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CC Resolution 2025-023 SilverRock - Econ Dev Subsidy Rpt, TOT Rev Sharing Agr, Option to Purch Real Property AgrRESOLUTION NO. 2025 - 023 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, CONDITIONALLY APPROVING THE ECONOMIC DEVELOPMENT SUBSIDY REPORT, TRANSIENT OCCUPANCY TAX REVENUE SHARING AGREEMENT, AND OPTION TO PURCHASE REAL PROPERTY AGREEMENT WHICH INCLUDES A REPURCHASE OPTION AGREEMENT FOR PHASE 2 OPTION PROPERTY, ASSOCIATED WITH DEVELOPMENT AGREEMENT 2025-0001 (REINSTATED AND AMENDED DEVELOPMENT AGREEMENT 2014-1001) FOR THE SILVERROCK RESORT PROJECT PROJECT: SILVERROCK RESORT APPLICANT: TBE RE ACQUISITION CO II LLC (SUBSIDIARY OF TURNBRIDGE EQUITIES) WHEREAS, the City Council of the City of La Quinta, California, did, on September 22, 2025, hold a duly noticed Public Hearing to consider a request by TBE RE Acquisition Co II LLC., subsidiary of Turnbridge Equities, for approval of a Reinstated and Amended Development Agreement (ADA) and associated documents and agreements for the SilverRock Resort (2025 SilverRock Master Plan), relating to real property south of Avenue 52, west of Jefferson Street, with Assessor Parcel Numbers: APNs: 770-260-037; 776-150-029, -030; 777-060-008, -010, -011, -019, -020, -062, -070, - 071, -072, -074, -075, -078, -079, -080, -081, -082, -083, -084, -085; 777-490-023, -024, - 035, -037, -039, -042, -046, -047, -048, -049, -050, -053, -054, -055, -057, -058, -059, - 060, -061, -062, -063, -064, -065, -066, -067, -068, -069, -070, -071, -072, -073, -074, - 075, -076, -077, -078, -079, -080; 777-510-001, -002, -003, -004, -005, -006, -007, -008, - 009, -010, -011, -012, -013, -014, -015, -016, -017, -018, -019, -020, -021, -022, -023, - 024, -025; 777-520-001, -002, -003, -004, -005, -006, -007, -008, -009, -010, -011, -012, - 013, -014, -015, -016, -017, -018 WHEREAS, the Design and Development Department published a public hearing notice in The Desert Sun newspaper on September 8, 11, and 18, 2025, for the City Council's consideration of the Economic Development Subsidy Report and the incentives proposed for the SilverRock Resort (2025 SilverRock Master Plan) as a part of the ADA and associated documents and agreements; and WHEREAS, the City Council has received and reviewed the Economic Development Subsidy Report pursuant to California Government Code Sections 53083 and 52201 (Exhibit A), the Transient Occupancy Tax (TOT) Revenue Sharing Agreement (Exhibit B), and the Option to Purchase Real Property Agreement which includes a Repurchase Option for Phase 2 Option Property (Exhibit C); and WHEREAS, the City Council finds that the explanations and supporting evidence for the economic subsidies and financial incentives, as set forth in the Economic Development Resolution No. 2025 — 023 SilverRock Resort (2025 SilverRock Master Plan) Adopted: September 22, 2025 Page 2 of 3 Subsidy Report, adequately and accurately describe the reasons why those economic development subsidies are necessary and appropriate for the economic opportunity related to the sale of the Phase 2 Option Property, and the net tax revenue accruing to the City as a result of the subsidies, based on the project presented by the applicants in the SilverRock Resort (2025 SilverRock Master Plan); and WHEREAS, based on the explanations and supporting evidence set forth in the Economic Development Subsidy Report, the City Council hereby incorporates by reference into this Resolution all of the findings in the Economic Development Subsidy Report as the findings of the City Council, and specifically finds that the consideration for the Phase 2 Option Property is not less than the fair reuse value at the use and with the covenants, conditions, and development costs that are authorized and required by the proposed project in SilverRock Resort (2025 SilverRock Master Plan); and WHEREAS, the sale to the applicant of the Phase 1 Property, as described in the ADA and Economic Development Subsidy Report, is contingent on the U.S. Bankruptcy Court for the District of Delaware authorizing said sale, in connection with the following bankruptcy petitions: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury Residences, LLC (6598) and SilverRock Phase I, LLC (2247) (collectively, referred to as the "Bankruptcy Lawsuit" in the "Bankruptcy Court"). As such, the approval of the Economic Development Subsidy Report, Transient Occupancy Tax (TOT) Revenue Sharing Agreement, and Option to Purchase Real Property Agreement which includes a Repurchase Option for Phase 2 Option Property, are subject to the condition that the Bankruptcy Court authorize the sale of the Phase 1 Property to the applicant; and WHEREAS, the City Council has separately considered Ordinance No. 626, conditionally approving the Reinstated and Amended Development Agreement (ADA), which is similarly contingent upon the Bankruptcy Court authorizing the sale of the Phase 1 Property to the applicant. The ADA must be adopted by said Ordinance pursuant to State law and the La Quinta Municipal Code. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of La Quinta, California, as follows: SECTION 1. The above recitations are true and constitute the Findings of the City Council in this case. SECTION 2. The City Council approves the Economic Development Subsidy Report, Transient Occupancy Tax (TOT) Revenue Sharing Agreement, and the Option to Purchase Real Property Agreement which includes a Repurchase Option for Phase 2 Option Property, with said approvals subject to the conditions that: (a) the Bankruptcy Court authorizes the sale of the Phase 1 Property to the applicant, and (b) the City Council adopts the Ordinance approving the ADA and said Ordinance becomes effective. If the Bankruptcy Court does not authorize the sale of the Phase 1 Property to the applicant, or if the Ordinance approving the ADA does not become effective, this Resolution shall Resolution No. 2025 — 023 SilverRock Resort (2025 SilverRock Master Plan) Adopted: September 22, 2025 Page 3 of 3 automatically be rescinded, without the requirement for further action by the City Council, and the conditional approvals set forth herein shall be of no force and effect. SECTION 3. The City Council hereby directs the City Manager to update the Economic Development Subsidy Report prepared under Government Code Sections 53083 and 52201 as required by law, which currently requires updates every five years. SECTION 4. Subject to the Bankruptcy Court authorizing the sale of the Phase 1 Property to the applicant and the City Council adopting the Ordinance approving the ADA and said Ordinance becoming effective, the City Council authorizes the City Manager to execute the Transient Occupancy Tax (TOT) Revenue Sharing Agreement and the Option to Purchase Real Property Agreement. PASSED, APPROVED, and ADOPTED at a special meeting of the La Quinta City Council held on September 22, 2025, by the following vote: AYES: Councilmembers Fitzpatrick, McGarrey, Pena, Sanchez, and Mayor Evans NOES: None ABSENT: None ABSTAIN: None LINDA EVANS, Mayor City of La Quinta, California MONIKA RADEVA, City Clerk City of La Quinta, California APPROVED AS TO FORM: WILLIAM H. IHRKE, City Attorney City of La Quinta, California SUMMARY REPORT PURSUANT TO RESOLUTION NO. 2025-023 EXHIBIT A Adopted: September 22, 2025 CALIFORNIA GOVERNMENT CODE SECTIONS 53083 & 52201 ON A REINSTATED AND AMENDED DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF LA QUINTA AND TBE RE ACQUISITION CO II LLC AN AFFILATE OF TURNBRIDGE EQUITIES The following Summary Report has been prepared pursuant to California Government Code Sections 53083 and 52201. The report sets forth certain details of the proposed Reinstated and Amended Development Agreement, and related agreements (Agreement) between the following parties: 1. The City of La Quinta (City), a California municipal corporation and charter city; 2. TBE RE Acquisition Co II LLC, a Delaware limited liability company an affiliate of Turnbridge Equities (Developer). The Agreement requires the City to provide a development incentive to the Developer for the purpose of constructing the Siver Rock Resort Area, which includes a hotel, condominiums, single-family residences, spa, public golf course clubhouse and complimentary amenities. The project is located on an approximately 134-acre site in the City of La Quinta (Phase 1 Property). This summary report considers only the proposed Agreement. The purpose of this Agreement is to effectuate economic development in the City. The following Summary Report is based upon the information contained within the Agreement, and is organized into the following six sections: I. Identity of the Developer: This section provides the name and address of the Developer. II. Salient Points of the Agreement: This section summarizes the major responsibilities imposed on the Developer and the City by the Agreement. III. Economic Incentives Provided and Cost of the Agreement: This section details the economic incentives provided and the costs incurred by the City to implement the Agreement. IV. Consideration Received and Comparison with the Economic Incentives Provided: This section describes the financial compensation to be received by the City. 1 2509003.LQ.kee 18994.007.001 V. Creation of Economic Opportunity and Public Purpose: This section explains how the Agreement will assist in creating economic opportunity in the City. VI. Job Creation: This section describes the number of full-time, part-time and temporary jobs created under the Agreement. This report and the Agreement are to be made available for public inspection prior to the approval of the Agreement. I. IDENTITY OF DEVELOPER Information on the Developer is provided below: TBE RE Acquisition CO II LLC an affiliate of Turnbridge Equities TBE RE Acquisition Co II LLC c/o Turnbridge Equities 4 Bryant Park, Suite 200 New York, New York 10018 II. SALIENT POINTS OF THE AGREEMENT A. Project Description At the time of this Report, the Phase 1 Property is subject to a voluntary "Debtor -In -Possession" bankruptcy proceeding, as referenced in the Agreement. The Developer's acquisition of the Phase 1 Property, and subsequent development of the Project, is contingent on the bankruptcy court authorizing the sale of the Phase 1 Property. On the Phase 1 Property the Developer will construct (approximately) the following improvements that are identified as Phase 1A and 1B in the Agreement (collectively "Phase 1"): 1. Luxury Resort Hotel - 154-room resort with supporting amenities (e.g. pool, lobby, etc.) 2. Banquet Facilities - 21,600 square feet of meeting and banquet space 3. Spa - 21,000 square foot amenity 4. Condominium Units - 70 Luxury Branded units 5. Luxury Branded Single Family Residences - 122 for -sale residences with 29 units in Phase 1A and 93 in Phase 1B 6. Public Golf Clubhouse - 16,200 square foot facility for the existing public Arnold Palmer Classic Golf Course (Golf Course) 2 2509003.LQ.kee 18994.007.001 7 Residential Clubhouse - 15,000 square foot facility with pools for use by residential owners A subsequent project phase (Phase 2) is contingent upon the completion of the Luxury Resort Hotel and Public Golf Clubhouse being constructed and open for business to the general public, which includes the conveyance of the City -owned Golf Course and Ahmanson Ranch Property, and, upon the valid exercise of an option to purchase, the Phase 2 Property from the City. Together, this City -owned property is approximately 380 acres, including the existing Golf Course and Ahmanson Ranch House, and with anticipated improvements that contemplate an 18-hole private golf course, 253 residential units and 40,000 square feet of commercial development. B. Developer Responsibilities The Agreement requires the Developer to accept the following responsibilities: 1. Developer shall develop or cause the development of the Project on the Property in accordance with this Agreement and other Project Approvals, the Project Description, Site Maps, Scope of Work for all Project Components, and within commencement and completion dates of the Project Components pursuant to the Schedule of Performance stated to be Project Milestones; 2. Developer shall have the obligation to apply for and obtain, at its own cost and expense, any and all permits, licenses, approvals and entitlements for the development of the Project; 3. Commencing upon the date of the close of escrow for Developer's acquisition of the Property, Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Property; 4. Developer shall not use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Property, the Project that would cause the exemption of the payment of all or any portion of real or personal property taxes otherwise assessable regarding the Property; 5. Provide commitment letter or similar instrument (which it is acknowledged may be non- binding) from the proposed Permitted Hotel Operator for the Luxury Hotel Project Component, Luxury Condominium and Luxury Single Family Residences (depending on which Project Component(s) Developer elects to undertake at the appliable time); 6. The Final Project Budget for the applicable Project Component; 7. The proposed financing plan generally identifying financing sources for all private and public improvements proposed for the Project Components on the Phase 1A Property, which financing plan is consistent with the Final Project Budget; 3 2509003.LQ.kee 18994.007.001 8. Developer covenants, for itself, its successors and assigns, that the Developer shall commence and complete the construction of the Project on the Property within the approximate (or, with respect to Project Milestones, the dates) time period for such actions set forth in the Schedule of Performance; 9. Except for the TOT rebate as provided for in the TOT Covenant Agreement and the potential premium purchase price for the City -Owned Option Property as provided for in the Option Agreement, all costs and expenses for the undertaking and completing the Project, including, without limitation, constructing all Project Components, all legally imposed on- and off -site improvements, and providing all utilities therefor, shall be borne by Developer at its sole cost, expense, and liability; 10. Developer shall assume the responsibility and be solely responsible for determining whether or not laborers employed relative to the construction of the Project must be paid the prevailing per diem wage rate for their labor classification; 11. Developer shall have at least one luxury hotel with first-class amenities and uses complementary to the Golf Course and surrounding SilverRock Resort Area, as approved by City as part of the Project Approvals; and 12. Developer shall operate and maintain the Golf Course and Ahmanson Ranch House in first-class condition and will continue to provide one-third of the available tee times at a reduced rate for City residents. C. City Responsibilities The Agreement imposes the following responsibilities on the City: 1. The financial assistance provided to Developer by City shall be the TOT rebate as provided for in the TOT Covenant Agreement and the potential purchase price for the City -Owned Option Property as provided for in the Option Agreement, and the transfer of the City -Owned Golf Course Property and City -Owned Ahmanson Ranch as provided in the Agreement; 2. City shall transfer to Developer the City -Owned Golf Course Property and City -Owned Ahmanson Ranch Property pursuant to and upon Developer's satisfaction of the Agreement provisions; 3. The City shall disburse to the Developer an amount equal to ninety percent (90%) of the Transient Occupancy Tax from the Project received by the City for 10 years and sixty percent (60%) of the TOT received for a subsequent five years. The City payments will expire 15 years after the Developer receives authorization from the City for occupancy and use of all hotel rooms in the Luxury Hotel or the Luxury Hotel Operations Commencement Project Milestone Date as detailed in the Transient Occupancy Tax Revenue Sharing Agreement; and 4 2509003.LQ.kee 18994.007.001 4. The City shall have timely performed all of the obligations required by the terms of the Agreement. III. ECONOMIC INCENTIVES PROVIDED AND COST OF THE AGREEMENT The City is providing economic incentives to facilitate the development of the Project. The incentives include: 1. TOT Revenue Sharing — The City has an agreement to share a portion of the Transient Occupancy Taxes (TOT) generated by the Project. The Project will generate nightly TOT sales from the 150 hotel keys and the Developer anticipates approximately 46 residences will be available for short-term/overnight stays. The Developer will receive the following as an economic incentive: a. Years 1-10: 90% of TOT generated by the Project b. Years 11-15: 60% of TOT generated by the Project The TOT sharing is limited to the actual revenue generated by the Development; there are no fixed payments. Therefore, the incentive will be solely based on Project performance and the TOT it generates. The Developer anticipates the Project will support an average daily rate (ADR) for the hotel rooms of $1,350 at stabilization in Year 4 (65% occupancy) and the residences a $6,850 ADR at stabilization in Year 4 (28% occupancy). These rates reflect a significant premium over the market area. If this level of performance is achieved, the City's economic incentive is $106.6 million over 15 years, having a present value of $64.8 million assuming an 8.0% discount rate. 2. Golf Course, Ahmanson Ranch House & Phase 2 Property — The Developer has the option to purchase the Phase 2 Property if certain conditions outlined in the Agreement are met. Since obtaining ownership in 2002/03, the City costs for acquisition, infrastructure improvements (e.g. public roads), Golf Course construction and operating/maintenance costs (e.g. Golf Course operating shortfalls) for the Phase 2 Property are estimated to be $89.0 million. The Agreement sets the Option Price at $17 million, which includes land for future development. The Agreement also provides for the conveyance of the existing Golf Course and the Ahmanson Ranch House. The Option Price reflects the fair reuse value of the property required for the Developer to achieve their target return on investment when considering the covenants, conditions and development costs associated with the Project improvements. Cushman & Wakefield conducted an appraisal of the Phase 2 Property with a date of value of June 11, 2025. The appraisal valued the property at $47.8 million based on its highest and best use, which is generally in -line with the proposed development program in the Agreement and the existing specific plan. The difference between the fair market value and the Option Price indicates a $30.8 million incentive is being provided. 5 2509003.LQ.kee 18994.007.001 3. Debtor in Possession Credit Agreement (DIP Agreement) - The purpose of the DIP Agreement is to provide the Debtors that own, in bankruptcy, the Phase 1 Property with liquidity to wind down their estates and prosecute a plan of liquidation that will enhance the distribution to secured creditors. The City provided an initial Credit Agreement of $11.0 million that was upsized by the amount of $1.0 million to $12.0 million in aggregate, with the potential for additional funding of another $1.0 million if approved by the City Council. The City conservatively estimates repayment of the credit facility at $5.5 million, indicating a potential additional $7.5 million incentive. Present Value of Project Economic Incentives TOT Revenue Sharing Golf Course, Ahmanson Ranch House, Phase 2 Property DIP Credit Agreement Total Economic Incentives $64,809,000 $30,800,000 $7,500,000 $103,109,000 IV. CONSIDERATION RECEIVED AND COMPARISON WITH THE ECONOMIC INCENTIVES PROVIDED The City expects to receive a significant increase in transient occupancy tax, sales tax and property tax from the development of the Project. Table 1 shows the projected City revenues generated by the Project over a 30-year term. The revenues are summarized below: 1. Transient Occupancy Tax (TOT) — The current City TOT rate is 11 % of room revenues for the hotel keys and 10% for the branded residences. As noted previously, the ADR for the hotel keys is $1,350 and the residences is $6,850 at stabilization. At this level of performance, the Project will generate room revenues of $77.7 million at stabilization, equating to $8.25 million in annual TOT revenue, totaling to $355.2 million over 30 years. Assuming an 8% discount rate, the net present value of this revenue is $119.9 million. 2. On -Site Sales Tax — The City receives 1.0% of the taxable sales generated by the Project as a base amount. The City also collects an additional 1.0% in sales tax revenue through its Measure G. As a full -service, luxury hotel, the Project will generate strong food & beverage sales. The sales in these departments are projected to be $35.4 million at stabilization, equating to $708,000 in annual sales tax, totaling to $30.5 million over 30 years. Assuming an 8% discount rate, the net present value of this revenue is $10.3 million. 3. Property Tax — The City receives approximately 7% of the general property tax levy of 1.0% of assessed value, with the balance of the collected property taxes going to other taxing jurisdictions. Assuming Project costs, the assessed value of the Project is estimated at $803 million. At this level of value, the Project will generate $597,000 in 6 2509003.LQ.kee 18994.007.001 annual property tax at stabilization, totaling $22.8 million over 30 years. Assuming a 8% discount rate, the net present value of this revenue is $8.3 million. The Project is projected to generate total revenues of $408.5 million over 30 years with a present value of $138.5 million, assuming an 8.0% discount rate. Present Value of Gross City Revenues - 30 Years Transient Occupancy Taxes $119,913,000 Sales Tax $10,278,000 Property Tax $8,297,000 Present Value of Gross City Revenues $138,488,000 Per the Agreement, the City's TOT revenue sharing payment is limited to 90% of TOT received for ten years and 60% of TOT received for five subsequent years ($106.6 million). Based on the current projections, the net City revenues over 30 years are $301.9 million, which have a present value of $73.7 million. Present Value of Net City Revenues - 30 Years Gross City Revenues $138,488,000 (Less): TOT Incentive Payments ($64,809,000) Present Value of Net City Revenues $73,679,000 V. CREATION OF ECONOMIC OPPORTUNITY AND PUBLIC PURPOSE The City of La Quinta has determined that encouraging economic development, including private investment that involves creation of new jobs and income in the City provides an important public benefit and serves an important public purpose. The Development Agreement is consistent with the applicable objectives, policies, general land uses, and programs of the La Quinta General Plan as follows: 1. The proposed project continues the SilverRock Specific Plan development and includes elements of recreation, tourist commercial and residential uses to provide a high -quality project consistent with the General Plan and SilverRock Specific Plan. 2. A balanced and varied economic base which provides a broad range of goods and services to the City's residents and the region. 3. The proposed project continues the development of the SilverRock Specific Plan area as a resort development to support the City's economic base. 7 2509003.LQ.kee 18994.007.001 In addition, the Project will promote the following guiding principles of the City's Economic Development Strategic Plan: 1. Develop a year-round, recession resistant economic base in La Quinta through business attraction, expansion and retention. The proposed improvements will provide opportunities for hotel guests, golf course users and residents to visit the City throughout the year. 2. Stimulate expansion of La Quinta's hotel/resort/hospitality industries. The Project will include a high end, luxury hotel and accompanying residential units with consistent branding. 3. Encourage recreational and cultural events that promote La Quinta's quality of life and support existing economic base. The construction of the new golf course clubhouse and promotion/management of the Ahmanson Ranch House will achieve these goals. 4. Maintain a stake in regional economic development by supporting initiatives that lead to: Increased educational opportunities that support local job creation. The Project will generate 445 total jobs (full-time equivalents). Other important goals and objectives that are satisfied by the Project are: 1. Construction of the Project is expected to generate a substantial number of construction jobs, estimated to be 2,500 to 3,000. 2. Potential increase in private investment because of the public investment in this Project. 3. Increased number of visitors to the City, which will spend money on dining, retail and entertainment activities in the City. VI. JOB CREATION The Project is projected to create the following number of temporary jobs during construction, and full-time and part-time jobs during operation. It is estimated that 2,500 to 3,000 temporary construction jobs will be created during the construction period. After opening, the Developer indicates the Project will create 445 total jobs (full-time equivalents). Attachment 8 2509003.LQ.kee 18994.007.001 TABLE 1 ESTIMATED CITY REVENUES SILVEROCK PROJECT LA QUINTA, CALIFORNIA Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 30 Years Total NPV @ 8.0% Room Revenue $33,389,000 $38,303,000 $43, 081, 000 $48,150,000 $49,594,000 $51, 082, 000 $52,615,000 $54,193, 000 $55,819,000 $57,493,000 $59,218,000 $60,995,000 $62,825,000 $64,709,000 $66,651,000 $68,650,000 $70,710,000 $72,831,000 $75,016,000 $77,266,000 $79,584,000 $81, 972, 000 $84,431,000 $86,964,000 $89,573,000 $92,260,000 $95,028,000 $97,879,000 $100,815,000 $103,840,000 TOT Revenue Residential Revenue $16,927,000 $23,517,000 $26,451,000 $29,548,000 $30,435,000 $31,347,000 $32,288,000 $33,256,000 $34,254,000 $35,282,000 $36,340,000 $37,430,000 $38,553,000 $39,710,000 $40,901,000 $42,128,000 $43,392,000 $44,694,000 $46,034,000 $47,415,000 $48,838,000 $50,303,000 $51,812,000 $53,367,000 $54,968,000 $56,617,000 $58,315,000 $60,064,000 $61,866,000 $63,722,000 TOT $5,365,000 $6,565,000 $7,384,000 $8,251,000 $8,499,000 $8,754,000 $9,016,000 $9,287,000 $9,565,000 $9,852,000 $10,148,000 $10,452,000 $10,766,000 $11,089,000 $11,422,000 $11, 764, 000 $12,117,000 $12,481,000 $12,855,000 $13,241,000 $13,638,000 $14,047,000 $14,469,000 $14,903,000 $15,350,000 $15,810,000 $16,285,000 $16,773,000 $17,276,000 $17,795,000 $355,219,000 $119,913,000 Gross Sales Tax Hotel F&B Sales Sales Tax $23,093,000 $462,000 $27,531,000 $551,000 $31,427,000 $629,000 $35,408,000 $708,000 $36,470,000 $729,000 $37,568,000 $751,000 $38,695,000 $774,000 $39,856,000 $797,000 $41,052,000 $821,000 $42,283,000 $846,000 $43,552,000 $871,000 $44,858,000 $897,000 $46,204,000 $924,000 $47,590,000 $952,000 $49,018,000 $980,000 $50,488,000 $1,010,000 $52,003,000 $1,040,000 $53,563,000 $1,071,000 $55,170,000 $1,103,000 $56,825,000 $1,137,000 $58,530,000 $1,171,000 $60,286,000 $1,206,000 $62,094,000 $1,242,000 $63,957,000 $1,279,000 $65,876,000 $1,318,000 $67,852,000 $1,357,000 $69,888,000 $1,398,000 $71,985,000 $1,440,000 $74,144,000 $1,483,000 $76,369,000 $1,527,000 $30,474,000 $10,278,000 Assessed Value $803,000,000 $819,060,000 $835,441,000 $852,150,000 $869,193,000 $886,577,000 $904,309,000 $922,395,000 $940,843,000 $959,660,000 $978,853,000 $998,430,000 $1,018,399,000 $1,038,767,000 $1,059,542,000 $1,080,733,000 $1,102,348,000 $1,124,395,000 $1,146,883,000 $1,169,821,000 $1,193,217,000 $1,217,081,000 $1,241,423,000 $1,266,251,000 $1,291,576,000 $1,317,408,000 $1,343,756,000 $1,370,631,000 $1,398,044,000 $1,426,005,000 Estimated Property Tax City Share $562,000 $573,000 $585,000 $597,000 $608,000 $621,000 $633,000 $646,000 $659,000 $672,000 $685,000 $699,000 $713,000 $727,000 $742,000 $757,000 $772,000 $787,000 $803,000 $819,000 $835,000 $852,000 $869,000 $886,000 $904,000 $922,000 $941,000 $959,000 $979,000 $998,000 $22,805,000 $8,297,000 Proposed Subsidy ($4,829,000) ($5,909,000) ($6,646,000) ($7,426,000) ($7,649,000) ($7,879,000) ($8,114,000) ($8,358,000) ($8,609,000) ($8,867,000) ($6,089,000) ($6,271,000) ($6,460,000) ($6,653,000) ($6,853,000) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ($106,612,000) ($64,809,000) City Revenues Gross Net $6,389,000 $1,560,000 $7,689,000 $1,780,000 $8,598,000 $1,952,000 $9,556,000 $2,130,000 $9,836,000 $2,187,000 $10,126,000 $2,247,000 $10,423,000 $2,309,000 $10,730,000 $2,372,000 $11,045,000 $2,436,000 $11,370,000 $2,503,000 $11,704,000 $5,615,000 $12,048,000 $5,777,000 $12,403,000 $5,943,000 $12,768,000 $6,115,000 $13,144,000 $6,291,000 $13,531,000 $13,531,000 $13,929,000 $13,929,000 $14,339,000 $14,339,000 $14,761,000 $14,761,000 $15,197,000 $15,197,000 $15,644,000 $15,644,000 $16,105,000 $16,105,000 $16,580,000 $16,580,000 $17,068,000 $17,068,000 $17,572,000 $17,572,000 $18,089,000 $18,089,000 $18,624,000 $18,624,000 $19,172,000 $19,172,000 $19,738,000 $19,738,000 $20,320,000 $20,320,000 $408,498,000 $301,886,000 $138,488,000 $73,679,000 RESOLUTION NO. 2025-023 EXHIBIT B Adopted: September 22, 2025 LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attn: City Clerk [SPACE ABOVE FOR RECORDER.] EXEMPT FROM RECORDER'S FEE PER GOV. CODE §6103 and §27383 TRANSIENT OCCUPANCY TAX (TOT) REVENUE SHARING AGREEMENT NOTICE TO ALL INTERESTED PERSONS: THIS IS AN AGREEMENT CONTAINING COVENANTS, CONDITIONS, AND RESTRICTIONS AFFECTING REAL PROPERTY [ Cover Page for Recorder's Office ] [ Remainder intentionally blank ] 0698/015610-0207 22798270.2 a09/18/25 LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attn: City Clerk [SPACE ABOVE FOR RECORDER.] EXEMPT FROM RECORDER'S FEE PER GOV. CODE §6103 and §27383 TRANSIENT OCCUPANCY TAX (TOT) REVENUE SHARING AGREEMENT NOTICE TO ALL INTERESTED PERSONS: THIS IS AN AGREEMENT CONTAINING COVENANTS, CONDITIONS, AND RESTRICTIONS AFFECTING REAL PROPERTY This TRANSIENT OCCUPANCY TAX (TOT) REVENUE SHARING AGREEMENT (the "Covenant Agreement") is entered into as of this day of , 2025 ("Covenant Agreement Date"), by and between the CITY OF LA QUINTA, a California municipal corporation and charter city ("City"), and TBE RE Acquisition Co II LLC, a Delaware limited liability company and affiliate of Turnbridge Equities ("Developer") (individually a "Party" and collectively the "Parties"). RECITALS A. Developer is the owner of that certain real property located in the City of La Quinta, County of Riverside, State of California, which is more particularly described in the legal description attached hereto as Exhibit No. 1 and incorporated herein by this reference (the "Property" or "TOT Covenant Property"). [NOTE: THIS TOT COVENANT AGREEMENT SHOULD BE RECORDED AGAINST ONLY PARCELS OF PHASE 1A PROPERTY (AS DEFINED AND DEPICTED IN REINSTATED DEV. AGREEMENT) THAT ARE NORTH AND WEST OF CANAL AND EXCLUDE PARCEL WITH PUBLIC GOLF CLUBHOUSE / DEFINITION OF "TOT COVENANT PROPERTY" INTENDED FOR CLARITY WHEN COMPARED TO REINSTATED DEV AGREEMENT DEFINITIONS] B. On , 2025, the La Quinta City Council adopted Ordinance No. , approving pursuant to applicable State and City laws that certain Reinstated and Amended Development Agreement, with reference date , 2025, between City and Developer (the "Reinstated Development Agreement"). Among other terms and conditions, the Reinstated Development Agreement vests development and use rights to Developer, prescribes rights and obligations of Developer for the resumption and completion of construction, and the continuous operation and use, of specified "Project Components" that include, among others, a luxury hotel with related ancillary amenities and luxury single-family detached and condominium residential dwellings available for use as short-term vacation rentals, as more particularly set forth therein. The Reinstated 0698/015610-0207 22798270.2 a09/18/25 -1- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Development Agreement governs Developer's ownership interest in fee title to certain real property comprised of approximately 140+/- acres and defined therein as the "Phase 1 Property," consisting the "Phase 1A Property" and "Phase 1B Property" as more particularly described therein. The TOT Covenant Property is a portion of the Phase 1A Property. The Reinstated Development Agreement was recorded in the Recorder's Office of or about even date as this Covenant Agreement, with said Reinstated Development Agreement to remain with priority over this Covenant Agreement. C. Prior to City and Developer entering into this Covenant Agreement, Reinstated Development Agreement, and other agreements and instruments, the following relevant history is hereby recited: 1. Except for portions of land previously transferred to SilverRock Development Company, LLC, a Delaware limited liability company (or one of its affiliated companies, which are referred to herein collectively as "SDC" or "Debtor(s)")' as explained below in the next Recital Subparagraph, City owns fee title to that certain real property of approximately 525 acres located at the southwest intersection of Jefferson Street and Avenue 52, in the City of La Quinta, California, generally referred to as the "SilverRock Resort Area" and subject to a Specific Plan adopted by the La Quinta City Council and enforceable as a land use governing document pursuant to the Planning and Zoning Law, California Government Code section 65000 et seq. (the "SilverRock Specific Plan"); 2. On or about November 19, 2014, City and SDC entered into that certain Purchase, Sale, and Development Agreement (the "Original SDC PSDA"), pursuant to which, among other terms and conditions, City agreed to sell to SDC and SDC agreed to purchase from City specified parcels and planning areas (PAs) to thereafter construct, complete, and operate thereon a commercial project containing a luxury resort hotel and spa and associated branded luxury residential units, a lifestyle hotel and associated lifestyle branded residential units, a conference and shared service facility, a temporary and permanent clubhouse for the SilverRock Resort's Arnold Palmer Classic Golf Course, a mixed use village, a resort residential village, and associated amenities, all as further described in the Original SDC PSDA and referred to as various project components, as more 1 Debtors were SilverRock Development Company, LLC and affiliated entities that, on August 5, 2024, filed for voluntary bankruptcy protection under chapter 11 of the U.S. Bankruptcy Code, with case number(s) identified in the Title of this Agreement along with the last four digits of each Debtor's federal tax identification number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury Residences, LLC (6598) and SilverRock Phase I, LLC (2247) (collectively, referred to herein as the "Bankruptcy Lawsuit" in the "Bankruptcy Court"). 0698/015610-0207 22798270.2 a09/18/25 -2- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT particularly described therein. Concurrent with the Original SDC PSDA, on or about November 19, 2014, City and SDC entered into Development Agreement 2014-1001 (the "Original SDC Development Agreement") pursuant to the Development Agreement Law, which agreement, among other terms and conditions, required SDC to develop the planning areas and project components in accordance with the SDC PSDA, vested with SDC specified development obligations, memorialized the potential for the future acquisition of additional City -owned property in the SilverRock Resort Area as incorporated vis-a-vis the SDC PSDA, and subjected SDC to City's rights and oversight for those portions of the SilverRock Resort Area to be conveyed to SDC. After entering into the Original SDC PSDA and Original SDC Development Agreement, the following relevant events, very briefly summarized, occurred: i. Pursuant to the Original SDC PSDA, City and SDC had the authority to amend by mutual agreement of the parties. Between October 29, 2015, and November 16, 2023, City and SDC entered into five amendments thereto, dated October 29, 2015 ("First Amendment"), April 18, 2017 ("Second Amendment"), November 28, 2018 ("Third Amendment"), October 12, 2021 ("Fourth Amendment"), and November 16, 2023 ("Fifth Amendment," and the Original SDC PSDA as amended by all five amendments is referred to herein as the "SDC PSDA"); ii. Pursuant to the SDC PSDA and consistent with boundaries established by applicable subdivision maps and lot line adjustments, City conveyed to SDC the Phase 1 Property for the pre -development, development, operation, and use of a project that was eventually re -named "Talus" and consisted of the following project components (all as defined in the SDC PSDA): Luxury Hotel, Luxury Branded Residential Development, Lifestyle Hotel, Lifestyle Branded Residential Development, Conference and Shared Services Facility (including spa and other amenities), Permanent Golf Clubhouse, Promenade Mixed -Use Village/Resort Residential Village (on Planning Areas 7,8,9), as well as a specified Golf Course Realignment and corresponding Master Site Infrastructure Improvements (MSII). These project components on the Property, pursuant to the SDC PSDA, were divided into Phase 1A project components on the Phase 1A Property and the Phase 1B project components on the Phase 1B Property respectively, as described in the SDC PSDA; 0698/015610-0207 22798270.2 a09/18/25 -3- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT iii. Pursuant to the Third and Fourth Amendments to the SDC PSDA, SDC commenced pre -development and development on the Property for the Phase 1A project components, which as of the Reference Date of this Agreement, in various degrees, were partially constructed after SDC failed to continue to make payments to various contractors, subcontractors, and other interested parties in the development of the Talus project. Multiple lawsuits, including lawsuits seeking payments pursuant to mechanic's lien or various loan or investment agreements, and a City lawsuit against SDC for unlawful and unapproved conveyances in secured interests or mechanic's liens, were filed against SDC; iv. On August 5, 2024, SDC (Debtors) filed the Bankruptcy Lawsuit, and, pursuant to Bankruptcy Court -approved Bid Procedures, Debtors retained a Chief Restructuring Officer (Douglas Wilson Companies) and marketing professional (JLL) for the purposes of, among other items, marketing the sale of the Debtors estate (which is primarily comprised of the Property) and soliciting proposals for the: (a) acquisition of the Debtors estate, (b) use, re -use, and/or substitution of the partially constructed improvements on the Property, (c) potential replacement project for a world -class hotel and residential destination resort with related amenities on the Property that complement the existing Arnold Palmer Classic Golf Course surrounding the Phase 1 Property and real property owned by the City, and (d) possible acquisition in the future of the City -Owned Option Property in the SilverRock Resort Area (previously referred to as the Future Option Property in the SDC PSDA and generally referred to in the Bankruptcy Lawsuit and marketing materials as the "Phase 2 Property") for possible future development that would also complement a world -class hotel and residential destination resort; 3. Pursuant to Bankruptcy Court order [Bankruptcy Lawsuit Docket No. ], among other provisions: (i) Developer was authorized to purchase the Phase 1 Property, (ii) the Original SDC Development Agreement was reinstated and amended and memorialized by the Reinstated Development Agreement (as more particularly described therein), and (iii) An escrow to facilitate the purchase and sale of the Debtors' estate (which includes the TOT Covenant Property) was authorized, which, among other terms and conditions, included the transfer of funds and recording of documents (such as the Reinstated Development Agreement and this Covenant Agreement) as more particularly set forth in the Debtor PSA (as defined in the Reinstated Development Agreement) [NOTE: OTHER RELEVANT ITEMS 0698/015610-0207 22798270.2 a09/18/25 -4- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT FROM THE BANKRUPTCY COURT ORDER FOR SALE OF DEBTORS PROPERTY MAY BE INSERTED PRIOR TO RECORDING OF THIS COVENANT AGREEMENT] D. Developer submitted a proposal in response to the marketing materials, and, pursuant to the Bankruptcy Court -approved Bid Procedures, Debtors and City approved Developer's proposal, which, among other terms and conditions, included a modified "Project" (as more particularly defined and memorialized in the Reinstated Development Agreement) on the Phase 1 Property as well as possible acquisition in the future of the City -Owned Option Property (also referred to therein as the Phase 2 Property) for possible future development that would also complement a world -class hotel and residential destination resort. E. Pursuant to and as more particularly set forth the Reinstated Development Agreement, Developer has agreed to develop, open, and continuously operate and maintain a luxury hotel as part of the "Luxury Hotel Project Component" as more particularly defined and described therein, and Developer has agreed to develop and have available for sale, ownership, rental, and occupancy the "Phase 1A Luxury Residential Project Component" as more particularly defined and described therein, generally consisting of for -sale, single family luxury home lots and luxury condominiums on the Phase 1A Property which will be linked to the Luxury Hotel operations and available as short-term vacation rentals. F. Pursuant to and as more particularly set forth the Reinstated Development Agreement, Developer is required, among other provisions relating to the Luxury Hotel Project Component, to deliver to City documentation identifying the proposed hotel operator (a "Hotel Operator") and confirming certain of the terms and conditions pursuant to which the Permitted Hotel Operator will operate and manage the luxury hotel and residential dwellings (including single-family and condominium units) in the Phase 1A Luxury Residential Project Component, as more particularly set forth in the Reinstated Development Agreement (the "Hotel Management Documentation"). G. As part of Developer's proposal for the Project on the Phase 1 Property, Developer requested, and City accepted, a revenue sharing program based on receipts by City of "Transient Occupancy Tax" (as defined below) generated from the uses and operation of the uses on the TOT Covenant Property, as more particularly set forth in this Covenant Agreement. H. In consideration of Developer's rights and obligations set forth in the Reinstated Development Agreement and within this Covenant Agreement, City has agreed to make certain payments to Developer, the amount of which are measured by the "Transient Occupancy Tax" (as defined below) generated from the uses and operation of the uses on the TOT Covenant Property. City and Developer have agreed that the portion of Transient Occupancy Tax required to be paid by City to Developer hereunder during each "Quarter" of the "Operating Period" (as those terms are defined below) provided for herein is a fair exchange for the consideration to be furnished by Developer to City in that Quarter, as more particularly set forth in this Covenant Agreement. 0698/015610-0207 22798270.2 a09/18/25 -5- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT COVENANTS Based upon the foregoing Recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by both Parties, City and Developer hereby agree as follows: 1. DEFINED TERMS. In addition to the terms that may be defined elsewhere in this Covenant Agreement, the following terms when used in this Covenant Agreement shall have the meanings set forth below. Any capitalized words not otherwise defined in this Covenant Agreement shall have the same meaning ascribed to them in the Reinstated Development Agreement. "5-Year Portion Of The Operating Period" shall mean the last five (5) years of the Operating Period, commencing immediately after the end of the 10-Year Portion Of The Operating Period as described in Section 4.1.2 of this Agreement. "10-Year Portion Of The Operating Period" shall mean the first ten (10) years of the Operating Period (reduced, if applicable, by the number of days (or partial days) subject to the Luxury Hotel Daily Rebate Reduction as set forth in this Agreement) as described in Section 4.1.2 of this Agreement. "Affiliate" shall mean any corporation, partnership, limited liability company or other organization or entity which is Controlled by, Controlling or under common Control with (directly or indirectly) Developer. "Annotated Site Map" shall mean the site map attached to this Covenant Agreement as Exhibit No. 2 and incorporated herein by this reference. The Annotated Site Map depicts "Phase 1A," which corresponds to the real property and improvements thereon, and which, excluding the property containing the Public Golf Clubhouse Project Component (as defined in the Reinstated Development Agreement), is defined as the "TOT Covenant Property" herein. "Assignment and Assumption Agreement" shall mean an assignment and assumption agreement that is subject to and consented by City, in substance and form substantially similar to that attached as an Exhibit to the Reinstated Development Agreement. "Auditor" shall have the meaning ascribed to it in Section 4.1.3 of this Covenant Agreement. "Control", "Controlled", or "Controlling" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of an entity or person, whether through the ability to exercise voting power, by contract or otherwise. 0698/015610-0207 22798270.2 a09/18/25 -6- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT "Covenant Agreement" shall mean this Agreement Containing Covenants, Conditions, and Restrictions Affecting Real Property. "Covenant Agreement Date" shall mean the date inserted in the preamble to this Covenant Agreement. "Covenant Payments" shall mean the amounts to be paid by City to Developer with respect to each Quarter during the Operating Period. "Delayed Actual Luxury Hotel Operations Commencement Date" shall have the meaning ascribed to it in Section 2.1.2 of this Covenant Agreement "Default" shall have the meaning ascribed to it in Section 5.1 of this Covenant Agreement. "Default Notice" shall mean a written notice of Default delivered pursuant to this Agreement. "Force Majeure" shall have the meaning ascribed to such term in the Reinstated Development Agreement. "Hotel" shall mean the "Luxury Hotel." "Hotel Budget" shall mean the budget of hard and soft costs to be incurred by Developer in connection with the development and opening of the Hotel, which budget shall be prepared by Developer and delivered to City for review prior to the commencement of construction of the Hotel and which budget may be revised from time in Developer's discretion, with updates provided to City of all material changes to the Hotel Budget (defined as increases or decreases of more than five percent (5%) in total costs). The Hotel Budget shall be that portion of the "Final Project Budget" (as defined in the Reinstated Development Agreement, and pursuant thereto may be supplemented or updated) for the Luxury Hotel Project Component. "Hotel Management Agreement" shall be the final and binding management agreement for the Luxury Hotel between Developer and the Permitted Hotel Operator, which final and binding agreement shall be substantially consistent with the Hotel Management Documentation. "Hotel Management Documentation" shall have the meaning ascribed to it in Recital F of this Covenant Agreement. "Hotel Operator" shall have the meaning ascribed to it in Recital F of this Covenant Agreement. "Improvements" and "improvements" shall mean and include all buildings, structures, fixtures, parking, sidewalks, pedestrian lighting, landscaping, irrigation of landscaping, and other improvements of whatsoever character to be constructed or performed by Developer on the Site. 0698/015610-0207 22798270.2 a09/18/25 -7- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT "Luxury Hotel" shall mean the approximately 150-room luxury branded hotel building and all related uses that are part of the "Luxury Hotel Project Component" described in Recital E of this Covenant Agreement. "Luxury Hotel Daily Rebate Reduction" shall have the meaning ascribed to it in Section 2.1.1 of this Covenant Agreement. "Luxury Hotel Operations Commencement Project Milestone Date" shall have the meaning ascribed in Section 2.1 of this Covenant Agreement. "Luxury Hotel Project Component" shall have the meaning ascribed to it in Recital E of this Covenant Agreement. "MAE Default" is a materially adverse effect Default and has the meaning set forth in Section 5.1 of this Covenant Agreement. "Municipal Code" shall mean the La Quinta Municipal Code. "Operating Period" refers to the period commencing upon the Operating Period Commencement Date and ending upon the Operating Period Expiration Date. The Operating Period is comprised the 10-Year Portion Of The Operating Period (reduced, if applicable, by the number of days (or partial days) subject to the Luxury Hotel Daily Rebate Reduction as set forth in this Agreement) and the 5-Year Portion Of The Operating Period. "Operating Period Commencement Date" shall mean the earlier of either: (a) Luxury Hotel Operations Commencement Project Milestone Date, or (b) the date when Developer has completed all of the following: (i) has received authorization from City for occupancy and use of all hotel rooms at the Luxury Hotel (including, if applicable pursuant to a temporary certificate of occupancy) and (ii) has commenced business operations at the Luxury Hotel and (iii) has had the first overnight paying guest(s) at the Luxury Hotel. "Operating Period Expiration Date" shall mean the date that is fifteen (15) years after the Operating Period Commencement Date, reduced (if applicable) by the number of days (or partial days) subject to the Luxury Hotel Daily Rebate Reduction as set forth in this Agreement. "Operating Year" shall mean a period of twelve (12) consecutive months, the first of which shall commence upon the Operating Period Commencement Date, with each subsequent Operating Year commencing upon the day immediately following the expiration of the preceding Operating Year. "Phase IA Luxury Residential Project Component" shall have the meaning ascribed to it in Recital E of this Covenant Agreement. "Permitted Closure" shall mean the permitted closures of the Hotel as specified in Section 3.1 of this Covenant Agreement. 