882/015610-0057 -1- 1102564.05 a07/02/10 bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kin s 858 713 Placer 1028 379 Sierra 38 187 Alpine 3 130- Lake 437 110 Plumas 166 1307 Siskiyou 506 762 31 Amador 133 438 Lassen 192 367 Riverside 3778 347 Solano 1287 621 Butte 1 - 513 Los T- 874 Sacramento 5039 124 Sonoma 2067 427 Angeles 3878 Calaveras 18 33 Sa 1970 56 Colusa 323 391 Marin 1849 122 San 6213 768 Sutter 655 585 Bernardino Contra 4684 1 Mariposa 90 453 San A-804 596 Tehama 457 183 Costa Francisco Del Norte 101 549 Mendocino 667 99 San 2855 283 Trinity 108 595 Joaquin EI Dorado 704 635 Merced 1660 753 San Luis 1311 137 Tulare 2530 108 Obispo Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa 2065 881 Ventura 2607 237 Barbara Humboldt 801 83 Montere 357 239 Santa Clara 6626 664 Yolo 769 16 Im erial 1189 701 Napa 704 742 Santa Cruz 1638 607 Yuba 398 693 In o 165 672 Nevada 363 94 Shasta 800 633 Kern 3756 690 Orange 7182 18 San Diego SERIES 5 Book 1964, Page 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. 882/01561M057 -2- 3 1102564.05 a07/O2/10 DO NOT RECORD The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed of Trust, Truster agrees: I ) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials famished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 3) 'ro appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay: at least ten (10) days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Truster fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without obligation so to do and without notice to or demand upon Truster and without releasing Trustor from any obligation hereof, may: make or do the same is such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: I) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof; join in granting any casement thereon, orjoin in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as -the person or persons legally entitled thereto." 5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Truster the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or be a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take 982/015610-0057 -3- 301 1102564 05 a07/02/10 p" possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Afier deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of. all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof, all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. 882/015610-0057 -4- r. 302 1102564.05 a07/02/10 1°• ' SEE RIDER ATTACHED TO THIS DEED OF TRUST "Trustor" GARFF PROPERTIES -LA QUINTA, LLC, a Utah limited liability company Date: 2010 By: Its: 303 882/015610-0057 -$- 1102564 05 a07/02/10 State of California ) County of ) On , before me, (here insert name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) 882/015610-0057 -6- 1102564.05 a07/02/10Q��" v n 4 DO NOT RECORD REQUEST FOR FULL RECONVEYANCE TO ,TRUSTEE: The undersigned is the legal owner and holder of the note or notes and of all indebtedness secured by the foregoing Deed of Trust. Said note or notes, together with all other indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note or notes above mentioned, an all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you under the same. Dated Please mail Deed of"Trust, Note and Reconveyance to Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures. Both must be delivered to the Trustee for cancellation before reconveyance will be made. 882/01561"057 -7- n 305 1102564.05 a07/02/10rr.. . RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS This RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is entered into this _ day of 2010, by and between GARFF PROPERTIES - LA QUINTA, LLC, a Utah limited liability company, herein "Trustor," herein "Trustee," and LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein "Beneficiary," the same parties to that certain form Deed of Trust With Assignment of Rents, of even date hereto, to which this Rider is attached. This Rider is made a part of and is incorporated into the form Deed of Trust. This Rider shall supersede any conflicting term or provision of the form Deed of Trust to which it is attached. Reference is made to: a. The Owner Participation Agreement by and between Trustor as "Developer" and Beneficiary as "Agency" dated on or about 2010 (the "OPA") which sets forth terms and conditions for Borrower's redevelopment of the real property legally described in Exhibit "A" to this Deed of Trust ("Property"); b. The Promissory Note of even date herewith, in the Principal amount of up to Two Million Three Hundred Thousand Dollars ($2,300,000), with Truster as "Borrower" and Beneficiary as "Agency" or "Lender" ("Note"), which Notes is secured by this Deed of Trust. The parties hereto agree: C. The Operating Covenant of even date herewith with Trustor as "Developer" and Beneficiary as "Agency" (the "Operating Covenant") which sets forth Trustor's obligations to ensure the continuous operation of Cadillac and Chevrolet automobile dealerships on the Property for a period of ten (10) years after completion of Trustor's redevelopment of the Property. 