0698/015610-0207 22798270.2 a09/18/25 -8- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT "Permitted Hotel Operator" shall have the same meaning as set forth in the Reinstated Development Agreement. "Permitted Transfer" shall have the same meaning as set forth in the Reinstated Development Agreement, applied to this Covenant Agreement. Permitted Transferee" shall have the same meaning as set forth in the Reinstated Development Agreement, applied to this Covenant Agreement. "Project" shall have the meaning ascribed to it in Recital D of this Covenant Agreement. "Property" means the "TOT Covenant Property." "Quarter" shall mean any of the following three (3) month periods during the Operating Period: July 1-September 30, October 1-December 31, January 1-March 31, or April 1-June 30. "Reinstated Development Agreement" shall have the meaning ascribed in Recital B of this Covenant Agreement. "Short -Term Vacation Rental Regulations" means all provisions of the Municipal Code related to short-term vacation rentals as the same may be amended from time to time, including specifically Chapter 3.24 or successor provisions related to transient occupancy tax and Chapter 3.25 related to short-term vacation rentals, except to the extent any provision directly conflicts with the vested rights in Section 2.2.1 of the Reinstated Development Agreement. "Term" shall mean the operative term of this Covenant Agreement, which shall be the period commencing on the Covenant Agreement Date and ending on the Termination Date. "Termination Date" shall mean the date that this Covenant Agreement is terminated for a Default as provided in Article 5 of this Covenant Agreement or, if not terminated for a Default, expires of its own accord on the date that is the latest of (i) the Operating Period Expiration Date; (ii) the date upon which City makes its final Covenant Payment to Developer upon the expiration of the Operating Period; or (iii) if there is a pending dispute based on a Default Notice issued as of the date specified in either clause (i) or (ii), then the date of final resolution of the dispute based on that Default Notice. "TOT Covenant Agreement Permitted Transfer(s)" shall have the meaning ascribed in Section 6.2.5 of this Covenant Agreement. "TOT Covenant Property" shall have the meaning ascribed in Recital A of this Covenant Agreement and is depicted in the Annotated Site Map. "Transfer" means any transfer of any interest in this Covenant Agreement and/or the TOT Covenant Property (or any portion thereof), including but not limited to a sale, 0698/015610-0207 22798270.2 a09/18/25 -9- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT ground lease, lease, sublease, lien, secured interest for payment of an obligation, assignment, conveyance, hypothecation, encumbrance, or other transfer. "Transient Occupancy Tax" and "TOT" means, for each month, or part thereof, during the Operating Period, that portion of transient occupancy taxes remitted by Developer or the Permitted Hotel Operator to City pursuant to Chapter 3.24 of the Municipal Code (and any amendments or replacements to the Municipal Code) and are generated from the use and occupancy of hotel guest rooms in the Luxury Hotel or permanently constructed residential dwellings (i.e., Phase 1A Luxury Branded Condominiums and Phase 1A Luxury Branded Residences as described in the Reinstated Development Agreement) subject to the Hotel Management Documentation on any portion of the TOT Covenant Property. If said Municipal Code Section is amended or repealed during the Operating Period such that Transient Occupancy Taxes are no longer payable to City, then, for the purposes of this Agreement, the term "Transient Occupancy Tax" shall include any substitute tax imposed upon occupants of hotel guest rooms or residential dwellings subject to the Hotel Management Documentation on any portion of the TOT Covenant Property, and payable to the City of La Quinta. Notwithstanding anything herein to the contrary, Transient Occupancy Tax shall not include any interest or penalty that has been paid by Developer or the Hotel Operator pursuant to Chapter 3.24 of the Municipal Code, and any costs City incurs in enforcing Chapter 3.24 of the Municipal Code or any provision of this Covenant Agreement shall be deducted from the amount of the Covenant Payment payable by City to Developer. 2. CONDITIONS TO DEVELOPER'S RIGHT TO RECEIVE COVENANT PAYMENTS. As a condition to Developer's right to receive the Covenant Payments pursuant to this Covenant Agreement, and as more particularly set forth herein, Developer shall be required (a) to complete construction timely of the Luxury Hotel Project Component, (b) to open and to continue operating the Luxury Hotel on the TOT Covenant Property, and (c) to continuously allow for availability as short-term vacation rentals the residential dwellings that are constructed and owned as part of the Phase 1A Luxury Residential Project Component. Developer's obligations to perform its obligations set forth in Section 3 of this Covenant Agreement shall be a condition to the receipt of Covenant Payments during the Operating Period. 2.1 Luxury Hotel Completion and Operations by Project Milestone Date in Schedule of Performance. Prior to Developer having a right to receive the first Covenant Payment, construction of the Luxury Hotel Project Component shall have been completed, with authorization by City for use and occupancy of all hotel rooms at the Luxury Hotel, and with business operations having commenced and the first overnight paying guest(s) having stayed at the Luxury Hotel, no later than the "Completion Date" for the Luxury Hotel Project Component (which is a "Project Milestone") set forth in the Schedule of Performance in the Reinstated Development Agreement (referred to in this Covenant 0698/015610-0207 22798270.2 a09/18/25 -10- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Agreement as the "Luxury Hotel Operations Commencement Project Milestone Date"), subject to extension for Force Majeure and other allowances for extensions of dates of performance set forth in the Reinstated Development Agreement. Subject to extension for Force Majeure and other allowances for extensions of dates of performance set forth in the Reinstated Development Agreement, Developer shall be subject to a reduction in Developer's eligibility to receive a rebate based on TOT receipts if Developer fails to meet the Luxury Hotel Operations Commencement Project Milestone Date, according to the following: 2.1.1 Daily Rebate Reduction. For each day (or portion thereof) for which Developer fails to meet the Luxury Hotel Operations Commencement Project Milestone Date, Developer shall not be eligible to receive a Covenant Payment during the 10-Year Portion Of The Operating Period that otherwise would have been available to Developer pursuant to this Covenant Agreement (referred to as the "Luxury Hotel Daily Rebate Reduction"). 2.1.2 Application of Daily Rebate Reduction. The Luxury Hotel Daily Rebate Reduction shall be applied by: (a) counting the number of days between the Luxury Hotel Operations Commencement Project Milestone Date and, if later, the date upon which Developer actually completes all of the following: (i) has received authorization from City for use and occupancy of all hotel rooms at the Luxury Hotel and (ii) has commenced business operations at the Luxury Hotel and (iii) has had the first overnight paying guest(s) at the Luxury Hotel (referred to herein as the "Delayed Actual Luxury Hotel Operations Commencement Date"); then (b) subtracting the number of days calculated pursuant to clause (a) from the 10-Year Portion Of The Operating Period. The "number of days" as provided in this Section shall include any portion of a day. In explanation of the foregoing, if there are ninety (90) days between the Luxury Hotel Operations Commencement Project Milestone Date and Delayed Actual Luxury Hotel Operations Commencement Date, then 90 days would be subtracted from the 10-Year Portion Of The Operating Period and the "Operating Period" and "Term" of this Covenant Agreement likewise would be shorted by 90 days. 2.1.3 Written Documentation of Any Daily Rebate Reductions. Developer and City shall cooperate in good faith to memorialize in writing, including by amendment to this Covenant Agreement in recordable form, any adjustments or modifications because the Luxury Hotel Daily Rebate Reduction has been triggered, including memorializing in writing adjustments to Covenant Payments, the dates of the 10-Year Portion Of The Operating Period, the Operating Period, and the Term of this Covenant Agreement. 2.2 Final and Binding Hotel Management Agreement. It is anticipated that Developer may have a Hotel Management Agreement executed by Developer and Permitted Hotel Operator well before the Operating Period Commencement Date. In no event, however, shall Developer have a right to receive the first Covenant Payment unless and until the Hotel Management Agreement is fully executed and in effect, and City has received the Hotel Management Documentation; no 0698/015610-0207 22798270.2 a09/18/25 -11- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT later than the anticipated Operating Period Commencement Date, Developer and Permitted Hotel Operator shall have executed the Hotel Management Agreement. 2.3 Phase 1A Luxury Residential Dwellings; Completion and Operation of Luxury Hotel Required Prior to Inclusion of Short -Term Vacation Rental TOT as Part of Covenant Payments. Developer has represented that some or all of the single-family detached homes and luxury condominium units incorporated into the Phase 1A Luxury Residential Project Component will be integrated with the Luxury Hotel operations and will be available for use and used as short-term vacation rentals, thereby also generating revenues to the City from Transient Occupancy Tax. Prior to City having any obligation to include Transient Occupancy Tax revenues generated from any residential dwellings on the TOT Covenant Property and/or part of the Phase 1A Luxury Residential Project Component, the Luxury Hotel: (i) shall have received authorization from City for the use and occupancy of all hotel rooms at the Luxury Hotel and (ii) has commenced business operations at the Luxury Hotel and (iii) has had the first overnight paying guest(s) at the Luxury Hotel. In the event that any residential dwelling(s) is(are) available and used as short-term vacation rentals, and thereby generating Transient Occupancy Tax revenues, prior to the Luxury Hotel having met the provisions in clauses (i)-(iii) in the preceding sentence, City shall have no obligation to include such Transient Occupancy Tax revenue as party of any Covenant Payment or the TOT rebate program set forth in this Covenant Agreement. 3. DEVELOPER'S OBLIGATIONS. 3.1 Continuous Operation. During the Operating Period, Developer covenants and agrees to cause the Hotel to be continuously operated on the TOT Covenant Property, subject to temporary and reasonable interruptions for casualty losses, repairs, labor unrest, "acts of God", legally mandated closures, and events of Force Majeure as defined in the Reinstated Development Agreement (each, a "Permitted Closure"). 3.2 Use Restriction. During the entire Operating Period, the TOT Covenant Property shall not be put to any use other than, (a) for that portion of the TOT Covenant Property on which the Luxury Hotel Project Component is situated, for the continuous use and operation of the Luxury Hotel and all uses ancillary thereto as set forth in the Reinstated Development Agreement, so that all such uses shall qualify as a transient occupancy use under Chapter 3.24 of the La Quinta Municipal Code; and (b) for that portion of the TOT Covenant Property on which the Phase 1A Luxury Residential Project Component is situated, for the continuous use and operation of residential dwellings and uses ancillary thereto subject to the Hotel Management Documentation and as set forth in the Reinstated Development Agreement, so that the uses may qualify as a transient occupancy use under Chapter 3.24 of the La Quinta Municipal Code. 0698/015610-0207 22798270.2 a09/18/25 -12- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 3.3 Maintenance and Repair of Hotel, Landscaping, and TOT Covenant Property Generally. (a) During the entire Term of this Covenant Agreement, Developer, at its sole cost and expense, shall keep and maintain the TOT Covenant Property and the improvements thereon and all facilities appurtenant thereto in good condition and repair, in accordance with the "Maintenance Standards" (as that term is hereinafter defined). (b) To comply with the maintenance obligations set forth in this Section 3.3, Developer shall cause the Permitted Hotel Operator, for that portion of the TOT Covenant Property on which the Luxury Hotel Project Component is situated, to 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 Covenant Agreement. (c) Developer shall, or shall cause the Permitted Hotel Operator and its/their maintenance staff, contractors or subcontractors to comply with the following standards ("Maintenance Standards"): 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, safe road conditions, including 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. 3. All maintenance work shall conform to all applicable federal Occupational Safety and Health Act, as amended (29 U.S.C. § 651 et seq.), and California -law equivalent, 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 many areas are conditionally accessible to the public. 0698/015610-0207 22798270.2 a09/18/25 -13- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 5. The TOT Covenant Property and improvements thereon (including the Luxury Hotel and residential dwellings) shall be maintained in conformance and in compliance with the City -approved construction and architectural plans and design scheme, 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. Developer may incorporate these maintenance obligations into the "CC&Rs" (as defined and required in the Reinstated Development Agreement) for the portions of the TOT Covenant Property that include and are comprised of the Phase 1A Luxury Residential Project Components (as defined in the Reinstated Development Agreement), thereby transferring the maintenance obligations to the homeowners association and/or owners of the residential dwellings. 7. Developer may incorporate these maintenance obligations into the Hotel Management Agreement for the Luxury Hotel Project Component thereby transferring the maintenance obligations herein to the Permitted Hotel Operator. (d) During the Operating Period, Developer shall not abandon any portion of the TOT Covenant Property, any Improvements thereon, or leave it unguarded or unprotected, and shall not otherwise act or fail to act in such a way as to unreasonably increase the risk of any damage to the TOT Covenant Property, any Improvements thereon, or of any other impairment of City's interest set forth in this Covenant Agreement. 3.4 Failure to Maintain TOT Covenant Property and/or Luxury Hotel. In the event Developer does not maintain the TOT Covenant Property or the Luxury Hotel, or otherwise cause the TOT Covenant Property (or Improvements thereon) or the Luxury Hotel to be maintained, in the manner set forth herein and in accordance with the Maintenance Standards and such failure materially and adversely affects the Phase 1A Luxury Residential Project Components, City shall have the right, but not the obligation, to maintain such private and/or public improvements, or to contract for the correction of such deficiencies, in accordance with the provisions of this Section 3.4. City shall notify Developer in writing if the condition of said improvements 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. Subject to the following sentence, upon notification of any maintenance deficiency, Developer shall have thirty (30) days within which to correct, remedy or cure the deficiency, provided that if the deficiency cannot reasonably be cured within thirty (30) days and Developer provides written notification to the City of the time reasonably required by Developer to correct, remedy or cure the deficiency, then Developer shall have up to but not exceeding ninety (90) days within which to correct, remedy or cure the deficiency so long as Developer commences to correct, remedy or cure the deficiency within said thirty (30) day period and diligently prosecutes the correction, remedy or cure to completion. If the written notification states the problem is urgent relating to the public health and safety of City, then Developer shall 0698/015610-0207 22798270.2 a09/18/25 -14- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT have forty-eight (48) hours to commence to correct, remedy, or cure the problem and to diligently prosecute same to completion. In the event Developer or any person or entity acting on behalf of Developer fails to correct, remedy, or cure after notification and after the period of correction has lapsed as set forth in the previous paragraph of this Section 3.4, then Developer shall be in MAE Default and City shall have the right to maintain such improvements. Developer agrees to reimburse City for its actual costs reasonably incurred in connection with such maintenance performed by City pursuant to this Section. Until so paid, City shall have a lien on the TOT Covenant Property (or portion thereof) for the amount of such unpaid reimbursement, which lien shall be perfected by the recordation of a "Notice of Claim of Lien" against the TOT Covenant Property (or portion thereof). Upon recordation of a Notice of a Claim of Lien, such lien shall constitute a lien on the fee estate in and to the TOT Covenant Property (or portion thereof) 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 and permitted to be recorded against the TOT Covenant Property (or portion thereof) under the Reinstated Development Agreement, it being understood that the priority of any such lien for costs incurred to comply with this Covenant Agreement shall date from the date of the recordation of the Notice of Claim of Lien. Developer acknowledges and agrees City may also pursue any and all other remedies available in law or equity as a result of a maintenance deficiency by Developer hereunder. Developer shall be liable for any and all reasonable attorneys' fees, and other legal costs or fees incurred in collecting said maintenance costs. Notwithstanding the foregoing or anything else to the contrary contained herein, the notice and cure periods and other rights and protections granted to Lenders in the Reinstated Development Agreement shall apply in all respects to this Agreement and the Reinstated Development Agreement, mutatis mutandis, and shall be deemed to be incorporated by reference into this Agreement with such Lenders having the full right to enforce such rights and protections in the same manner as if such Lenders were a direct party hereto. 3.5 Level of Service. During the Term, Developer shall cause the Luxury Hotel to be operated as a hotel offering luxury amenities, full service accommodations, on -site full service restaurants and a level of personalized and professional service by Permitted Hotel Operator or such other hotel operator approved by City pursuant to the terms of the Reinstated Development Agreement, and in accordance with the Hotel Management Agreement. Subject to Developer's and the Permitted Hotel Operator's right to use their commercially reasonable business judgment in the day-to-day operation of the Luxury Hotel, Developer shall use its best efforts to cause the Luxury Hotel to be operated in a manner that maximizes the generation of Transient Occupancy Tax to be remitted to City, and similarly, because the single-family detached homes and luxury condominium units incorporated into the Phase 1A Luxury Residential Project Components (as defined in the Reinstated Development Agreement) will be integrated with the Luxury Hotel operations 0698/015610-0207 22798270.2 a09/18/25 -15- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT and will be available for use and used as short-term vacation rentals, Developer shall use its best efforts to maximize the Transient Occupancy Tax generated from those residential dwellings and luxury condominiums to be remitted to City, subject to compliance with all applicable City laws (including the Short -Term Vacation Rental Regulations) such that the overall Transient Occupancy Tax revenue generated by the TOT Covenant Property is maximized without impacting the commercially reasonable business judgment in the day- to-day operations of the Luxury Hotel. 3.6 Compliance with Laws. During the Operating Period, Developer shall cause the Luxury Hotel to be operated: (i) in conformity with all valid and applicable federal, state (including without limitation the California Civil Code, the California Government Code, the California Health & Safety Code, the California Labor Code, the California Public Resources Code, and the California Revenue & Taxation Code), and local laws, ordinances, and regulations, provided that Developer does not waive its right to challenge the validity or applicability thereof to Developer or the portion of the TOT Covenant Property on which the Luxury Hotel Project Component is situated, and (ii) in compliance with all of the requirements of the Reinstated Development Agreement and all other Project Approvals (as defined in the Reinstated Development Agreement) including all Conditions of Approval. Nothing herein constitutes a representation or warranty by City that the construction of the Luxury Hotel is not or will not be a "public work" or 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 expressly waives any right of reimbursement for any "increased costs" under California Labor Code Section 1781 or otherwise with respect to the Hotel or Developer's development thereof. Developer shall indemnify, defend, and hold City and City's representatives, volunteers, officers, officials, members, employees, and agents 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 in connection with Developer's development of the Luxury Hotel or any other improvements on the TOT Covenant Property, or failure to comply with federal or state labor laws, regulations, or standards. This indemnification obligation is in addition to and does not supplant or replace Developer's indemnification obligations to City as set forth in the Reinstated Development Agreement. 3.7 Compliance with Hotel Documents. Developer shall comply with all of Developer's obligations under the Hotel Management Agreement. Developer shall promptly provide City with copies of any notices of default received by Developer from the Permitted Hotel Operator (or any Hotel Operator) with respect to Developer's obligations under the Hotel Management Agreement. 3.8 Non -Discrimination. 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, 0698/015610-0207 22798270.2 a09/18/25 -16- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 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. Developer shall have the obligation to ensure Hotel Operator complies with these nondiscrimination covenants. 3.9 Indemnification of City. Developer shall defend, indemnify, assume all responsibility for, and hold City, and City's representatives, volunteers, officers, officials, members, employees and agents, harmless from any and all claims, demands, damages, defense costs or liability of any kind (including attorneys' fees and costs), that arise from Developer's uses or operations (including the Luxury Hotel and residential dwellings) on the TOT Covenant Property, or which may be caused by any acts or omissions of the Developer under this Covenant Agreement, whether such activities or performance thereof be by Developer or by anyone directly or indirectly employed or contracted with by Developer and whether such damage shall accrue or be discovered before or after termination of this Covenant Agreement. This indemnification obligation is in addition to and does not supplant or replace Developer's indemnification obligations to City as set forth in the Reinstated Development Agreement. 4. OBLIGATIONS OF CITY. 4.1 Covenant Payments to Developer. 4.1.1 Covenant Payments for Operating Period. Provided Developer is not in default or breach of this Covenant Agreement or the Reinstated Development Agreement, then, commencing on the Operating Period Commencement Date and ending on the Operating Period Expiration Date, and subject to modification because of a Luxury Hotel Daily Rebate Reduction as provided in this Agreement, City shall pay to Developer the Covenant Payments throughout the Operating Period in accordance with the payment provisions below. 4.1.2 Amount of Covenant Payments. In consideration for Developer's undertakings pursuant to this Covenant Agreement, City shall make the following payments (each, a "Covenant Payment") to Developer, at the end of each Quarter (or part thereof) during the Operating Period: (a) For each Quarter during the first ten (10) years of the Operating Period (i.e., during the 10-Year Portion Of The Operating Period), the Covenant Payments with respect to each such Quarter shall be in an amount equal to ninety percent (90%) of the Transient Occupancy Tax for that Quarter that is generated by the uses on the TOT Covenant Property. 0698/015610-0207 22798270.2 a09/18/25 -17- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT (b) For each Quarter during the last five (5) years of the Operating Period (i.e., during the 5-Year Portion Of The Operating Period), the Covenant Payments with respect to each such Quarter shall be in an amount equal to sixty percent (60%) of the Transient Occupancy Tax for that Quarter that is generated by the uses on the TOT Covenant Property. (c) It is understood and agreed that the Covenant Payments are in consideration of Developer's performance during each Quarter, or portion thereof, of the Operating Period, and are not repayments of a loan made by City. (d) In no event shall the Operating Period exceed fifteen (15) years from the Operating Period Commencement Date except in the event of any government - mandated complete closures (such as a "stay at home" mandate or other public health restrictions, similar to those issued during the COVID-19 pandemic) by a federal, state, or local agency that prohibit the operation of the Luxury Hotel at no fault of Developer or the Permitted Hotel Operator, in which case the Operating Period will automatically be extended on a day -for -day basis for the period of such closure, and the Parties shall confirm the length of such extension in writing and such modification shall be by amendment to this Covenant Agreement and shall be recorded in the Recorder's Office. 4.1.3 Payment Procedure; Reconciliation For Over- Or Under -Payments. Not later than thirty (30) days after the Transient Occupancy Tax generated from the uses on the TOT Covenant Property (including at a minimum the Luxury Hotel) is reported and remitted to City by Developer for the final month in each Quarter, or portion thereof, during the Operating Period, City shall pay the Covenant Payment for said Quarter, or portion thereof, to Developer. Each such payment shall be accompanied by a statement identifying the amount of Transient Occupancy Tax upon which the Covenant Payment amount was calculated. For example, if Developer files a report and remits the Transient Occupancy Tax generated during the month of March 2026, on April 15, 2026, then City shall provide the Covenant Payment for the January -March 2026 Quarter no later than May 15, 2026. (a) It is understood that the amount of City's quarterly Covenant Payments to Developer shall be based upon the amount of Transient Occupancy Tax that City shall have actually received from Developer generated on the TOT Covenant Property. In addition, if after any such quarterly payment is made, either City or Developer obtains information that the amount of City's payment was in error, including, without limitation, by reason of Developer's overpayment of tax, the Party obtaining such information shall promptly notify the other Party and shall provide such detailed information as may be necessary to explain the discrepancy. The discrepancy then shall be taken into consideration by means of an adjustment to the next quarterly Covenant Payment(s) to be made by City (either by City making an additional payment in the event City has underpaid a prior Covenant Payment that is due, or by City receiving a credit against the subsequent Covenant Payment in the event City has overpaid a prior Covenant Payment). 0698/015610-0207 22798270.2 a09/18/25 -18- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT (b) In the event an adjustment needs to be made pursuant to Paragraph (a) above that would be for an amount in excess of Fifty Thousand Dollars ($50,000), the Party entitled to said sum may deliver a written notice to the other Party requesting an immediate adjustment and, in such event, the other Party shall take all commercially reasonable efforts to make a payment for all or most of the adjustment amount within fifteen (15) days from receipt of said notice. Any amount not paid to the requesting Party within the 15-day period shall be subject to the reconciliation and adjustment procedure set forth in Paragraph (a) above. (c) During the Term of this Agreement, the Parties may mutually agree to modify the payment process and reconciliation process as prescribed herein. Any such modification shall be by amendment to this Covenant Agreement and shall be recorded in the Recorder's Office. 4.2 Source of Payments. The Covenant Payments shall be payable from any source of funds legally available to City. In this regard, it is understood and agreed that the Transient Occupancy Tax is being used merely as a measure of the amount of the Covenant Payments that are periodically owing by City to Developer, and that City is not pledging any portion of the actual Transient Occupancy Tax generated from the TOT Covenant Property (or any real property) to Developer. 4.3 Books and Records. Upon the written request of either Party, the other Party shall make available for inspection (at City Hall in the event of a review of City records and at Developer's place of business in La Quinta in the event of a review of Developer's records) only such of its books and records as may reasonably be necessary to determine whether the correct amount of Covenant Payments have been made or are being made hereunder. Notwithstanding the foregoing, City shall not be required to produce any books or records that it is prohibited from producing by law, and Developer shall not be required to produce information that violates the statutorily prescribed privacy rights of individual customers or any contractual confidentiality rights of any party as long as City remains able to review the books and records reasonably necessary to confirm the correct amount of any Covenant Payments. 4.4 No Acceleration. It is acknowledged by the Parties that any payments by City provided for in this Covenant Agreement are in consideration for the performance by Developer during the time period(s) for which payments are due. Therefore, City's failure to timely make any payments or City's failure to perform any of its other obligations hereunder shall not cause the acceleration of any anticipated future Covenant Payments by City to Developer. 4.5 Additional Condition Precedent to City's Obligations. In addition to the provisions set forth in Article 2 of this Covenant Agreement, City's obligation to make the Covenant Payments pursuant to Article 4 of this Covenant Agreement for any Quarter (or portion thereof) during the Operating Period shall be contingent and conditional upon Developer's performance of its obligations set forth in Article 3 of this Covenant Agreement during such Quarter. 0698/015610-0207 22798270.2 a09/18/25 -19- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 5. DEFAULTS AND REMEDIES. 5.1 Defaults and MAE Defaults. 5.1.1 Defaults Generally, Subject to Section 8.7 of this Covenant Agreement, the occurrence of any of the following shall constitute a "Default": (a) the failure by either Party to perform any obligation of such Party for the payment of money under this Covenant Agreement if such failure is not cured within thirty (30) calendar days following receipt of written notice of default; or (b) the failure by either Party to perform any of its obligations (other than obligations described in clause (a) of this Section 5.1) set forth in this Covenant Agreement, if such failure is not cured within thirty (30) days following receipt of written notice of default, or, if such failure is of a nature that cannot reasonably be cured within thirty (30) days and the non -performing Party provides written notification to the other Party thereof, the failure by the non -performing Party to commence such cure within such thirty (30) days and completes such cure with diligence no later than ninety (90) days after the commencement of cure; or (c) any representation or warranty by a Party set forth in this Covenant Agreement proves to have been incorrect in any material respect when made subject to the same notice and cure periods as set forth in clause (b) above with respect to such representation or warranty; or (d) Developer closes or otherwise fails to continuously operate or allow for continuous operation the Luxury Hotel, except for a Permitted Closure or event of Force Majeure; or (e) Developer defaults under the Hotel Management Agreement or the Reinstated Development Agreement and has not cured the default within the applicable cure period (if any) thereby giving Hotel Operator the right to terminate (and results in the actual termination of ) the Hotel Management Agreement (unless a replacement Permitted Hotel Operator has entered into a Hotel Management Agreement in accordance with the terms of the Reinstated Development Agreement within ninety (90) days of such termination; or (f) the Luxury Hotel is materially damaged or destroyed by fire or other casualty during the Operating Period and Developer fails to diligently pursue all necessary permits and commence restoration of the improvements within a reasonable time or thereafter fails to diligently proceed to complete such restoration in accordance with this Covenant Agreement, subject to events of Force Majeure; or (g) Developer concludes a "Transfer" without the prior written approval of City, except for a "Permitted Transfer"; or (h) Developer, or any constituent controlling member of Developer, (1) is the subject of an order for relief for a bankruptcy court (except for an order from the 0698/015610-0207 22798270.2 a09/18/25 -20- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Bankruptcy Court in the Bankruptcy Case authorizing Developer to purchase the Debtor's assets that allowed for the acquisition by Developer of the TOT Covenant Property), or is unable or admits in writing in a legal proceeding its inability to pay its debts as they mature (unless compelled to do so), or makes an assignment for the benefit of creditors; (2) applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or any part of its property; or (3) institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship, liquidation, rehabilitation or similar proceeding relating to it or any part of its property, or any similar proceeding is instituted without the consent of Developer and continues undismissed or unstayed for ninety (90) days; or (i) Any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed for Developer or the TOT Covenant Property without the application or consent of Developer, and the appointment continues undischarged or unstayed for ninety (90) days; or any judgment, writ, warrant of attachment or execution, or similar process is issued or levied against the TOT Covenant Property and is not released, vacated, or fully bonded within ninety (90) days after its issue or levy; or (j) Except as provided in Section 4.1.2(d) or for an event of Force Majeure, and subject to Developer's right to cure any Default prior to being a MAE Default, Developer or the Permitted Hotel Operator is at fault resulting in being enjoined or otherwise prohibited by any governmental agency from occupying the TOT Covenant Property at any time during the Operating Period and such injunction or prohibition continues unstayed for ninety (90) days or more for any reason. 5.1.2 Uncured Defaults. Any Default that is not cured within the applicable cure period set forth in this Covenant including Section 5.1.1 above and 5.2 may be referred to herein as an "MAE Default." 5.2 City's Remedies Upon Default by Developer. Upon the occurrence of any MAE Default by Developer, and after Developer's receipt of a Default Notice and subsequent notice that an MAE Default has occurred, City may, at its option: (a) Suspend the payment of Covenant Payments otherwise due and payable to Developer hereunder for the period that Developer remains in MAE Default. If City has so suspended its payments in accordance with the terms of this clause (a), then upon Developer's cure of such MAE Default prior to the occurrence of a MAE Default, the City shall resume its payment obligations, but shall have no obligation to make payments for any Quarter or portion thereof during which City's obligation to make payments was so suspended; or (b) If the Default continues uninterrupted for a period of six (6) months following Developer's receipt of written notice thereof, without Developer commencing and diligently pursuing good faith efforts to cure the Default prior to the occurrence of a MAE Default, City may terminate this Covenant Agreement and City may seek a judicial determination that Developer has materially breached this Agreement resulting in an MAE 0698/015610-0207 22798270.2 a09/18/25 -21- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Default, in which case City's obligation to make payments to Developer for any period of time after the occurrence of the Default shall be finally terminated and discharged. If the City is the prevailing Party in any judicial determination, the City shall be entitled to recover attorney's fees pursuant to Section 8.5 of this Covenant Agreement. 5.3 Developer's Remedies Upon Default by City. Upon the occurrence of any Default by City, and City's failure to cure the Default prior to the occurrence of a MAE Default, Developer may terminate this Covenant Agreement by written notice to City and seek legal or equitable remedies available to Developer pursuant to the provisions of this Section 5.3, Section 4.4 (No Acceleration) and Section 8.4 (Legal Actions). (a) Notwithstanding any provisions in this Covenant Agreement to the contrary, in no event shall Developer be entitled to recover damages of any kind from City, except for damages up to, but not exceeding, the amount that Developer would have received under this Covenant Agreement as an unpaid Covenant Payment that was payable to Developer prior to the date of the notice of Default. Developer's right to notice a Default to recover damages for an alleged unpaid Covenant Payment shall terminate on the date that is two (2) years after the date City pays (or fails to pay) a quarterly Covenant Payment as provided in this Agreement. Developer shall be deemed to waive any right to recover damages for an alleged unpaid Covenant Payment that would have been due to Developer more than two (2) years after the date the applicable Covenant Payment (or failure of Payment) from the City was made. For example, if City provides to Developer a Covenant Payment for the January -March 2026 Quarter on May 15, 2026, and there is an alleged unpaid amount relating to that Covenant Payment, Developer may be eligible to recover damages for the alleged unpaid amount as long as Developer delivers a notice of default and pursues a permissible remedy to recover as damages the alleged unpaid amount no later than May 15, 2028. If Developer is the prevailing Party in any judicial determination, the City shall be entitled to recover attorney's fees pursuant to Section 8.5 of this Covenant Agreement. (b) The Parties acknowledge and agree that City would not have entered into this Agreement if it were to be liable, except as provided for in Section 5.3(a), for monetary damages of any kind whatsoever, including compensatory (whether special or general) damages, punitive damages, consequential damages, incidental damages, and/or future damages, under or with respect to this Covenant Agreement. As such, the Parties agree that, except for limited damages expressly set forth in Section 5.3(a), declaratory and injunctive relief, writ of mandate, and specific performance shall be Developer's sole and exclusive judicial remedies against City with respect to enforcement of the terms and conditions of this Covenant Agreement. In amplification of the preceding sentence and Section 5.3(a), and not by way of limitation, in no event shall City be liable for or Developer be entitled to an award of damages for economic loss, lost profits, or any other economic or consequential damages of any kind. 5.4 Cumulative Remedies. Except as expressly provided in this Covenant Agreement, the nondefaulting Party's rights and remedies hereunder are cumulative and in addition to all rights and remedies provided by law from time to time and the exercise 0698/015610-0207 22798270.2 a09/18/25 -22- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT by the nondefaulting Party of any right or remedy shall not prejudice such Party in the exercise of any other right or remedy. 5.5 Waivers. Except as expressly provided in this Covenant Agreement in which failure by a Party to assert a right or remedy is deemed a waiver, no waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought and referring expressly to this Section. No delay or omission by either Party in exercising any right or power accruing upon non-compliance or failure to perform by the other Party under any of the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof, except as expressly provided in this Covenant Agreement. No waiver by either Party of any of the covenants or conditions to be performed by the other Party shall be construed or deemed a waiver of any succeeding breach or nonperformance of the same or other covenants and conditions hereof, except as expressly provided in this Covenant Agreement. 5.6 No Joint Venture or Partnership; Limitations on City's Liability. Developer acknowledges and agrees that: (i) this Covenant Agreement shall not be deemed or construed as creating a partnership, joint venture, or similar association between Developer and City, the relationship between Developer and City pursuant to this Covenant Agreement is and shall remain solely that of contracting Parties, that the operation of the Luxury Hotel is a private undertaking, and City neither undertakes nor assumes any responsibility pursuant to this Covenant Agreement with respect to the operation of the Luxury Hotel or any other uses or improvements on the TOT Covenant Property, and Developer shall rely entirely on its own judgment with respect to such matters; provided, that nothing herein is intended to release City from whatever obligations it may have pursuant to applicable laws independent of this Covenant Agreement; (ii) by virtue of this Agreement, City shall not be directly or indirectly liable or responsible for any loss or injury of any kind to any person or property resulting from any occupancy or use of the TOT Covenant Property, whether arising from: (a) any defect in any building, grading, landscaping, other onsite or offsite improvement, or any other improvements; (b) any act or omission of Developer or any of Developer's agents, employees, independent contractors, licensees, lessees, or invitees; or (c) any accident on the TOT Covenant Property or any fire, earthquake, or other casualty or hazard thereon; and (iii) by accepting or approving anything required to be performed or given to City under this Covenant Agreement, including any certificate, notice, or insurance policy, City shall not be deemed to have warranted or represented the sufficiency or legal effect of the same, and no such acceptance or approval shall constitute a warranty or representation by City to anyone. 6. TRANSFERS OF INTEREST IN TOT COVENANT PROPERTY OR TOT COVENANT AGREEMENT 6.1 Developer Unique and Material Term to this Agreement. Developer acknowledges and agrees that the qualifications and identity of Developer are of particular importance to City. Developer further recognizes and 0698/015610-0207 22798270.2 a09/18/25 -23- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT acknowledges that City has relied and is relying on the specific qualifications and identity of Developer in entering into this Covenant Agreement with Developer and, as a consequence, Transfers are permitted only as expressly provided in this Covenant Agreement. Developer shall promptly notify City in writing of any and all changes whatsoever in the identity of the business entities or individuals either comprising or in control of Developer, as well as any and all changes in the interest or the degree of control of Developer by any such person, of which information Developer or any of its partners, members or officers are notified or may otherwise have knowledge or information. 6.2 Transfers Generally Prohibited Without Prior City Approval. Except for Permitted Transfers to Permitted Transferees, as those terms are defined in and pursuant to the Reinstated Development Agreement, Developer may not Transfer or otherwise assign this Covenant Agreement or Developer's interest in the TOT Covenant Property (or any portion thereof), without the prior written consent of the City, which shall not be unreasonably withheld, delayed or conditioned. 6.2.1 Obtaining City Approval for Transfers. Developer represents to City that it has not made and agrees that it will not make or create, or suffer to be made or created, any Transfer other than a Permitted Transfer, either voluntarily, involuntarily or by operation of law, until the Termination Date of this Covenant Agreement; provided, however, that City may approve in its reasonable discretion, Transfers other than Permitted Transfers prior to the Termination Date of this Covenant Agreement. In deciding whether to approve or disapprove any proposed Transfer, City may consider the proposed transferee's financial strength and the experience of the proposed transferee (or its Affiliates or direct or indirect investors) and its senior management in undertaking and successfully completing projects of a similar type and size as the Luxury Hotel Project Component and Phase 1A Luxury Residential Project Components (or portions thereof) proposed to be transferred. Any Transfer made in contravention of this Covenant Agreement shall be voidable at the election of City, and this Covenant Agreement may be terminated by City or City may exercise any other remedy available to the City under this Covenant Agreement; provided, however, that (i) City shall first notify Developer in writing of its intention to terminate this Covenant Agreement or to exercise any other remedy, and (ii) Developer shall have thirty (30) calendar days following delivery of such written notice to cure the Default based on the unpermitted Transfer by Developer and submit evidence of the satisfactory completion of such cure to City, in a form and substance reasonably satisfactory to City (without reducing any other cure rights expressly set forth in this Agreement). 