1. Obligations Secured. Trustor makes this grant and assignment for the purpose of securing the following obligations ("Secured Obligations"): a. Payment to Beneficiary of all indebtedness at any time owing under the terms of the Note; b. Payment and performance of all obligations of Trustor under this Deed of Trust; C. Payment and performance of all obligations of Trustor under the OPA; d. Payment and performance of all future advances and other obligations of Trustor or any other person, firm, or entity with the approval of Trustor, may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when the obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; and C. All modifications, extensions and renewals of any of the obligations secured hereby, however evidenced. 882/015610-0057 _g_ •n•• •✓ 306 1102564.05 a07/02/10 2. Obligations. The term "obligations" is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges, prepayment charges, late charges and fees at any time accruing or assessed on any of the Secured Obligations. 3. Incorporation. All terms of the Secured Obligations are incorporated herein by this reference. All persons who may have or acquire an interest in the Property shall be deemed to have notice of the terms of the Secured Obligations and to have notice that, if provided therein, the Note or the OPA may permit borrowing, repayment and re -borrowing. 4. Mortgagee -in -Possession. Neither the assignment of rents set forth in the Deed of Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder shall be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property, unless Beneficiary, in person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver for the Property by any court at the request of Beneficiary or by agreement with Trustor, or the entering into possession of the Property by such receiver, be deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect to the Property. 5. No Cure. In the event Beneficiary collects and receives any rents under the Deed of Trust upon any default hereof, such collection or receipt shall in no way constitute a curing of the default. 6. Possession Upon Default. Upon the occurrence of a default, Beneficiary may, at its option, without any action on its part being required and without in any way waiving such default, take possession of the Property and have, hold, manage, lease and operate the same, on such terms and for such period of time as Beneficiary may deem proper, and may collect and receive all rents and profits, with full power to make, from time to time, all alterations, renovations, repairs or replacements thereto as may seem proper to Beneficiary, and to apply such rents and profits to the payment of (a) the cost of all such alterations, renovations, repairs and replacements, and all costs and expenses incident to taking and retaining possession of the Property, and the management and operation thereof, and keeping the same properly insured; (b) all taxes, charges, claims, assessments, and any other liens which may be prior in lien or payment of the Note, and premiums for insurance, with interest on all such items; and (c) the indebtedness secured hereby, together with all costs and attorney's fees, in such order or priority as to any of such items as Beneficiary in its sole discretion may determine, any statute, law, custom or use to the contrary notwithstanding. Any amounts received by Beneficiary or its agents in the performance of any acts prohibited by the terms of this assignment, including, but not limited to, any amounts received in connection with any cancellation, modification or amendment of any lease prohibited by the terms of this assignment and any rents and profits received by Trustor after the occurrence of a default shall be held by Trustor as trustee for Beneficiary and all such amounts shall be accounted for to Beneficiary and shall not be commingled with other funds of the Trustor. Any person receiving any portion of such trust funds shall receive the same in trust for Beneficiary as if such person had actual or constructive notice that such funds were impressed with a trust in accordance therewith. 882/015610-0057 " -" 307 1102564.05 a07102/10 -9- 7. Receiver. In addition to any and all other remedies of Beneficiary set forth under this Deed of Trust or permitted at law or in equity, if a default shall have occurred, Beneficiary, to the extent permitted by law and without regard to the value, adequacy or occupancy of the security for the Note and other sums secured hereby, shall be entitled as a matter of right if it so elects to the appointment of a receiver to enter upon and take possession of the Property and to collect all rents and profits and apply the same as the court may direct, and such receiver may be appointed by any court of competent jurisdiction by ex parte application and without notice, notice of hearing being hereby expressly waived. The expenses, including receiver's fees, attorneys' fees, costs and agent's compensation, incurred pursuant to the power herein contained shall be secured by this Deed of Trust. 8. Subordination. The Beneficiary acknowledges and agrees that the this Deed of Trust is and shall be subject and subordinate to the "Komerstone Deed of Trust" (as defined in the OPA) and to all renewals, modifications, consolidations, replacements, and extensions thereof, provided the maximum cumulative principal amount of the loan secured by any such renewal, modification, consolidation, replacement, or extension, when added to the outstanding principal balance due under the Note, shall not exceed ninety percent (90%) of the lender's appraised value of the Property upon completion of the rehabilitation project required under the OPA, which amount shall be verified in writing to Beneficiary's Executive Director's reasonable satisfaction. In addition, notwithstanding anything herein to the contrary, Beneficiary agrees to subordinate this Deed of Trust to any subsequent deed of trust recorded against the Property relating to any take-out or permanent financing or refinancing thereof obtained by Truster, provided the maximum cumulative principal amount secured by any such take-out or permanent financing, when added to the outstanding principal balance due under the Note, shall not exceed ninety percent (90%) of the lender's appraised value of the Property. 9. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary addressed to: To Agency: Notices Delivered by U.S. Mail: La Quinta Redevelopment Agency P.O. Box 1504 La Quinta, CA 92247 Phone No.: 760-777-7031 Facsimile No.: 760-777-7101 Attention: Executive Director Notices Delivered Personally or by Courier: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Phone No.: 760-777-7031 Facsimile No.: 760-777-7101 Attention: Executive Director [signatures on next page] 882/01561M057 ro••'� 308 1102564,05 a07/02/1 0 -� �- IN WITNESS WHEREOF, Trustor has executed this Rider on the date of Trustor's acknowledgment hereinbelow, to be effective for all purposes as of the day and year first set forth above. "Trustor" GARFF PROPERTIES -LA QUINTA, LLC, a Utah limited liability company 2010 By: Its: 882/015610-0057 1102564 05 a07/02/10 11.. • ! 309 State of California ) County of ) On , before me, Notary Public, (here insert name and title of the officer) personally appeared > who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (seal) 892/015610-0057 Co.. •'J 310 1102564.05 a07/02110 -12- ATTACHMENT "8" OPERATING COVENANT [See Following Document] 311 110ro64,05 a07/ ATTACHMENT 8 11025fi4.05 a07N2/10 RECORDING REQUESTED BY AND When Recorded Mail to: La Quinta Redevelopment Agency P.O. Box 1504 Calle Tampico La Quinta, CA 92247 Attn: Executive Director This document is exempt from the payment of a fee pursuant to Government Code Section 27383. OPERATING COVENANT THIS OPERATING COVENANT ("Operating Covenant") is made this day of , 2010 (the "Effective Date"), by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and GARFF PROPERTIES, LLC, a Utah limited liability company (the "Developer"), with reference to the following: A. The Agency and the Developer have executed an Owner Participation Agreement ("Agreement"), dated as of 2010, which provides, inter alia, for the redevelopment of that certain real property located in the City of La Quinta, County of Riverside, State of California, more fully described in Exhibit "A" attached hereto and incorporated herein by this reference (the "Property"), and Developer's construction and operation thereon of the "Project" as further defined in the Agreement. The Agreement is available for public inspection and copying at the office of the City Clerk, La Quints City Hall, 78-495 Calle Tampico, La Quinta, CA 92253. B. Developer owns fee title to the Property. C. Pursuant to the Agreement, Developer has agreed to construct the Project on the Property, and Agency has agreed to provide the Developer with certain financial assistance to reimburse Developer for costs associated therewith. D. The Agreement also provides for the recordation of this Operating Covenant against the Property to memorialize certain covenants, conditions, and restrictions regarding the use, maintenance, and operation of the Property by Developer and Developer's successors and assigns. E. The City of La Quinta has fee interests in parks, City Hall, public libraries, and in various streets, sidewalks, and other property within the City (collectively, the "Benefited Public Property"), and is responsible for planning of land uses within the City in such a manner as to provide for the health, safety, and welfare of the residents of the City. The Benefited Public Property is legally described in Exhibit `B" attached hereto and incorporated herein by this reference. 8821015610-0057 ,• . •r1 312 1102564,05 a07/02/10 -j- NOW, THEREFORE, Developer hereby covenants, agrees, and declares by and for itself and its successors and assigns that the Property shall be held, sold, conveyed, hypothecated, encumbered, used, occupied, and improved subject to the following covenants, conditions, and restrictions (sometimes collectively referred to hereinafter as the "Covenants"). These Covenants shall run with the Property and shall be binding on all parties having or acquiring any right, title, or interest in the Property or any part thereof and shall inure to the benefit of the Agency and its successors and assigns regardless of whether the Agency holds any interest in any real property benefited thereby. 