6.2.2 Request for City Approval of Transfer. Unless more time is otherwise required under this Agreement, Developer shall provide City no less than thirty (30) days prior written notice (or, for a Permitted Transfer, no less than ten (10) days prior written notice) of any proposed Transfer which Developer desires to enter into. Developer shall have the burden of 0698/015610-0207 22798270.2 a09/18/25 -24- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT demonstrating to City's reasonable satisfaction that the proposed Transfer meets the conditions and requirements of this Agreement with respect to any Transfer that is not a Permitted Transfer. 6.2.3 Costs for Review of Proposed Transfer. In connection with City's review of any request for approval of any proposed Transfer under this Covenant Agreement or of any Lender or Loan (as defined in the Reinstated Development Agreement), Developer agrees to reimburse City for those reasonable out of pocket third party costs and expenses incurred by City in connection with its review of Developer's request for approval, including, without implied limitation, the reasonable fees and costs of those outside consultants and legal counsel retained by City to assist it in its review of Developer's request, including the City Attorney. 6.2.4 Assignment and Assumption Agreement. For every Transfer of any interest in this Agreement and/or the TOT Covenant Property, including for Permitted Transfers, such Transfer of this Covenant Agreement and in the TOT Covenant Property (or any portion thereof) shall be subject to the same terms and conditions governing Transfers in Article 10 (and relevant definitions and other provisions) in the Reinstated Development Agreement that are applicable to the TOT Covenant Property. When a Transfer, including a Permitted Transfer, is required to be memorialized by an assignment and assumption agreement in the Reinstated Development Agreement, said Transfer of this Covenant Agreement shall similarly be subject to an assignment and assumption agreement that is subject to and consented by City to the extent such consent is required under the Reinstated Development Agreement, in substance and form substantially similar to that attached to the Reinstated Development Agreement ("Assignment and Assumption Agreement"). No such Transfer shall be operative or effective unless and until an Assignment and Assumption Agreement, consented to by City (to the extent such consent is required under the Reinstated Development Agreement), is fully executed and recorded in the Recorder's Office against the TOT Covenant Property (or portion thereof) to which the Transfer applies. 6.2.5 Permitted Transfers. Notwithstanding anything to the contrary contained in this Covenant Agreement, a permitted Transfer of this Covenant Agreement and in the TOT Covenant Property (or any portion thereof) shall be subject to the same terms and conditions governing Permitted Transfers in Article 10 (and relevant definitions and other provisions) in the Reinstated Development Agreement that are applicable to the TOT Covenant Property and, if said Transfer is permitted and in compliance with the Reinstated Development Agreement in such regard, said Transfer shall similarly be a permitted Transfer of this Covenant Agreement (each, a "Permitted Transfer"). 0698/015610-0207 22798270.2 a09/18/25 -25- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 6.2.6 Partial Release of Obligations from Transferor. Upon the Transfer in whole or in part of Developer's right and interest to all or any portion of the TOT Covenant Property or this Covenant Agreement, in compliance with this Covenant Agreement and Article 10 (and relevant definitions and provisions) in the Development Agreement, Developer may apply to City for a release of obligations under this Covenant Agreement, with said release to be subject to and governed by Section 10.2.6 of the Reinstated Development Agreement. 6.3 Successors and Assigns. All of the terms, covenants and conditions of this Covenant Agreement shall be binding upon 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. Except if expressly set forth in this Covenant Agreement, all successors and assigns of this Covenant Agreement shall be subject to and governed by Section 10.3 (and relevant definitions and other provisions) in the Reinstated Development Agreement. 6.4 Developer Entities Documentation. City shall have the right to request from Developer written documentation and evidence confirming a proposed Permitted Affiliate Assignee is consistent with and in compliance with the restrictions contained in the Reinstated Development Agreement. 6.5 Assignment by City. City may assign or transfer any of its rights or obligations under this Covenant Agreement with the approval of Developer, which approval shall not be unreasonably withheld; provided, however, that City may assign or transfer any of its interests hereunder to a joint powers authority in which City is a member at any time without the consent of Developer. 7 DEVELOPER'S EXCLUSIVE RIGHT TO COVENANT PAYMENTS; NO RIGHT TO COVENANT PAYMENTS FOR RESIDENTIAL OWNERS. 7.1 Developer Only Intended Beneficiary of Covenant Agreement. Notwithstanding the TOT Covenant Agreement Permitted Transfer provisions in Article 7 or any other provisions in this Covenant Agreement to the contrary, no person or entity with a legal or equitable interest in a residential dwelling on the TOT Covenant Property does or shall have any right to receive any Covenant Payment or any other payment from City by virtue of this Covenant Agreement with Developer. In amplification of the preceding sentence, any person or entity that has any real property interest or use rights in a residential dwelling on the TOT Covenant Property —which includes but not limited to: the "owner" of a short-term vacation rental unit (as defined in the Short -Term Vacation Rentals Regulations); any owner (or partial 0698/015610-0207 22798270.2 a09/18/25 -26- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT owner) of a single-family detached home, any owner (or partial owner) of a condominium unit, any renter or occupant of any residential dwelling pursuant to a lease, license, or any other verbal or written agreement —does not and shall not have any right to receive any Covenant Payment or any other payment from City by virtue of this Covenant Agreement, it being expressly the intent of the Parties that Developer is the intended beneficiary of the Covenant Payments because of Developer's obligations to construct, develop, and ensure continued operation of the Project as more particularly defined in the Reinstated Development Agreement. 7.2 Developer to Obtain Written Acknowledgement from Residential Owners. City shall have the right, prior to the Transfer of any residential dwelling to an owner from Developer, to require any such owner to execute for the benefit of Developer and City a written acknowledgment and binding agreement, in a form reasonably approved by the Parties. The written acknowledgement at a minimum shall memorialize that such owner of a residential dwelling has no rights under this Covenant Agreement, including but not limited to having no right to any Covenant Payments that are intended to be for Developer. City and Developer shall cooperate in good faith to ensure the requirements of this Article 7 are diligently enforced and honored. 8. GENERAL PROVISIONS. 8.1 Integration and Amendment. This Covenant Agreement and the Reinstated Development Agreement constitute the entire agreement by and between the Parties pertaining to the subject matter hereof, and supersede all prior agreements and understandings of the Parties with respect thereto. This Covenant Agreement may not be modified, amended, supplemented, or otherwise changed except by a writing executed by both Parties. 8.2 Captions. Section headings used in this Covenant Agreement are for convenience of reference only and shall not affect the construction of any provisions of this Covenant Agreement. 8.3 Computation of Days. Unless expressly identified as being subject to "business days," the computation for performance and word "Days" and "days" shall mean calendar days, continuously calculated and without exclusion of weekends or holidays; provided, however, that if the last "day" were to fall on a weekend day or official holiday recognized under federal or state law, then the time for performance on that last day shall be extended to the next business day. For purposes of this Agreement, "Business Day(s)" and "business day(s)" means every day of the calendar year except Saturdays, Sundays, and official holidays recognized under federal or state law and for which City Hall is closed to the general public. 8.4 Legal Actions. This Covenant Agreement shall be governed by and construed in accordance with the internal laws of the State of California without regard to conflict of law principles. 0698/015610-0207 22798270.2 a09/18/25 -27- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 8.5 Attorney's Fees. If either Party to this Covenant Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Covenant 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 actual attorneys' fees and all 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. 8.6 Effect of Violation of the Terms and Provisions of this Covenant Agreement. The covenants established in this Covenant Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of City, its successors and assigns, as to those covenants which are for its benefit. The covenants contained in this Covenant Agreement shall remain in effect for the periods of time specified therein. City is deemed the beneficiary of the terms and provisions of this Covenant Agreement and of the covenants running with the land, for and in its 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 Covenant Agreement and the covenants running with the land have been provided. This Covenant Agreement and the covenants shall run in favor of City, without regard to whether City has been, remains, or is an owner of any land or interest in the Site. City shall have the right, if the Covenant Agreement 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 it or any other beneficiaries of this Covenant Agreement and covenants may be entitled. 8.7 Force Majeure. Notwithstanding any other provision set forth in this Covenant Agreement to the contrary, in no event shall a Party be deemed to be in Default or MAE Default of its obligations set forth herein where delays or failures to perform are due to a Force Majeure, as defined in the Reinstated Development Agreement. Notwithstanding anything to the contrary in this Covenant 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 a reasonable time following commencement of the cause, which notice requirement shall be deemed waived if the other Party is aware of the facts giving rise to the Force Majeure. Upon receiving notice of a Force Majeure or becoming aware of the facts giving rise thereto, the Parties shall meet and confer in good faith to determine the appropriate period of Force Majeure delay and document the same in writing. Times of performance under this Covenant Agreement may also be extended in writing by the mutual agreement of City and Developer. 8.8 Notices. 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 shall be sufficiently given if (i) delivered by hand, (ii) delivered by reputable same -day or overnight messenger service that provides a receipt showing date and time of delivery, or (iii) dispatched by registered or certified mail, postage prepaid, 0698/015610-0207 22798270.2 a09/18/25 -28- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT return receipt requested, to the principal offices of City and Developer at the addresses specified below, or at any other address as that Party may later designate by Notice. To City: With a copy to: To Developer: City of La Quinta 78-495 Calle Tampico La Quinta, California 92253 Attn: City Clerk Rutan & Tucker, LLP 18575 Jamboree Road, 9th Floor Irvine, California 92612 Attn: William H. Ihrke Email: bihrke@rutan.com TBE RE Acquisition Co II LLC c/o Turnbridge Equities 4 Bryant Park, Suite 200 New York, New York 10018 Attention: General Counsel and Michael Gazzano Email: jw@turnbridgeeq.com and mg@turnbridgeeq.com with a copy to: DLA Piper 1251 Avenue of the Americas New York, New York 10020 Attention: Todd Eisner Email: todd.eisner@us.dlapiper.com with a copy to: Procopio 200 Spectrum Center Drive, Suite 1650, Irvine, CA 92618 Attn: James Vaughn Email: james.vaughn@procopio.com Any written notice, demand or communication shall be deemed received immediately if personally delivered or delivered by delivery service, and shall be deemed received on the fifth (5th) day from the date it is postmarked if delivered by registered or certified mail. 8.9 City Approvals and Actions. City shall maintain authority of this Covenant Agreement and the authority to implement this Covenant Agreement through the City Manager. The City Manager shall have the authority to make approvals, issue interpretations, waive provisions, negotiate and enter into amendments to this Covenant 0698/015610-0207 22798270.2 a09/18/25 -29- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Agreement and/or negotiate and enter into implementing agreements or documents on behalf of City so long as such actions do not materially or substantially change the business terms of this Covenant Agreement, or materially or substantially add to the costs incurred or to be incurred by City as specified herein. Such approvals, interpretations, waivers, amendments, and/or implementing agreements or documents may include extensions of time to perform and approvals of delays associated with a Force Majeure event. All other material and/or substantial interpretations, waivers, or amendments shall require the consideration, action and written consent of the City Council. Nothing in this Section limits or precludes the City Manager from presenting to the Planning Commission and/or City Council, as applicable, for review and consideration any matters to which the City Manager otherwise may act on behalf of City pursuant to this Section. 8.10 Further Acts. Each Party agrees to take such further actions and to execute such other documents as may be reasonable and necessary in the performance of its obligations hereunder; reserving to City, however, its lawful discretionary and police power authority. Without limiting the generality of the foregoing, upon the expiration or termination of the Operating Period, City will execute and deliver such instruments as may be prepared by Developer at Developer's expense to release the cloud upon title to the TOT Covenant Property created by this Covenant Agreement; provided, however, that any such document shall be in a form reasonably acceptable to the City Attorney of City. 8.11 Third Party Beneficiaries. There are no intended third party beneficiaries under this Covenant Agreement and no such other third parties shall have any rights or obligations hereunder except as otherwise expressly provided in this Agreement. 8.12 Estoppel Certificates. Either Party may, at any time, deliver written notice to any other Party requesting such Party to certify in writing that such Party and its designees, to the best knowledge of the certifying Party, (i) this Covenant Agreement is in full force and effect and a binding obligation of the Parties, (ii) this Covenant Agreement has not been amended or modified either orally or in writing, or if so amended, identifying the amendments, (iii) the requesting Party is not in default in the performance of its obligations under this Agreement, or if in default, describing the nature and amount of any such defaults, and (iv) any other reasonable information requested. A Party receiving a request hereunder shall execute and return such certificate within thirty (30) days following approval of the proposed estoppel certificate by the City Attorney, which approval shall not be unreasonably withheld or delayed. The City Manager or authorized designee is authorized to sign and deliver an estoppel certificate on behalf of City. 8.13 Severability. If any term, provision, covenant or condition of this Covenant Agreement is held in a final disposition by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged by such invalidation, voiding or unenforceability. 0698/015610-0207 22798270.2 a09/18/25 -30- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 8.14 Standard of Approval. Any consents or approvals required or permitted under this Covenant Agreement shall not be unreasonably delayed, conditioned or withheld, except where it is specifically provided that a sole discretion standard applies. 8.15 Time of the Essence. Time is of the essence for each provision of this Covenant Agreement of which time is an element. 8.16 Recordation. This Covenant Agreement shall be recorded in the Recorder's Office at Developer's cost, if any, within the period required by the Reinstated Development Agreement or, if not specified therein or by escrow instructions for the acquisition of the TOT Covenant Property by Developer, within the day after Developer has fee title to the TOT Covenant Property vested in Developer's name and after the recording of the Reinstated Development Agreement. Amendments approved by the Parties, Assignment and Assumption Agreements, and any cancellation or termination of this Agreement, shall be similarly recorded. 8.17 Counterparts. This Covenant Agreement may be executed in two or more counterparts, each of which when so executed and delivered shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument. [End — Signature page follows] 0698/015610-0207 22798270.2 a09/18/25 -31- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT IN WITNESS WHEREOF, the Parties have executed this Covenant Agreement to be effective as of the Effective Date. "City" CITY OF LA QUINTA, a California municipal corporation Date: , 2025 By: Jon McMillen, City Manager ATTEST: By: Monika Radeva, City Clerk APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: William H. Ihrke, City Attorney "Developer" TBE RE Acquisition Co II LLC, a Delaware limited liability company and affiliate of Turnbridge Equities Date: , 2025 By: Its: By: Its: 0698/015610-0207 22798270.2 a09/18/25 -32- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Riverside On ) ) , 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) 0698/015610-0207 22798270.2 a09/18/25 -33- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Riverside On ) ) , 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) 0698/015610-0207 22798270.2 a09/18/25 -34- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT EXHIBIT NO. 1 LEGAL DESCRIPTION OF TOT COVENANT PROPERTY [Attached] 0698/015610-0207 22798270.2 a09/18/25 EXHIBIT NO. 1 LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT EXHIBIT A LEGAL DESCRIPTION OF TOT COVENANT PROPERTY All that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: PARCEL A: THAT PORTION OF PARCELS 4 AND 18 OF PARCEL MAP NO. 37207, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY A MAP FILED IN BOOK 242, PAGES 72 THROUGH 87, INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: LOT "C" OF LOT LINE ADJUSTMENT NO. 2020-0010, AS DISCLOSED BY GRANT DEED RECORDED JULY 15, 2021 AS INSTRUMENT NO. 20210426711 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA, AS DESCRIBED THEREIN. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES, AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PHASE 1A AND 1B PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PHASE 1A AND 1B PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE FROM SAID PHASE 1A AND 1B PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PHASE 1A AND 1B PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PHASE 1A AND 1B PROPERTY, AS RESERVED BY THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, IN THE GRANT DEED RECORDED NOVEMBER 28, 2018, AS INSTRUMENT NO. 2018-0464674 AND RECORDED NOVEMBER 6, 2017, AS INSTRUMENT NO. 2017-0463950, BOTH OF OFFICIAL RECORDS. APNs 777-490-058, 777-490-063, 777-490-064, 777-490-065 AND 777-490-066 (OLD APNs PORTION OF 777-490-041 and 777-490-051) [continues on next page] 0698/015610-0207 22798270.2 a09/18/25 EXHBIT NO. 1 -2- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT PARCEL B: THAT PORTION OF PARCELS 3 AND 4 OF PARCEL MAP NO. 37207, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY A MAP FILED IN BOOK 242, PAGES 72 THROUGH 87, INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: LOT "B" OF LOT LINE ADJUSTMENT NO. 2020-0010, AS DISCLOSED BY GRANT DEED RECORDED JULY 16, 2021 AS INSTRUMENT NO. 20210428113 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA, AS DESCRIBED THEREIN. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES, AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PHASE 1A AND 1B PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PHASE 1A AND 1B PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE FROM SAID PHASE 1A AND 1B PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PHASE 1A AND 1B PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PHASE 1A AND 1B PROPERTY, AS RESERVED BY THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, IN THE GRANT DEED RECORDED NOVEMBER 28, 2018, AS INSTRUMENT NO. 2018-0464674 AND RECORDED NOVEMBER 6, 2017, AS INSTRUMENT NO. 2017-0463950, BOTH OF OFFICIAL RECORDS. APNs 777-490-037, 777-490-057, 777-490-059 AND 777-490-068 (OLD APNs PORTION OF 777-490-040 AND 777-490-041) [continues on next page] 0698/015610-0207 22798270.2 a09/18/25 EXHBIT NO. 1 -3- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT PARCEL C: PARCEL 5 OF PARCEL MAP NO. 37207 AS SHOWN BY A MAP ON FILE IN BOOK 242 OF PARCEL MAPS, PAGES 72 THROUGH 87, INCLUSIVE, TOGETHER WITH PORTIONS OF PARCELS A AND B OF LOT LINE ADJUSTMENT NO. 2020-0005, RECORDED SEPTEMBER 2, 2021 AS DOCUMENT NO. 2021-0527060 OF OFFICIAL RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: PARCEL "A" OF LOT LINE ADJUSTMENT NO. 2023-0003 OF THE CITY OF LA QUINTA, AS DISCLOSED BY GRANT DEED RECORDED MAY 4, 2023 AS INSTRUMENT NO. 2023-0128115 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA, AS DESCRIBED THEREIN. EXCEPTING FROM PARCEL 5 ABOVE, ALL OIL, GAS, HYDROCARBON SUBSTANCES, AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PHASE 1A AND 1B PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PHASE 1A AND 1B PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE FROM SAID PHASE 1A AND 1B PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PHASE 1A AND 1B PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PHASE 1A AND 1B PROPERTY, AS RESERVED BY THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, IN THE GRANT DEED RECORDED NOVEMBER 28, 2018, AS INSTRUMENT NO. 2018-0464674 AND RECORDED NOVEMBER 6, 2017, AS INSTRUMENT NO. 2017-0463950, BOTH OF OFFICIAL RECORDS. APNs: 777-490-042, 777-490-076 AND PORTIONS OF 777-490-072 AND 777-490-073 (OLD APNs PORTION of 777-490-043 and 777-490-044) [continues on next page] 0698/015610-0207 22798270.2 a09/18/25 EXHBIT NO. 1 -4- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT PARCEL D: PORTIONS OF PARCELS A THROUGH C, INCLUSIVE, OF LOT LINE ADJUSTMENT NO. 2020-0005, RECORDED SEPTEMBER 2, 2021 AS DOCUMENT NO. 2021- 0527060 OF OFFICIAL RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: PARCEL "B" OF LOT LINE ADJUSTMENT NO. 2023-0003 OF THE CITY OF LA QUINTA, AS DISCLOSED BY GRANT DEED RECORDED MAY 4, 2023 AS INSTRUMENT NO. 2023-0128115 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA, AS DESCRIBED THEREIN. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES, AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PHASE 1A AND 1B PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PHASE 1A AND 1 B PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE FROM SAID PHASE 1A AND 1 B PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PHASE 1A AND 1 B PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PHASE 1A AND 1 B PROPERTY, AS RESERVED BY THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, IN THE GRANT DEED RECORDED NOVEMBER 28, 2018, AS INSTRUMENT NO. 2018-0464674 AND RECORDED NOVEMBER 6, 2017, AS INSTRUMENT NO. 2017-0463950, BOTH OF OFFICIAL RECORDS. APN: 777-490-074 AND PORTIONS OF APNs 777-490-072, 777-490-073, 777-490- 075, 777- 490-077, 777-490-079 AND 777-490-080 (OLD APNs PORTION of 777-490-043, 777-490-044 AND 777-490-045) [continues on next page] 0698/015610-0207 22798270.2 a09/18/25 EXHBIT NO. 1 -5- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT PARCEL E: [INTENTIONALLY OMITTED] PARCEL F: PORTIONS OF PARCELS B AND C OF LOT LINE ADJUSTMENT NO. 2020-0005, RECORDED SEPTEMBER 2, 2021 AS DOCUMENT NO. 2021-0527060 OF OFFICIAL RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: PARCEL "C" OF LOT LINE ADJUSTMENT NO. 2023-0003 OF THE CITY OF LA QUINTA, AS DISCLOSED BY GRANT DEED RECORDED MAY 4, 2023 AS INSTRUMENT NO. 2023-0128115 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA, AS DESCRIBED THEREIN. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES, AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PHASE 1A AND 1B PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PHASE 1A AND 1B PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE FROM SAID PHASE 1A AND 1B PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PHASE 1A AND 1B PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PHASE 1A AND 1B PROPERTY, AS RESERVED BY THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, IN THE GRANT DEED RECORDED NOVEMBER 28, 2018, AS INSTRUMENT NO. 2018-0464674 AND RECORDED NOVEMBER 6, 2017, AS INSTRUMENT NO. 2017-0463950, BOTH OF OFFICIAL RECORDS. PORTION APN: 777-490-075, 777-490-077, 777-490-078, 777-490-079 AND 777-490- 080 (OLD APNs PORTION of 777-490-044 AND 777-490-045) [continues on next page] 0698/015610-0207 22798270.2 a09/18/25 EXHBIT NO. 1 -6- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT PARCEL G: PORTIONS OF PARCEL C OF LOT LINE ADJUSTMENT NO. 2020-0005, RECORDED SEPTEMBER 2, 2021 AS DOCUMENT NO. 2021-0527060 OF OFFICIAL RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: PARCEL "D" OF LOT LINE ADJUSTMENT NO. 2023-0003 OF THE CITY OF LA QUINTA, AS DISCLOSED BY GRANT DEED RECORDED MAY 4, 2023 AS INSTRUMENT NO. 2023-0128115 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA, AS DESCRIBED THEREIN. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES, AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PHASE 1A AND 1B PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PHASE 1A AND 1B PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE FROM SAID PHASE 1A AND 1B PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PHASE 1A AND 1B PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PHASE 1A AND 1B PROPERTY, AS RESERVED BY THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, IN THE GRANT DEED RECORDED NOVEMBER 28, 2018, AS INSTRUMENT NO. 2018-0464674 AND RECORDED NOVEMBER 6, 2017, AS INSTRUMENT NO. 2017-0463950, BOTH OF OFFICIAL RECORDS. PORTION APN: 777-490-079 (OLD APN PORTION of 777-490-045) [continues on next page] 0698/015610-0207 22798270.2 a09/18/25 EXHBIT NO. 1 -7- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT PARCEL H: LOTS 1 THROUGH 29 AND LOTS A THROUGH L, OF TRACT NO. 37730, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, FILED IN BOOK 479, PAGES 27 THROUGH 33 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT ALL OIL, GAS, HYDROCARBON SUBSTANCES, AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PHASE 1A PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PHASE 1A PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE FROM SAID PHASE 1A PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PHASE 1A PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PHASE 1A PROPERTY, AS RESERVED BY THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, IN THE GRANT DEED RECORDED NOVEMBER 6, 2017, AS INSTRUMENT NO. 2017- 0463950 OF OFFICIAL RECORDS. APNs: 777-510-001 THRU -023; 777-510-025; 777-520-001 THRU -018 0698/015610-0207 22798270.2 a09/18/25 EXHBIT NO. 1 -8- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT PARCEL I: Parcels E, F and G of Parcel Map No. 37207, in the City of La Quinta, County of Riverside, State of California, as shown by a Map filed for Record May 3, 2017 in Book 242, Pages 72 through 87, inclusive of Parcel Maps, in the Office of the County Recorder of said County. Excepting all oil, gas, hydrocarbon substances, and minerals of every kind and character lying more than five hundred (500) feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the Phase 1A and 1 B property lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals from said Phase 1A and 1 B property or other lands, but without, however, any right to use either the surface from said Phase 1A and 1 B property or any portion thereof within five hundred (500) feet of the surface for any purpose or purposes whatsoever, or to use the Phase 1A and 1 B property in such a manner as to create a disturbance to the use or enjoyment of the Phase 1A and 1 B property, as reserved by The City of La Quinta, a California Municipal Corporation and Charter City, in the Grant Deed recorded November 28, 2018, as Instrument No. 2018-0464674, of Official Records. FOR INFORMATIONAL PURPOSES ONLY: APN: 777-490-053, 777-490-054, 777- 490-055 [End of legal description for TOT Covenant Property] *Explanatory Note: All legal descriptions may be corrected, if necessary, prior to recording to conform with instructions from title or escrow officer(s) for final corrections. This explanatory note shall be deleted prior to recording. 0698/015610-0207 22798270.2 a09/18/25 EXHBIT NO. 1 -9- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT EXHIBIT NO. 2 ANNOTATED SITE MAP (2025 SilverRock Master Plan) Phase 2 44, Option Land Residential Lots 29lots Avg Lot SF: 14,110 Luxury Hotel # keys: 150 Spa SF: 21,000 Lobby SF: 25,000 Luxury Hotel Branded Condominiums & Clubhouse Branded Single Family Home Lots Public Golf Clubhouse Phase 1A L i I" ▪ I Phase1B Phase 2 Option Land Phase 2 Option Land • Golf Clubhouse Clubhouse: 16,200sf Phase 2 11/ Option Land Hotel Banquet / BOH Banquet: 21,600 sf BOH: 26,000 sf Condominiums 70 Condos (Avg 3,000 sf) Clubhouse (15,000 sf) Residential Lots 93 lots Avg Lot SF: 20k Pursuant to this Covenant Agreement, the "TOT Covenant Property" means that real property, any improvements thereon, that corresponds to "Phase 1A" as depicted in the above Annotated Site Map, with the exception of the Public Golf Clubhouse Property. The "TOT Covenant Property" does not include, and shall not be deemed to include, any of the real property or improvements thereon that corresponds to "Phase 1 B" or the Golf Clubhouse as depicted above. In further clarification of preceding paragraph, the "Phase 1 B Property" as defined in the Reinstated Development Agreement is not TOT Covenant Property, including the following parcels described as follows: [continues on next page] 0698/015610-0207 22798270.2 a09/18/25 EXHIBIT NO. 2 LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT EXCLUDED PARCELS from TOT COVENANT PROPERTY: PARCEL 1: THAT PORTION OF PARCEL 10 OF PARCEL MAP NO. 37207, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY A MAP FILED IN BOOK 242, PAGES 72 THROUGH 87, INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: PARCEL "B" OF LOT LINE ADJUSTMENT NO. 2020-0007, AS DISCLOSED BY GRANT DEED RECORDED AUGUST 20, 2021 AS INSTRUMENT NO. 2021-0499856 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA, AS DESCRIBED THEREIN. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES, AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PHASE 1A AND 1B PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PHASE 1A AND 1B PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE FROM SAID PHASE 1A AND 1B PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PHASE 1A AND 18 PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PHASE 1A AND 1B PROPERTY, AS RESERVED BY THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, IN THE GRANT DEED RECORDED NOVEMBER 28, 2018, AS INSTRUMENT NO. 2018-0464674 AND RECORDED NOVEMBER 6, 2017, AS INSTRUMENT NO. 2017-0463950, BOTH OF OFFICIAL RECORDS. APN 777-060-083 [continues on next page] 0698/015610-0207 22798270.2 a09/18/25 EXHBIT NO. 2 -2- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT PARCEL 2: THAT PORTION OF PARCEL 11 OF PARCEL MAP NO. 37207, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY A MAP FILED IN BOOK 242, PAGES 72 THROUGH 87, INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: PARCEL "C" OF LOT LINE ADJUSTMENT NO. 2020-0007, AS DISCLOSED BY GRANT DEED RECORDED AUGUST 20, 2021 AS INSTRUMENT NO. 2021-0499856 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA, AS DESCRIBED THEREIN. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES, AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PHASE 1A AND 1B PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PHASE 1A AND 1B PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE FROM SAID PHASE 1A AND 1B PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PHASE 1A AND 1B PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PHASE 1A AND 1B PROPERTY, AS RESERVED BY THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, IN THE GRANT DEED RECORDED NOVEMBER 28, 2018, AS INSTRUMENT NO. 2018-0464674 AND RECORDED NOVEMBER 6, 2017, AS INSTRUMENT NO. 2017-0463950, BOTH OF OFFICIAL RECORDS. APN 777-060-085 [continues on next page] 0698/015610-0207 22798270.2 a09/18/25 EXHBIT NO. 2 -3- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT PARCEL 3: PARCEL 12 OF PARCEL MAP NO. 37207, AS SHOWN BY A MAP FILED IN BOOK 242, PAGES 72 THROUGH 87, INCLUSIVE OF PARCEL MAPS, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES, AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PHASE 1A AND 1B PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PHASE 1A AND 1 B PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE FROM SAID PHASE 1A AND 1 B PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PHASE 1A AND 1 B PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PHASE 1A AND 1 B PROPERTY, AS RESERVED BY THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, IN THE GRANT DEED RECORDED NOVEMBER 28, 2018, AS INSTRUMENT NO. 2018-0464674 AND RECORDED NOVEMBER 6, 2017, AS INSTRUMENT NO. 2017-0463950, BOTH OF OFFICIAL RECORDS. APN 777-060-075 AND APN 777-060-078 [continues on next page] 0698/015610-0207 22798270.2 a09/18/25 EXHBIT NO. 2 -4- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT PARCEL 4. THAT PORTION OF PARCELS 9, 10, 11 AND 19 OF PARCEL MAP NO. 37207, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY A MAP FILED IN BOOK 242, PAGES 72 THROUGH 87, INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: PARCEL "A" OF LOT LINE ADJUSTMENT NO. 2020-0007, AS DISCLOSED BY GRANT DEED RECORDED AUGUST 20, 2021 AS INSTRUMENT NO. 2021-0500015 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA, AS DESCRIBED THEREIN. EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON SUBSTANCES, AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF THE PHASE 1A AND 1B PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID PHASE 1A AND 1B PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE FROM SAID PHASE 1A AND 1B PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PHASE 1A AND 1B PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE PHASE 1A AND 1B PROPERTY, AS RESERVED BY THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, IN THE GRANT DEED RECORDED NOVEMBER 28, 2018, AS INSTRUMENT NO. 2018-0464674 AND RECORDED NOVEMBER 6, 2017, AS INSTRUMENT NO. 2017-0463950, BOTH OF OFFICIAL RECORDS. APNs: 777-490-046, 777-490-071, 777-060-082, AND 777-060-084 (OLD APNs PORTION of 777-490-052, 777-060-076 and 777-060-077) [End of EXCLUDED PARCELS from TOT COVENANT PROPERTY] *Explanatory Note: All legal descriptions may be corrected, if necessary, prior to recording to conform with instructions from title or escrow officer(s) for final corrections. This explanatory note shall be deleted prior to recording. 0698/015610-0207 22798270.2 a09/18/25 EXHBIT NO. 2 -5- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT ADDENDUM TO TRANSIENT OCCUPANCY TAX (TOT) REVENUE SHARING AGREEMENT DO NOT RECORD THIS ADDENDUM Agreement re: Cooperation in the Event of Legal Challenge; Validation Action. 1. In the event any third party files an action seeking to invalidate this Covenant Agreement or seeking any equitable remedy that would prevent the full performance hereof or thereof, City and Developer agree to cooperate in the defense of such action. Such cooperation shall include, without limitation: (i) an agreement by each Party to not default or allow a compromise of said action without the prior written consent of the other Party; (ii) an agreement by each Party to make available to the other Party all non -privileged information necessary or appropriate to conduct the defense of the action; and (iii) an agreement by each Party to make available to the other Party, without charge, any witnesses within the control of the first Party upon reasonable notice who may be called upon to execute declarations or testify in said action. Developer shall pay all of City's costs and expenses (including reasonable attorneys' fees) and City shall have the sole right to select its legal counsel; provided, however, Developer shall have the right, exercisable upon written notice to City, to retain counsel of Developer's choice, but subject to City's reasonable approval, to defend City against any such third party action, in which event Developer shall not be responsible for any costs incurred by City in connection with the defense of such third party action. 2. In addition to the foregoing, if Developer delivers a written request for such action to City (c/o the City Manager) not later than thirty (30) days after the date the City Council of City approves this Agreement at a public meeting, City shall file an action in Riverside County Superior Court pursuant to California Code of Civil Procedure Section 860 et seq. to validate this Agreement and the Covenant Agreement and each and every one of its and their provisions. In such event, City and Developer shall reasonably cooperate in drafting the complaint, briefs, the proposed judgment of validation, and such other pleadings, documents, and filings as may be required or desirable in connection with the validation action. City and its legal counsel shall file and prosecute the validation action, but shall reasonably coordinate and cooperate with Developer concerning the drafting of pleadings and other documents and with regard to the litigation strategy to be employed. Developer shall reimburse City within fifteen (15) days after written demand therefor for all costs ("Costs") of the validation action incurred by City. Costs include without limitation, reasonable attorney's fees, filing fees and court reporter fees (if any), costs of publication and to effectuate service of process, reasonable photocopying and other reproduction charges, travel time and mileage expenses, and other costs and expenses reasonably incurred by City. In the event of an appeal of such action, the Parties shall cooperate with respect to the appeal to the same extent as at the Superior Court level of the proceedings. 0698/015610-0207 22798270.2 a09/18/25 PERSONAL\1619759319.1 ADDENDUM DO NOT RECORD LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 3. Upon the entry of a final non -appealable judgment of any court with jurisdiction invalidating or enjoining the performance of any material covenant set forth in this Covenant Agreement, this Covenant Agreement shall automatically terminate without the need of further action by either Party, except that any reimbursement obligations of Developer shall survive such termination. IN WITNESS WHEREOF, the Parties have executed this ADDENDUM to be effective as of the effective date of the Covenant Agreement Date. "City" CITY OF LA QUINTA, a California municipal corporation Date: , 2025 By: Jon McMillen, City Manager ATTEST: By: Monika Radeva, City Clerk APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: William H. Ihrke, City Attorney "Developer" a Date: , 2025 By: Its: By: 0698/015610-0207 22798270.2 a09/18/25 Its: ADDENDUM DO NOT RECORD RESOLUTION NO. 2025-023 EXHIBIT C Adopted: September 22, 2025 LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT OPTION TO PURCHASE REAL PROPERTY THIS OPTION TO PURCHASE REAL PROPERTY (this "Agreement" or "Option Agreement") is entered into as of the day of , 2025 (the "Reference Date"), by and between the CITY OF LA QUINTA, a California municipal corporation and charter city ("City"), and TBE RE Acquisition Co II LLC, a Delaware limited liability company, an affiliate of Turnbridge Equities ("Optionee" or "Developer"). City and Optionee are sometimes each referred to individually herein as a "Party" and collectively as the "Parties." RECITALS A. City currently owns fee title to that certain real property comprised of approximately 193+/- acres, identified as APN(s): 777-060-047, 777-060-048, 777-060-049, portion of 776-150-030, 777-060-074, and 777-060-079, and more specifically described on Exhibit A-1 attached hereto and incorporated herein by this reference (the "Phase 2 Property"). The Phase 2 Property that is subject to Optionee's right to purchase pursuant to this Option Agreement expressly excludes the approximately 24+/- acre SilverRock Park and adjacent Flood Control/Water Retention Basin (collectively, the "Park And Retention Basin Property"), also owned by City, which are adjacent to the Option Property and located in the SilverRock Resort Area (defined below). The Phase 2 Property, excluding the Park and Retention Basin Property, is referred to in this Option Agreement as the "Option Property" or "Property"). [NOTE: APNs AND LEGAL DESCRIPTION TO MATCH "Phase 2 Property" (i.e., "City -Owned Option Property" IN THE REINSTATED DEVELOPMENT AGREEMENT]. B. The Option Property is in close proximity to certain real property owned by Optionee (referred to herein as the "Developer -Owned Property") and is subject to that certain Reinstated and Amended Development Agreement by and between the City and Optionee, adopted by City Council Ordinance No. on , 2025, and recorded as Document No. (the "Reinstated Development Agreement") on or about even date as the Memorandum of Option Agreement (as defined below in this Option Agreement) in the Official Records of the Office of the County Recorder of Riverside, California (the "Recorder's Office") providing for the development of the Developer -Owned Property as provided therein (referred to therein and herein as the "Developer's Project"). C. Prior to City and Optionee entering into this Option Agreement and the Reinstated Development Agreement (among other agreements and instruments), the following relevant history is hereby recited: 1. Except for portions of land transferred to SilverRock Development Company, LLC, a Delaware limited liability company (or one of its affiliated companies or tenants -in -common, which are referred to herein collectively as "SDC" or 698/015610-0207 22798455.4 a09/18/25 LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT "Debtor(s)")1 as explained below in the next Recital Paragraph, City owns fee title to that certain real property of approximately 525 acres located at the southwest intersection of Jefferson Street and Avenue 52, in the City of La Quinta, California, generally referred to as the "SilverRock Resort Area" and subject to a Specific Plan adopted by the La Quinta City Council and enforceable as a land use governing document pursuant to the Planning and Zoning Law, California Government Code section 65000 et seq. (the "SilverRock Specific Plan"); 2. On or about November 19, 2014, City and SDC entered into that certain Purchase, Sale, and Development Agreement (the "Original SDC PSDA"), pursuant to which, among other terms and conditions, City agreed to sell to SDC and SDC agreed to purchase from City specified parcels and planning areas (PAs) to thereafter construct, complete, and operate thereon a commercial project containing a luxury resort hotel and spa and associated branded luxury residential units, a lifestyle hotel and associated lifestyle branded residential units, a conference and shared service facility, a temporary and permanent clubhouse for the SilverRock Resort's Arnold Palmer Classic Golf Course, a mixed use village, a resort residential village, and associated amenities, all as further described in the Original SDC PSDA and referred to as various project components, as more particularly described therein. Concurrent with the Original SDC PSDA, on or about November 19, 2014, City and SDC entered into Development Agreement 2014-1001 (the "Original SDC Development Agreement") pursuant to the Development Agreement Act and Development Agreement Ordinance (as defined in the Reinstated Development Agreement), which agreement, among other terms and conditions, required SDC to develop the planning areas and project components in accordance with the SDC PSDA, vested with SDC specified development obligations, memorialized the potential for the future acquisition of additional City -owned property in the SilverRock Resort Area as incorporated vis-a-vis the SDC PSDA, and subjected SDC to City's rights and oversight for those portions of the SilverRock Resort Area to be conveyed to SDC. After entering into the Original SDC PSDA and Original SDC Development Agreement, the following relevant events, very briefly summarized, occurred: i. Pursuant to the Original PSDA, City and SDC had the authority to amend 1 Debtors were SilverRock Development Company, LLC and affiliated entities that, on August 5, 2024, filed for voluntary bankruptcy protection under chapter 11 of the U.S. Bankruptcy Code, with case number(s) identified in the Title of this Agreement along with the last four digits of each Debtor's federal tax identification number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury Residences, LLC (6598) and SilverRock Phase I, LLC (2247) (collectively, referred to herein as the "Bankruptcy Lawsuit" in the "Bankruptcy Court"). 698/015610-0207 22798455.4 a09/18/25 -2- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT the Original PSDA by mutual agreement of the parties. Between October 29, 2015, and November 16, 2023, City and SDC entered into five amendments thereto, dated October 29, 2015 ("First Amendment"), April 18, 2017 ("Second Amendment"), November 28, 2018 ("Third Amendment"), October 12, 2021 ("Fourth Amendment"), and November 16, 2023 ("Fifth Amendment," and the Original PSDA as amended by all five amendments is referred to herein as the "SDC PSDA"); ii. Pursuant to the SDC PSDA and consistent with boundaries established by applicable subdivision maps and lot line adjustments, City conveyed to SDC the Property for the pre -development, development, operation, and use of a project that was eventually re -named "Talus" and consisted of the following project components (all as defined in the SDC PSDA): Luxury Hotel, Luxury Branded Residential Development, Lifestyle Hotel, Lifestyle Branded Residential Development, Conference and Shared Services Facility (including spa and other amenities), Permanent Golf Clubhouse, Promenade Mixed -Use Village/Resort Residential Village (on Planning Areas 7,8,9), as well as a specified Golf Course Realignment and corresponding Master Site Infrastructure Improvements (MSII). These project components on the Property, pursuant to the SDC PSDA, were divided into Phase 1A project components on the Phase 1A Property and the Phase 1 B project components on the Phase 1 B Property respectively, as described in the SDC PSDA; iii. Pursuant to the Third and Fourth Amendments to the SDC PSDA, SDC commenced pre -development and development on the Property for the Phase 1A project components, which as of the Reference Date of this Agreement, in various degrees, were partially constructed after SDC failed to continue to make payments to various contractors, subcontractors, and other interested parties in the development of the Talus project. Multiple lawsuits, including lawsuits seeking payments pursuant to mechanic's lien or various loan or investment agreements, and a City lawsuit against SDC for unlawful and unapproved conveyances in secured interests or mechanic's liens, were filed against SDC; iv. On August 5, 2024, SDC (Debtors) filed the Bankruptcy Lawsuit, and, pursuant to Bankruptcy Court -approved Bid Procedures, Debtors retained a Chief Restructuring Officer (Douglas Wilson Companies) and marketing professional (JLL) for the purposes of, among other items, marketing the sale of the Debtors estate (which and is primarily comprised of the SDC-Held Property(ies)) and soliciting proposals for the: (a) acquisition of the Debtors estate, (b) use, re -use, and/or substitution of the partially constructed improvements on the Phase 1A Property, (c) potential replacement project for a world -class hotel and residential destination resort with related amenities on the SDC-Held Property(ies) that complement the existing Arnold Palmer Golf Course surrounding the SDC-Held Property and owned by City, and (d) possible acquisition in the 698/015610-0207 22798455.4 a09/18/25 -3- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT future of the Option Property in the SilverRock Resort Area (referred to as the Future Option Property in the PSDA and generally referred to in the Bankruptcy Lawsuit and marketing materials as the "Phase 2 Property") for possible future development that would also complement a world -class hotel and residential destination resort; 3. Pursuant to Bankruptcy Court order [Bankruptcy Lawsuit Docket No. ], among other provisions: (i) Optionee was authorized to purchase the Developer -Owned Property, (ii) the Original SDC Development Agreement was reinstated and amended and memorialized by the Reinstated Development Agreement (as defined above), and (iii) An escrow to facilitate the purchase and sale of the Debtors' estate (which includes the Developer -Owned Property) was authorized, which, among other terms and conditions, included the transfer of funds and recording of documents (such as the Reinstated Development Agreement) as more particularly set forth in the Debtor PSA (as defined in the Reinstated Development Agreement). [NOTE: OTHER RELEVANT ITEMS FROM THE BANKRUPTCY COURT ORDER FOR SALE OF DEBTORS PROPERTY MAY BE INSERTED PRIOR TO FINAL (SECOND) READING OF ORDINANCE FOR THIS AGREEMENT]. D. Optionee (as Developer) submitted a proposal in response to the marketing materials, and, pursuant to the Bankruptcy Court -approved Bid Procedures, Debtors and City approved Optionee's proposal, which, among other terms and conditions, includes a modified project (referred above as the Developer's Project) on the Developer -Owned Property as well as possible acquisition in the future of the "Option Property" as defined in this Option Agreement for possible future development that would also complement a world -class hotel and residential destination resort. The approximately 193+/- acres owned by the City that Optionee has a right to purchase pursuant to this Option Agreement as the Option Property includes raw land and an existing driving range, but Option Property expressly excludes approximately 24+- acres that comprises the Park And Retention Basin Property (as defined above), with the Option Property and Park And Retention Basin Property depicted in the Site Maps attached to this Option Agreement as Exhibit A-2 and incorporated herein by this reference (the "Site Maps"). E. As part of Optionee's (as Developer) proposal, Optionee covenanted to prepare for construction, construct, and open for use and occupancy of a flagship luxury hotel consisting of approximately 150 rooms with amenities, as more particularly described in the Reinstated Development Agreement (the "Luxury Hotel"). F. Developer's acquisition of the Developer -Owned Property was conditioned on the final negotiation and approval of certain "La Quinta Amended Development Documents" as referenced in the Bankruptcy Lawsuit, which included (among other agreements) this Option Agreement, and separate agreements that include the Reinstated Development Agreement (which includes as exhibits certain "Reinstated and Amended Covenants Affecting Real Property" relating to Golf Course Use and Ahmanson Ranch House (the "Reinstated Covenant Affecting Real Property (Golf Course Use)" and "Reinstated Covenant Affecting Real Property (Ahmanson Ranch 698/015610-0207 22798455.4 a09/18/25 -4- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT House)," respectively)) and a "Transient Occupancy Tax (TOT) Revenue Sharing Covenant," and various land use covenants. G. As more particularly set forth herein, City and Optionee desire to enter into this Option Agreement for Optionee's potential acquisition of the Option Property in connection with Optionee's acquisition of the Developer -Owned Property and timely performance and completion of specified obligations in the Reinstated Development Agreement for Developer's Project. H. All actions taken by City have been duly taken in accordance with all applicable legal requirements, including the California Environmental Quality Act (Public Resources Code Section 21000, et seq.) ("CEQA"), and all other requirements for notice, public hearings, findings, votes and other procedural matters. I. Pursuant to Government Code section 65402, the La Quinta Planning Commission has determined the disposition of the Option Property, if Optionee exercises the Option pursuant to this Agreement, is and would be in conformity with the City's General Plan because, as of the date of this Option Agreement, Optionee has no proposed specific entitlement applications for development of the Option Property and has represented that, as of the date of this Option Agreement, the intended future development and use of the Option Property would be consistent with the authorized uses in the existing SilverRock Specific Plan. J. This Option Agreement is intended to be interpreted and implemented in accordance and consistent with the Reinstated Development Agreement. Any capitalized words not otherwise defined in this Option Agreement shall have the meanings ascribed to them in the Reinstated Development Agreement. K. City and Optionee desire to enter into this Agreement to provide for City to grant to Optionee and for Optionee to obtain from City an option to purchase the Option Property upon the terms and conditions more particularly set forth in this Agreement. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS, WHICH ARE INCORPORATED HEREIN BY THIS REFERENCE, AND THE MUTUAL PROMISES CONTAINED IN THIS AGREEMENT, THE PARTIES AGREE AS FOLLOWS: AGREEMENT 1 Pre -Option Provisions; Grant of Option. (a) Memorandum of Option Agreement. On the same day as the recording in the Recorder's Office of the Reinstated Development Agreement, but to be recorded after the Reinstated Development Agreement, the City shall record (or cause to be recorded) a memorandum of this Option Agreement, fully executed and notarized by the Parties hereto, in a form substantially similar to the "Memorandum of Option Agreement" attached hereto as Exhibit B and, upon recording, all of the terms and 698/015610-0207 22798455.4 a09/18/25 -5- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT conditions of this Option Agreement (and any amendments hereto) shall be incorporated by reference into the Memorandum of Option Agreement as though set forth in full. (b) Option Effective Date. The Option to purchase the Option Property shall not commence until the following date that corresponds to the potential transfer of other City -owned real property in the SilverRock Resort Area (specifically, the City -Owned Golf Course Property and City -Owned Ahmanson Ranch Property) as provided in Section 6.1.2 of the Reinstated Development Agreement: (i) The Date when construction of the Luxury Hotel Project Component (as defined in the Reinstated Development Agreement) has been substantially completed (which may not be later than the completion date in the Schedule of Performance (as a Project Milestone)) as set forth and defined in the Reinstated Development Agreement and as evidenced by the issuance by the City of a temporary or permanent certificate of occupancy, and the Luxury Hotel has been open to the general public or other designated guests (such as designated guests for a "soft opening" followed by an opening to the general public) with expectation of or actual payments to be received on a regular basis from guest of the Luxury Hotel (the "Option Effective Date"). The Option Effective Date shall be memorialized in a written addendum, executed by the Parties hereto, which shall be incorporated into this Option Agreement. (ii) In the event Optionee fails to substantially complete the Luxury Hotel Project Component (as defined in the Reinstated Development Agreement) by the completion date in the Schedule of Performance (as a Project Milestone) as set forth and defined in the Reinstated Development Agreement, so that the Option Effective Date is never realized, then this Option Agreement shall automatically terminate, without the need of any notice or documentation, and neither Party shall have any further rights or obligations hereunder except for: (i) any indemnification obligations hereunder, all of which shall survive the termination hereof, and (ii) executing with notarization a notice of termination of this Option Agreement to be recorded by the City in the Recorder's Office, referencing the termination of this Option Agreement, Memorandum of Option Agreement, and City Repurchase Option Agreement. (c) Option. Commencing on the Option Effective Date, City hereby grants to Optionee the option (the "Option") to purchase the Option Property on the terms and conditions set forth in this Agreement. (d) Form of Purchase and Sale Agreement. In the event Optionee exercises the Option, Optionee's purchase of the Option Property from City shall occur pursuant to an Agreement for Purchase and Sale and Escrow Instructions in the form of Exhibit D attached hereto and incorporated herein by this reference (the "PSA" or "Purchase/Sale Agreement"), subject only to non -material deviations approved by both 698/015610-0207 22798455.4 a09/18/25 -6- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Parties to reflect the substance of the purchase contemplated herein. Among other terms and conditions specified therein, the PSA shall provide at a minimum for: (i) The purchase and sale of the Option Property shall be serviced through an escrow, with the closing of escrow and the transaction contemplated therein no later than an outside date specified therein ("PSA Outside Closing Date"); (ii) The purchase price of the Option Property in the amount of Seventeen Million Dollars ($17,000,000.00) (the "Option Property Base Purchase Price"), subject to increases for each 1-Year Extension Period as set forth below; (iii) Among other conditions precedent to either City's or Optionee's obligation to sell and purchase the Option Property and close the escrow for the acquisition of the Option Property, Optionee shall have submitted any and all permit, licensing, and entitlement applications (it being agreed that Optionee shall submit the same before or after the Option is exercised so that said applications may be processed by the closing of escrow as provided in the PSA, and the City will use its best efforts to expedite consideration thereof) in accordance with applicable California and City law for another "phase" of the Developer's Project (the "Potential Future Development Phase" and, as applicable, any "Potential Future Development Phase Permit Application(s)" for the Option Property, which is referenced as "Planning Area (PA) 8" in the Reinstated Development Agreement). Provided that Optionee (as Developer) has completed or has caused the completion of the construction of the "Public Golf Clubhouse Project Component" as defined in and in accordance with the Reinstated Development Agreement, and provided further that Optionee is not in MAE Default (as hereinafter defined) under this Option Agreement, the Reinstated Development Agreement, the PSA, or any of the other Required City Land Use Agreements (as defined below), escrow shall close and fee title to the Option Property shall transfer to Optionee on the date that is the earlier of either: (A) ninety (90) days following the date on which the City has issued any and all Permits (as hereinafter defined) for the Potential Future Development Phase, or (B) twenty-four (24) months from the date Optionee delivers to City the Option Notice (as defined below); provided, however, such Permits being issued by City shall be a condition to Optionee's obligation to close escrow under the PSA and, provided further, that City shall transfer fee title of the Option Property to Optionee no later than ninety (90) days following the satisfaction (or waiver) of all of City's and Optionee's respective conditions precedent to closing the escrow as provided in the PSA. For the purposes hereof, "Permits" shall mean final approval by the City (after all appeal periods and legal challenge periods shall have expired) of a Development Agreement or amendment to the Reinstated Development Agreement applicable to the Option Property (as described in Section 6.2.2 of the Reinstated Development Agreement), 698/015610-0207 22798455.4 a09/18/25 -7- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT a parcel map subdividing the Phase 2 Property to exclude the Park And Retention Basin Property from the Option Property, a tentative tract map for the number and type of residential dwellings Optionee proposes to be subdivided on all or a portion of the Option Property, and one or more site development permits for the Potential Future Development Phase, as designed by Optionee. In the event that any condition precedent to the closing under the PSA is not satisfied, the Earnest Money Deposit (as defined in the PSA) may be refunded pursuant to the terms and conditions in the PSA. (iv) Also as a condition precedent to either City's or Optionee's obligation to sell and purchase the Option Property and close the escrow for the sale and acquisition of the Option Property, Optionee and City shall have fully executed and have notarized, in a form suitable for recording and recorded immediately after the Development Agreement or amendment to the Reinstated Development Agreement applicable to the Option Property on the date of the close of escrow for the Option Property under the PSA, a repurchase option for the benefit of the City in a form substantially similar to the "City Repurchase Option Agreement" attached hereto as Exhibit C and incorporated herein by this reference. As more particularly set forth in the City Repurchase Option Agreement, upon the full execution and recording of the City Repurchase Option Agreement, City shall have the right to repurchase all or any portion of the Option Property in the event Optionee (as Developer) remains in MAE Default (as hereinafter defined). (v) As a condition of exercising the Option and entering into the PSA, Optionee shall obtain, at its sole cost, a standard preliminary title report for the Option Property prepared no more than three (3) months prior to the date Optionee exercises the Option by delivery of the Option Notice (defined below). The PSA will contain additional conditions precedent including without limitation that there be no taking or condemnation of all or any portion of the Option Property, and the Option Property not being subject to any delinquent tax or other monetary liens that are not approved by Optionee as exceptions to title insurance. (e) No Default on La Quinta Amended Development Agreements. Notwithstanding any provisions in this Option Agreement to the contrary, prior to and as a condition of exercising the Option as provided herein, Optionee shall have entered into with City, and once entered into, Optionee shall not be in MAE Default, on the date Optionee exercises the Option by delivery of the Option Notice (defined below), of any of these La Quinta Amended Development Documents: this Option Agreement, the Reinstated Development Agreement, the Transient Occupancy Tax (TOT) Revenue Sharing Covenant, and/or the Reinstated and Amended Covenants Affecting Real Property relating to Golf Course Use and the Ahmanson Ranch House (the Reinstated Covenant Affecting Real Property (Golf Course Use and Reinstated Covenant Affecting Real Property (Ahmanson Ranch House), respectively) (collectively referred to herein as the "Required City Land Use Agreements"). If Optionee commits a MAE Default under 698/015610-0207 22798455.4 a09/18/25 -8- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT any of the aforementioned Required City Land Use Agreements as of the date of delivery of the Option Notice, then Section 9 of this Agreement shall apply. 2. Term of Option. (a) Term. The term of the Option (i.e., the time during which the Option may be exercised) shall be for a period commencing on the Option Effective Date and expiring at 5:00 p.m. (California time) on the date (the "Expiration Date") that is five (5) years from the Option Effective Date (the "Term"). The Term and Expiration Date shall be memorialized in a written addendum, executed by the Parties hereto, which shall be incorporated into this Option Agreement. The Option shall expire at the end of the Term unless extended pursuant to the following: (i) Extension Periods. Optionee shall have the right to extend the Term up to five (5) times for successive one (1) year extension periods (each, a "1-Year Extension Period" and collectively, the "Extension Periods") with the aggregate totaling no more than five (5) years after the Expiration Date. For the avoidance of doubt, and in explanation of the preceding sentence, the right to exercise the Option granted by this Option Agreement shall expire, if not earlier terminated or expired, no later than ten (10) years after the Option Effective Date; (ii) Notice to Exercise Right to Extension Period(s). In the event Optionee wants to extend the Term for one or more Extension Periods, Optionee shall deliver to City (pursuant to Section 7 below) written notice thereof (each, an "Option Extension Notice") no later than sixty (60) days prior to the expiration of the Term or, as applicable, no later than sixty (60) days prior to the expiration of the then operative 1-Year Extension Term. Optionee shall not be in MAE Default of this Agreement or of any Required City Land Use Agreements on the date Optionee delivers to City any Option Extension Notice. If Optionee is in MAE Default of this Agreement or any of the aforementioned Required City Land Use Agreements as of the date of delivery of the Option Extension Notice, then City shall have the right, in its sole and absolute discretion, to deny the 1-Year Extension Period requested by Optionee, to return to Optionee any Additional Option Consideration Payment (defined below) delivered to City with the Option Extension Notice within thirty (30) days after receipt of the Option Extension Notice, and to terminate the Option and this Option Agreement, in which case City shall deliver to Optionee written notice (pursuant to Section 7 below) of the termination of the Option and this Option Agreement, and the Option shall thereafter automatically terminate, without the need of any further notice or documentation, and neither Party shall have any further rights or obligations hereunder except for: (a) any indemnification obligations hereunder, all of which shall survive the termination hereof, and (b) executing with notarization a notice of termination of the Option Agreement, to be recorded by the City in the Recorder's Office, referencing the termination of this Option Agreement and Memorandum of Option 698/015610-0207 22798455.4 a09/18/25 -9- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Agreement; (iii) Additional Option Deposits. In the event Optionee wants to extend the Term for one or more Extension Periods, Optionee shall deposit with City, for each 1-Year Extension Period and concurrently with the applicable Option Extension Notice, an additional deposit of an amount of One Million Dollars ($1,000,000.00) (each $1,000,000.00 is referred to as the "Additional Option Consideration Payment" and collectively, referred to as the "Total Additional Option Consideration Payments"). While each Additional Option Consideration Payment shall remain non-refundable to Optionee (except as provided in Sections 12, 15, or elsewhere in the PSA), the Additional Option Consideration Payment shall be credited towards the Option Property Base Purchase Price, as increased pursuant to Subsection 2(a)(iv) below; (iv) Additional Amount to Option Property Base Purchase Price. For each 1-Year Option Extension exercised by Optionee in accordance with this Agreement, the Option Property Base Purchase Price shall increase in the amount of Two Million Dollars ($2,000,000.00), payable at the closing of escrow for the acquisition of the Option Property pursuant to the PSA. By way of example, in the event Optionee elects to extend the Term by one (1) year, Optionee, at the time of making said election, shall pay a deposit to City in the amount of the $1,000,000.00 Additional Option Consideration Payment, and the amount of the Option Property Base Purchase Price shall increase from $17,000,000.00 to $19,000,000.00, with the Option Property Base Purchase Price (as increased) being paid at close of escrow for the acquisition of the Option Property and the $1,000,000 Additional Option Consideration Payment being credited towards that increased Option Property Base Purchase Price. Additionally, for the avoidance of doubt, the $2,000,000 payment defined below as the Option Consideration, paid to City at the closing of escrow when Optionee purchased the Developer -Owned Property, shall be applied to the Option Property Base Purchase Price on the close of escrow for the acquisition of the Option Property; provided, however, in the event that the closing under the PSA does not occur, then the Option Consideration shall remain non-refundable to Optionee, except as provided in Sections 12, 15, or elsewhere in the PSA. (b) Exercise of Option; Notice Thereof. At any time during the Term (and including any duly exercised 1-Year Extension Period), and provided Optionee is not in MAE Default under this Option Agreement or any of any Required City Land Use Agreements, Optionee may exercise the Option by giving written notice to City of its exercise of the Option pursuant to Section 7 below (the "Option Notice"). Promptly after the exercise of the Option, Optionee and City shall execute and deliver the PSA. (c) Term of Option and PSA Outside Closing Date. Notwithstanding any provisions in this Option Agreement to the contrary, the Term of the Option (and any 698/015610-0207 22798455.4 a09/18/25 -10- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Extension Periods pursuant hereto) shall terminate no later than the PSA Outside Closing Date together with the termination of the PSA. 3. Option Consideration. (a) The Option is granted in consideration of Optionee's payment to City of the sum of Two Million Dollars ($2,000,000.00) (the "Option Consideration"), payable to City concurrent with the close of escrow on the transaction resulting in Optionee's acquisition of the Developer -Owned Property from Debtors and the execution and delivery of all Required City Land Use Agreements. The Option Consideration shall be non-refundable to Optionee (unless the conditions precedent to the closing of escrow for Developer's acquisition from Debtors (SDC) of the Phase 1A Property and Phase 1B Property Developer's acquisition are not satisfied and Developer does not acquire fee title to the Phase 1A Property and Phase 1B Property or as otherwise provided in Sections 12, 15, or elsewhere in the PSA), but, in the event Optionee exercises the Option granted herein and closes escrow on the acquisition of the Option Property pursuant to this Agreement and the PSA, then the Option Consideration shall be applied to the Option Property Base Purchase Price (as may be increased for each 1-Year Extension Period as set forth herein). Optionee shall pay City the Option Consideration in legal tender, United States dollars by wire transfer pursuant to separate wire instructions delivered to Optionee from City. (b) If Optionee exercises its right to extend the Term of the Option, Optionee shall pay to City any and all Additional Option Consideration Payment(s) pursuant to Section 2 of this Agreement. (c) City and Optionee shall cooperate to submit any and all necessary and proper instructions and supplemental instructions to the escrow officer/holder, responsible for the purchase and sale of the Developer -Owned Property, conveying same from Debtors to Optionee, to effectuate payment to City of the Option Consideration as well as execute and deliver, and implement the relevant terms and conditions of, this Option Agreement as they pertain to that transaction. 4. Due Diligence. From and after the date that the Memorandum of Option Agreement is recorded through the expiration of the Term (including any duly exercised 1-Year Extension Period), Optionee and its employees, contractors, agents, representatives, architects, engineers, consultants and other invitees (collectively, the "Optionee Entities"), at Optionee's sole cost and expense, shall have the right to enter and inspect the Option Property, make surveys and conduct such soils, engineering, hazardous or toxic material, pollution, seismic or other tests, studies and investigation as Optionee may require (each an "Inspection," and collectively, the "Inspections"), pursuant to the terms of this Section 4: (a) Optionee shall cause the Inspections to be conducted at times reasonably acceptable to City, upon not less than seventy-two (72) hours' prior written notice to City in each instance, and in a manner that does not materially adversely affect 698/015610-0207 22798455.4 a09/18/25 -11- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT the Option Property or Park And Retention Basin Property. City may have the right to have a representative of City present at any Inspections of the Option Property. (b) In conducting its Inspections at the Option Property, Optionee, its affiliates and affiliated entities, and the Optionee's officers, directors, employees, agents, consultants, engineers, and other agents (collectively, "Optionee Entities"): (i) shall not damage any part of the Option Property (other than invasive testing conducted in accordance with Sections 4(c) and (d) below) or any personal property located on or adjacent to the Option Property; (ii) promptly repair any damage to the Option Property resulting directly or indirectly from the entry by Optionee or the Optionee Entities or from any such Inspections; (iii) not injure or otherwise cause bodily harm to City, or its tenants, agents, guests, invitees, contractors and employees; (iv) comply with all applicable laws; and (v) not permit any liens to attach to the Option Property and/or Park And Retention Basin Property by reason of the exercise of Optionee's rights hereunder. (c) Notwithstanding anything to the contrary in this Section 4, Optionee shall not undertake any invasive testing, including, without limitation, taking samples of any kind or type from the Option Property, until such time as Optionee has submitted to City and obtained City's prior written approval of Optionee's proposed work plan, which work plan shall include Optionee's sampling and testing procedures, as well as the specific locations proposed to be accessed. City's approval pursuant to this Section 4 shall not be unreasonably withheld, conditioned, or delayed. (d) Promptly upon completion of each Inspection, Optionee shall cause the portion of the Option Property subject to such Inspection to be restored to the condition existing immediately prior to such Inspection, provided, however, Optionee shall have no obligation to remediate any pre-existing environmental condition discovered by Optionee in connection with any Inspection, so long as such Inspection has not exacerbated the pre-existing environmental condition. If this Option Agreement or the PSA is terminated prior to the closing of escrow on the Option Property pursuant to this Option Agreement and the PSA, Optionee shall provide to City, if City requests and at no additional charge and without representation or warranty of any kind or liability with respect to the use thereof, a copy(ies) of any final report(s) (excluding market studies and architectural renderings, if any) prepared by third parties for Optionee in connection with the Inspections so long as the City reimburses Optionee for the actual costs to Optionee paid to a third party(ies) for the final report(s) requested by City within thirty (30) calendar days of the City's written request therefor and Optionee's receipt of such reimbursement. (e) Optionee hereby indemnifies, defends (with counsel of City's choosing in its reasonable discretion), and holds harmless City and City's officers, officials, members, employees, agents, representatives, contractors, and volunteers (collectively, the "City and City Personnel"), from and against any and all claims, damages, liabilities, demands, injury, actions, liens, stop notices, losses, costs and expenses (including without limitation reasonable attorneys' fees and court costs) to the extent arising from or as a result of the conducting of Inspections, except that the City and City Personnel shall not be indemnified to the extent any claim, loss or damage (i) is caused by the City and City Personnel's gross negligence, recklessness or intentional 698/015610-0207 22798455.4 a09/18/25 -12- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT misconduct (ii) for any matter to the extent arising directly from the discovery of any pre-existing condition at the Option Property, or (iii) as a result of the City and City Personnel's material breach of this Agreement. (f) Optionee's obligations under this Section 4 shall survive the expiration or termination of this Agreement. 5. Insurance. Without limiting Optionee's indemnification obligations under this Agreement, Optionee shall procure and maintain, at its sole cost and for the duration of this Agreement, insurance coverage as provided below, against all claims for injuries against persons or damages to property which may arise from or in connection with the performance of the work under Section 4 hereunder. In the event that Optionee subcontracts any portion of the work, the contract between Optionee and such subcontractor shall require the subcontractor to maintain the same types (with the same endorsements) and amounts of insurance that Optionee is required to maintain pursuant to this Section. A. Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office "occurrence" form CG 00 01 including completed operations and contractual liability, with limits of liability of not less than One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) annual aggregate for liability arising out of Optionee's performance of this Agreement, including without limitation Optionee's conducting of the Inspections. Such insurance shall be endorsed to: (1) Name the City and City Personnel as additional insureds for claims arising out of Optionee's performance of this Agreement, including without limitation Optionee's conducting of the Inspections. (2) Provide that the insurance is primary and non-contributing with any other valid and collectible insurance or self-insurance available to City. B. Automobile Liability Insurance with a limit of liability of not less than One Million Dollars ($1,000,000) combined single limit. Such insurance shall include coverage for all "owned," "hired" and "non -owned" vehicles, or coverage for "any auto." Such insurance shall be endorsed to name the City and City Personnel as additional insureds. C. Workers' Compensation Insurance in accordance with the California Labor Code and covering all employees of Optionee providing any service in the performance of this Agreement. Such insurance shall be endorsed to: (1) Waive the insurer's right of subrogation against the City and City Personnel. D. Evidence of Insurance: Optionee shall provide to City a 698/015610-0207 22798455.4 a09/18/25 -13- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Certificate(s) of Insurance evidencing such coverage, together with copies of the required policy endorsements, no later than three (3) days prior to commencement of any Inspections and prior to the expiration of any policy. Statements on an insurance certificate will not be accepted in lieu of the actual endorsements required. Coverage shall not be cancelled, without thirty (30) days prior written notice thereof given by the insurer to City by U.S. mail, or by personal delivery, except for nonpayment of premiums, in which case ten (10) days prior notice shall be provided . E. Acceptability of Insurers. Each policy shall be from a company with current A.M. Best's rating of A- VII or higher and authorized to do business in the State of California, or otherwise allowed to place insurance through surplus lines brokers under applicable provisions of the California Insurance Code or any federal law. Any other rating must be approved in writing by City. 6. City's Cooperation in Seeking Permits and Approvals. From and after the date that the Memorandum of Option Agreement is recorded through the expiration of the Term (including any duly exercised 1-Year Extension Period), Optionee may meet with all governmental entities, including City to discuss Optionee's proposed development of, and other matters relating to, the development of the Option Property and may obtain all project approvals that Optionee may deem necessary or advisable in connection therewith. Provided City does not incur any liabilities or out-of-pocket costs except those authorized by City and without binding the Option Property prior to the execution and delivery of the PSA in any way, City agrees to cooperate with Optionee in any such matters and execute any and all documents or join in any applications that may be required to obtain all such project approvals in connection with the development of the Option Property. However, the Parties agree that this Agreement shall not be binding on the City Council, the Planning Commission, or any other entitlement approval body of the City regarding any approvals required by such bodies pursuant to Federal, State, or City law. Optionee acknowledges and agrees, and hereby accepts that Optionee obtains no right to develop the Option Property or any portion thereof (or any other project or portion thereof on the Option Property) by virtue of this Agreement. 7. Notices. All notices or other communications made pursuant to this Agreement shall be in writing and shall be served to the Parties at the following addresses (i) mailed by certified mail, postage prepaid, return receipt requested; (ii) sent by express delivery service, such as FedEx, charges prepaid with a delivery receipt; (iii) personally delivered with a delivery receipt: City: AND: City of La Quinta 78-495 Calle Tampico La Quinta, California 92253 Attn.: City Manager City of La Quinta 78-495 Calle Tampico La Quinta, California 92253 Attn.: City Clerk 698/015610-0207 22798455.4 a09/18/25 -14- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT With a copy to: Optionee: With a copy to: With a copy to: Rutan & Tucker, LLP 18575 Jamboree Road, 9th Floor Irvine, CA 92612 Attn: William H. Ihrke, Esq. Email: bihrke@rutan.com TBE RE Acquisition Co II LLC c/o Turnbridge Equities 4 Bryant Park, Suite 200 New York, NY 10018 Attn: Michael Gazzano and General Counsel Email: mg@turnbridgeeq.com; jw@turnbridgeeq.com DLA Piper LLP 1251 Avenue of the Americas New York, NY 10020 Attn: Todd Eisner Email: todd.eisner@us.dlapiper.com Procopio 200 Spectrum Center Drive, Suite 1650, Irvine, CA 92618 Attn: James Vaughn Email: james.vaughn@procopio.com All notices shall be deemed received on the date shown on the delivery receipt as the date of delivery, the date delivery was refused, or the date the notice was returned as undeliverable. Either Party may change its address for the purposes of this paragraph by giving prior written notice of the change to the other Party in the manner provided in this Section. 8. Transfers and Assignment. Optionee may not transfer or assign its rights or obligations under this Option Agreement, and may not transfer or assign any interest Optionee has in the Option Property pursuant to this Agreement, without the prior written consent of City, which may be granted or denied in City's sole and absolute discretion except for such transfers and assignments as are "Permitted Transfers" pursuant to the Reinstated Development Agreement, and memorialized by an Assignment and Assumption Agreement (as and when required under and pursuant to the Reinstated Development Agreement) executed and recorded in the Recorder's Office. 9. Defaults and Remedies. (a) The occurrence of any of the following shall be deemed a default under this Agreement (each, a "Default" or "default"): (a) The failure or delay by any Party to perform any obligation set forth in this Agreement if such failure is not cured, corrected or remedied within any specific time period set forth in this Agreement; (b) If no 698/015610-0207 22798455.4 a09/18/25 -15- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT other specific time period is set forth herein for the cure of a default, the failure to cure a monetary default under this Agreement (other than any monetary defaults specifically listed in this Section 9) within fifteen (15) days after the nonperforming Party's receipt of written notice from another Party specifying the nature of the default; (c) If no other specific time period is set forth herein for the cure of a default, the failure to cure a non -monetary default under this Agreement (other than any non -monetary defaults specifically listed in this Section 9) within thirty (30) days after the nonperforming Party's receipt of written notice from the other Party specifying the nature of the default, provided, however, that if the failure cannot reasonably be corrected within such period, it shall not constitute a default if the failure is correctable, and if corrective action is instituted by the non -performing Party within such 30-day period and diligently pursued until the failure is corrected, and provided further that any such failure is cured within ninety (90) days of receipt of notice of such failure; (d) Any of the warranties or representations made by any Party herein are or become false, incorrect, or misleading in any material respect, and to the extent capable of being cured are not cured within the cure period set forth in subsection (c) above; (e) Any Party files for any relief under the federal Bankruptcy Act or is sought by or against any Party, or if a receiver is appointed to take charge of the assets or affairs of any Party or if any Party should make an assignment for the benefit of creditors, or if any Party should become insolvent, or upon any liquidation or termination of any Party; provided, however, that if any such proceeding is brought involuntarily against a Party, such Party shall have ninety (90) days to obtain the dismissal of such proceeding; or (f) As of the date of delivery of the Option Notice, Optionee is in MAE Default of the Required City Land Use Agreements without having cured said MAE Default pursuant to the applicable Required City Land Use Agreement(s). A material Default that is not cured within such cure periods as provided in this Option Agreement is referred to herein as a "MAE Default" of this Option Agreement. (b) Upon any uncured MAE Default, the defaulting Party shall be in breach of this Option Agreement and, in addition to any other rights or remedies available at law or in equity, the non -defaulting Party may, subject to any limitations as provided in this Option Agreement, terminate this Agreement and/or institute legal action to cure, correct, or remedy any MAE Default or to obtain any other remedy consistent with the purposes of this Option Agreement. (c) It is expressly understood and agreed by the Parties that the cure provisions set forth in this Section 9 are not available to, and shall not apply, to any of the following actions which are deemed to have firm deadlines: (i) The ability for Optionee to exercise the Option pursuant to Section 2(b) of this Option Agreement; and (ii) The ability for Optionee to exercise its right to any 1-Year Extension Period pursuant to Section 2(a) of this Option Agreement. (d) In the event of an uncured MAE Default by City of the terms of this Option Agreement, Optionee, at its option, may institute legal action in law or in equity to cure, correct, or remedy such MAE Default, enjoin any threatened or attempted violation, or enforce the terms of this Option Agreement; provided, however, that in no event shall Optionee be entitled to recover damages of any kind from City, but if Optionee is the prevailing Party in any action consistent with the provisions of this Option Agreement, 698/015610-0207 22798455.4 a09/18/25 -16- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Optionee may be entitled to an award of attorney's fees as set forth in this Option Agreement. (e) The Parties acknowledge agree that City would not have entered into this Agreement if City were to be liable in monetary damages of any kind whatsoever, including compensatory (whether special or general) damages, punitive damages, consequential damages, incidental damages, and/or future damages, under or with respect to this Agreement. As such, the Parties agree that, except as expressly set forth in Subsection 9(d) above, declaratory and injunctive relief, writ of mandate, and specific performance shall be Optionee's sole and exclusive judicial remedies against City with respect to enforcement of the terms and conditions of this Agreement. In amplification of the preceding sentence, and not by way of limitation, in no event whatsoever shall City be liable to Optionee for, or Optionee be entitled to an award of damages from City, for economic loss, lost profits, or any other economic or consequential damages of any kind. 10. City Approvals and Actions. City shall maintain authority to implement this Option Agreement through the City Manager. The City Manager shall have the authority to make approvals, issue interpretations, waive provisions, negotiate and enter into amendments to this Option Agreement and/or negotiate and enter into implementing agreements or documents on behalf of City so long as such actions do not materially or substantially change the business terms of this Option Agreement or the uses or development permitted on the Option Property, or materially or substantially add to the costs incurred or to be incurred by City as specified herein. Such approvals, interpretations, waivers, amendments, and/or implementing agreements or documents may include extensions of time to perform as specified in this Option Agreement , except that City Manager shall not have the authority to waive or extend the times for performance for any of the following actions which are deemed to have firm deadlines: (a) The ability for Optionee to exercise the Option pursuant to Section 2(b) of this Option Agreement, and (b) The ability for Optionee to exercise its right to any 1-Year Extension Period pursuant to Section 2(a) of this Option Agreement. Furthermore, any and all other material and/or substantial interpretations, waivers, or amendments shall require the consideration, action and written consent of the City Council. Furthermore, the City Manager may seek review and approval by the City Council on any approval, interpretation, wavier, amendment, document, or any other matter that, pursuant to this Section 10, City Manager otherwise has authority to act upon on behalf of City. Nothing in this Section 10 does or shall be deemed to authorize the City Manager to take any action that is otherwise required to be reviewed and decided by the City Council, Planning Commission, or other reviewing board, commission, or public official, pursuant to any applicable Federal, State, or City law. 11. Binding Effect. This Option Agreement and its terms and conditions shall be binding upon and inure to the benefit of the Parties to this Option Agreement and their respective successors and permitted assigns. 12. Time of the Essence. Time is of the essence of this Option Agreement and of each and every term and provision hereof, it being understood that the parties hereto have specifically negotiated the dates for the completion of each obligation herein. 698/015610-0207 22798455.4 a09/18/25 -17- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 13. Nonliability of City Officials and Employees. No officer, official, employee, agent, or representative of City shall be personally liable to Optionee or any successor in interest, in the event of any default or breach by City, or for any amount which may become due to Optionee or its successor, or for breach of any obligation of the terms of this Option Agreement. 14. Further Documents. Upon the reasonable request of the other Party, each Party will execute, acknowledge and deliver or cause to be executed, acknowledged and delivered, such further instruments and documents as may be reasonably necessary in order to carry out the intent and purpose of this Option Agreement, including escrow instructions. 15. Exhibits. All exhibits attached to this Option Agreement and referred to in this Option Agreement are incorporated into this Option Agreement by this reference as though they were fully set forth in this Option Agreement. 16. Brokers Commission. Each Party to this Agreement represents to the other Party that it has not engaged or used the services of any person, firm or corporation that may claim a broker's commission or finder's fee upon execution of this Option Agreement, the exercise of the Option or the execution of the PSA, and each Party hereto agrees to hold the other Party harmless from any loss, damage, expense or liability, including attorney's fees, resulting from any claim by any person, firm or corporation based upon its having acted as broker or finder on behalf of said indemnifying Party. 17. Captions. The captions of the sections/paragraphs of this Option Agreement are for convenience and reference only, and the words contained in the captions shall in no way be held to explain, modify, amplify or aid in the interpretations, constructions or meaning of the provisions of this Option Agreement. 18. Counterparts. This Option Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same Option Agreement. 19. Attorney's Fees. In any action between Optionee and City to enforce or interpret any of the terms of this Option Agreement , the prevailing Party shall be entitled to recover its costs and expenses, including, without limitation, reasonable attorneys' fees and expert witness fees. 20. Choice of Laws; Litigation Matters. This Agreement shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Agreement. Service of process on the City shall be made in accordance with California law. Service of process on Optionee shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 21. Waivers and Amendments. All waivers of the provisions of this Option 698/015610-0207 22798455.4 a09/18/25 -18- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 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 City and Optionee. No waiver of any provision of this Option Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought and referring expressly to this Section. No delay or omission by either Party in exercising any right or power accruing upon non-compliance or failure to perform by the other Party under any of the provisions of this Option Agreement shall impair any such right or power or be construed to be a waiver thereof, except as expressly provided herein. No waiver by either Party of any of the covenants or conditions to be performed by the other Party shall be construed or deemed a waiver of any succeeding breach or nonperformance of the same or other covenants and conditions hereof. 22. Estoppel Certificate. Either Party may, at any time, deliver written notice to any other Party requesting such Party to certify in writing that, to the best knowledge of the certifying Party, (i) this Option Agreement is in full force and effect and a binding obligation of such Party, (ii) this Option Agreement has not been amended or modified either orally or in writing, or if so amended, identifying the amendments, (iii) the requesting Party is not in default in the performance of its obligations under this Option Agreement, or if in default, describing the nature and amount of any such defaults, and (iv) any other reasonable information requested. A Party receiving a request hereunder shall execute and return such certificate within thirty (30) days following delivery of the written request. The City Manager or authorized designee is authorized to sign and deliver an estoppel certificate on behalf of City. City acknowledges that a certificate hereunder may be relied upon by transferees and mortgagees. 23. Time Period Computations. All periods of time referred to in this Option Agreement shall include all Saturdays, Sundays and California state or national holidays unless the reference is to "business days," in which event such weekends and holidays shall be excluded in the computation of time and provide that if the last date to perform any act or give any notice with respect to this Option Agreement shall fall on a Saturday, Sunday or California state or national holiday, such act or notice shall be deemed to have been timely performed or given on the next succeeding day which is not a Saturday, Sunday or California state or national holiday. 