1. Covenant Regarding Specific Uses. (a) Construction of Project. Developer covenants and agrees for itself, its successors, assigns, and every successor in interest to Developer's interest in the Property or any part thereof, that within the times set forth in the Schedule of Performance attached to the Agreement as Attachment 3 (the "Schedule of Performance"), Developer shall commence, diligently proceed with, and satisfactorily complete construction of the Project so as to entitle Developer to the Agency's issuance of a Release of Construction Covenants for the Project as provided for in Section 2.8 of the Agreement. The foregoing covenant shall be deemed satisfied and shall terminate upon the Agency's issuance of a Release of Construction Covenants. (b) Operation of Project. For a term (the "Term") commencing upon the Effective Date hereof and ending on the tenth (10'") anniversary of the date of recording of the Release of Construction Covenants for the Project (the "Operating Covenant Termination Date"), the Developer hereby covenants and agrees to devote the Property for the exclusive purpose and use of development and operation of the Project and will comply with the other obligations contained herein. Notwithstanding anything herein to the contrary, the nondiscrimination covenants contained in subdivision (a) of Section 4 hereof shall run with the land in perpetuity and shall not terminate on the Operating Covenant Termination Date. Except as provided below, or with the prior written consent of the Agency for each instance, which consent may be granted or withheld in the Agency's sole and absolute discretion, the failure of the Developer (or its tenant) to operate any portion of the Project on the Property as required herein for thirty (30) or more consecutive days shall, at the Agency's option, constitute a default hereunder; provided, however, that the Developer shall for purposes of this Section 1 be deemed to be operating such portion of the Project during any period that the Developer is prevented from operating such portion due to (i) required or necessary rehabilitation of such portion of the Project (provided that the period during which such portion of the Project is not operated as a result of the rehabilitation shall in no event exceed thirty (30) days), unless the rehabilitation cannot reasonably be completed within such thirty (30) day period, in which case the period may extend as necessary for completion, provided such rehabilitation was commenced within the thirty (30) period and is diligently pursued to completion or (ii) war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; or acts or failures to act of the City or Agency other public or governmental agency or entity. Notwithstanding anything to the contrary herein, (a) an extension of time for any cause listed in romanette (ii) above shall be for the period of the enforced delay and shall commence to run 882/015610-0057 (1 3 3 1102564.05 a07/02/10 -2- �� from the time of the commencement of the cause, if notice by the Developer is sent to the other party within ten (10) days of the commencement of the cause, and (b) Developer is not entitled pursuant to this Section 1 to an extension of time to perform because of past, present, or future difficulty in obtaining financing necessary to operate the Project because of economic or market conditions. Notwithstanding anything herein to the contrary, in the event that at any time after the Effective Date hereof (1) General Motors, LLC, a Delaware limited liability company ("General Motors"), ceases to exist, or (2) General Motors terminates the franchise agreement with respect to either or both of the Chevrolet or Cadillac automobile dealerships required to be operated on the Property pursuant to this Operating Covenant, through no fault of the Developer, then this Operating Covenant shall automatically terminate; provided, however, that if General Motors terminates only one of the two franchise agreements as described in clause (2) above, then this Operating Covenant shall only terminate with respect to the automobile dealership covered by such terminated franchise agreement. 2. Performance of Maintenance. (a) Developer shall maintain the Project, the Property and all "improvements" (as defined hereinafter) thereon in accordance with the Maintenance Standards, as hereinafter defined. As used herein, the term "Improvements" shall mean and include, but not be limited to, buildings, sidewalks, pedestrian lighting, landscaping, irrigation of landscaping, architectural elements identifying the Property and any and all other improvements on the Property. (b) To accomplish said maintenance, Developer shall either staff or contract with and hire licensed and qualified personnel to perform the maintenance work, including the provision of labor, equipment, materials, support facilities, and any and all other items necessary to comply with the requirements of this Operating Covenant. (c) The following standards ("Maintenance Standards") shall be complied with by Developer and Developer's maintenance staff, contractors or subcontractors: 1. Landscape maintenance shall include, but not be limited to: watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning; trimming and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road conditions and visibility, and irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. 2. Clean-up maintenance shall include, but not be limited to: maintenance of all sidewalks, paths and other paved areas in clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping prior to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers. 314 882/015610-0057 1102564.05 a07/02/10 -3- 3. All maintenance work shall conform to all applicable federal and state Occupational Safety and Health Act standards and regulations for the performance of maintenance. 4. Any and all chemicals, unhealthful substances, and pesticides used in and during maintenance shall be applied in strict accordance with all governing regulations. Precautionary measures shall be employed recognizing that all areas are open to public access. 5. The Project and Property shall be maintained in conformance and in compliance with the approved Property construction and architectural plans and design scheme, as the same may be amended from time to time with the approval of the City, and reasonable commercial development maintenance standards for similar projects, including but not limited to: painting and cleaning of all exterior surfaces and other exterior facades comprising all private improvements and public improvements to the curbline. 6. The Project and Property shall be maintained as required by this Section in good condition and in accordance with current factory standards of General Motors for General Motors automobile dealerships, as determined by the Dealer Development Division of General Motors factory standards (the "General Motors Standards"). 3. Failure to Maintain Property. In the event Developer does not maintain the Property in the manner set forth herein and in accordance with the Maintenance Standards, Agency shall have the right to maintain such private and/or public improvements, or to contract for the correction of such deficiencies, after written notice to Developer. However, prior to taking any such action, Agency agrees to notify Developer in writing if the condition of the Project or Property do not meet with the Maintenance Standards and to specify the deficiencies and the actions required to be taken by Developer to cure the deficiencies. Upon notification of any maintenance deficiency, Developer shall have thirty (30) days within which to correct, remedy or cure the deficiency. If the written notification states the problem is urgent relating to the public health and safety of the City, then Developer shall have forty-eight (48) hours to rectify the problem. In the event Developer fails to correct, remedy, or cure (or for deficiencies which cannot reasonably be corrected, remedied, or cured within thirty (30) days has failed to commence correcting, remedying or curing such maintenance deficiency and diligently pursue such correction, remedy, or cure to completion) after notification and after the period of correction has lapsed, then Agency shall have the right to maintain such improvements. Developer agrees to pay Agency such charges and costs. Until so paid, the Agency shall have a lien on the Property for the amount of such charges or costs, which lien shall be perfected by the recordation of a "Notice of Claim of Lien" against the Property. Upon recordation of a Notice of a Claim of Lien against the Property, such lien shall constitute a lien on the fee estate in and to the Property prior and superior to all other monetary liens except: (i) all taxes, bonds, assessments, and other levies which, by law, would be superior thereto; (ii) the lien or charge of any mortgage, deed of trust, or other security interest then of record made in good faith and for value, it being understood that the priority of any such lien for costs incurred to comply with this Agreement shall date from the 882/015610-0057��.. •r 315 1102564,05 a07/02/10 4- date of the recordation of the Notice of Claim of Lien. Developer shall be liable for any and all attorneys' fees, and other legal costs or fees incurred in collecting said maintenance costs. 4. Compliance with Law. Developer shall comply with all local, state and federal laws relating to the uses of or condition of the Property and the Project. The operation of the Project shall be in compliance with the requirements of any entitlements issued by the City for the Project, including, as applicable, a conditional use permit, site development permit, and specific plan amendment. (a) Nondiscrimination Covenants. Developer covenants by and for itself and any successors in interest to all or any portion of the Property that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, subleases or vendees of the Property. The foregoing covenants shall run with the land. Developer shall refrain from restricting the rental, sale or lease of the Property any portion thereof on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (1) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (2) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." 882/015610-0057 'ea„ �' 316 1102564.05 a07/02/10 (3) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." (b) No Violation of Statutes Relating to Relocation of Vehicle Dealerships. Until the Operating Covenant Termination Date, Developer shall not take any action that would result in a violation by the Agency and/or City of California Government Code Section 53084 or Health & Safety Code Section 33426.7. Developer further agrees to indemnify, defend, and hold harmless the Agency and City from and against any claims, proceedings, losses, costs, or expenses incurred as a result of any such violation arising out of actions by Developer. (c) No Violation of Statutes Relating to Direct Assistance by Agency. Developer represents and warrants that it is using the Agency financial assistance for the sole and exclusive purpose of causing the construction of the Project on the Property and for no other purpose and that the Agency's financial assistance shall not be used in a manner that would constitute a violation of Health & Safety Code section 33426.5. Developer further agrees to indemnify, defend, and hold harmless the Agency or City from and against any claims, proceedings, losses, costs, or expenses incurred as a result of any such violation arising out of actions by Developer. 