24. No Liens or Encumbrances Against the Phase 2 Property Prior to Acquisition of Fee Title by Optionee of Option Property. Optionee shall not record, and shall not authorize or allow the recording, in the Recorder's Office of any mortgage, deed of trust, encumbrance, or any other instrument that is defined as a "Lien" in the Reinstated Development Agreement against the Phase 2 Property (or any portion thereof, which includes the Option Property) unless Optionee acquires fee title to the Option Property, pursuant to this Option and the PSA. 25. Entire Agreement. This Option Agreement, along with the Restated Development Agreement and other Required City Land Use Agreements, contain the entire agreement between the Parties respecting the matters set forth herein, and supersedes all prior agreements between the Parties respecting such matters. 698/015610-0207 22798455.4 a09/18/25 -19- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 26. Mortgagee Protections. Notwithstanding anything else to the contrary contained herein, the notice and cure periods and other rights and protections granted to Lenders (as defined in the Reinstated Development Agreement) in the Reinstated Development Agreement shall apply in all respects to this Option Agreement and the Reinstated Development Agreement, mutatis mutandis, and shall be deemed to be incorporated by reference into this Option Agreement with such Lenders having the full right to enforce such rights and protections in the same manner as if such Lenders were a direct party hereto. [END OF AGREEMENT - SIGNATURES ON FOLLOWING PAGE] 698/015610-0207 22798455.4 a09/18/25 -20- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. Date: , 2025 "OPTIONEE" & "DEVELOPER" TBE RE Acquisition Co II LLC, a Delaware limited liability company, an affiliate of Turnbridge Equities By: Its: "CITY" CITY OF LA QUINTA, a California municipal corporation and charter city Date: , 2025 By: ATTEST: Monika Radeva, City Clerk APPROVED AS TO FORM RUTAN & TUCKER, LLP William H. Ihrke, City Attorney Jon McMillen, City Manager 698/015610-0207 22798455.4 a09/18/25 -21- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT EXHIBIT A-1 DESCRIPTION OF THE PROPERTY All that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: PARCEL 1: Parcels 13, 14, and 15 of Parcel Map No. 37207, in the City of La Quinta, County of Riverside, State of California, as shown by a Map filed for Record May 3, 2017 in Book 242, Pages 72 through 87, inclusive of Parcel Maps, in the Office of the County Recorder of said County. PARCEL 2: Parcel 16 of Parcel Map No. 37207, in the City of La Quinta, County of Riverside, State of California, as shown by a Map filed for Record May 3, 2017 in Book 242, Pages 72 through 87, inclusive of Parcel Maps, in the Office of the County Recorder of said County. NOTE: NOTWITHSTANDING THE ABOVE -REFERENCED LEGAL DESCRIPTION FOR PARCEL 16 ABOVE, THE PHASE 2 PROPERTY DOES NOT INCLUDE SILVERROCK PARK AND RETENTION BASIN, AS SET FORTH IN THIS OPTION AGREEMENT AND THE REINSTATED DEVELOPMENT AGREEMENT, RECITAL D AND DEFINITIONS OF "PHASE 2 PROPERTY" / "CITY OWNED OPTION PROPERTY" *Explanatory Note: All legal descriptions may be corrected, if necessary, prior to recording to conform with instructions from title or escrow officer(s) for final corrections. This explanatory note shall be deleted prior to recording. 698/015610-0207 22798455.4 a09/18/25 EXHIBIT A-1 LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT EXHIBIT A-2 SITE MAPS DEPICTING THE PHASE 2 PROPERTY AND PARK AND RETENTION BASIN PROPERTY [ attached ] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT A-2 LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT SITE MAP BY PLANNING AREAS (PAs) (2025 SilverRock Master Plan) PA1 -Golf Course (existing) PA2-Luxury Branded Residence (29 lots) PA3-Luxury Hotel � (154 guest rooms, lobby. restaurants, retail. amenities, BOH. etc. totaling 225,000sf) 1 Phase 1 t o 1 ' Phase 2 en [Site Maps Continue on Next Page] PA4- Public Golf Clubhouse (17,000sf) PA5- Luxury Hotel Banquet & Back of House Functions (Banquet: 25,000sf) (BOH: 30.000sf) PAG - Luxury Branded Condominiums (70 units) Resident Clubhouse & Facilities (20,000sf) PA7 - Luxury Branded Residences (93 lots) PAB - Future Golf, Residential, and Commercial (113-hole private golf course, 253 residential units, and 40,000sf commercial) 698/015610-0207 22798455.4 a09/18/25 EXHIBIT A-2 LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT SITE MAP OF PHASE 2 PROPERTY (2025 SilverRock Master Plan) Orange area is Phase 2 Property (i.e., City -Owned Option Property) appx. 193+/- acres [Site Maps Continue on Next Page] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT A-2 LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT SITE MAP OF EXISTING SILVERROCK PARK AND RETENTION BASIN PROPERTY (Not Included in the Phase 2 Property) SilverRock Park and Retention Basin, appx. 24+/- acres [End of Exhibit A-2 - Site Maps] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT A-2 LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT EXHIBIT B FORM OF MEMORANDUM OF OPTION AGREEMENT [see attached] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT B LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attn: City Clerk Space Above This Line for Recorder's Use (Exempt from Recording Fee per Gov't Code §6103 and §27383) MEMORANDUM OF OPTION AGREEMENT This MEMORANDUM OF OPTION AGREEMENT ("Memorandum") is entered into this day of , 2025, by and between the CITY OF LA QUINTA, a California municipal corporation and charter city ("City"), and TBE RE Acquisition Co II LLC, a Delaware limited liability company, an affiliate of Turnbridge Equities ("Optionee" and "Developer"), This Memorandum is made with reference to the following: 1. On or about , City and Optionee entered into that certain OPTION TO PURCHASE REAL PROPERTY (the "Option Agreement") pursuant to which Optionee, upon satisfaction of terms and conditions therein, has an "Option" (as defined in the Option Agreement) to purchase from City the Option Property (as defined in the Option Agreement and herein below). The Option Property is a portion of that certain real property owned by the City, comprised of approximately 193+/- acres, identified as APN(s): 777-060-047, 777-060-048, 777-060-049, portion of 776-150-030, 777-060-074, and 777-060-079, and more specifically described in Attachment No. 1 hereto and incorporated herein by this reference (the "Phase 2 Property"). The Phase 2 Property that is subject to Optionee's right to purchase pursuant to the Option Agreement expressly excludes the approximately 24+/- acre SilverRock Park and adjacent Flood Control/Water Retention Basin (collectively, the "Park And Retention Basin Property"), also owned by City, which Park And Retention Basin Property is adjacent to the Option Property and located in the SilverRock Resort Area (as defined in the Option Agreement). The Phase 2 Property, excluding the Park and Retention Basin Property, is referred to and defined in the Option Agreement as the "Option Property." The Option Property and Park And Retention Basin Property are depicted in the Site Maps attached to this Memorandum as Attachment No A-2 and incorporated herein by this reference (the "Site Maps"). 2. The Option Property is in close proximity to certain real property owned by Optionee (referred to in the Option Agreement as the "Developer -Owned Property") that is subject to that certain Reinstated and Amended Development Agreement by and 698/015610-0207 22798455.4 a09/18/25 EXHIBIT B LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT between the City and Optionee (as Developer), adopted by City Council Ordinance No. on , 2025, and recorded as Document No. (the "Reinstated Development Agreement") on or about even date as this Memorandum in the Official Records of the Office of the County Recorder of Riverside, California (the "Recorder's Office"). The Reinstated Development Agreement provides, among other terms and conditions, for the development of the Developer -Owned Property as provided therein (referred to in the Option Agreement as the "Developer's Project"). As more specifically set forth in the Reinstated Development Agreement and Option Agreement, the Developer's Project includes the possible acquisition and development of the Option Property in addition to the Developer -Owned Property. The Option Agreement and Reinstated Development Agreement are public records and available for inspection during regular business hours in the Clerk's Office at City Hall for the City of La Quinta, at the address: 78-495 Calle Tampico, La Quinta, CA 92253, and may be accessed at the City's Internet web site: www.laquintaca.gov. 3. The Option Agreement provides for City and Optionee to enter into this Memorandum and to record the same in the Recorder's Office to provide notice to all persons of the existence of said Option Agreement and to cause the Option Agreement to run with the Option Property and be binding on Optionee and Optionee's successors -in -interest as more particularly permitted and set forth in the Option Agreement. 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. [ signatures on next page ] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT B LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT IN WITNESS WHEREOF, Optionee and City have executed this Agreement as of the recording date hereof. "DEVELOPER" TBE RE Acquisition Co II LLC, a Delaware limited liability company, an affiliate of Turnbridge Equities By: Date: , 2025 Its: "CITY" CITY OF LA QUINTA, a California municipal corporation and charter city Date: , 2025 By: ATTEST: Monika Radeva, City Clerk APPROVED AS TO FORM RUTAN & TUCKER, LLP William H. Ihrke, City Attorney Jon McMillen, City Manager 698/015610-0207 22798455.4 a09/18/25 EXHIBIT B LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Riverside On ) ) , 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) A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Riverside On ) ) , 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) 698/015610-0207 22798455.4 a09/18/25 EXHIBIT B LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT ATTACHMENT NO. 1 TO MEMORANDUM OF OPTION AGREEMENT DESCRIPTION OF THE PROPERTY All that certain property located in the City of La Quinta, County of Riverside, State of California, described as follows: PARCEL 1: Parcels 13, 14, and 15 of Parcel Map No. 37207, in the City of La Quinta, County of Riverside, State of California, as shown by a Map filed for Record May 3, 2017 in Book 242, Pages 72 through 87, inclusive of Parcel Maps, in the Office of the County Recorder of said County. PARCEL 2: Parcel 16 of Parcel Map No. 37207, in the City of La Quinta, County of Riverside, State of California, as shown by a Map filed for Record May 3, 2017 in Book 242, Pages 72 through 87, inclusive of Parcel Maps, in the Office of the County Recorder of said County. NOTE: NOTWITHSTANDING THE ABOVE -REFERENCED LEGAL DESCRIPTION FOR PARCEL 16 ABOVE, THE PHASE 2 PROPERTY DOES NOT INCLUDE SILVERROCK PARK AND RETENTION BASIN, AS SET FORTH IN THIS OPTION AGREEMENT AND THE REINSTATED DEVELOPMENT AGREEMENT, RECITAL D AND DEFINITIONS OF "PHASE 2 PROPERTY" / "CITY OWNED OPTION PROPERTY" *Explanatory Note: All legal descriptions may be corrected, if necessary, prior to recording to conform with instructions from title or escrow officer(s) for final corrections. This explanatory note shall be deleted prior to recording. 698/015610-0207 22798455.4 a09/18/25 EXHIBIT B LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT ATTACHMENT NO. 2 TO MEMORANDUM OF OPTION AGREEMENT SITE MAPS DEPICTING THE PHASE 2 PROPERTY AND PARK AND RETENTION BASIN PROPERTY [ attached ] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT B LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT SITE MAP BY PLANNING AREAS (PAs) (2025 SilverRock Master Plan) PA1 -Golf Course (existing) PA2-Luxury Branded Residence (29 lots) PA3-Luxury Hotel � (154 guest rooms, lobby. restaurants, retail. amenities, BOH. etc. totaling 225,000sf) 1 Phase 1 t o 1 ' Phase 2 en [Site Maps Continue on Next Page] PA4- Public Golf Clubhouse (17,000sf) PA5- Luxury Hotel Banquet & Back of House Functions (Banquet: 25,000sf) (BOH: 30.000sf) PAG - Luxury Branded Condominiums (70 units) Resident Clubhouse & Facilities (20,000sf) PA7 - Luxury Branded Residences (93 lots) PAB - Future Golf, Residential, and Commercial (113-hole private golf course, 253 residential units, and 40,000sf commercial) 698/015610-0207 22798455.4 a09/18/25 EXHIBIT B LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT SITE MAP OF PHASE 2 PROPERTY (2025 SilverRock Master Plan) Orange area is Phase 2 Property (i.e., City -Owned Option Property) appx. 193+/- acres [Site Maps Continue on Next Page] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT B LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT SITE MAP OF EXISTING SILVERROCK PARK AND RETENTION BASIN PROPERTY (Not Included in the Phase 2 Property) SilverRock Park and Retention Basin, appx. 24+/- acres [End of Attachment No. 2 - Site Maps] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT B LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT EXHIBIT C FORM OF CITY REPURCHASE OPTION AGREEMENT [see attached] 698/015610-0207 22798455.4 a09/18/25 ACTIVE\1622842580.9 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of La Quinta 78-495 Calle Tampico La Quinta, CA 92253 Attn: City Clerk Space Above This Line for Recorder's Use (Exempt from Recording Fee per Gov't Code § 6103 and 27383) REPURCHASE OPTION AGREEMENT (PHASE 2 PROPERTY) (SilverRock Resort Areal This REPURCHASE OPTION AGREEMENT (PHASE 2 PROPERTY — SilverRock Resort Area) ("Repurchase Option Agreement") is made this day of (the "Repurchase Option Agreement Effective Date"), by and between TBE RE Acquisition Co II LLC, a Delaware limited liability company, an affiliate of Turnbridge Equities ("Developer"), and the CITY OF LA QUINTA, a California municipal corporation and charter city ("City"). City and Developer are hereinafter sometimes referred to individually as a "Party" and collectively as the "Parties." A. On , 2025, the La Quinta City Council adopted Ordinance No. , approving pursuant to applicable State and City laws that certain Reinstated and Amended Development Agreement, with reference date , 2025, between City and Developer and recorded on as Document No. (the "Reinstated Development Agreement") in the Official Records of the Office of the County Recorder of Riverside, California (the "Recorder's Office"). Among other terms and conditions, the Reinstated Development Agreement vests development and use rights to Developer, prescribes rights and obligations of Developer for the resumption and completion of construction, and the continuous operation and use, of specified "Project Components" that include, among others, a luxury hotel with related ancillary amenities and luxury single-family detached and condominium residential dwellings available for use as short-term vacation rentals, on certain real property comprised of approximately 134+/- acres and defined therein as the "Phase 1 Property" (consisting the "Phase 1A Property" and "Phase 1B Property") as more particularly described therein as more particularly set forth therein. The Reinstated Development Agreement also references the possible acquisition in the future by Developer of certain unimproved real property owned by the City in the SilverRock Resort Area and defined therein as the "Phase 2 Property" for possible future development that would also complement a world -class hotel and residential destination resort on the Phase 1 Property. B. On or about even date of the Reinstated Development Agreement was entered into and recorded in the Recorder's Office, City and Developer entered into that certain OPTION TO PURCHASE REAL PROPERTY (the "Phase 2 Property Option 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Agreement"), pursuant to which Developer purchased an option for right to acquire, and for the City to sell, the Phase 2 Property upon the satisfaction of specified conditions (which generally included the completion of construction of a luxury hotel project component and related amenities on the Phase 1A Property), as more particularly set forth therein. A Memorandum of the Phase 2 Property Option Agreement, dated on or about even as the Phase 2 Property Option Agreement, which incorporated by reference the Phase 2 Property Option Agreement, was recorded in the Recorder's Office on as Document No. (the "Phase 2 Property Option Agreement Memorandum"). Pursuant to the Phase 2 Property Option Agreement, if Developer timely and validly exercised the option to acquire the Phase 2 Property, then this Repurchase Option Agreement for the benefit of the City was to be executed, notarized, and recorded against the Phase 2 Property with the closing of the escrow servicing the purchase and sale transaction. Furthermore, pursuant to the Reinstated Development Agreement, if Developer acquired the Phase 2 Property pursuant to the Phase 2 Property Option Agreement, then the Reinstated Development Agreement had to be amended to include, among any other necessary or proper terms and conditions, a scope of work, schedule of performance and phasing of development, and the authorized uses (with necessary and appropriate covenants, conditions, and restrictions) for the Phase 2 Property; in the alternative to amending the Reinstated development Agreement, Developer could have applied for a new development agreement governing only the Phase 2 Property, which was to be processed and reviewed in accordance with the Development Agreement Act and Development Agreement Ordinance, and had to include, among any other necessary or proper terms and conditions, a scope of work, schedule of performance and phasing of development, and the authorized uses (with necessary and appropriate covenants, conditions, and restrictions) for the Phase 2 Property. Developer opted to INSERT HERE WHETHER DEVELOPER AMENDED THE 2025 REINSTATED DEVELOPMENT AGREEMENT OR ENTERED INTO A NEW A DEVELOPMENT AGREEMENT FOR PHASE 2 PROPERTY; AND IDENTIFY ORDINANCE ADOPTING EITHER AMENDMENT OR NEW D.A. ], and on , , the La Quinta City Council adopted Ordinance No. , adopting said INSERT EITHER "AMENDMENT TO THE REINSTATED DEVELOPMENT AGREEMENT" or "NEW DEVELOPMENT AGREEMENT"], which is referred to in this Repurchase Option Agreement as the "Development Agreement For The Phase 2 Property." C. As of the Repurchase Option Agreement Effective Date, Developer owns fee title to the Phase 2 Property, also defined for purposes of this Repurchase Option Agreement as the "Repurchase Option Property" that is legally described and depicted in Exhibit "A", which is attached hereto and incorporated herein by this reference. [NOTE — LEGAL DESCRIPTION SHOULD INCLUDE ONLY PHASE 2 PROPERTY FOR THIS REPURCHASE OPTION AGREEMENT] D. Prior to City and Developer entering into this Repurchase Option Agreement, the prior Reinstated Development Agreement, and other agreements and instruments, the following relevant history is hereby recited: 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT i. Except for portions of land previously transferred to SilverRock Development Company, LLC, a Delaware limited liability company (or one of its affiliated companies, which are referred to herein collectively as "SDC" or "Debtor(s)")2 as explained below in the next Recital Subparagraph, City owns fee title to that certain real property of approximately 525 acres located at the southwest intersection of Jefferson Street and Avenue 52, in the City of La Quinta, California, generally referred to as the "SilverRock Resort Area" and subject to a Specific Plan adopted by the La Quinta City Council and enforceable as a land use governing document pursuant to the Planning and Zoning Law, California Government Code section 65000 et seq. (the "SilverRock Specific Plan"); ii. On or about November 19, 2014, City and SDC entered into that certain Purchase, Sale, and Development Agreement (the "Original SDC PSDA"), pursuant to which, among other terms and conditions, City agreed to sell to SDC and SDC agreed to purchase from City specified parcels and planning areas (PAs) to thereafter construct, complete, and operate thereon a commercial project containing a luxury resort hotel and spa and associated branded luxury residential units, a lifestyle hotel and associated lifestyle branded residential units, a conference and shared service facility, a temporary and permanent clubhouse for the SilverRock Resort's Arnold Palmer Classic Golf Course, a mixed use village, a resort residential village, and associated amenities, all as further described in the Original SDC PSDA and referred to as various project components, as more particularly described therein. Concurrent with the Original SDC PSDA, on or about November 19, 2014, City and SDC entered into Development Agreement 2014-1001 (the "Original SDC Development Agreement") pursuant to the Development Agreement Law, which agreement, among other terms and conditions, required SDC to develop the planning areas and project components in accordance with the SDC PSDA, vested with SDC specified development obligations, memorialized the potential for the future acquisition of additional City -owned property in the SilverRock Resort Area as incorporated vis-a-vis the SDC PSDA, and subjected SDC to City's rights and oversight for those portions of 2 Debtors were SilverRock Development Company, LLC and affiliated entities that, on August 5, 2024, filed for voluntary bankruptcy protection under chapter 11 of the U.S. Bankruptcy Code, with case number(s) identified in the Title of this Agreement along with the last four digits of each Debtor's federal tax identification number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury Residences, LLC (6598) and SilverRock Phase I, LLC (2247) (collectively, referred to herein as the "Bankruptcy Lawsuit" in the "Bankruptcy Court"). 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT the SilverRock Resort Area to be conveyed to SDC. After entering into the Original SDC PSDA and Original SDC Development Agreement, the following relevant events, very briefly summarized, occurred: i. Pursuant to the Original SDC PSDA, City and SDC had the authority to amend by mutual agreement of the parties. Between October 29, 2015, and November 16, 2023, City and SDC entered into five amendments thereto, dated October 29, 2015 ("First Amendment"), April 18, 2017 ("Second Amendment"), November 28, 2018 ("Third Amendment"), October 12, 2021 ("Fourth Amendment"), and November 16, 2023 ("Fifth Amendment," and the Original SDC PSDA as amended by all five amendments is referred to herein as the "SDC PSDA"); ii. Pursuant to the SDC PSDA and consistent with boundaries established by applicable subdivision maps and lot line adjustments, City conveyed to SDC the Phase 1 Property for the pre -development, development, operation, and use of a project that was eventually re -named "Talus" and consisted of the following project components (all as defined in the SDC PSDA): Luxury Hotel, Luxury Branded Residential Development, Lifestyle Hotel, Lifestyle Branded Residential Development, Conference and Shared Services Facility (including spa and other amenities), Permanent Golf Clubhouse, Promenade Mixed -Use Village/Resort Residential Village (on Planning Areas 7,8,9), as well as a specified Golf Course Realignment and corresponding Master Site Infrastructure Improvements (MSII). These project components on the Phase 1 Property, pursuant to the SDC PSDA, were divided into Phase 1A project components on the Phase 1A Property and the Phase 1B project components on the Phase 1B Property respectively, as described in the SDC PSDA; iii. Pursuant to the Third and Fourth Amendments to the SDC PSDA, SDC commenced pre -development and development on the Phase 1 Property for the Phase 1A project components, which as of the Reference Date of this Agreement, in various degrees, were partially constructed after SDC failed to continue to make payments to various contractors, subcontractors, and other interested parties in the development of the Talus project. Multiple lawsuits, including lawsuits seeking payments pursuant to mechanic's lien or various loan or investment agreements, and a City lawsuit against SDC for unlawful and unapproved 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT conveyances in secured interests or mechanic's liens, were filed against SDC; iv. On August 5, 2024, SDC (Debtors) filed the Bankruptcy Lawsuit, and, pursuant to Bankruptcy Court -approved Bid Procedures, Debtors retained a Chief Restructuring Officer (Douglas Wilson Companies) and marketing professional (JLL) for the purposes of, among other items, marketing the sale of the Debtors estate (which is primarily comprised of the Phase 1 Property) and soliciting proposals for the: (a) acquisition of the Debtors estate, (b) use, re -use, and/or substitution of the partially constructed improvements on the Phase 1 Property, (c) potential replacement project for a world -class hotel and residential destination resort with related amenities on the Phase 1 Property that complement the existing Arnold Palmer Classic Golf Course surrounding the Phase 1 Property and real property owned by the City, and (d) possible acquisition in the future of the City -Owned Option Property in the SilverRock Resort Area (previously referred to as the Future Option Property in the SDC PSDA and generally referred to in the Bankruptcy Lawsuit and marketing materials [and for this Repurchase Option Agreement] as the Phase 2 Property) for possible future development that would also complement a world -class hotel and residential destination resort; iii. Pursuant to Bankruptcy Court order [Bankruptcy Lawsuit Docket No. ], among other provisions: (i) Developer was authorized to purchase the Phase 1 Property, (ii) the Original SDC Development Agreement was reinstated and amended and memorialized by this Reinstated Development Agreement (as more particularly described herein), and (iii) [INSERT IF ANY OTHER RELEVANT ITEMS FROM THE BK COURT ORDER FOR SALE OF PROPERTY] E. Developer submitted a proposal in response to the marketing materials, and, pursuant to the Bankruptcy Court -approved Bid Procedures, Debtors and City approved Developer's proposal, which, among other terms and conditions, included a modified "Project" (as more particularly defined and memorialized in the Reinstated Development Agreement) on the Phase 1 Property (comprised of the Phase 1A Property and Phase 1 B Property) as well as possible acquisition in the future of the Repurchase Option Property (also referred to therein as the Phase 2 Property) for possible future development that would also complement a world -class hotel and residential destination resort, all as more particularly set forth in the Reinstated Development Agreement. F. The Reinstated Development Agreement and Specific Plan, among other land use governing documents, permits, and entitlements, are centered around the existing use and enjoyment, by residents, guests of the City, and members of the public, of the Golf Course in the SilverRock Resort Area. 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT G. As of the Repurchase Option Agreement Effective Date, the Repurchase Option Property (i.e., Phase 2 Property) is unimproved vacant land. Pursuant to the Development Agreement For The Phase 2 Property, Developer has proposed and agreed to develop and have for use on the Repurchase Option Property (i.e., the Phase 2 Property) a [INSERT "PROJECT COMPONENTS" FOR PHASE 2 PROPERTY, WHICH ARE UNKNOWN AS OF THE PHASE 2 PROPERTY OPTION AGREEMENT DATE BUT MAY BE PROPOSED AFTER COMMENCEMENT OF PHASE 1A AND PHASE 1 B, AND CAN BE DESCRIPTING IN THE MANNER AS THE PHASE 1A AND PHASE 1B PROJECT COMPONENTS WERE DEFINED ], and the "Master Site Infrastructure Improvements Project Component," all as more particularly described in the Development Agreement For The Phase 2 Property (each, a "Phase 2 Property Project Component," and collectively, the "Phase 2 Property Project Components"). H. The Phase 2 Property Project Components are to be developed, constructed, and operated on the Repurchase Option Property in accordance with all of the requirements set forth in the Development Agreement For The Phase 2 Property. This Repurchase Option Agreement is intended to grant to City: i. An option to purchase the Repurchase Option Property, or certain portions thereof, from Developer if an MAE Default (as such term is defined in the Repurchase Option Agreement) has occurred and is continuing and Developer (a) fails to commence, continuously proceed with, or complete construction of the Master Site Infrastructure Improvements pursuant to the Development Agreement For The Phase 2 Property within certain specified time frames, (b) fails to commence, continuously proceed with, or complete construction of any Phase 2 Property Project Component pursuant to the Development Agreement For The Phase 2 Property within certain specified time frames, or (c) transfers the Repurchase Option Property, or any portion thereof, in violation of the terms and conditions of the Development Agreement For The Phase 2 Property; ii. A right of first offer to purchase the Repurchase Option Property, or any portion thereof, if an MAE Default has occurred and is continuing and (I) City's option under (i)(a), (i)(b), or (i)(c) above has been triggered, (II) City decides not to exercise or does not timely exercise the option, (III) the MAE Default which gave rise to City's option has not been cured by Developer, and (IV) Developer has determined to sell or otherwise transfer the Repurchase Option Property, all as further described in this Repurchase Option Agreement. I. This Repurchase Option Agreement also memorializes the City's right to exercise the power of termination pursuant to Civil Code Sections 885.010 et seq., exercisable by the City in its sole and absolute discretion, to terminate the fee interest of the Developer in the Phase 2 Property and/or any improvements to the Phase 2 Property and revest such fee title in the City and take possession of all or any portion of such real 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT property and improvements, upon the occurrence and during the continuance of an MAE Default. J. Unless otherwise expressly defined in this Repurchase Option Agreement, capitalized terms used in this Repurchase Option Agreement, including in the foregoing Recitals, shall have the meanings ascribed to them in the Development Agreement For The Phase 2 Property or, in not defined therein, then the meanings ascribed to them in the Reinstated Development Agreement. 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 Development Agreement For The Phase 2 Property, Developer hereby grants to City the following purchase options: 27. Option I - Failure to Commence Construction of Master Site Infrastructure Improvements on the Phase 2 Property Subject to Section 7(f) hereof, Developer hereby grants to City an exclusive option ("Option I") to purchase any or all of the subdivided parcels of the Repurchase Option Property that remain subject to this Repurchase Option Agreement as of the date the Option I is exercised (the "Option I Property"), if an MAE Default has occurred and is continuing and Developer fails to commence construction of the Master Site Infrastructure Improvements Project Component on the Phase 2 Property in accordance with the Development Agreement For The Phase 2 Property. For the purposes of this Section 1, the term "commence construction" shall mean the start date in accordance with "Schedule of Performance" set forth in the Development Agreement For The Phase 2 Property. For purposes of this Repurchase Option Agreement, Option I applies to those subdivided parcels of the Repurchase Option Property that, pursuant to the Schedule of Performance and Development Agreement For The Phase 2 Property, have Master Site Infrastructure Improvements to be constructed and installed independently from the development and construction of any other Project Component on the Phase 2 Property. [NOTE: SCHEDULE OF PERFORMANCE SHOULD HAVE A MSII START AND END DATE BUT WOULD BE SUBORDINATE IF MSII ATTACHES TO A PROJECT COMPONENT AND THAT PROJECT COMPONENT, WHICH IS GOVERNED BY OPTIONS III AND IV) In the event of the continuance of an MAE Default and Developer's failure to commence construction of the Master Site Infrastructure Improvements Project Component within the time period described above, and such failure is not cured within the cure period provided for under Sections 7(b) and 7(c) below, then City shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of sixty (60) days following the final determination of the "Fair Market Value" for the Option I Property (as set forth in Section 1(b), Subparagraphs (A)-(D) below) and after the expiration of such cure period (the "Option I Period"). 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT (a) Exercise of Option I City shall exercise Option I by giving written notice to Developer ("City's Notice of Option I Exercise"), in accordance with Section 8 of this Repurchase Option Agreement, prior to the expiration of the Option I Period. Failure of City to exercise Option I shall constitute a waiver of City's right to exercise Option I only with respect to Developer's failure to commence construction of a phase of the Master Site Infrastructure Improvements Project Component by the identified start date in the Schedule of Performance in the Development Agreement For The Phase 2 Property, but no other phase or other Project Component, and shall not constitute a waiver by City of Developer's breach of its obligation to commence construction of any other Project Component, or any other phase of the Master Site Infrastructure Improvements, on the Phase 2 Property for which the start date has not yet occurred as of the date of the Developer's receipt of City's Notice of Option I Exercise, nor shall constitute a waiver by City of any remedies City may have under the terms of the Development Agreement For The Phase 2 Property or under any other agreement for Developer's failure to timely commence construction of the Master Site Infrastructure Improvements Project Component on the Phase 2 Property pursuant to the start dates identified in the Schedule of Performance in the Development Agreement For The Phase 2 Property. (b) Purchase Price - Option I City's purchase price for the Repurchase Option Property ("Option I Purchase Price"), shall be the lesser of: (i) the amount of the purchase price for the Phase 2 Property that Developer paid City upon close of escrow for the Phase 2 Property pursuant to the Phase 2 Property Option Agreement and purchase and sale agreement attached to said Phase 2 Property Option Agreement, or (ii) the Fair Market Value of the Option I Property (as defined below). For purposes of this Section 1, the term "Fair Market Value" of the Option I Property shall be the current appraised fair market value of the land and improvements thereon (if any) taking into account for purposes of valuation not the highest and best use of the Option I Property but rather the existing conditions (such as having no or only partially completed improvements) and only those uses authorized as of the date of the MAE Default giving rise to City's ability to exercise Option I. If City and Developer are unable to agree upon the Fair Market Value of the Option I Property on or before the date that is the end of the cure period for the "Option Triggering Event" as defined in Section 7(b) of this Repurchase Option Agreement giving rise to Option I (i.e., on or before the date that commences the Option I Period), then the Option I Period during which City has the right to exercise Option I shall be extended, in addition to the 60-days following the expiration of such cure period, for an additional sixty (60) days for City and Developer to resolve and agree upon the Fair Market Value. If no agreement on Fair Market Value is reached, then, in the absence of another method agreed upon by City and Developer to resolve the Fair Market Value, the following process (in Subparagraphs (A)-(D) below) shall be used and binding upon the Parties: 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT A. City and Developer shall jointly attempt to agree on the appointment of a real estate appraiser who is a member of the Appraisal Institute or successor thereto (or, in the event the Appraisal Institute or any successor shall not then be in existence, a disinterested real estate appraiser having appropriate qualifications to appraise real estate similar to the Option I Property), with at least ten (10) years professional experience in Southern California in appraising land and improvements similar to the Option I Property. All appraisers selected pursuant to the provisions hereof shall be impartial and unrelated, directly and indirectly, so far as employment of services is concerned, to either of the Parties hereto or their successors, and the appraiser(s) shall be required to so certify as a condition to being designated and accepting the appraisal assignment. The cost of the services performed by such appraiser shall be borne equally by the Parties. The single appraiser jointly appointed by the Parties shall determine the Fair Market Value of the Option I Property and shall render his or her appraisal opinion within sixty (60) days after said appraiser has been selected or as soon as practical if such longer period is needed for the appraisal to be completed. B. If City and Developer are unable to jointly agree on a single appraiser to determine the Fair Market Value of the Option I Property, then City and Developer shall each, within fifteen (15) days of the date that is the end of the cure period for the "Option Triggering Event" as defined in Section 7(b) of this Repurchase Option Agreement giving rise to Option I (i.e., fifteen (15) days after the date that commences the Option I Period), separately at its own cost designate an appraiser meeting the qualifications stated in Subparagraph (A) above. If two appraisers are appointed and they concur on the Fair Market Value of the Option I Property, then the Fair Market Value determined by them shall be the Fair Market Value of the Option I Property for purposes of this Repurchase Option Agreement. If the two appraisers do not concur but the difference between their appraisal numbers is an amount less than ten percent (10%) of the amount of the higher determination of Fair Market Value, the mean average of the two determinations shall be the Fair Market Value of the Option I Property for purposes of this Repurchase Option Agreement. The two appraisers shall render their respective appraisals within sixty (60) days after said appraisers have been selected or as soon as practical if such longer period is needed for the appraisal to be completed. If the difference between the two appraisers' determinations exceeds the ten percentage (10%) amount specified in this Subparagraph (B), the two appraisers shall jointly select a third appraiser meeting the qualifications set forth in Subparagraph (A) above. If the two appraisers are unable to agree on a third appraiser, then the third appraiser shall be selected as follows: first, the Parties each shall select the names of two (2) new 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT appraisers meeting the criteria in Subparagraph (A) above; second, the names of the four (4) new appraisers shall be grouped together blindly such that only one (1) name will be chosen at random, such as by writing the four (4) names on separate pieces of paper of equal size and then placing the four (4) names in an enclosed box and then having one (1) name selected; third, the selection of the one (1) new appraiser's name shall be witnessed with a representative from the City, Developer, and the two appraisers who could not agree upon the third appraiser. The name of the appraiser selected blindly shall be the third appraiser. C. Within fifteen (15) days from the date of selection of the third appraiser, if applicable, all three appraisers shall meet and the first two appraisers shall present to the third appraiser all of their findings, data, and conclusions as to the Fair Market Value of the Option I Property. The third appraiser shall review all of such findings, data, and conclusions, and shall determine which of the two appraisers' respective determinations of the Fair Market Value is the most reasonable determination under the criteria set forth above. The third appraiser shall not be permitted to make any other independent determination of the Fair Market Value of the Option I Property. The appraiser's determination found by the third appraiser to be the most reasonable determination shall be the Fair Market Value of the Option I Property for purposes of determining the Option I Purchase Price pursuant to Section 1(b) of this Repurchase Option Agreement. The third appraiser's conclusion shall be reached within thirty (30) days from the selection of the third appraiser or as soon as practical if such longer period is needed for the appraisal to be completed. The expenses related to the selection and services of the third appraiser shall be shared equally by City and Developer. D. The Fair Market Value determined in accordance with these procedures set forth in Subparagraphs (A)-(D) shall be binding and conclusive on the Parties for purposes of determining the Option I Purchase Price pursuant to Section 1(b) of this Repurchase Option Agreement. (c) City Election to Purchase Plans City may elect to purchase, pursuant to Section 7(1) below, either the Phase 2 Property Master Site Infrastructure Improvements or the Project Components comprising the Phase 2 Property Project Components, or both. If City elects to purchase said Plans (to the extent permitted by the applicable third party contracts relating to such Plans), City shall pay the cost of such Plans in addition to the Option I Purchase Price. 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT (d) City Reservation of Rights for Power of Termination In addition to City's right to exercise Option I pursuant to this Section 1, City reserves its right to exercise a power of termination pursuant to Civil Code section 885.010 et seq., as provided for in Section 7(n) of this Repurchase Option Agreement. 