5. Sales and Use Tax Covenant. From the date this Operating Covenant is recorded against the Property until the Operating Covenant Termination Date, Developer shall designate the Property as the point of sale for sales tax purposes in all retail sales and lease contracts for vehicles, parts, and equipment, and all other goods sold or leased on the Property, whose sales and leases originate from the Property. 6. Covenant to Pay Taxes and Assessments. From the date this Operating Covenant is recorded against the Property until the Operating Covenant Termination Date, Developer shall pay or cause to be paid, prior to delinquency, all ad valorem real estate taxes, special taxes, and assessments levied against the Property and any improvements thereon, subject to Developer's right to contest any such tax or assessment in good faith. During such period Developer shall remove or have removed any levy or attachment made on the Property or any part thereof or assure the satisfaction thereof within a reasonable time and prior to a sale of the Property. 7. Defaults. (a) Failure or delay by either party to perform any term or provision of this Operating Covenant constitutes a default under this Operating Covenant. A party claiming a default shall give written notice of default to the other party, specifying the default complained of and the actions required to correct such default. (b) Unless otherwise provided by the Agreement, the claimant shall not institute proceedings against the other party if the other party within thirty (30) days from receipt 882/015610-0057 .. ,. 317 110256C05 a07/02/10 -6- of such notice immediately, with due diligence, commences to cure, correct or remedy such failure or delay and completes such cure, correction or remedy as soon as reasonably practicable after receipt of such notice. (c) This Operating Covenant and the Developer's obligations hereunder are secured by a Deed of Trust With Assignment of Rents and Rider Attached Hereto ("Deed of Trust"), which has been entered and recorded on approximately the same date as this Operating Covenant. 8. Legal Actions. (a) In addition to any other rights or remedies and subject to the notice and cure provisions in Section 7 above, any party may institute legal action to seek specific performance of the terms of this Operating Covenant, or to cure, correct or remedy any default, or to obtain any other legal or equitable remedy consistent with the purpose of this Operating Covenant. The Agency shall also have the right to pursue damages for Developer's defaults, but in no event shall Developer be entitled to damages of any kind from Agency, including, without limitation, damages for economic loss, lost profits, or any other economic or consequential damages of any kind. Such legal actions must be instituted in the Superior Court of the County of Riverside, State of California or in the Federal District Court in the Central District of California. In the event of any litigation between the parties hereto, the prevailing party shall be entitled to receive, in addition to the relief granted, its reasonable attorney's fees and costs and such other costs incurred in investigating the action and prosecuting the same, including costs for expert witnesses, costs on appeal, and for discovery. (b) The internal laws of the State of California shall govern the interpretation and enforcement of this Operating Covenant, without regard to conflict of laws. (c) In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director of the Agency in addition to such other manner as may be provided by law. (d) In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service upon any officer or director of Developer, whether made within or outside the State of California, or in such other manner as may be provided by law. (e) Except as otherwise expressly stated in this Operating Covenant, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. (f) Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 882/015610-0057 .. r` 318 1102564 05 a07/02/10 -7- 9. Effect of Violation of the Terms and Provisions of this Operating Covenant. The covenants established in this Operating Covenant shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency and the City of La Quinta ("City"), and each of their successors and assigns, as to those covenants which are for their benefit. The covenants contained in this Operating Covenant shall remain in effect for the periods of time specified therein. The Agency and City are deemed the beneficiary of the terms and provisions of this Operating Covenant and of the covenants running with the land, for and in their own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Operating Covenant and the covenants running with the land have been provided. This Operating Covenant and the covenants shall run in favor of the Agency and the City, without regard to whether the Agency or City have been, remain or are an owner of any land or interest therein in the Property. The Agency and City shall have the right, if the Operating Covenant