28. Option II - Failure to Continuously Proceed With Construction of the Master Site Infrastructure Improvements or to Complete Construction of the Master Site Infrastructure Improvements Developer hereby grants to City an exclusive option ("Option II") to purchase any or all of the subdivided parcels of the Repurchase Option Property that remain subject to this Repurchase Option Agreement as of the date that Option II is exercised (the "Option II Property") if an MAE Default has occurred and is continuing and after commencement of construction of the Master Site Infrastructure Improvements on the Phase 2 Property, Developer fails to continuously proceed with construction of the Master Site Infrastructure Improvements in accordance with the Schedule of Performance in the Development Agreement For The Phase 2 Property, or to complete the Master Site Infrastructure Improvements in accordance with the Schedule of Performance in the Development Agreement For The Phase 2 Property, as evidenced by acceptance of such Master Site Infrastructure Improvements by the La Quinta City Council, within the applicable time period(s) set forth in the Schedule of Performance in the Development Agreement For The Phase 2 Property to finish such phase of Master Site Infrastructure Improvements (each, as applicable, a "Master Site Infrastructure Improvements Phase Completion Deadline"). For purposes of this Section 2, the term "continuously proceed with construction" shall mean construction that is interrupted, if at all, for periods of no longer than ninety (90) days, subject to Force Majeure. For purposes of this Repurchase Option Agreement, Option II applies to those subdivided parcels of the Repurchase Option Property that, pursuant to the Schedule of Performance and Development Agreement For The Phase 2 Property, have Master Site Infrastructure Improvements to be constructed and installed independently from the development and construction of any other Project Component on the Phase 2 Property. [NOTE: SCHEDULE OF PERFORMANCE SHOULD HAVE A MSII START AND END DATE BUT WOULD BE SUBORDINATE IF MSII ATTACHES TO A PROJECT COMPONENT AND THAT PROJECT COMPONENT, WHICH IS GOVERNED BY OPTIONS III AND IV) In the event of the continuance of an MAE Default and Developer's failure to continuously proceed with construction of the Master Site Infrastructure Improvements, or to complete construction of the Master Site Infrastructure Improvements by the applicable Master Site Infrastructure Improvements Phase Completion Deadline, and such failure is not cured within the cure period provided for under Sections 7(b) and 7(c) below, then City shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of sixty (60) days following the date on which the later occurs: (i) the completion of the "Master Site Infrastructure Improvements Cost Audit" (as that term is defined in Section 2(b) below) and after expiration of such cure period, or (ii) the final determination of the "Fair Market Value" for the Option II Property (as set forth in Section 2(b), Subparagraphs (A)-(D) below) and after the expiration of such cure period ("Option II 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Period"). Notwithstanding anything to the contrary in this Section 2, Option II shall not apply to, and the Option II Property shall not include, those subdivided parcels of the Repurchase Option Property for which construction of the Project Component(s) designated pursuant to the Development Agreement For The Phase 2 Property to be constructed thereon has commenced and the Master Site Infrastructure Improvements are attached to the development of the Project Component(s). Such subdivided parcels are addressed in Section 4 below. (a) Exercise of Option II City shall exercise Option II by giving written notice to Developer ("City's Notice of Option II Exercise"), in accordance with Section 8 of this Repurchase Option Agreement, prior to the expiration of the Option II Period. Failure of City to exercise Option II shall constitute a waiver by City of City's right to exercise Option II only with respect to Developer's specific incidence of failure to continuously proceed with construction of the Master Site Infrastructure Improvements on the Phase 2 Property that gave rise to Option II or of Developer's failure to complete construction of the Master Site Infrastructure Improvements on the Phase 2 Property by the Master Site Infrastructure Improvements Phase Completion Deadline (as applicable), but shall not constitute a waiver by City of Developer's breach of its obligation on any other Project Component, or to continuously proceed with construction of the Master Site Infrastructure Improvements or to complete construction of the Master Site Infrastructure Improvements by the Master Site Infrastructure Improvements Phase Completion Deadline (as applicable) or of any remedies City may have under the terms of the Development Agreement For The Phase 2 Property or under any other agreement for Developer's failure to continuously proceed with construction of the Master Site Infrastructure Improvements or to complete construction of the Master Site Infrastructure Improvements by the Master Site Infrastructure Improvements Phase Completion Deadline (as applicable). (b) Purchase Price - Option II City's purchase price for the Option II Property ("Option II Purchase Price"), shall be the lesser of: (i) the amount of the purchase price for the Phase 2 Property that Developer paid City upon close of escrow for the Phase 2 Property pursuant to the Phase 2 Property Option Agreement and purchase and sale agreement attached to said Phase 2 Property Option Agreement plus Developer's MSII Construction Costs (if any, and as defined below), or (ii) the Fair Market Value of the Option II Property (as defined below). For purposes of this Section 2, the term "Developer's MSII Construction Costs" shall mean the construction costs, if any, actually incurred by Developer for construction of the Master Site Infrastructure Improvements on the Option II Property on or after the Repurchase Option Agreement Effective Date to the date of the Developer's receipt of City's Notice of Option II Exercise, as determined by an independent audit (the "Option II MSII Construction Cost Audit"), performed by an independent auditor who shall be selected by City and approved by Developer and be a partner at a nationally recognized 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT firm of accountants with experience in auditing large-scale, mixed use construction projects (the "Auditor"), which costs shall consist only of: (I) the amount(s) paid by Developer to the contractor or contractors performing the construction, (II) reasonable inspection, supervision, and testing costs paid by Developer to independent third party engineers, architects, or consultants in conjunction with said construction, and (III) any amounts paid by Developer to material suppliers and equipment suppliers in connection with the construction (including any so-called "soft costs" incurred in the planning, environmental review, or design of the Master Site Infrastructure Improvements constructed on the Option II Property, but not including any 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 City and the Auditor with all records and documentation necessary for the Auditor to perform the Option II MSII Construction Cost Audit. In the event that there are any outstanding mortgages or deeds of trust that have been approved by City (to the extent approval was required) pursuant to the Development Agreement For The Phase 2 Property (any of the foregoing, a "Valid Lien") and that are recorded against the Option II Property at the time that Option II is exercised, Developer and City agree that the Option II Purchase Price shall be paid to the lender on any such Valid Lien (any such lender with a Valid Lien, a "Lender"), up to the then outstanding balance due under same including, without limitation, the outstanding principal balance, all accrued and unpaid interest, and any prepayment fees and costs (collectively, the "Outstanding Balance"). Any portion of the Option II Purchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. For purposes of this Section 2, the term "Fair Market Value" of the Option II Property shall be the current appraised fair market value of the land and improvements thereon (if any) taking into account for purposes of valuation not the highest and best use of the Option II Property but rather the existing conditions (such as having no or only partially completed improvements) and only those uses authorized as of the date of the MAE Default giving rise to City's ability to exercise Option II. If City and Developer are unable to agree upon the Fair Market Value of the Option II Property on or before the date that is the end of the cure period for the "Option Triggering Event" as defined in Section 7(b) of this Repurchase Option Agreement giving rise to Option II (i.e., on or before the date that commences the Option II Period), then the Option II Period during which City has the right to exercise Option II shall be extended, in addition to the 60-days following the expiration of such cure period, for an additional sixty (60) days for City and Developer to resolve and agree upon the Fair Market Value. If no agreement on Fair Market Value is reached, then, in the absence of another method agreed upon by City and Developer to resolve the Fair Market Value, the following process (in Subparagraphs (A)-(D) below) shall be used and binding upon the Parties: A. City and Developer shall jointly attempt to agree on the appointment of a real estate appraiser who is a member of the Appraisal Institute or successor thereto (or, in the event the Appraisal Institute or any successor shall not then be in existence, a disinterested real estate appraiser having appropriate qualifications to appraise real estate similar to the Option II Property), with at least ten (10) years 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT professional experience in Southern California in appraising land and improvements similar to the Option II Property. All appraisers selected pursuant to the provisions hereof shall be impartial and unrelated, directly and indirectly, so far as employment of services is concerned, to either of the Parties hereto or their successors, and the appraiser(s) shall be required to so certify as a condition to being designated and accepting the appraisal assignment. The cost of the services performed by such appraiser shall be borne equally by the Parties. The single appraiser jointly appointed by the Parties shall determine the Fair Market Value of the Option II Property and shall render his or her appraisal opinion within sixty (60) days after said appraiser has been selected or as soon as practical if such longer period is needed for the appraisal to be completed. B. If City and Developer are unable to jointly agree on a single appraiser to determine the Fair Market Value of the Option II Property, then City and Developer shall each, within fifteen (15) days of the date that is the end of the cure period for the "Option Triggering Event" as defined in Section 7(b) of this Repurchase Option Agreement giving rise to Option II (i.e., fifteen (15) days after the date that commences the Option II Period), separately at its own cost designate an appraiser meeting the qualifications stated in Subparagraph (A) above. If two appraisers are appointed and they concur on the Fair Market Value of the Option II Property, then the Fair Market Value determined by them shall be the Fair Market Value of the Option II Property for purposes of this Repurchase Option Agreement. If the two appraisers do not concur but the difference between their appraisal numbers is an amount less than ten percent (10%) of the amount of the higher determination of Fair Market Value, the mean average of the two determinations shall be the Fair Market Value of the Option II Property for purposes of this Repurchase Option Agreement. The two appraisers shall render their respective appraisals within sixty (60) days after said appraisers have been selected or as soon as practical if such longer period is needed for the appraisal to be completed. If the difference between the two appraisers' determinations exceeds the ten percentage (10%) amount specified in this Subparagraph (B), the two appraisers shall jointly select a third appraiser meeting the qualifications set forth in Subparagraph (A) above. If the two appraisers are unable to agree on a third appraiser, then the third appraiser shall be selected as follows: first, the Parties each shall select the names of two (2) new appraisers meeting the criteria in Subparagraph (A) above; second, the names of the four (4) new appraisers shall be grouped together blindly such that only one (1) name will be chosen at random, such as by writing the four (4) names on separate pieces of paper of equal size and then placing the four (4) names in an enclosed box and then having one (1) name selected; third, the selection of the one (1) new 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT appraiser's name shall be witnessed with a representative from the City, Developer, and the two appraisers who could not agree upon the third appraiser. The name of the appraiser selected blindly shall be the third appraiser. C. Within fifteen (15) days from the date of selection of the third appraiser, if applicable, all three appraisers shall meet and the first two appraisers shall present to the third appraiser all of their findings, data, and conclusions as to the Fair Market Value of the Option II Property. The third appraiser shall review all of such findings, data, and conclusions, and shall determine which of the two appraisers' respective determinations of the Fair Market Value is the most reasonable determination under the criteria set forth above. The third appraiser shall not be permitted to make any other independent determination of the Fair Market Value of the Option II Property. The appraiser's determination found by the third appraiser to be the most reasonable determination shall be the Fair Market Value of the Option II Property for purposes of determining the Option II Purchase Price pursuant to Section 2(b) of this Repurchase Option Agreement. The third appraiser's conclusion shall be reached within thirty (30) days from the selection of the third appraiser or as soon as practical if such longer period is needed for the appraisal to be completed. The expenses related to the selection and services of the third appraiser shall be shared equally by City and Developer. D. The Fair Market Value determined in accordance with these procedures set forth in Subparagraphs (A)-(D) shall be binding and conclusive on the Parties for purposes of determining the Option II Purchase Price pursuant to Section 2(b) of this Repurchase Option Agreement. (c) City Election to Purchase Plans City may elect to purchase, pursuant to Section 7(1) below, either the Phase 2 Property Master Site Infrastructure Improvements or the Project Components comprising the Phase 2 Property Project Components, or both. If City elects to purchase said Plans (to the extent permitted by the applicable third party contracts relating to such Plans), City shall pay the cost of such Plans in addition to the Option 11 Purchase Price. (d) City Reservation of Rights for Power of Termination In addition to City's right to exercise Option II pursuant to this Section 2, City reserves its right to exercise a power of termination pursuant to Civil Code section 885.010 et seq., as provided for in Section 7(n) of this Repurchase Option Agreement. 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 29. Option III - Failure to Commence Construction of One or More Project Components. Developer hereby grants to City an exclusive option ("Option III") to purchase any or all of the subdivided parcels of the Repurchase Option Property that remain subject to this Repurchase Option Agreement as of the date that Option III is exercised (the "Option III Property") if an MAE Default has occurred and is continuing and Developer fails to commence construction of any of the Project Components designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on a portion of the Option III Property on or prior to the start date for commencement of such Project Component set forth in the Schedule of Performance in the Development Agreement For The Phase 2 Property, subject to Force Majeure. For purposes of this Section 3, the term "commence construction" shall mean the date specified in the Schedule of Performance by which a specified Project Component on the Phase 2 Property shall have construction commence. In the event of the continuance of an MAE Default and Developer's failure to commence construction of any of the Project Components designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on a portion of the Option III Property within the time period described above (subject to Force Majeure), and such failure is not cured within the cure period provided for under Sections 7(b) and 7(c) below, then City shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of sixty (60) days following the date on which the later occurs: (i) the completion of the "Master Site Infrastructure Improvements Cost Audit" (as that term is defined in Section 3(b) below) and after expiration of such cure period, or (ii) the final determination of the "Fair Market Value" for the Option III Property (as set forth in Section 3(b), Subparagraphs (A)-(D) below) and after the expiration of such cure period (the "Option III Period"). Notwithstanding anything to the contrary in this Section 3, Option III shall not apply to, and the Option III Property shall not include, those subdivided parcels of the Repurchase Option Property for which construction of the Project Component(s) designated pursuant to the Development Agreement For The Phase 2 Property to be constructed thereon has commenced. Such subdivided parcels are addressed in Section 4 below. (a) Exercise of Option III City shall exercise Option III by giving written notice to Developer ("City's Notice of Option III Exercise"), in accordance with Section 8 of this Repurchase Option Agreement, prior to the expiration of the Option III Period. Failure of City to exercise Option III shall constitute a waiver by City of City's right to exercise Option III only with respect to Developer's specific incidence of failure to timely commence construction of one or more Project Component(s) designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on a portion of the Option III Property within the time period described above in this Section 3, but shall not constitute a waiver by City of Developer's breach of its obligation to continuously proceed with construction and 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT complete one or more Project Components, or obligation to commence construction of said Project Component(s) or any other Project Component(s), or of any remedies City may have under the terms of the Development Agreement For The Phase 2 Property or under any other agreement for Developer's failure to commence construction of a Project Component(s) within the time period described above in this Section 3. (b) Purchase Price - Option III City's purchase price for the Option III Property ("Option III Purchase Price"), shall be the lesser of: (i) the amount of the purchase price for the Phase 2 Property that Developer paid City upon close of escrow for the Phase 2 Property pursuant to the Phase 2 Property Option Agreement and purchase and sale agreement attached to said Phase 2 Property Option Agreement plus Developer's MSII Construction Costs (if any, and as defined below), or (ii) the Fair Market Value of the Option III Property (as defined below). For purposes of this Section 3, the term "Developer's MSII Construction Costs" shall mean the construction costs, if any, actually incurred by Developer for construction of the Master Site Infrastructure Improvements on the Option III Property on or after the Repurchase Option Agreement Effective Date to the date of Developer's receipt of City's Notice of Option III Exercise, as determined by an independent audit (the "Option III MSII Construction Cost Audit"), performed by the Auditor, which costs (if any) shall consist only of (I) the amount(s) paid by Developer to the contractor or contractors performing the construction, (II) reasonable inspection, supervision, and testing costs paid by Developer to independent third party engineers, architects, or consultants in conjunction with said construction, and (III) any amounts paid by Developer to material suppliers and equipment suppliers in connection with the construction (including any so-called "soft costs" incurred in the planning, environmental review, or design of the Master Site Infrastructure Improvements constructed on the Option III Property, but not including any 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 City and the Auditor with all records and documentation necessary for the Auditor to perform the Option III MSII Construction Cost Audit. In the event that there are any Valid Liens recorded against the Option III Property at the time that Option III is exercised, Developer and City agree that the Option III Purchase 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 Option III Purchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. For purposes of this Section 3, the term "Fair Market Value" of the Option III Property shall be the current appraised fair market value of the land and improvements thereon (if any) taking into account for purposes of valuation not the highest and best use of the Option III Property but rather the existing conditions (such as having no or only partially completed improvements) and only those uses authorized as of the date of the MAE Default giving rise to City's ability to exercise Option III. If City and Developer are unable to agree upon the Fair Market Value of the Option III Property on or before the date that is the end of the cure period for the "Option Triggering Event" as defined in Section 7(b) of this Repurchase Option Agreement giving rise to Option III (i.e., on or 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT before the date that commences the Option III Period), then the Option III Period during which City has the right to exercise Option III shall be extended, in addition to the 60-days following the expiration of such cure period, for an additional sixty (60) days for City and Developer to resolve and agree upon the Fair Market Value. If no agreement on Fair Market Value is reached, then, in the absence of another method agreed upon by City and Developer to resolve the Fair Market Value, the following process (in Subparagraphs (A)-(D) below) shall be used and binding upon the Parties: A. City and Developer shall jointly attempt to agree on the appointment of a real estate appraiser who is a member of the Appraisal Institute or successor thereto (or, in the event the Appraisal Institute or any successor shall not then be in existence, a disinterested real estate appraiser having appropriate qualifications to appraise real estate similar to the Option III Property), with at least ten (10) years professional experience in Southern California in appraising land and improvements similar to the Option III Property. All appraisers selected pursuant to the provisions hereof shall be impartial and unrelated, directly and indirectly, so far as employment of services is concerned, to either of the Parties hereto or their successors, and the appraiser(s) shall be required to so certify as a condition to being designated and accepting the appraisal assignment. The cost of the services performed by such appraiser shall be borne equally by the Parties. The single appraiser jointly appointed by the Parties shall determine the Fair Market Value of the Option III Property and shall render his or her appraisal opinion within sixty (60) days after said appraiser has been selected or as soon as practical if such longer period is needed for the appraisal to be completed. B. If City and Developer are unable to jointly agree on a single appraiser to determine the Fair Market Value of the Option III Property, then City and Developer shall each, within fifteen (15) days of the date that is the end of the cure period for the "Option Triggering Event" as defined in Section 7(b) of this Repurchase Option Agreement giving rise to Option III (i.e., fifteen (15) days after the date that commences the Option III Period), separately at its own cost designate an appraiser meeting the qualifications stated in Subparagraph (A) above. If two appraisers are appointed and they concur on the Fair Market Value of the Option III Property, then the Fair Market Value determined by them shall be the Fair Market Value of the Option III Property for purposes of this Repurchase Option Agreement. If the two appraisers do not concur but the difference between their appraisal numbers is an amount less than ten percent (10%) of the amount of the higher determination of Fair Market Value, the mean average of the two determinations shall be the Fair Market Value of the Option III Property for purposes of this Repurchase Option Agreement. The two appraisers shall render their respective appraisals within sixty (60) days after said appraisers have been 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT selected or as soon as practical if such longer period is needed for the appraisal to be completed. If the difference between the two appraisers' determinations exceeds the ten percentage (10%) amount specified in this Subparagraph (B), the two appraisers shall jointly select a third appraiser meeting the qualifications set forth in Subparagraph (A) above. If the two appraisers are unable to agree on a third appraiser, then the third appraiser shall be selected as follows: first, the Parties each shall select the names of two (2) new appraisers meeting the criteria in Subparagraph (A) above; second, the names of the four (4) new appraisers shall be grouped together blindly such that only one (1) name will be chosen at random, such as by writing the four (4) names on separate pieces of paper of equal size and then placing the four (4) names in an enclosed box and then having one (1) name selected; third, the selection of the one (1) new appraiser's name shall be witnessed with a representative from the City, Developer, and the two appraisers who could not agree upon the third appraiser. The name of the appraiser selected blindly shall be the third appraiser. C. Within fifteen (15) days from the date of selection of the third appraiser, if applicable, all three appraisers shall meet and the first two appraisers shall present to the third appraiser all of their findings, data, and conclusions as to the Fair Market Value of the Option III Property. The third appraiser shall review all of such findings, data, and conclusions, and shall determine which of the two appraisers' respective determinations of the Fair Market Value is the most reasonable determination under the criteria set forth above. The third appraiser shall not be permitted to make any other independent determination of the Fair Market Value of the Option III Property. The appraiser's determination found by the third appraiser to be the most reasonable determination shall be the Fair Market Value of the Option III Property for purposes of determining the Option III Purchase Price pursuant to Section 3(b) of this Repurchase Option Agreement. The third appraiser's conclusion shall be reached within thirty (30) days from the selection of the third appraiser or as soon as practical if such longer period is needed for the appraisal to be completed. The expenses related to the selection and services of the third appraiser shall be shared equally by City and Developer. D. The Fair Market Value determined in accordance with these procedures set forth in Subparagraphs (A)-(D) shall be binding and conclusive on the Parties for purposes of determining the Option III Purchase Price pursuant to Section 3(b) of this Repurchase Option Agreement. 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT (c) City Election to Purchase Plans City may elect to purchase, pursuant to Section 7(1) below, either the Phase 2 Property Master Site Infrastructure Improvements or the Project Components comprising the Phase 2 Property Project Components, or both. If City elects to purchase said Plans (to the extent permitted by the applicable third party contracts relating to such Plans), City shall pay the cost of such Plans in addition to the Option III Purchase Price. (d) City Reservation of Rights for Power of Termination In addition to City's right to exercise Option 1111 pursuant to this Section 3, City reserves its right to exercise a power of termination pursuant to Civil Code section 885.010 et seq., as provided for in Section 7(n) of this Repurchase Option Agreement. 30. Option IV - Failure to Continuously Proceed With Construction of one or more Project Components or to Complete Construction of one or more Project Components Developer hereby grants to City an exclusive option ("Option IV") to purchase any or all of the subdivided parcels of the Repurchase Option Property that remain subject to this Repurchase Option Agreement as of the date that Option IV is exercised (the "Option IV Property") if an MAE Default has occurred and is continuing and after commencement of construction of any Project Component(s) designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on a portion of the Option IV Property, Developer fails to continuously proceed with construction of said Project Component(s) and/or to complete construction of said Project Component(s) within the time period for completion of such Project Component(s) set forth in the Schedule of Performance in the Development Agreement For The Phase 2 Property, subject to Force Majeure, as evidenced by either City's issuance of a certificate of occupancy or by the recording of a "Certificate of Completion" (as defined in the Development Agreement For The Phase 2 Property, or if not defined therein, the Reinstated Development Agreement), whichever event occurs earlier, for such Project Component(s) (the "Option IV Project Component(s) Completion Deadline"). For purposes of this Section 4, the term "continuously proceed with construction" shall mean construction that is interrupted, if at all, for periods of no longer than ninety (90) days, subject to Force Majeure. In the event of the continuance of an MAE Default and Developer's failure to continuously proceed with construction of any Project Component(s) designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on a portion of the Option IV Property, or Developer's failure to complete construction of any of said Project Component(s) by the applicable Option IV Project Component(s) Completion Deadline, subject to Force Majeure, and such failure is not cured within the cure period provided for under Sections 7(b) and 7(c) below, then City shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a period of sixty (60) days following the date on which the later occurs: (i) the completion of the "Option IV Project Component(s) Cost Audit" (as that term is defined in Section 4(b) below) and after expiration of such cure period, or (ii) final determination of the "Fair Market 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Value" for the Option IV Property (as set forth in Section 4(b), Subparagraphs (A)-(D) below) and after the expiration of such cure period ("Option IV Period"). Notwithstanding anything in this Repurchase Option Agreement to the contrary, City is not obligated and shall not be deemed obligated to purchase any portions of the Option IV Property on which construction of the Project Component designated pursuant to the Development Agreement For The Phase 2 Property to be constructed thereon has commenced. (a) Exercise of Option IV City shall exercise Option IV by giving written notice to Developer ("City's Notice of Option IV Exercise"), in accordance with Section 8 of this Repurchase Option Agreement, prior to the expiration of the Option IV Period. Failure of City to exercise Option IV shall constitute a waiver by City of City's right to exercise Option IV only with respect to Developer's specific incidence of failure to continuously proceed with construction of the Project Component(s) designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on a portion of the Option IV Property that gave rise to Option IV, or failure to complete construction of said Project Component(s) by the applicable Option IV Project Component(s) Completion Deadline that gave rise to Option IV, but shall not constitute a waiver by City of Developer's breach of its obligation to continuously proceed with construction of said Project Component(s), or to complete construction of said Project Component(s) by the applicable Option IV Project Component(s) Completion Deadline (as applicable), or of any remedies City may have under the terms of the Development Agreement For The Phase 2 Property or under any other agreement for Developer's failure to continuously proceed with construction of said Project Component(s), or to complete construction of said Project Components by the Option IV Project Component(s) Completion Deadline (as applicable). (b) Determination of Purchase Price - Option IV City's purchase price for the Option IV Property ("Option IV Purchase Price"), shall be the lesser of: (i) the amount of the purchase price for the Phase 2 Property that Developer paid City upon close of escrow for the Phase 2 Property pursuant to the Phase 2 Property Option Agreement and purchase and sale agreement attached to said Phase 2 Property Option Agreement plus Developer's Option IV Project Component(s) Construction Costs (if any, and as defined below), or (ii) the Fair Market Value of the Option IV Property (as defined below). For purposes of this Section 4, the term "Developer's Option IV Project Component(s) Construction Costs" shall mean the construction costs, if any, actually incurred by Developer for construction of (I) the portion of the Master Site Infrastructure Improvements constructed on the Option IV Property on or after the Repurchase Option Agreement Effective Date to the date of Developer's receipt of City's Notice of Option IV Exercise, and (II) the portion of the Project Component(s) designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on the Option IV Property to the date of Developer's receipt of City's Notice of Option IV Exercise, all as 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT determined by an independent audit (the "Option IV Project Component(s) Cost Audit"), performed by the Auditor, which costs (if any) shall consist only of (i) the amount(s) paid by Developer to the contractor or contractors performing the construction, (ii) reasonable inspection, supervision, and testing costs paid by Developer to independent third party engineers, architects, or consultants in conjunction with said construction, and (iii) any amounts paid by Developer to material suppliers and equipment suppliers in connection with the construction (including any so-called "soft costs" incurred in the planning, environmental review, or design of the Master Site Infrastructure Improvements constructed on the Option IV Property or the Project Component(s) designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on the Option IV Property, but not including any 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 City and the Auditor with all records and documentation necessary for the Auditor to perform the Option IV Project Component(s) Cost Audit. In the event that there are any Valid Liens recorded against the Option IV Property at the time that Option IV is exercised, Developer and City agree that the Option IV Purchase 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 Option IV Purchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. For purposes of this Section 4, the term "Fair Market Value" of the Option IV Property shall be the current appraised fair market value of the land and improvements thereon (if any) taking into account for purposes of valuation not the highest and best use of the Option IV Property but rather the existing conditions (such as having no or only partially completed improvements) and only those uses authorized as of the date of the MAE Default giving rise to City's ability to exercise Option IV. If City and Developer are unable to agree upon the Fair Market Value of the Option IV Property on or before the date that is the end of the cure period for the "Option Triggering Event" as defined in Section 7(b) of this Repurchase Option Agreement giving rise to Option IV (i.e., on or before the date that commences the Option IV Period), then the Option IV Period during which City has the right to exercise Option IV shall be extended, in addition to the 60-days following the expiration of such cure period, for such time as required for City and Developer to resolve and agree upon the Fair Market Value. In the absence of another method agreed upon by City and Developer to resolve the Fair Market Value, the following process (in Subparagraphs (A)-(D) below) shall be used and binding upon the Parties: A. City and Developer shall jointly attempt to agree on the appointment of a real estate appraiser who is a member of the Appraisal Institute or successor thereto (or, in the event the Appraisal Institute or any successor shall not then be in existence, a disinterested real estate appraiser having appropriate qualifications to appraise real estate similar to the Option IV Property), with at least ten (10) years professional experience in Southern California in appraising land and improvements similar to the Option IV Property. All appraisers selected pursuant to the provisions hereof shall be impartial and 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT unrelated, directly and indirectly, so far as employment of services is concerned, to either of the Parties hereto or their successors, and the appraiser(s) shall be required to so certify as a condition to being designated and accepting the appraisal assignment. The cost of the services performed by such appraiser shall be borne equally by the Parties. The single appraiser jointly appointed by the Parties shall determine the Fair Market Value of the Option IV Property and shall render his or her appraisal opinion within sixty (60) days after said appraiser has been selected or as soon as practical if such longer period is needed for the appraisal to be completed. B. If City and Developer are unable to jointly agree on a single appraiser to determine the Fair Market Value of the Option IV Property, then City and Developer shall each, within fifteen (15) days of the date that is the end of the cure period for the "Option Triggering Event" as defined in Section 7(b) of this Repurchase Option Agreement giving rise to Option IV (i.e., fifteen (15) days after the date that commences the Option IV Period), separately at its own cost designate an appraiser meeting the qualifications stated in Subparagraph (A) above. If two appraisers are appointed and they concur on the Fair Market Value of the Option IV Property, then the Fair Market Value determined by them shall be the Fair Market Value of the Option IV Property for purposes of this Repurchase Option Agreement. If the two appraisers do not concur but the difference between their appraisal numbers is an amount less than ten percent (10%) of the amount of the higher determination of Fair Market Value, the mean average of the two determinations shall be the Fair Market Value of the Option IV Property for purposes of this Repurchase Option Agreement. The two appraisers shall render their respective appraisals within sixty (60) days after said appraisers have been selected or as soon as practical if such longer period is needed for the appraisal to be completed. If the difference between the two appraisers' determinations exceeds the ten percentage (10%) amount specified in this Subparagraph (B), the two appraisers shall jointly select a third appraiser meeting the qualifications set forth in Subparagraph (A) above. If the two appraisers are unable to agree on a third appraiser, then the third appraiser shall be selected as follows: first, the Parties each shall select the names of two (2) new appraisers meeting the criteria in Subparagraph (A) above; second, the names of the four (4) new appraisers shall be grouped together blindly such that only one (1) name will be chosen at random, such as by writing the four (4) names on separate pieces of paper of equal size and then placing the four (4) names in an enclosed box and then having one (1) name selected; third, the selection of the one (1) new appraiser's name shall be witnessed with a representative from the City, Developer, and the two appraisers who could not agree upon 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT the third appraiser. The name of the appraiser selected blindly shall be the third appraiser. C. Within fifteen (15) days from the date of selection of the third appraiser, if applicable, all three appraisers shall meet and the first two appraisers shall present to the third appraiser all of their findings, data, and conclusions as to the Fair Market Value of the Option IV Property. The third appraiser shall review all of such findings, data, and conclusions, and shall determine which of the two appraisers' respective determinations of the Fair Market Value is the most reasonable determination under the criteria set forth above. The third appraiser shall not be permitted to make any other independent determination of the Fair Market Value of the Option IV Property. The appraiser's determination found by the third appraiser to be the most reasonable determination shall be the Fair Market Value of the Option IV Property for purposes of determining the Option IV Purchase Price pursuant to Section 4(b) of this Repurchase Option Agreement. The third appraiser's conclusion shall be reached within thirty (30) days from the selection of the third appraiser or as soon as practical if such longer period is needed for the appraisal to be completed. The expenses related to the selection and services of the third appraiser shall be shared equally by City and Developer. D. The Fair Market Value determined in accordance with these procedures set forth in Subparagraphs (A)-(D) shall be binding and conclusive on the Parties for purposes of determining the Option IV Purchase Price pursuant to Section 4(b) of this Repurchase Option Agreement. (c) City Election to Purchase Plans City may elect to purchase, pursuant to Section 7(1) below, either the Phase 2 Property Master Site Infrastructure Improvements or the Project Components comprising the Phase 2 Property Project Components, or both. If City elects to purchase said Plans (to the extent permitted by the applicable third party contracts relating to such Plans), City shall pay the cost of such Plans in addition to the Option IV Purchase Price. (d) City Reservation of Rights for Power of Termination In addition to City's right to exercise Option IV pursuant to this Section 4, City reserves its right to exercise a power of termination pursuant to Civil Code section 885.010 et seq., as provided for in Section 7(n) of this Repurchase Option Agreement. 31. Option V - Transfer of the Repurchase Option Property, or Portion Thereof, Prior to Completion of Project Components on Phase 2 Property Developer hereby grants to City an exclusive option ("Option V") to purchase any or all of the subdivided parcels of the Repurchase Option Property that remain subject to 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT this Repurchase Option Agreement as of the date that Option V is exercised (the "Option V Property"), if, prior to the time Developer completes all of the Project Components on the Repurchase Option Property as evidenced by either City's issuance of a certificate of occupancy or by the recording of a "Certificate of Completion" (as defined in the Development Agreement For The Phase 2 Property, or if not defined therein, the Reinstated Development Agreement), an MAE Default has occurred and is continuing and Developer transfers, enters into a transaction for an anticipated transfer (an "anticipated transfer"), or suffers an involuntary transfer of the Repurchase Option Property or portion thereof in violation of the terms of the Development Agreement For The Phase 2 Property. In the event of the continuance of an MAE Default and Developer's transfer of the Repurchase Option Property or any portion thereof in violation of the Development Agreement For The Phase 2 Property or if not defined therein, the Reinstated Development Agreement (an "Unauthorized Transfer") and such Unauthorized Transfer is not cured within the cure period provided under Sections 7(b) and 7(c) below, then, City shall be entitled to exercise, but is not obligated to exercise, the foregoing option for sixty (60) days following the date on which the last event occurs: (i) the date of the Unauthorized Transfer that gives rise to Option V; (ii) City's discovery of the anticipated or actual Unauthorized Transfer that gives rise to Option V; (iii) for Option V Property subject to the same purchase price provisions as the Option I Purchase Price pursuant to Section 5(b) below, the final determination of the "Fair Market Value" for the Option V Property as if it were Option I Property (as set forth in Section 1(b), Subparagraphs (A)-(D)), and after the expiration of the cure period for the Option V Triggering Event in Sections 7(b) and 7(c) of this Repurchase Option Agreement; (iv) for Option V Property subject to the same purchase price provisions as the Option II Purchase Price pursuant to Section 5(b) below, the later to occur of either the completion of the "Master Site Infrastructure Improvements Cost Audit" (as that term is defined in Section 2(b) of this Repurchase Option Agreement) or the final determination of the "Fair Market Value" for the Option V Property as if it were Option II Property (as set forth in Section 2(b), Subparagraphs (A)-(D)), and after the expiration of the cure period for the Option V Triggering Event in Sections 7(b) and 7(c) of this Repurchase Option Agreement; (v) for Option V Property subject to the same purchase price provisions as the Option III Purchase Price pursuant to Section 5(b) below, the later to occur of either the completion of the "Master Site Infrastructure Improvements Cost Audit" (as that term is defined in Section 3(b) of this Repurchase Option Agreement) or the final determination of the "Fair Market Value" for the Option V Property as if it were Option III Property (as set forth in Section 3(b), Subparagraphs (A)-(D)), and after the expiration of the cure period for the Option V Triggering Event in Sections 7(b) and 7(c) of this Repurchase Option Agreement; or (vi) for Option V Property subject to the same purchase price provisions as the Option IV Purchase Price pursuant to Section 5(b) below, the later to occur of either the completion of the "Option IV Project Component(s) Cost Audit" (as that term is defined in Section 4(b) of this Repurchase Option Agreement) or the final determination of the "Fair Market Value" for the Option V Property as if it were Option IV Property (as set forth in Section 4(b), Subparagraphs (A)-(D)), and after the expiration of the cure period for the Option V Triggering Event in Sections 7(b) and 7(c) of this Repurchase Option Agreement (the "Option V Period"). Notwithstanding anything to the contrary in this 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Section 5, (a) Option V shall not apply to, and the Option V Property shall not include, those portions of the Repurchase Option Property that are not or were not the subject of an Unauthorized Transfer, and (b) City shall not be obligated to purchase any portion of the Option V Property on which construction of the Project Component designated pursuant to the Development Agreement For The Phase 2 Property to be constructed thereon has commenced. (a) Exercise of Option V City shall exercise Option V by giving written notice to Developer ("City's Notice of Option V Exercise"), in accordance with Section 8 of this Repurchase Option Agreement, prior to the expiration of the Option V Period. Failure of City to exercise Option V shall constitute a waiver by City of City's right to exercise Option V only with respect to the specific Unauthorized Transfer that gave rise to Option V, but shall not constitute a waiver by City of Developer's breach of the transfer provisions in the Development Agreement For The Phase 2 Property or pursuant to this Repurchase Option Agreement, or of any remedies City may have under the terms of the Development Agreement For The Phase 2 Property, the Reinstated Development Agreement, or under any other agreement for Developer's transfer or sufferance of an involuntary transfer of the Repurchase Option Property or portion thereof. (b) Purchase Price - Option V City's purchase price for the Option V Property ("Option V Purchase Price") shall be as follows: (i) In the event Developer has not yet commenced construction of the Master Site Infrastructure Improvements to be constructed on the Option V Property at the time City exercises Option V, the Option I Purchase Price as set forth in Section 1 (b) of this Repurchase Option Agreement; (ii) In the event Developer has commenced but not yet completed construction of the Master Site Infrastructure Improvements to be constructed on the Option V Property at the time City exercises Option V, the Option II Purchase Price as set forth in Section 2(b) of this Repurchase Option Agreement; provided, however, that if Developer commenced construction of the Master Site Infrastructure Improvements concurrent with a Project Component or Project Components subject to this Option V, the Option V Purchase Price shall be the Option IV Purchase Price as set forth in Section 4(b) of this Repurchase Option Agreement; (iii) In the event Developer has not yet commenced construction of the Project Component or Project Components to be constructed on the Option V Property at the time City exercises Option V, the Option III Purchase Price as set forth in Section 3(b) of this Repurchase Option Agreement; and (iv) In the event Developer has commenced but not yet completed construction of the Master Site Infrastructure Improvements to be constructed 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT on the Option V Property at the time City exercises Option V, the Option IV Purchase Price as set forth in Section 4(b) of this Repurchase Option Agreement. In the event that there are any Valid Liens recorded against the Option V Property at the time that Option V is exercised, Developer and City agree that the Option V Purchase 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 Option V Purchase Price not so needed to extinguish a Valid Lien shall be paid to Developer. In the event that an Unauthorized Transfer has been completed such that a transferee of the Unauthorized Transfer claims to have a right or interest under the Repurchase Option Property and/or the Development Agreement For The Phase 2 Property and/or any other agreement relating to the Project (including this Repurchase Option Agreement), Developer shall have the obligation, to the extent possible, to rescind immediately the prior transaction that led to the Unauthorized Transfer so that City's rights under this Section 5 may be exercised. (c) City Election to Purchase Plans City may elect to purchase, pursuant to Section 7(1) below, either the Phase 2 Property Master Site Infrastructure Improvements or the Project Components comprising the Phase 2 Property Project Components, or both. If City elects to purchase said Plans (to the extent permitted by the applicable third party contract relating to such Plans), City shall pay the cost of such Plans in addition to the Option V Purchase Price. (d) City Reservation of Rights for Power of Termination In addition to City's right to exercise Option V pursuant to this Section 4, City reserves its right to exercise a power of termination pursuant to Civil Code section 885.010 et seq., as provided for in Section 7(n) of this Repurchase Option Agreement. 32. City's Right of First Offer Developer hereby grants to City a right of first offer ("City's Right of First Offer") to purchase any or all of the subdivided parcels of the Repurchase Option Property that remain subject to this Repurchase Option Agreement as of the date that City exercised the Right of First Offer (the "Right of First Offer Property"), in accordance with the terms and conditions in this Section 6, in the event that (i) City has had the right to exercise any of Option I, Option II, Option III, Option IV, or Option V and has elected not to exercise Option I, Option II, Option III, Option IV, or Option V (as applicable) in accordance with the terms of this Repurchase Option Agreement and Developer's MAE Default that gave rise to Option I, Option II, Option III, Option IV, or Option V (as applicable) has not been cured, and (ii) Developer intends or is otherwise compelled to sell or otherwise transfer the Repurchase Option Property or portion thereof. Notwithstanding anything to the contrary in this Section 6, (a) the Right of First Offer Property shall not include any portion of the Repurchase Option Property that is not included in "Developer's Sale Notice" (as that term is defined in Section 6(a) below), and (b) in the event City elects to exercise City's Right of First Offer, City may elect to purchase only those portions of the Right of First 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Offer Property that City was authorized and desires to purchase pursuant to the terms of Option I, Option II, Option III, Option IV, or Option V (as applicable). The portions of the Right of First Offer Property City acquires hereunder shall be hereinafter referred to as the "Right of First Offer City Acquisition Property". (a) Developer's Notice to City; City's Election In the event that the circumstances described in clauses (i) and (ii) of the immediately preceding paragraph exist, then prior to entering into any transaction with a third party concerning the sale of any of the Right of First Offer Property, Developer shall provide City with written notice of Developer's intent to sell such Right of First Offer Property, and Developer's proposed sale price for the same ("Developer's Sale Notice"). City shall have sixty (60) days after receiving Developer's Sale Notice to notify Developer, in writing, of City's election to exercise City's Right of First Offer to acquire the Right of First Offer City Acquisition Property, at the price noted in Developer's Sale Notice ("City's Election to Exercise"); provided, however, that if the Right of First Offer City Acquisition Property does not comprise all of the Right of First Offer Property, then City's acquisition price shall be the amount that would have been payable under this Repurchase Option Agreement by City to Developer if such portion of the Right of First Offer City Acquisition Property would have been purchased by City pursuant to Option I, Option II, Option III, or Option IV as applicable depending upon the status of construction upon such portion of the Right of First Offer City Acquisition Property as of the date that the Right of First Offer is exercised by City. (b) City's Failure to Exercise City's failure to deliver to Developer City's Election to Exercise within such sixty (60) day period shall be deemed City's election not to exercise City's Right of First Offer and, except as provided below, City's Right of First Offer with respect to the Right of First Offer City Acquisition Property shall then terminate and City shall have no further right of first offer with respect to the Right of First Offer City Acquisition Property. If City elects not to exercise (or is deemed to have elected not to exercise) City's Right of First Offer then Developer may sell the Right of First Offer City Acquisition Property to a third party purchaser; provided, however, that in the event Developer determines to sell the Right of First Offer City Acquisition Property at a price that is more than ten percent (10%) less than the price set forth in Developer's Sale Notice, Developer shall provide City with a written notice of Developer's intent to sell the Right of First Offer City Acquisition Property, with Developer's new proposed sale price for the same ("Developer's Second Sale Notice"), and City's Right of First Offer shall again apply with respect to the Right of First Offer City Acquisition Property, in accordance with the process outlined in Subparagraph (a) above and this Subparagraph (b). (c) Transfer Restrictions of Reinstated Development Agreement Notwithstanding any of the provisions in Option V (Section 5 above) or this Section 6 to the contrary, nothing in this Repurchase Option Agreement is intended to or shall have the effect of waiving the transfer restrictions set forth in the Reinstated Development 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Agreement, the Development Agreement For The Phase 2 Property, any of City's rights related thereto in the Reinstated Development Agreement and/or Development Agreement For The Phase 2 Property, or any other agreements between City and Developer relating to the Repurchase Option Property, and any proposed sale or transfer by Developer shall be effected in accordance with the same. (d) City Reservation of Rights for Power of Termination In addition to City's right to exercise its Right of First Offer pursuant to this Section 6, City reserves its right to exercise a power of termination pursuant to Civil Code section 885.010 et seq., as provided for in Section 7(n) of this Repurchase Option Agreement. 33. Additional Terms Applicable to the Purchase Options The following additional terms shall apply to Option I, Option II, Option III, Option IV, Option V, and City's Right of First Offer: (a) Successors and Assigns. Option I, Option II, Option III, Option IV, Option V, and City's Right of First Offer created hereby shall be irrevocable by Developer and shall be binding upon the successors and assigns of Developer and on the Repurchase Option Property. (b) Developer's Right to Cure Certain Defaults. Notwithstanding anything in this Repurchase Option Agreement to the contrary, (A) City shall not be entitled to exercise Option I, Option II, Option III, or Option IV until City has provided a written notice to Developer regarding Developer's failure to commence construction, continuously proceed with construction, or to complete construction, as applicable (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 within one hundred twenty (120) days of the commencement of cure, and (B) City shall not be entitled to exercise Option V until City has provided a written notice to Developer regarding an anticipated and/or actual Unauthorized Transfer (an "Option V Triggering Event") and Developer has not, within thirty (30) days after receipt of such notice, cured, corrected or remedied such Option V Triggering Event. (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 City may deliver any notice or demand to Developer with respect to an Option Triggering Event (including, but not limited to, an Option V Triggering Event), City 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, if such holder has previously requested to City such notice in writing and City has actual notice off such holder requesting such notice. Each such holder shall 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT (insofar as the rights granted by City are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice (except in the event of an Option V Triggering Event, in which case the cure period shall be thirty (30) days), to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy of any such MAE Default within one hundred twenty (120) days of commencement of cure 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 MAE Default which requires title and/or possession of the Repurchase Option 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 MAE Default within one hundred twenty (120) days after obtaining title and/or possession of the applicable portion of the Repurchase Option Property coved by said mortgage or deed of trust. The City and Developer shall modify this clause (c) as reasonably requested by a mortgagee, so long as such modifications do not materially and adversely affect the City, including, without limitation, by adding additional mortgagee protections included in Section 9 of the Reinstated Development Agreement. (d) No City Obligation: Purchase of Whole Project Components. (i) Notwithstanding any covenant, term, or provision in this Repurchase Option Agreement to the contrary, City shall not be obligated to exercise Option I, Option II, Option III, Option IV, Option V, or City's Right of First Offer. (ii) Notwithstanding anything to the contrary in this Repurchase Option Agreement, if City elects to purchase any part of a Project Component pursuant to Option IV, Option V, or City's Right of First Offer, then City shall be obligated to purchase all of such Project Component that remains subject to this Repurchase Option Agreement as of date of such election. For purposes of determining a Project Component subject to this provision, a Project Component shall be the specific Project Component as defined and described in the Development Agreement For The Phase 2 Property, coupled with the specific subdivided parcels for which the specific Project Component is situated and to be developed upon. (e) .Release of Repurchase Option Agreement Upon Completion of Project Component. In the event that Developer commences and completes construction of a Project Component, as evidenced by City's issuance of a temporary or final certificate of occupancy for such Project Component, and City has not exercised Option I, Option II, Option III, Option IV, Option V or City's Right of First Offer with respect to such Project Component or the subdivided parcels on which such Project Component is situated pursuant to the Development Agreement For The Phase 2 Property, then, City's issuance of that temporary or final certificate of occupancy for such Project Component shall act to automatically release this Repurchase Option Agreement with respect to said Project Component and the subdivided parcels on which such Project Component is situated, 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT with no further action required by City or Developer; provided, however, upon request of Developer, City shall execute and record a termination and release of this Repurchase Option Agreement applicable to such Project Component. Notwithstanding the foregoing to the contrary, City shall, at or prior to the close of escrow for the bona -fide sale of any fully constructed residential dwelling unit to a third party buyer for any residential dwelling units on the Repurchase Option Property, cause this Repurchase Option Agreement to be terminated with respect to such residential dwelling unit. Within thirty (30) days following City's receipt of written notice from Developer of a pending escrow for the sale of any such residential dwelling unit, City shall (i) execute and have notarized a termination and release, and/or such other document(s), required by the applicable escrow holder to evidence the termination of this Repurchase Option Agreement with respect to such residential dwelling unit being sold, and (ii) deposit the original of such executed and notarized document(s) into such escrow. (f) Enforced Delay Pursuant to Development Agreement For The Phase 2 Property. Notwithstanding anything to the contrary herein, in the event performance by Developer under the Development Agreement For The Phase 2 Property is extended pursuant to an event of "Force Majeure" as defined in the Development Agreement. For The Phase 2 Property (or, if not defined therein, as defined in the Reinstated Development Agreement), such that the time by which Developer is required thereunder to commence construction of the Master Site Infrastructure Improvements, complete construction of the Master Site Infrastructure Improvements, commence construction of one or more Project Components designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on a portion of the Repurchase Option Property, or complete construction of one or more Project Components designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on a portion of the Repurchase Option Property, is extended, such extensions shall automatically apply to this Repurchase Option Agreement so as to (as applicable) extend the time by which Developer is required to commence construction of the Master Site Infrastructure Improvements, complete construction of the Master Site Infrastructure Improvements, commence construction of one or more Project Components designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on a portion of the Repurchase Option Property, or complete construction of one or more Project Components designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on a portion of the Repurchase Option Property, by the same time as extended under the Development Agreement For The Phase 2 Property. (g) Subordination. City may, but is not obligated to, subordinate this Repurchase Option Agreement upon Developer's written request for subordination in connection with an "Infrastructure Loan" or "Construction Loan" (as those terms are defined in the Reinstated Development Agreement and Development Agreement For The Phase 2 Property) if such loan is to be secured by a mortgage or deed of trust. Upon City's receipt of Developer's written request for subordination of this Repurchase Option Agreement, City shall deliver to Developer a written decision to approve or disapprove such subordination, which decision shall be based on City's reasonable discretion taking into account, among other criteria for project financing in the Reinstated Development 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Agreement and Development Agreement For The Phase 2 Property, the Lender (source) of the proposed financing, the amount of such loan, and the then -applicable loan -to -value and/or loan -to -cost ratio applicable to the Project Component(s) to be financed with such loan. If City approves subordination of this Repurchase Option Agreement, City and Developer shall enter into with the Lender a subordination or similar agreement that provides at a minimum the following: (i) the Lender to notify City, in writing, of any default by Developer under the Lender's loan documents concurrently with its notification to Developer of such default, (ii) the Lender to provide City with a copy of any Notice of Default (each, a "Notice of Default") recorded against the title to the Repurchase Option Property in the Official Records of the County of Riverside, State of California (the "Official Records") concurrently with its delivery of such Notice of Default to Developer; (iii) the right of City to cure the default at any time prior to the foreclosure (or recording of a deed in lieu thereof) on the Lender's deed of trust, (iv) the right of City to negotiate with the Lender regarding the default at any time prior to the foreclosure (or recording of a deed in lieu) on the Lender's deed of trust, and (v) the Lender's agreement that Lender shall not conduct a foreclosure sale (or exercise a power of sale or record a deed in lieu of foreclosure or any similar action that would result in the ownership and vesting of title in the name of Lender or its assignee or transferee) prior to the date that is at least six (6) months after the Lender delivers written notice of the default to City and Developer pursuant to clause (i) above. The foregoing provisions in clauses (i)-(v), and any other additional terms and conditions that City, Developer, and Lender may deem necessary or appropriate, shall be in any subordination or other agreement as may be requested or required by either the Lender or Developer, which agreement would result in this Repurchase Option Agreement having lower priority from a mortgage or deed of trust that is executed on behalf of and for the benefit of the Lender, and to be recorded in the Official Records. (h) City's and City's Assignee's Investigation of Repurchase Option Property . (i) City shall have a period of forty-five (45) days commencing on the date of an event that triggers City's ability to exercise any of Option I, Option II, Option III, Option IV, Option V, or City's Right of First Offer, to enter upon the Repurchase Option Property (or applicable portion thereof) to conduct any tests, inspections, investigations, or studies of the condition of the Repurchase Option Property (or applicable portion thereof) (the "Option Agreement Tests and Investigations"). Developer shall permit City access to the Repurchase Option Property (or applicable portion thereof) for such purposes at reasonable times upon reasonable notice; provided, however, City will not be permitted to perform any such inspection unless and until City delivers to Developer reasonably satisfactory evidence that City has obtained such insurance as Developer shall reasonably require in connection with any such inspection, which insurance shall name Developer as an additional insured. In no event shall City be permitted to conduct any drilling or other invasive testing without the prior written consent of Developer. City hereby agrees to repair and restore any portion of the Repurchase Option Property damaged as a result of any inspection of the Repurchase Option Property by City. City's obligation to close "Escrow" (as that term is defined in Section 7(i) below) shall be subject to City's approval of any environmental and other site testing conducted by City in 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT City's reasonable discretion. City 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 Repurchase Option Property (or applicable portion thereof), which indemnity shall survive any closing pursuant to this Agreement or earlier termination of this Agreement. (ii) In the event City assigns its rights under this Repurchase Option Agreement, City's assignee shall have the right to enter upon the Repurchase Option Property (or applicable portion thereof) during the period commencing on the date of City's assignment of this Repurchase Option Agreement to said assignee and ending on the "Closing Date" (as that term is defined in Section 7(i) below) to conduct any Option Agreement Tests and Investigations elected by the assignee. Developer shall permit City's assignee access to the Repurchase Option Property (or applicable portion thereof) for such purposes, provided that, prior to any entry upon the Repurchase Option Property by such assignee or its employees, agents, representatives or consultants, City shall cause such assignee to provide Developer with evidence that it has a liability insurance policy that names Developer as an additional insured, which policy shall have limits of coverage and be on terms reasonably acceptable to Developer. City hereby agrees to cause any such assignee to repair and restore any portion of the Repurchase Option Property damaged as a result of any inspection of the Repurchase Option Property by such assignee. City's obligation to close "Escrow" (as defined in Section 7(i) below) shall be subject to City's assignee's approval of any environmental and other site testing conducted by said assignee in said assignee's discretion. City shall cause said assignee to 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 Repurchase Option Property (or applicable portion thereof), which indemnity shall survive any closing pursuant to this Agreement or earlier termination of this Agreement. (i) Escrow Provisions. (i) Within five (5) business days after City has exercised Option I, Option II, Option III, Option IV, Option V, or City's Right of First Offer (as applicable), or as soon thereafter as reasonably practicable, an escrow shall be opened ("Escrow") with an escrow company at a national title company selected by City and approved by Developer ("Escrow Holder") for the conveyance to City of the portions of the Repurchase Option Property to be acquired by City pursuant to this Repurchase Option Agreement. Escrow shall be deemed opened on the date that a fully executed copy of this Repurchase Option Agreement and a notice of exercise of option prepared by City are delivered to Escrow Holder ("Opening of Escrow"). Escrow Holder shall notify Developer and City 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 following date, as applicable: (A) for Option I Property, six (6) months after the expiration of the Option 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Period; (B) for Option II Property, six (6) months after the expiration of the Option II Period; (C) for Option III Property, six (6) months after the expiration of the Option III Period; (D) for Option IV Property, six (6) months after the expiration of the Option IV Period; (E) for Option V Property, six (6) months after the expiration of the Option V Period; and (F) for Right of First Offer Property, six (6) months after the City's Election to Exercise after delivery of Developer's Sale Notice pursuant to Section 6(a) of this Repurchase Option Agreement, unless extended by mutual agreement by Developer and City and/or extended to allow for the completion or waive of any conditions to closing required by City or any assignee of City to acquire the Repurchase Option Property (or portion thereof) ("Close of Escrow" or "Closing Date"). The terms "Close of Escrow" and "Closing Date" shall mean the date the grant deed (in a form approved by City) conveying fee title to City is recorded in the Official Records. Possession of the portions of the Repurchase Option Property conveyed to the City pursuant to this Repurchase Option Agreement shall be delivered to City at the Close of Escrow. (iii) This Repurchase Option Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of Developer and City to Escrow Holder as well as an agreement between Developer and City. In the event of any conflict between the provisions of this Repurchase Option Agreement and Escrow Holder's standard instructions, this Repurchase Option Agreement shall prevail. (iv) The Escrow shall be subject to City's approval of a then -current preliminary title report. Any monetary lien(s) or encumbrance(s) shown on such preliminary title report that were concurrent with or after the close of escrow that conveyed the Repurchase Option Property from City to Developer shall be removed by Developer at its sole expense prior to the Close of Escrow pursuant to this Section 7(i) unless such exception(s) is (are) accepted by City in its sole and absolute discretion; provided, however, that City 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 conveying from City to Developer the Repurchase Option Property (or applicable portion thereof), and (iii) matters shown as printed exceptions in the standard form ALTA policy of title insurance. In the event the Repurchase Option Property (or any portion thereof) is encumbered by a Valid Lien, City shall be permitted to unilaterally instruct Escrow Holder to satisfy the indebtedness secured thereby out of the proceeds payable to Developer through the Escrow. Any additional amount necessary to satisfy such Valid Lien, including, without limitation, the amount of the unpaid indebtedness secured by such Valid Lien, including principal and interest and all other sums secured by the Valid Lien, including, without limitation, any prepayment fees and costs, shall be paid by City (or City's assignee) at the Closing. (v) On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, City shall deposit in Escrow (i) the applicable of the Option I Purchase Price, the Option II Purchase Price, the Option III Purchase Price, the Option IV Purchase Price; the Option V Purchase Price, or the price noted in Developer's Sale Notice or Developer's Second Sale Notice (the last two are referred to herein as the "Right of First Offer Purchase Price"); (ii) one-half (1/2) of the escrow fees; (iii) the 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT portion of the title insurance premium attributable to any extra or extended coverages, or any additional charge resulting from City's request that the amount of insurance be higher than the applicable of the Option I Purchase Price, the Option II Purchase Price, the Option III Purchase Price, the Option IV Purchase Price, the Option V Purchase Price, or the Right of First Offer Purchase Price; and (iv) any and all additional instruments or other documents required from City (executed and acknowledged if appropriate) as may be necessary in order to effect the transfer of the Repurchase Option Property, or applicable portion thereof, to City. On or before 1:00 p.m. on the last business day preceding the scheduled Closing Date, Developer shall deposit in Escrow (i) a grant deed, in a form approved by City, executed and acknowledged by Developer conveying fee title to the Repurchase Option Property (or applicable portion thereof) to City; (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 Repurchase Option Property, or applicable portion thereof, to City. Developer shall also be required to pay for documentary tax stamps and recording fees, if any, and for an ALTA standard form owner's policy of title insurance in the amount of the Option I Purchase Price, the Option II Purchase Price, the Option III Purchase Price, the Option IV Purchase Price, the Option V Purchase Price, or the Right of First Offer Purchase Price (as applicable), showing title vested in City free and clear of all liens and encumbrances except those permitted by subparagraph (iv) above (the "Title Policy"). City'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 subparagraph (v) above, and Escrow Holder is in a position to cause the Title Policy to be issued to City, and provided City has approved of the condition of the Repurchase Option Property, or applicable portion thereof, Escrow Holder shall close the Escrow by taking the following actions: (a) recording in the Official Records the grant deed, in a form approved by City, executed and acknowledged by Developer conveying fee title to the Repurchase Option Property (or applicable portion thereof) to City, and delivering said recorded grant deed to City; (b) causing the Title Policy to be issued to City; and (c) delivering the portion of the applicable of the Option I Purchase Price, the Option II Purchase Price, the Option III Purchase Price, the Option IV Purchase Price, the Option V Purchase Price, or the Right of First Offer Purchase Price remaining after payment of all Valid Liens, if any, to Developer. (vii) In accordance with Section 10 this Repurchase Option Agreement, and for avoidance of any doubt, City shall have the right to assign its rights to purchase the Repurchase Option Property (or applicable portion thereof) and acquisition thereof through the Escrow pursuant to the terms and conditions of this Repurchase Option Agreement, upon providing prior written notice to Developer pursuant to Section 8 of this Repurchase Option Agreement, and thereafter entering into an assignment and assumption agreement with such assignee; Developer shall cooperate with City and/or Escrow Holder to the extent necessary or appropriate to facilitate any such assignment, including but not limited to executing any supplemental instructions or consent to an assignment and assumption agreement with such assignee. 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT (j) City's Right to Acquire the Repurchase Option Property. Notwithstanding anything herein to the contrary, upon City's exercise of Option I, Option II, Option III, Option IV, Option V, or City's Right of First Offer, Developer's commencement to cure the MAE Default that led to City's exercise shall not affect City's right to close the Escrow and acquire the Repurchase Option Property (or applicable portion thereof). (k) City's Purchase of Uncompleted Portions of the Residential Project Components on the Repurchase Option Property. Notwithstanding anything herein to the contrary, in the event that, as a result of City exercising Option III, Option IV or Option V, City acquires the Repurchase Option Property, or portion thereof, if Developer has obtained from City a certificate of occupancy and has sold to bone -fide purchaser a fully constructed residential dwelling unit for any residential dwelling units on the Repurchase Option Property that have been fully constructed pursuant to the Development Agreement For The Phase 2 Property, the provisions of this Repurchase Option Agreement shall apply only to those portions of the Repurchase Option Property which have not been sold to bona -fide purchasers of fully constructed residential dwelling units (the "Uncompleted Portion Of The Residential Project Component") and any calculations for determining the Option III Purchase Price, the Option IV Purchase Price or the Option V Purchase Price (as applicable) shall be based solely upon the Uncompleted Portion Of The Residential Project Component. (I) City's Right to Purchase Plans. To the extent permitted pursuant to the applicable third party contracts, at the time City exercises any of Option I, Option II, Option III, Option IV, Option V, or City's Right of First Offer, City shall also have the right, which City may exercise in its sole and absolute discretion, to purchase from Developer for the actual cost Developer incurred in preparing the same, all (but not less than all) of the 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 (collectively, the "Plans") relating to (i) all of the Master Site Infrastructure Improvements designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on the portions of the Repurchase Option Property to be acquired by City, and/or (b) all or any of the Project Components designated pursuant to the Development Agreement For The Phase 2 Property to be constructed on the portions of Repurchase Option Property to be acquired by City, together with copies of all of the Plans, as have been prepared for the development of the Repurchase Option Property as of the date of City's exercise of Option I, Option II, Option III, Option IV, or City's Right of First Offer (as applicable). Notwithstanding the foregoing, however, Developer does not covenant to convey to City the copyright or other ownership rights of third parties. City'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 City shall assume all risks in the use of the Plans. (m) City's Purchase Price Reflects Reasonable Approximation of Damages. City and Developer agree that City has the right to proceed with its remedies under the Development Agreement For The Phase 2 Property, the Reinstated 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Development Agreement, and other agreements between City and Developer relating to the Repurchase Option Property, or to exercise Option I, Option II, Option III, Option IV, or Option V. Notwithstanding anything to the contrary herein or in the Development Agreement For The Phase 2 Property or in the Reinstated Development Agreement, in the event that City exercises Option I, Option II, Option III, Option IV, or Option V (as applicable) to acquire the Repurchase Option Property, or a portion thereof, City shall be deemed to have elected to waive the remedies to which it would otherwise be entitled under the Development Agreement For The Phase 2 Property, Reinstated Development Agreement, and other agreements between City and Developer relating to the Repurchase Option Property. City and Developer agree that City will incur damages by reason of the MAE Default that gave rise to City's ability to exercise Option I, Option II, Option III, Option IV, or Option V (as applicable), which damages shall be impractical and extremely difficult, if not impossible, to ascertain. City and Developer, in a reasonable effort to ascertain what City's damages would be in the event of such MAE Default by Developer, have agreed that considering all of the circumstances existing on the date of this Repurchase Option Agreement, including the relationship of the sum to the range of harm to City that reasonably could be anticipated, including without limitation the potential loss of tax revenue to the City of La Quinta, and the anticipation that proof of actual damages would be costly or inconvenient, the exercise by City of Option I, Option II, Option III, Option IV, or Option V (as applicable), and the payment by City of the Option I Purchase Price, the Option II Purchase Price, the Option III Purchase Price, the Option IV Purchase Price, or the Option V Purchase Price (as applicable) and the conveyance of the Repurchase Option Property, or applicable portion thereof, by Developer to City, is fair and reasonable. City and Developer agree that the Option I Purchase Price, Option II Purchase Price, Option III Purchase Price, Option IV Purchase Price, or Option V Purchase Price (as applicable) reflect a reasonable estimate of City's damages under the provisions of California Civil Code section 1671 and shall operate as liquidated damages to City if City exercises Option I, Option II, Option III, Option IV, or Option V (as applicable). If City does not exercise Option I, Option II, Option III, Option IV, or Option V, then City shall retain and may exercise any and all of its rights and remedies as set forth in any other agreement, including, but not limited to, the Reinstated Development Agreement and the Development Agreement For The Phase 2 Property. (n) City Power of Termination and Reversionary Rights. Subject to the notice and right to cure provisions set forth in Sections7(b) and 7(c) of this Repurchase Option Agreement, whereby Developer shall have a right to cure any alleged MAE Defaults prior to the commencement of City's right under this Section 7(n), City hereby reserves a power of termination pursuant to Civil Code Sections 885.010 et seq., exercisable by the City, in its sole and absolute discretion, if Developer fails to cure the Option Triggering Event (or, as applicable, Option V Triggering Event) and City decides not to exercise, as applicable: Option I by the expiration of the Option I Period; Option II by the expiration of the Option II Period; Option III by the expiration of the Option III Period; Option IV by the expiration of the Option IV Period; or Option V by the expiration of the Option V Period. If City so decides not to exercise the applicable option as provided in the previous sentence, then, upon sixty (60) days written notice to the Developer referencing this Section 7(n), City shall have the right to terminate the fee 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT interest of the Developer in the Repurchase Option Property and/or any improvements to the Repurchase Option Property and revest such fee title in the City and take possession of all or any portion of such real property and improvements, for the purchase price specified for the applicable option pursuant to Section 1(b), 2(b), 3(b), 4(b) or 5(b) (as applicable), Developer, upon the occurrence of an MAE Default by Developer following Developer's acquisition of the Phase 2 Property and prior to the issuance of the final Certificate of Completion (as defined in the Development Agreement For The Phase 2 Property or, in not defined therein, as defined in the Reinstated Development Agreement) for the entire Phase 2 Property. The sixty (60) calendar day written notice specified in the paragraph above shall specify the MAE Default by Developer triggering City's exercise of its power of termination. City shall proceed with its remedy set forth in this Section 7(n) only if Developer continues in MAE Default for a period of sixty (60) days following such notice or, upon commencing to cure such MAE Default, fails to diligently and continuously prosecute said cure to satisfactory conclusion within one hundred (120) days of City's written notice to Developer specifying the MAE Default. (i) The rights of City under this Section 7(n) shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit the following: (A) Each Valid Lien recorded against the Repurchase Option Property and specifically authorized as a "Permitted Transfer" pursuant to the Development Agreement For The Phase 2 Property (or, if not defined in the Development Agreement For The Phase 2 Property, as defined in the Reinstated Development Agreement); and (B) Any leases, declarations of covenants, conditions and restrictions, easement agreements or other recorded documents or interests applicable to the Repurchase Option Property and specifically authorized as a "Permitted Transfer" pursuant to the Development Agreement For The Phase 2 Property (or, if not defined in the Development Agreement For The Phase 2 Property, as defined in the Reinstated Development Agreement), or otherized pursuant to the Phase 2 Property Option Agreement and/or at the close of escrow for Developer's acquisition of the Phase 2 Property pursuant to the purchase and sale agreement attached to the Phase 2 Property Option Agreement, or any other agreement between City and Developer for the development and use of the Phase 2 Property. (ii) Upon the City's exercise of its power of termination pursuant to this Section 7(n), Developer or its successors or assigns shall convey by grant deed (in a form approved by City) to the City title to the Repurchase Option Property, as specified in the City's written notice issued pursuant to this Section 7(n), and all improvements thereon, in accordance with Civil Code Section 1109, as such code section may hereafter be amended or renumbered, (from time to time). Such conveyance shall be duly acknowledged by Developer and a notary in a manner suitable for recordation in the Recorder's Office. City may enforce its rights pursuant to this Section 7(n) by means of an injunctive relief or forfeiture of title action filed in a court of competent jurisdiction with jurisdiction and venue authorized by this Repurchase Option Agreement. (iii) Upon the revesting in City of title to the Repurchase Option Property, whether by grant deed or court decree, City shall exercise its reasonable good 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT faith efforts to resell the Repurchase Option Property at its then fair market value, as soon and in such manner as the City finds feasible and consistent with the objectives of the Specific Plan and Development Agreement For The Phase 2 Property, to a qualified and responsible person or persons (as reasonably determined by the City) who will assume Developer's obligations to begin and/or complete and/or operate that portion of the Project located on the Repurchase Option Property, or such other replacement development acceptable to the City, in its sole and absolute discretion. Upon any such resale of the Repurchase Option Property (or any portion thereof), the proceeds to the City from such sale shall be applied as follows: A. First, to pay to a Lender any and all amounts required to release and fully reconvey any Valid Lien recorded against all or any portion of the Repurchase Option Property; and B. Second, to reimburse City on its own behalf or on behalf of City for all actual third -party costs and expenses previously or currently incurred by City related to the Repurchase Option Property, the Project, or this Repurchase Option Agreement, including, but not limited to, customary and reasonable fees or salaries to third -party personnel engaged in such actions, in connection with the recapture, management and resale of the Repurchase Option Property (or portion thereof); all taxes, assessments and utility charges paid by City with respect to the Repurchase Option Property (or portion thereof); any payment made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations incurred by Developer with respect to the acquisition of the Phase 2 Property or the construction of the Project thereon according to the Phase 2 Property Development Agreement; and amounts otherwise owing to City by Developer or its successors or assigns pursuant to the terms of this Repurchase Option Agreement; and C. Third, to the extent that any proceeds from such resale are, thereafter, available, taking into account any prior encumbrances with a claim thereto, to reimburse Developer, or its successors in interest to the equal to the sum of: (I) the amount of the purchase price for the Phase 2 Property that Developer paid City upon close of escrow for the Phase 2 Property pursuant to the Phase 2 Property Option Agreement and purchase and sale agreement attached to said Phase 2 Property Option Agreement; and (II) the third -party costs actually incurred and paid by Developer regarding the development of the Project located on the Phase 2 Property, including, but not limited to, pro rata costs of carrying costs, taxes, and other items as set forth in a cost certification to be 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT made by Developer to City prior to any such reimbursement, which certification shall be subject to City's reasonable approval; provided, however, that Developer shall not be entitled to reimbursement for any expenses to the extent that such expenses relate to any loans, Valid Liens or other encumbrances that are paid by City pursuant to the provisions of Subparagraphs (A) and (B) above; and D. Any portion of the proceeds from the resale of the Repurchase Option Property remaining after the foregoing applications in Subparagraphs (A)-(C) above shall be retained by the City as its sole and exclusive property. (iv) IMMEDIATELY FOLLOWING THE SIXTY (60) DAY PERIOD SPECIFIED IN SECTION 7(n) ABOVE, CITY, ITS EMPLOYEES AND AGENTS SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF THE REPURCHASE OPTION PROPERTY AND ANY IMPROVEMENTS THEREON, WITHOUT FURTHER NOTICE OR COMPENSATION TO THE DEVELOPER. BY INITIALING BELOW, DEVELOPER HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS THAT DEVELOPER MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 791 AND CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1162, AS THOSE STATUTES MAY BE AMENDED OR RENUMBERED FROM TIME TO TIME, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. Developer's Initials (v) DEVELOPER ACKNOWLEDGES AND AGREES THAT CITY'S EXERCISE OF ITS POWER OF TERMINATION AND RIGHT OF REENTRY PURSUANT TO THIS SECTION 7(n) MAY WORK A FORFEITURE OF THE ESTATE IN THE DEFAULTED PORTION OF THE PHASE 2 PROPERTY CONVEYED TO DEVELOPER BY CITY THROUGH THE GRANT DEED CONVEYING FEE TITLE PURSUANT TO THE PHASE 2 PROPERTY OPTION AGREEMENT. DEVELOPER HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT DEVELOPER MAY HAVE TO SUCH FORFEITURE, INCLUDING, BUT NOT LIMITED TO, THE DEFENSES OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR COMPENSABLE DAMAGES. DEVELOPER FURTHER EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS AND DEFENSES THAT DEVELOPER MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 3275 OR ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT. DEVELOPER ACKNOWLEDGES THAT THE TERMS AND CONDITIONS OF THIS REPURCHASE OPTION AGREEMENT REFLECT THE POSSIBILITY OF FORFEITURE BY VIRTUE OF THE EXERCISE OF CITY'S POWER OF TERMINATION PROVIDED IN THIS SECTION 7(n) AND FURTHER ACKNOWLEDGE THAT IT HAS RECEIVED INDEPENDENT AND ADEQUATE CONSIDERATION FOR ITS WAIVER AND RELINQUISHMENT OF RIGHTS AND 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT REMEDIES PURSUANT TO SECTION 7(n)(iv) AND THIS SECTION 7(n)(v). THESE WAIVERS DO NOT EXTEND TO ANY RIGHT OF REDEMPTION THAT DEVELOPER MAY HAVE UNDER APPLICABLE LAW IN THE CASE OF A FORECLOSURE WHICH ARISES FROM UNPAID MONETARY AMOUNTS. Developer's Initials 34. Notices, Demands and Communications Between the Parties. Formal notices, demands, and communications between City 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 City: With a copy to: To Developer: With a copy to: City of La Quinta 78-495 Calle Tampico La Quinta, California 92253 Attn: City Manager Rutan & Tucker, LLP 18575 Jamboree Road, 9th Floor Irvine, CA 92612 Attn: William H. Ihrke, Esq. Email: bihrke@rutan.com TBE RE Acquisition Co II LLC c/o Turnbridge Equities 4 Bryant Park, Suite 200 New York, New York 10018 Attention: General Counsel and Michael Gazzano Email: jw@turnbridgeeq.com and mg@turnbridgeeq.com DLA Piper 1251 Avenue of the Americas New York, New York 10020 Attention: Todd Eisner Email: todd.eisner@us.dlapiper.com Procopio 200 Spectrum Center Drive, Suite 1650, Irvine, CA 92618 Attn: James Vaughn Email: james.vaughn@procopio.com 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 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 received and effective on the third (3rd) 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. 35. 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 Repurchase Option Agreement. This Repurchase 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 and subject to the restrictions otherwise set forth in this Repurchase Option Agreement, including without limitation in this Section 9, 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 Repurchase Option Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Repurchase 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 City shall be made in the manner required by law for service on a public entity. Service of process on Developer shall be made in any manner permitted by law and shall be effective whether served within or outside of California. If either Party to this Repurchase Option Agreement is required to initiate or defend, or is made a party to, any action or proceeding in any way connected with this Repurchase 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. 36. Transfers and Assignments (a) City Right to Assign. In the event City has the right to exercise any of Option I, Option II, Option III, Option IV, Option V, or City's Right of First Offer, City shall have the right to assign its rights hereunder upon providing prior written notice to Developer pursuant to Section 8 of this Repurchase Option Agreement, and thereafter entering into an assignment and assumption agreement with such assignee. 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT (b) Escrow Provisions. Developer shall not transfer or assign any of its rights or obligations under this Repurchase Option Agreement without the expressed written consent of City, which may be granted or denied in City's sole absolute discretion except as permitted pursuant to the Reinstated Development Agreement; provided, however, that Developer's rights and obligations under this Repurchase Option Agreement may, upon Developer's request, be subject to and governed by the provisions in the Reinstated Development Agreement and the Development Agreement For The Phase 2 Property governing "Transfers" and "Permitted Transfers" as set forth therein. 37. City Approvals and Actions Whenever a reference is made in this Repurchase Option Agreement to an action or approval to be undertaken by the City, the City Manager or his or her authorized designee is authorized to act on behalf of the City unless this Repurchase Option Agreement specifically provides otherwise, including but not limited to provisions in this Repurchase Option Agreement when the City Council must review and take action, or the law requires otherwise. The City Manager shall have the authority to implement this Repurchase Option Agreement , including the authority to negotiate and sign on behalf of the City implementing agreements and other documents, so long as the substantive provisions of this Repurchase Option Agreement are maintained. Nothing in this Section limits or precludes the City Manager from presenting to the Planning Commission and/or City Council, as applicable, for review and consideration any matters to which the City Manager otherwise may act on behalf of City pursuant to this Section. 38. Nonliability of City Officials and Employees No officer, official, employee, agent, or representative of City shall be personally liable to Developer or any successor in interest, in the event of any default or breach by City, or for any amount which may become due to Developer or its successor, or for breach of any obligation of the terms of this Repurchase Option Agreement, unless due to the gross negligence or willful misconduct by such person. 39. 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 Repurchase Option Property, or any portion 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 Repurchase Option Property, or any portion thereof. The foregoing covenants shall run with the land. 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 40. Interpretation The terms of this Repurchase 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 Repurchase 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 Repurchase Option Agreement. 41. Entire Agreement This Repurchase Option Agreement and the Reinstated Development Agreement and the Development Agreement For The Phase 2 Property (and all exhibits and attachments hereto and thereto) integrate all of the terms and conditions mentioned herein, or incidental hereto, and supersede all negotiations or previous agreements between the Parties with respect to all or any part of the subject matter hereof. 42. Waivers and Amendments All waivers of the provisions of this Repurchase 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 City and Developer. All amendments and modifications to this Repurchase Option Agreement shall be recorded in the Recorder's Office no later than ten (10) days after complete execution by the Parties of said amendment, and shall be integrated into this Repurchase Option Agreement. No waiver of any provision of this Repurchase Option Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought and referring expressly to this Section. No delay or omission by either Party in exercising any right or power accruing upon non-compliance or failure to perform by the other Party under any of the provisions of this Repurchase Option Agreement shall impair any such right or power or be construed to be a waiver thereof, except as expressly provided herein. No waiver by either Party of any of the covenants or conditions to be performed by the other Party shall be construed or deemed a waiver of any succeeding breach or nonperformance of the same or other covenants and conditions hereof. 43. Severability In the event any section or portion of this Repurchase 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 Repurchase Option Agreement. 