or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which they or any other beneficiaries of this Operating Covenant and covenants may be entitled. Pursuant to applicable law, including, but not limited to, Section 1462, 1465 and 1468 of the Civil Code of the State of California, all provisions of this Covenant Agreement shall run with the land and be binding upon and inure to the benefit of the Benefited Public Property and the Property and each and every portion thereof or interest therein, and all parties having or acquiring any right, title, or interest in the Property or any portion thereof, and their successors and assigns 10. Miscellaneous Provisions. (a) If any provision of this Operating Covenant or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Operating Covenant, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not be deemed that any such invalid provision affects the consideration for this Operating Covenant; and each provision of this Operating Covenant shall be valid and enforceable to the fullest extent permitted by law. (b) This Operating Covenant shall be construed in accordance with the internal laws of the State of California without regard to conflict of law principles. (c) This Operating Covenant shall be binding upon and inure to the benefit of the successors and assigns of the Developer but any Transfer shall be subject to the requirements and provisions of Section 7 of the Agreement. (d) The City of La Quinta is a third party beneficiary of the terms of this Operating Covenant, and shall have the right, but not the obligation, to enforce the terms hereof. 11. Notices. All notices under this Agreement shall be effective (i) upon personal delivery, (ii) upon delivery by reputable overnight courier that provides a receipt with the date and time of delivery, (iii) via facsimile, so long as the sender receives confirmation of successful transmission from the sending machine, or (iv) three (3) business days after deposit in the United States mail, registered or certified, postage fully prepaid and addressed to the respective parties 882/015610-0057 '• 319 1102564 05 a07/02/10 -$- as set forth below or as to such other address as the parties may from time to time designate in writing: To Agency: Notices Delivered by U.S. Mail: La Quints Redevelopment Agency P.O. Box 1504 La Quinta, CA 92247 Phone No.: 760-777-7031 Facsimile No.: 760-777-7101 Attention: Executive Director Notices Delivered Personally or by Courier: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Phone No.: 760-777-7031 Facsimile No.: 760-777-7101 Attention: Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton, Suite 1400 Costa Mesa, CA 92626 Phone No.: 714-641-5100 Facsimile No.: 714-546-9035 Attention: M. Katherine Jenson, Esq. To Developer: Garff Properties -La Quinta, LLC 405 South Main Street, Suite 1200 Salt Lake City, UT 84111 Phone No.: 801-257-3402 Facsimile No.: 801-257-3460 Attention: John Garff and Garff Enterprises, Inc. 405 South Main Street, Suite 1100 Salt Lake City, UT 84111 Phone No.: 801-257-3412 Facsimile No.: 801-257-3400 Attention: Tony Kraatz With a copy to: Garff Enterprises, Inc. 405 South Main Street, Suite 1200 Salt Lake City, UT 84111 Phone No.: 801-257-3468 Facsimile No. 801-428-1968 Attention: Michael D. Creer, Esq. 320 882/015610-0057 1102564.05 a07/02/10 -9- IN WITNESS WHEREOF, the parties hereto has executed this instrument the day and year first hereinabove written. "Developer" GARFF PROPERTIES -LA QUINTA, LLC, a Utah limited liability company Date: 2010 By: Its: "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Date: 2010 By: Executive Director ATTEST: Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Agency Counsel 321 882/015610-0057 1102564,05 a07/02/10 -10- State of California ) County of ) On , before me, (here insert name and title of the officer) Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) State of California ) County of ) On , before me, (here insert name and title of the officer) Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) n 882/015610-0057 322 " - 1102564.05 a07/02/10 -11- EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY All that property located in the City of La Quinta, County of Riverside, State of California, described as follows: PARCEL 3 OF PARCEL MAP 28525-1, AS SHOWN BY MAP ON FILE IN BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. ASSESSOR'S PARCEL NUMBER 600-020-014. 882/015610-0057 323 1102564 05 .07/02/10 -12- EXHIBIT `B" LEGAL DESCRIPTION OF BENEFITED PUBLIC PROPERTY North La Quinta Park North East Corner of Westward Ho & Dune Palms Adams Park South West Corner of Adams Street & La Palma Centre Pointe Dog Park South East Corner of Seeley Drive & Miles Avenue City Hall South West Corner of Washington Street & Calle Tampico City Library 78-275 Calle Tampico Senior Center 78-450 Avenida La Fonda Boys and Girls Club North West Corner of Park Avenue & Avenue 50 Sports Complex North West Corner Park Avenue & Avenue 50 YMCA North West Corner of Park Avenue & Avenue 50 Seasons Park Cloud View Way & Calle Las Ramblas Fritz Burns Park South East Corner of Avenida Bermudas & Avenue 52 Highway 111, from Adams Street to Dune Palms Road Dune Palms Road, from Avenue 48 to Highway 111 Adams Street, from La Quinta Centre Drive to Highway I I I La Quinta Centre Drive, from Adams Street to Highway I I I 882/0156 10.00„ 324 I102564 05 OVUM -13-