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 44. Counterparts This Repurchase Option Agreement may be executed in counterparts, each of which, after all the Parties hereto have signed this Repurchase Option Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 45. Termination. The City and Developer hereby agree that this Repurchase Agreement shall terminate with respect to each Project Component of the Phase 2 Property at such time as the City approves the applicable Project Component, as evidenced by either City's issuance of a certificate of occupancy or by the recording of a Certificate of Completion. [ Signature page follows ] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT IN WITNESS WHEREOF, the Parties have executed this Repurchase Option Agreement as of the date first above written. "DEVELOPER" TBE RE ACQUISITION CO II LLC, a Delaware limited liability company, an Date: , 2025 affiliate of Turnbridge Equities By: Its: "CITY" CITY OF LA QUINTA, a California municipal corporation and charter city Date: , 2025 By: ATTEST: Monika Radeva, City Clerk APPROVED AS TO FORM RUTAN & TUCKER, LLP William H. Ihrke, City Attorney Jon McMillen, City Manager 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Riverside On , 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) 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Riverside On ) ) , 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) 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT EXHIBIT "A" LEGAL DESCRIPTION OF THE REPURCHASE OPTION PROPERTY [To be inserted] [NOTE: FOR THIS REPURCHASE OPTION AGREEMENT, LEGAL WILL BE the "OPTION PROPERTY" as defined in the OPTION AGREEMENT, which is a portion of the PHASE 2 PROPERTY] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT C LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT EXHIBIT D FORM OF AGREEMENT FOR PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS [see attached] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS BY AND BETWEEN THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY 698/015610-0207 22798455.4 a09/18/25 ("SELLER") AND TBE RE ACQUISITION CO II LLC AN AFFILIATE OF TURNBRIDGE EQUITIES ("BUYER") EXHIBIT D LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS THIS AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS ("Agreement" or "PSA" or "Purchase/Sale Agreement") is made and entered into as of , ("Effective Date") by and between the CITY OF LA QUINTA, a California municipal corporation and charter city ("Seller"), and TBE RE Acquisition Co II LLC, a Delaware limited liability company, an affiliate of Turnbridge Equities ("Buyer"). [NOTE: AFFILIATE OF TURNBRIDGE EQUITIES THAT IS A PERMITTED TRANSFEREE UNDER THE REINSTATED DEVELOPMENT AGREEMENT MAY BE "BUYER"] RECITALS: A. Seller is the owner of that certain real property located in the City of La Quinta, County of Riverside, State of California, comprising approximately acres with Assessor's Parcel Number(s) ("APN") , more particularly described in the legal description attached hereto as Attachment No. 1 and incorporated herein by this reference and all rights and privileges appurtenant thereto (the "Property" or "Option Property"). [NOTE: APNs AND LEGAL DESCRIPTION MUST ONLY INCLUDE "OPTION PROPERTY" AS DEFINED IN OPTION AGREEMENT, AFTER SUBDIVISION OF PARCELS] B. On or about , Seller ("City") and Buyer (as "Optionee") entered into that certain Option To Purchase Real Property (the "Option Agreement") pursuant to which Optionee, upon satisfaction of terms and conditions therein, had an "Option" (as defined in the Option Agreement) to purchase from City the Property. On or about even date as the Option Agreement, Seller and Buyer entered into a "Memorandum of Option Agreement" recorded on as Document No. in the Official Records of the Office of the County Recorder of Riverside, California (the "Recorder's Office"), which was required to be recorded under, and provided notice of, the Option Agreement. C. The Property is in close proximity to certain real property owned by Buyer (referred to in the Option Agreement as the "Developer -Owned Property") that is subject to that certain Reinstated and Amended Development Agreement by and between the City and Optionee (as Developer), adopted by City Council Ordinance No. on 2025, and recorded on , 2025, as Document No. (the "Reinstated Development Agreement") in the Recorder's Office. The Reinstated Development Agreement provides, among other terms and conditions, for the development of the Developer -Owned Property as provided therein (referred to in the Option Agreement as the "Developer's Project"). As more specifically set forth in the Reinstated Development Agreement and Option Agreement, the Developer's Project includes the possible acquisition and development of the Property in addition to the Developer -Owned Property. 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -1- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT D. The Option Agreement included as Exhibit D a form of purchase and sale agreement to be used for such purpose if Buyer validly exercised the Option and met other terms and conditions therein. Buyer has validly exercised the Option, and Buyer and Seller now enter into this Purchase/Sale Agreement to facilitate the purchase and sale transaction for the Property pursuant to the Option Agreement and this Purchase/Sale Agreement. E. Buyer desires to purchase the Property from Seller, and Seller desires to sell the Property to Buyer, on the terms and conditions set forth herein. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals and mutual covenants herein contained, the parties hereto agree as follows: 1. PROPERTY. Subject to all of the terms, conditions, and provisions of this Agreement, and for the consideration herein set forth, Seller hereby agrees to sell to Buyer and Buyer hereby agrees to purchase from Seller the Property. 2. PURCHASE PRICE. 2.1 Amount. The purchase price which Seller agrees to accept, and Buyer agrees to pay for the Property is the sum of ("Purchase Price") [ TO BE INSERTED — "PROPERTY BASE PURCHASE PRICE" IS $17,000,000.00, AND MAY INCREASE BASED ON WHEN OPTION IS EXERCISED PER OPTION AGREEMENT ]. 2.2 Earnest Money Deposit. Concurrent with its opening of the Escrow, Buyer shall deposit into Escrow the earnest money deposit in the amount of ($ ) ("Earnest Money Deposit"). The Earnest Money Deposit shall be comprised of the following amounts previously paid to Seller (City) by Buyer (as Optionee) pursuant to the Option Agreement: $2,000,000.00 as the "Option Consideration" and $ [IF APPLICABLE, AMOUNT WOULD BE BETWEEN $1,000,000 to $5,000,000] as the "Total Additional Option Consideration Payments." [ TO BE INSERTED AND BASED ON WHEN OPTION IS EXERCISED PER OPTION AGREEMENT. CITY WILL TRANSFER ALL DEPOSITS RECEIVED UNDER THE OPTION AND ACCRUED INTEREST INTO ESCROW ]. The Escrow Holder shall deposit the Earnest Money Deposit into an interest -bearing account. All interest earned on such funds shall be added to the original principal amount of the Earnest Money Deposit and be considered part of the same. The Earnest Money Deposit shall be nonrefundable to Buyer upon the Effective Date, except as otherwise expressly provided herein and in the Option Agreement. Upon the Close of Escrow, the Earnest Money Deposit shall be credited toward the Purchase Price and paid to the Seller as part of the Purchase Price. Except as provided in Sections 12, 15, or elsewhere herein, should Escrow fail to close, then, in accordance with the Option Agreement, both the Option Consideration and (if applicable) Total Additional Option Consideration Payments (and accrued interest attached thereto) shall be forfeited by 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -2- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Buyer and shall be returned to the Seller, and any remaining balance that was deposited by Buyer for the Earnest Money Deposit (and accrued interest attached thereto) shall be returned to the Buyer, upon the cancelation of Escrow in accordance with this Agreement. 2.3 Deposit of Purchase Price. The Buyer shall deposit the Purchase Price, less the Earnest Money Deposit, with the Escrow Holder, plus Buyer's closing costs and subject to adjustment for prorations and other charges, in good funds prior to the "Close of Escrow" (as defined in Section 6.1 below). 3. ESCROW. 3.1 Opening of Escrow. Closing of the sale of the Property shall take place through an escrow ("Escrow") to be established within three (3) business days after the execution of this Agreement by the parties hereto, with [TO BE A NATIONAL TITLE AND ESCROW COMPANY SELECTED BY MUTUAL AGREEMENT OF BUYER AND SELLER] ("Escrow Holder"), on which date Seller shall pay by wire transfer of federal funds the Earnest Money into Escrow, at its office located at . The opening of the Escrow (the "Opening of Escrow") shall be deemed to be the date that a fully executed copy of this Agreement is delivered to the Escrow Holder. Escrow Holder is instructed to notify Buyer and Seller in writing of the date of the Opening of Escrow. 3.2 Escrow Instructions. This Agreement and the Option Agreement, once deposited in Escrow, shall constitute the joint escrow instructions of Buyer and Seller to Escrow Holder. Additionally, if Escrow Holder so requires, Buyer and Seller agree to execute any reasonable form of escrow instructions that Escrow Holder customarily requires in real property escrows administered by it. In the event of any conflict or inconsistency between Escrow Holder's standard instructions and the provisions of this Agreement or the Option Agreement, the provisions of this Agreement and the Option Agreement shall supersede and be controlling. 4. TITLE MATTERS. Buyer has obtained a preliminary title report (Order No.: prepared by [TO BE ORDERED FROM A NATIONAL TITLE COMPANY SELECTED BY MUTUAL AGREEMENT OF BUYER AND SELLER] ("Title Company") describing the state of title of the Property together with copies of all underlying documents (the "Preliminary Title Report"). Buyer may, at its sole cost and expense, obtain a current survey of the Property (a "Survey") no later than ten (10) days from the Opening of Escrow. Notwithstanding anything herein to the contrary, Seller shall be obligated to remove all monetary liens and encumbrances against the Property (including monetary liens and encumbrances placed upon the Property after the execution and delivery of the Option Agreement) (excluding non -delinquent real property taxes (except as otherwise provided in Section 9 below) without Buyer objection thereto pursuant to the following process. Buyer shall notify Seller in writing of any objections Buyer may have to title exceptions contained in the Preliminary Title Report or matters shown on the Survey (if Buyer has obtained) no later than the date which is twenty-one (21) days after the later of (i) Opening of Escrow, or (ii) 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -3- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Buyer's receipt of the Survey ("Buyer's Objection Notice"). Buyer's approval or disapproval of the matters set forth in the Preliminary Title Report (and the Survey, if applicable) may be granted or withheld in Buyer's sole and absolute discretion. Buyer's failure to provide Seller with a Buyer's Objection Notice within said period shall constitute Buyer's approval of all exceptions to title shown on the Preliminary Title Report and all matters shown on the Survey (if Buyer has obtained). Seller shall have a period of five (5) days after receipt of Buyer's Objection Notice in which to deliver written notice to Buyer ("Seller's Notice") of Seller's election to either (i) agree to remove the objectionable items on the Preliminary Title Report or Survey prior to the Close of Escrow, or (ii) decline to remove any such title exceptions or Survey matters. Seller's failure to provide Buyer with Seller's Notice within said period shall constitute Seller's election not to remove the objectionable items on the Preliminary Title Report. If Seller notifies Buyer of its election not to remove the objectionable items on the Preliminary Title Report or Survey or is deemed to have elected not to remove the objectionable items on the Preliminary Title Report or Survey, Buyer shall have the right, by written notice delivered to Seller within five (5) days after Buyer's receipt of Seller's Notice or the date Seller is deemed to have elected not to remove the objectionable items on the Preliminary Title Report or Survey, to elect to terminate the Agreement and Escrow and the rights and obligations of the Parties hereunder in which event the Earnest Money shall be returned to Buyer, and if Buyer does not give Buyer's termination notice in such five (5) day period, Buyer shall take title at the Close of Escrow subject to such objectionable items without any adjustment to or credit against the Purchase Price. All exceptions to title shown on the Preliminary Title Report, other than those which Seller may agree to remove pursuant to this Section 4, shall be deemed to have been approved by Buyer unless Seller is notified otherwise in writing. Upon the issuance of any amendment or supplement to the Preliminary Title Report which adds additional exceptions, including any survey exceptions, the foregoing right of review and approval shall also apply to said amendment or supplement. The process set forth above for Buyer's review and Seller's response shall apply to any review and response with respect to any amendment or supplement to the Preliminary Title Report, and the Closing shall be extended for such period as is necessary to allow for that review and response process to be completed. Seller shall not alter the Property in any manner that would give rise to any changes being made to the Survey after an inspection thereof by the surveyor. 5. RIGHT OF ENTRY. Beginning on the Effective Date up to and including the Closing Date, Seller grants Buyer, its agents, contractors, employees, and representatives, the right to enter into and upon the Property at reasonable times for the purposes related to Buyer's inspection and proposed acquisition of the Property. Optionee shall not undertake any invasive testing, including, without limitation, taking samples of any kind or type from the Option Property, until such time as Optionee has submitted to City Optionee's scope of work, as well as the specific locations proposed to be accessed, and obtained Seller's consent, which shall not be unreasonably withheld or delayed. Any costs, expenses, or charges incurred or related to Buyer's activities under this right of entry shall be at the sole cost and expense of Buyer and at no cost and expense to Seller. Buyer shall, at its own cost and expense entirely, repair any damage to 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -4- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT the Property resulting from any such entry and shall restore the Property to its condition prior to such entry. Buyer agrees to indemnify, defend (with counsel selected by Seller) and hold Seller and the Property harmless from any and all claims, liabilities, liens, actions, judgments, costs, expense, or charges (including without limitation attorneys' fees and costs) for personal injury or property damage arising from or connected or related in any way to the right of entry granted under this Agreement. 6. CLOSE OF ESCROW. 6.1 Close of Escrow; Closing Date. Provided that all of the conditions precedent of this Agreement and the Option Agreement to the "Close of Escrow" (as hereinafter defined) as set forth in Section 10 below have been satisfied (or waived by the appropriate party), and this Agreement has not otherwise been terminated, prior to or on the Closing Date, the Closing of this transaction for the sale and purchase of the Property shall take place on the earlier of either: (A) ninety (90) days following the date on which the City has issued any and all Permits (as defined in the Option Agreement), or (B) twenty-four (24) months from the date Buyer delivered to City the Option Notice under the Option Agreement ("Outside Closing Date"). Notwithstanding the foregoing, if Buyer and Seller agree to advance the Closing, and so long as all of "Buyer's Conditions to Closing" and all of "Seller's Conditions to Closing" (as those terms are defined in Section 10) have been satisfied (or waived by the appropriate party), Seller and Buyer may elect to authorize the Closing in writing before the Outside Closing Date. The terms "Close of Escrow", "Closing Date" and the "Closing" are used herein to mean the time Seller's grant deed conveying fee title to the Property to Buyer is recorded in the Official Records of the Office of the County Recorder of Riverside, California ("Recorder's Office"). 6.2 Recordation; Release of Funds and Documents. 6.2.1 Escrow Holder is directed, on the Closing Date, to record in the Recorder's Office, the following documents in the order listed: (i) the grant deed (in the form attached hereto as Attachment No 2) transferring title to the Property to Buyer ("Grant Deed"); and (ii) the following documents: (a) As required pursuant to the Reinstated Development Agreement and Option Agreement, a fully executed and notarized, in recordable form, Development Agreement or amendment to the Reinstated Development Agreement, between Buyer and Seller, governing the pre -development, development, and use of the Property upon Buyer acquiring fee title; (b) A termination and release, in a form mutually agreeable to Buyer and Seller, of the Memorandum of Option Agreement ("Termination of Option Agreement and Memorandum of Option Agreement"), which shall be effective upon Close of Escrow and the recording thereof in the Recorder's Office; and (c) Such other and further documents as may be directed jointly by Buyer and Seller. 6.2.2 Upon the Closing, Escrow Holder shall deliver (i) the Purchase Price 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -5- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT to Seller, less any amount to Closing costs, including property taxes and/or assessments allocable to Seller pursuant to Section 9 below, and (ii) conformed copies of all recorded and other closing documents to both Buyer and Seller. 7. DELIVERY OF DOCUMENTS REQUIRED FROM BUYER AND SELLER. 7.1 Buyer's Obligations. Buyer agrees that on or before the Closing Date, Buyer shall deposit or cause to be deposited with Escrow Holder the following: (a) The Purchase Price (as prorated pursuant to this Agreement), less the Earnest Money Deposit; (b) As required pursuant to the Reinstated Development Agreement and Option Agreement, a fully executed and notarized, in recordable form, Development Agreement or amendment to the Reinstated Development Agreement, between Buyer and Seller, governing the pre -development, development, and use of the Property upon Buyer acquiring fee title; and (c) Any and all additional funds, instruments or other documents required from Buyer (executed and acknowledged where appropriate) as may be reasonably necessary in order for the Escrow Holder, Seller and Buyer to comply with the terms of this Agreement and consummate the transaction so long as the same do not increase Buyer's obligations or decrease its rights from that which is provided herein or in the Option Agreement. 7.2 Seller's Obligations. Seller agrees that on or before 5:00 p.m. of the last business day immediately preceding the Closing Date, Seller shall deposit or cause to be deposited with Escrow Holder each of the following: (a) The executed and acknowledged Grant Deed, subject only to the Permitted Exceptions (defined hereafter); (b) A bill of sale in customary and reasonable form transferring to title (free of liens and claims) all personal property located on the Property; (c) A customary title affidavit sufficient to provide for extended coverage for Buyer as well as the removal of the mechanic's liens and parties in possession exceptions; (d) A fully executed and notarized, in recordable form, Development Agreement or amendment to the Reinstated Development Agreement, between Buyer and Seller, governing the pre -development, development, and use of the Property upon Buyer acquiring fee title; (e) A fully executed and notarized, in recordable form, Termination of Option Agreement and Memorandum of Option Agreement; and 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -6- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT (f) Any and all additional funds, instruments or other documents required from Seller (executed and acknowledged where appropriate) as may be reasonably necessary in order for the Escrow Holder, Seller and Buyer to comply with the terms of this Agreement and consummate the transaction so long as the same do not increase Seller's obligations or decrease its rights from that which is provided herein or in the Option Agreement. 8. TITLE INSURANCE POLICY. 8.1 Title Policy. On the Closing Date, the Title Company, as insurer, shall issue a [CLTA or ALTA — AT BUYER'S CHOICE] owner's standard coverage policy of title insurance ("Title Policy"), in favor of Buyer, as insured, for the Property, with liability in the amount of the Purchase Price, subject only to the following (the "Permitted Exceptions"): (a) non -delinquent real property taxes, subject to Seller's obligations to pay certain taxes pursuant to Section 9 below; (b) covenants, conditions, restrictions and reservations of record that do not interfere with the Buyer's proposed use of the Property, as determined in the sole and absolute discretion of Buyer; (c) title exceptions approved or deemed approved by Buyer pursuant to Section 4 above; (d) any other exceptions approved by Buyer; and (e) the standard printed conditions and exceptions contained in the CLTA or ALTA Company. standard owner's policy of title insurance regularly issued by the Title 8.2 Payment for Title Policy. Buyer shall be responsible for all charges for the Title Policy, and Surveys if elected by Buyer. 9. REAL PROPERTY TAXES AND ASSESSMENTS. All taxes (general and special) including real property taxes shall be current and not in default and Seller shall pay any delinquent real property taxes. Real property taxes shall be prorated to the Closing (with the Closing Date being treated as if Buyer was the owner). The provisions of this Section shall survive Close of Escrow. At the Closing, Seller shall be responsible for paying for all real or personal property taxes or assessments assessed against the Property for any period prior to the Closing. Buyer shall be responsible for paying for all real or personal property taxes or assessments assessed against the Property for time periods on or after the Closing. 10. CONDITIONS PRECEDENT TO CLOSING. 10.1 Conditions Precedent to Buyer's Obligations. The obligations of Buyer under this Agreement to purchase the Property and close the Escrow shall be subject to the satisfaction or signed written waiver by Buyer of each and all of the following 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -7- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT conditions precedent (collectively, "Buyer's Conditions to Closing"): (a) On the Closing Date, the Title Company shall be irrevocably committed to issue the Title Policy pursuant to Section 8.1 above insuring fee title to the Property as being vested in Buyer, subject only to the Permitted Exceptions; (b) Escrow Holder holds all instruments and funds required for the Closing and will deliver to Buyer the instruments and funds, if any, accruing to Buyer pursuant to this Agreement; (c) Except as otherwise permitted by this Agreement, all representations and warranties by the Seller in this Agreement shall be true on and as of the Closing Date as though made at that time and all covenants of Seller pursuant to this Agreement shall have been fulfilled by the Closing Date; (d) Seller is not in material default of any term or condition of this Agreement or the Option Agreement; (e) A fully executed and notarized, in recordable form, Development Agreement or amendment to the Reinstated Development Agreement, between Buyer and Seller, governing the pre -development, development, and use of the Property upon Buyer acquiring fee title; [NOTE: CONDITIONS TO CLOSING FROM OPTION AGREEMENT TO BE INTEGRATED IN THIS SECTION OF PSA ] In the event that any of Buyer's Conditions to Closing are not satisfied or waived in a writing signed by Buyer prior to the expiration of the applicable period for satisfaction or waiver, Buyer may terminate this Agreement in which event (except as provided in Sections 12, 15, or elsewhere herein), in accordance with the Option Agreement, both the Option Consideration and (if applicable) Total Additional Option Consideration Payments (and accrued interest attached thereto) shall be returned to the Seller, and any remaining balance that was deposited by Buyer for the Earnest Money Deposit (and accrued interest attached thereto) shall be returned to the Buyer. 10.2 Conditions Precedent to Seller's Obligations. The obligations of Seller under this Agreement shall be subject to the satisfaction or signed written waiver by Seller of each and all of the following conditions precedent ("Seller's Conditions to Closing"): (a) Escrow Holder holds the Purchase Price and all other instruments and funds required to be delivered by Buyer for the Closing and has been directed in writing by Buyer to deliver to Seller the instruments and funds, including but not limited to the Purchase Price (less any offsets and prorations against Seller specifically provided for hereunder) less the amount of the Earnest Money; (b) Except as otherwise permitted by this Agreement, all representations and warranties by the Buyer in this Agreement shall be true on and as of 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -8- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT the Closing Date as though made at that time and all covenants of Buyer pursuant to this Agreement shall have been fulfilled by the Closing Date; (c) As required by the Reinstated Development Agreement and Option Agreement, Buyer (as Developer) has completed or has caused the completion of the construction of the "Public Golf Clubhouse Project Component" as defined in and in accordance with the Reinstated Development Agreement; (d) As required pursuant to the Reinstated Development Agreement, a fully executed and notarized, in recordable form, Development Agreement or amendment to the Reinstated Development Agreement, between Buyer and Seller, governing the pre -development, development, and use of the Property upon Buyer acquiring fee title; (e) Buyer is not in material default of any term or condition of this Agreement or the Option Agreement; [NOTE: CONDITIONS TO CLOSING FROM OPTION AGREEMENT TO BE INTEGRATED IN THIS SECTION OF PSA] In the event that any of Seller's Conditions to Closing are not satisfied or waived in a writing signed by Seller prior to the expiration of the applicable period for satisfaction or waiver, Seller may terminate this Agreement, in which event (except as provided in Sections 12, 15, or elsewhere herein), in accordance with the Option Agreement, both the Option Consideration and (if applicable) Total Additional Option Consideration Payments (and accrued interest attached thereto) shall be returned to the Seller, and any remaining balance that was deposited by Buyer for the Earnest Money Deposit (and accrued interest attached thereto) shall be returned to the Buyer. 11. NOTICE OF DEFAULT. Upon a default by either Seller or Buyer under this Agreement, the non -defaulting party shall notify the defaulting party and Escrow Holder in writing of such default. If the non -defaulting party gives such notice, the notice shall set forth with specificity the alleged default and the defaulting party shall have ten (10) days to cure the default. If the defaulting party does not cure the default within ten (10) days of the receipt of such notice, the non -defaulting party may elect to terminate this Agreement and pursue the remedies provided in Section 12 below. 12. WAIVER OF DAMAGES, SPECIFIC PERFORMANCE, LIQUIDATED DAMAGES. Except as provided in the paragraphs immediately below, in the event a party defaults under this Agreement, the non -defaulting party's sole and exclusive remedy will be for specific performance of this Agreement. EACH PARTY HEREBY WAIVES ANY RIGHT TO PURSUE DAMAGES RESULTING FROM A DEFAULT OR BREACH OF THIS AGREEMENT, AND IN NO EVENT SHALL THE DEFAULTING PARTY BE LIABLE FOR DAMAGES FOR A DEFAULT OR BREACH OF DEFAULTING PARTY'S OBLIGATION UNDER THIS AGREEMENT, ALL OF WHICH RIGHTS ARE HEREBY WAIVED AND RELINQUISHED BY THE NON -DEFAULTING PARTY. The parties agree that the foregoing limitation on their respective remedies and measure of damages is reasonable under all of the circumstances of this Agreement, and is a material consideration for the 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -9- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT parties entering into this Agreement. Seller's Initials Buyer's Initials NOTWITHSTANDING THE PREVIOUS PARAGRAPH, IF BUYER SHOULD DEFAULT UNDER THIS AGREEMENT, SELLER AND BUYER AGREE THAT SELLER WILL INCUR DAMAGES BY REASON OF SUCH DEFAULT WHICH DAMAGES SHALL BE IMPRACTICAL AND EXTREMELY DIFFICULT, IF NOT IMPOSSIBLE, TO ASCERTAIN. THEREFORE, SELLER AND BUYER, IN A REASONABLE EFFORT TO ASCERTAIN WHAT SELLER'S DAMAGES WOULD BE IN THE EVENT OF SUCH DEFAULT BY BUYER HAVE AGREED BY PLACING THEIR INITIALS BELOW THAT THE EARNEST MONEY DEPOSIT SHALL CONSTITUTE A REASONABLE ESTIMATE OF SELLER'S DAMAGES UNDER THE PROVISIONS OF SECTIONS 1671 AND 1677 OF THE CALIFORNIA CIVIL CODE FOR A BREACH PRIOR TO THE CLOSING. THIS PROVISION DOES NOT APPLY TO OR LIMIT IN ANY WAY EITHER PARTY'S INDEMNITY OBLIGATIONS. Seller's Initials Buyer's Initials NOTWITHSTANDING THE FIRST PARAGRAPH IN THIS SECTION 12, IF SELLER SHOULD DEFAULT UNDER THIS AGREEMENT, SELLER AND BUYER AGREE THAT THE EARNEST MONEY DEPOSIT (INCLUDING ALL TOTAL ADDITIONAL OPTION CONSIDERATION PAYMENTS) SHALL BE PROMPTLY RETURNED TO BUYER. Seller's Initials Buyer's Initials 13. POSSESSION. Possession of the Property, free from all tenancies, parties in possession and occupants and contractual obligations (other than to the Seller as provided herein, the Option Agreement, or Reinstated Development Agreement), shall be delivered by Seller to Buyer on the Closing Date, subject only to the Permitted Exceptions. 14. ALLOCATION OF COSTS. 14.1 Buyer's Costs. Buyer shall pay any escrow fees or similar charges of Escrow Holder, all charges for the Title Policy, the Preliminary Title Report, and Surveys if elected by Buyer, and the cost of recording the Grant Deed and any other recording charges. 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -10- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 14.2 Miscellaneous Costs. Except to the extent otherwise specifically provided herein, all other expenses incurred by Seller and Buyer with respect to the negotiation, documentation and closing of this transaction, including, without limitation, attorneys' fees, shall be borne and paid by the party incurring the same. 15. CONDEMNATION. In the event that, prior to the Close of Escrow, any governmental entity (other than the City of La Quinta) shall commence any proceedings of or leading to eminent domain or similar type proceedings to take all or any portion of the Property, Buyer and Seller shall promptly meet and confer in good faith to evaluate the effect of such action on the purposes of this Agreement; provided, however, that Buyer and Seller shall each have the right to pursue the portion of the award allocable to their respective interests and either Buyer or Seller shall have the option to terminate this Agreement by delivery of a termination notice to the other Party prior to the Closing, in which event the Earnest Money Deposit (including the Option Consideration and (if applicable) Total Additional Option Consideration Payments (and accrued interest attached thereto)) shall be returned to the Buyer, upon cancellation of the Escrow. 16. DAMAGE. If the Property is damaged or destroyed by any casualty (a "Casualty") after the Effective Date, but prior to the Closing, and the costs to repair or restore the same shall exceed Fifteen Thousand Dollars ($15,000.00) (as reasonably determined by Seller and Buyer), then Buyer shall have the option to terminate this Agreement by delivery of a termination notice to Seller prior to the Closing. In the alternative, if a Casualty shall occur prior to the Closing, and if Buyer does not so exercise its right to terminate, then Buyer shall proceed with the Closing and upon consummation of the transaction herein provided, Seller shall assign to Buyer all claims of Seller under or pursuant to any applicable casualty insurance coverage and all proceeds from any such casualty insurance received by Seller on account of any such Casualty, the damage from which shall not have been repaired by Seller prior to the Closing. Seller agrees to execute any documents reasonably necessary to effectuate the provisions of this Section 16. 17. HAZARDOUS MATERIALS. To the best of Seller's actual knowledge (without any obligation of Seller to further investigate), the Property has not at any time been used for the purposes of storing, manufacturing, releasing or dumping Hazardous Materials. For purposes of this Agreement, the term "Hazardous Materials" shall mean (1) hazardous wastes, hazardous materials, hazardous substances, hazardous constituents, toxic substances or related materials, whether solids, liquids or gases, including, but not limited to, substances deemed as "hazardous wastes," "hazardous materials," "hazardous substances," "toxic substances," "pollutants," "contaminants," "radioactive materials," or other similar designations in, or otherwise subject to regulation under, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. § 9601 et seq.; the Toxic Substance Control Act ("TSCA"), 15 U.S.C. § 2601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1802; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 9601, et seq.; the Clean Water Act ("CWA"), 33 U.S.C. § 1151 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. § 7401 et seq.; the Hazardous Waste Control Law, California Health and Safety Code § 25100 et seq., the Carpenter -Presley -Tanner Hazardous Substance Account Act, California Health and 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -11- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Safety Code, Division 45, the Hazardous Materials Release Response Plans and Inventory Act, California Health and Safety Code, Division 20, Chapter 6.95, The Underground Storage of Hazardous Substances Act, California Health and Safety Code, Division 20, Chapter 6.7, the Porter -Cologne Water Quality Control Act, California Water Code § 13000 et seq. and in any permits, licenses, approvals, plans, rules, regulations or ordinances adopted, or other criteria and guidelines promulgated pursuant to the preceding laws or other similar federal, state or local laws, regulations, rules or ordinances now or hereafter in effect relating to environmental matters (collectively the "Environmental Laws"); and (ii) any other substances, constituents or wastes subject to any applicable federal, state or local law, regulation, ordinance or common law doctrine, including any Environmental Law, now or hereafter in effect, including, but not limited to, (A) petroleum, (B) refined petroleum products, (C) waste oil, (D) waste aviation or motor vehicle fuel, (E) asbestos, (F) lead in water, paint or elsewhere, (G) radon, (H) polychlorinated biphenyls (PCB's) and (I) ureaformaldehyde. 18. COVENANTS OF SELLER. Seller agrees that during the period between the Effective Date of this Agreement and the Closing Date: (a) Seller shall maintain the Property in not less than the state of repair as that existing on the Effective Date (excepting ordinary wear and tear); (b) Seller shall not convey, grant, lease, assign, mortgage, hypothecate, encumber, bind, or otherwise transfer (on or off record) the Property or any interest therein; (c) Prior to the Closing, Seller shall maintain Seller's existing insurance on the Property; (d) Prior to the Closing, Seller shall not alter the physical condition of the Property or introduce or release, or permit the introduction or release, of any Hazardous Materials in, from, under, or on the Property; and (e) This Agreement and all agreements, instruments, and documents herein provided to be executed or to be caused to be executed by Seller are and on the Closing will constitute legal, valid and binding obligations of Seller enforceable against Seller in accordance with their terms. This Agreement does not violate any provision of any material agreement or document to which Seller is a party or to which Seller is bound. 19. COVENANTS OF BUYER. Buyer agrees that during the period between the Effective Date of this Agreement and the Closing Date: (a) This Agreement and all agreements, instruments, and documents herein provided to be executed or to be caused to be executed by Buyer are and on the Closing will constitute legal, valid and binding obligations of Buyer enforceable against Buyer in accordance with their terms. This Agreement does not violate any provision of any material agreement or document to which Buyer is a party or to which Buyer is bound; 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -12- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT (b) As of the date of the Closing, Buyer will have the financial ability to perform its obligations under this Agreement; (c) As of the date of the Closing, Buyer is not and will not be in "Default" or "MAE Default," as those terms are defined and used in the Option Agreement, Reinstated Development Agreement, and other the Required City Land Use Agreements (as defined in the Option Agreement); (d) Except as expressly provided in this Agreement or the Option Agreement or the Required City Land Use Agreements (as defined in the Option Agreement), Buyer is purchasing the Property based solely upon Buyer's inspection and investigation of the Property and all documents related thereto or, its opportunity to do so, and Buyer is purchasing the Property in an "AS IS, WHERE IS" condition without relying upon any representations or warranties, express, implied or statutory of any kind. 20. MISCELLANEOUS. 20.1 Assignment. This Agreement shall be binding upon and shall inure to the benefit of Buyer and Seller and their respective successors and assigns. Neither party to this Agreement may transfer or assign this Agreement or any interest or right hereunder or under the Escrow without the prior written consent and approval of the other party, which consent and approval shall not be unreasonably withheld, and provided, further, that this Agreement may be assigned by Buyer to a "Permitted Affiliate Assignee" of Buyer (as that term is defined in and pursuant to the Reinstated Development Agreement) and said assignment is memorialized by an unrecorded assignment and assumption agreement that includes the written consent of Seller and the Escrow Holder. No provision of this Agreement is intended nor shall in any way be construed to benefit any party not a signatory hereto or to create a third party beneficiary relationship. 20.2 Notices. All notices under this Agreement shall be effective upon personal delivery, upon delivery by reputable overnight courier service that provides a receipt with the date and time of delivery, or three (3) business days after deposit in the United States mail, registered, 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 Buyer: c/o Turnbridge Equities 4 Bryant Park, Suite 200 New York, NY 10018 Attn: Michael Gazzano and General Counsel Email: mg@turnbridgeeq.com With a copy to:DLA Piper LLP 1251 Avenue of the _ New York, NY 10020 Attn: Todd Eisner 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -13- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Email: Email: todd.eisner@us.dlapiper.com With a copy to: Procopio 200 Spectrum Center Drive, Suite 1650, Irvine, CA 92618 Attn: James Vaughn Email: james.vaughn@procopio.com To Seller: City of La Quinta 78495 Calle Tampico La Quinta, CA 92253 Attn: City Manager Attn: City Clerk with copy to: Rutan & Tucker, LLP 18575 Jamboree Rd, 9th Floor Irvine, California 92612 Attn: William H. Ihrke Email: bihrke@rutan.com 20.3 Fair Meaning. This Agreement shall be construed according to its fair meaning and as if prepared by both parties hereto. 20.4 Headings. The headings at the beginning of each numbered Section of this Agreement are solely for the convenience of the parties hereto and are not a part of this Agreement. 20.5 Choice of Laws; Litigation Matters. This Agreement shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Agreement. Service of process on Seller shall be made in accordance with California law. Service of process on Buyer shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 20.6 Nonliability of Buyer and Seller Officials. No officer, official, member, employee, agent, or representative of Buyer or Seller shall be liable for any amounts due hereunder, and no judgment or execution thereon entered in any action hereon shall be personally enforced against any such officer, official, member, employee, agent, or representative. 20.7 Gender; Number. As used in this Agreement, masculine, feminine, and neuter gender and the singular or plural number shall be deemed to include the others wherever and whenever the context so dictates. 20.8 Survival. This Agreement and all covenants to be performed after the 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -14- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Closing, and, except as otherwise set forth herein, all representations and warranties contained herein, shall survive the Closing Date and shall remain a binding contract between the parties hereto. 20.9 Time of Essence. Time is of the essence of this Agreement and of each and every term and provision hereof, it being understood that the parties hereto have specifically negotiated the dates for the completion of each obligation herein. 20.10 Time Period Computations. All periods of time referred to in this Agreement shall include all Saturdays, Sundays and California state or national holidays unless the reference is to "business days," in which event such weekends and holidays shall be excluded in the computation of time and provide that if the last date to perform any act or give any notice with respect to this Agreement shall fall on a Saturday, Sunday or California state or national holiday, such act or notice shall be deemed to have been timely performed or given on the next succeeding day which is not a Saturday, Sunday or California state or national holiday. 20.11 Waiver or Modification. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by both Buyer and Seller. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 20.12 Broker's Fees. Seller and Buyer represent and warrant to the other that neither Buyer nor Seller has employed any broker and/or finder to represent its interest in this transaction. Each party agrees to indemnify and hold the other free and harmless from and against any and all liability, loss, cost, or expense (including court costs and reasonable attorney's fees) in any manner connected with a claim asserted by any individual or entity for any commission or finder's fee in connection with the conveyance of the Property arising out of agreements by the indemnifying party to pay any commission or finder's fee. 20.13 Duplicate Originals. This Agreement may be executed in any number of duplicate originals or counterparts (including electronic pdf counterparts), all of which shall be of equal legal force and effect. 20.14 Severability. If any term, covenant or condition of this Agreement or the application thereof to any person, entity, or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant, or condition to persons, entities, or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 20.15 Exhibits. The following exhibits are attached hereto and incorporated herein by this reference: Exhibit A Legal Description of Property 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -15- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Exhibit B Form of Grant Deed 20.16 Authority. The parties executing this Agreement on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other agreement to which such party is bound. 20.17 City Approvals and Actions. City shall maintain authority of this Agreement and the authority to implement this Agreement through the City Manager. The City Manager shall have the authority to make approvals, issue interpretations, waive provisions, negotiate and enter into amendments to this Agreement and/or negotiate and enter into implementing agreements or documents on behalf of City so long as such actions do not materially or substantially change the business terms of this Agreement or the uses or development permitted on the Property, or materially or substantially add to the costs incurred or to be incurred by City as specified herein. Such approvals, interpretations, waivers, amendments, and/or implementing agreements or documents may include extensions of time to perform as specified in this Agreement. Any and all other material and/or substantial interpretations, waivers, or amendments shall require the consideration, action and written consent of the City Council. Furthermore, the City Manager may seek review and approval by the City Council on any approval, interpretation, waiver, amendment, document, or any other matter that, pursuant to this Section, City Manager otherwise has authority to act upon on behalf of City. Nothing in this Section does or shall be deemed to authorize the City Manager to take any action that is otherwise required to be reviewed and decided by the City Council, Planning Commission, or other reviewing board, commission, or public official, pursuant to any applicable Federal, State, or City law. 20.18 Entire Agreement; Amendment. Except as set forth above, this Agreement and the exhibits incorporated herein, the Option Agreement, the Reinstated Development Agreement, and the other Required City Land Use Agreements (as defined in the Option Agreement), contain the entire agreement of Buyer and Seller with respect to the matters contained herein, and no other prior agreement or understanding pertaining to any such matter shall be effective for any purpose. No provisions of this Agreement may be amended or modified in any manner whatsoever except by an agreement in writing signed by duly authorized officers or representatives of each of the parties hereto. [END -- SIGNATURE PAGE FOLLOWS] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -16- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT IN WITNESS WHEREOF, Buyer and Seller 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. ATTEST: Monika Radeva, City Clerk APPROVED AS TO FORM: William H. Ihrke, City Attorney 698/015610-0207 22798455.4 a09/18/25 SELLER: CITY OF LA QUINTA, a California municipal corporation and charter city By: Jon McMillen, City Manager [signatures continue on next page] EXHIBIT D -17- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 698/015610-0207 22798455.4 a09/18/25 BUYER: TBE RE Acquisition Co II LLC, a Delaware limited liability company, an affiliate of Turnbridge Equities By: Its: [end of signatures] EXHIBIT D -18- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT . agrees to act as Escrow Holder in accordance with the terms of this Agreement that are applicable to it. 698/015610-0207 22798455.4 a09/18/25 By: Name: Its: Escrow Holder EXHIBIT D -19- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT ATTACHMENT NO. 1 LEGAL DESCRIPTION OF PROPERTY The real property and improvements thereon situated in the State of California, County of Riverside, City of La Quinta, are described as follows: [ TO BE INSERTED AFTER THE SUBDIVISION MAP IS RECORDED THAT SEPARATES THE "PARK AND RETENTION BASIN PROPERTY" FROM THE REMAINDER OF THE "PHASE 2 PROPERTY" AS DESCRIBED AND REQUIRED UNDER THE OPTION AGREEMENT AND REINSTATED DEVELOPMENT AGREEMENT] 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -20- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT 698/015610-0207 22798455.4 a09/18/25 ACTIVE\1622770766.4 ATTACHMENT NO. 2 FORM OF GRANT DEED [SEE ATTACHED] EXHIBIT D -21- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT RECORDING REQUESTED BY AND: WHEN RECORDED MAIL TO: City of La Quinta 78495 Calle Tampico La Quinta, CA 92253 Attn: City Manager Space above this line for Recorder's Use Exempt from Recordation Fee per Gov. Code § 27383 MAIL TAX STATEMENTS TO: City of La Quinta 78495 Calle Tampico La Quinta, CA 92253 Attn: City Manager The undersigned declares exemption under the following: Exempt from recording fee pursuant to Government Code Section 27383; recorded by a municipality Exempt from documentary transfer tax pursuant to Revenue and Taxation Code Section 11922; government agency acquiring title Order No. Escrow No. GRANT DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the CITY OF LA QUINTA, a California municipal corporation and charter city ("GRANTOR"), hereby grants, conveys, and transfers to the real property in the City of La Quinta, County of Riverside, State of California, described on Sub -Attachment No. 1 attached hereto and incorporated herein by reference (the "Property"). The Property conveyed hereby is subject to all matters of record. [NOTE: Final Form of Grant Deed will need to include anti -discrimination covenants required by state law, and other disclosures may be included relating to requirements in the Option Property's Development Agreement] 698/015610-0207 22798455.4 a09/18/25 [continued on following page] EXHIBIT D -22- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT IN WITNESS WHEREOF, Seller and Buyer have executed this Grant Deed as of the date noted herein. SELLER: CITY OF LA QUINTA, a California municipal corporation and charter city Date: , 2025 By: Jon McMillen, City Manager ATTEST: Monika Radeva, City Clerk APPROVED AS TO FORM: William H. Ihrke, City Attorney 698/015610-0207 22798455.4 a09/18/25 [signatures continue on next page] EXHIBIT D -23- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT Date: , 2025 698/015610-0207 22798455.4 a09/18/25 BUYER: TBE RE Acquisition Co II LLC, a Delaware limited liability company, an affiliate of Turnbridge Equities By: Name: Title: [end of signatures] EXHIBIT D -24- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Riverside On ) ) , 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) 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -25- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Riverside ) ) On , 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) 698/015610-0207 22798455.4 a09/18/25 EXHIBIT D -26- LA QUINTA CITY COUNCIL PUBLIC HEARING DRAFT SUB -ATTACHMENT NO. 1 TO GRANT DEED LEGAL DESCRIPTION OF REAL PROPERTY THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: 698/015610-0207 22798455.4 a09/18/25 [ TO BE INSERTED AFTER THE SUBDIVISION MAP IS RECORDED THAT SEPARATES THE "PARK AND RETENTION BASIN PROPERTY" FROM THE REMAINDER OF THE "PHASE 2 PROPERTY" AS DESCRIBED AND REQUIRED UNDER THE OPTION AGREEMENT AND REINSTATED DEVELOPMENT AGREEMENT ] EXHIBIT D -27-