08 TOT Revenue Sharing Agmt DOC # 2025-0382833Recording requested by
Stewart Title of Califomia, Inc.
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
City of La Quinta
78-495 Calle Tampico
La Quinta, CA 92253
Attn: City Clerk
2025-0332333
12/03/2025 03:47 PM Fee: $ 0.00
Page 1 of 52
Recorded in Official Records
County of Riverside
Peter Aldana
Assessor -County Clerk -Recorder
1111 ���� E'I►;�r'� �rk'�,'��� Jill
[SPACE ABOVE FOR RECORDER.]
Order No. 2664882 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 ]
Recorded concurrently and in connection
with a transfer subject to the imposition
of
Documentary Transfer Tax - GC 27388.1(a)(2)
0698/015610-0207
22798270 2 a11/22/25
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.]
Order No. 2664882 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 C , 2025
("Covenant Agreement Date"), by and between the CITY OF LA QUINTA, a California
municipal corporation and charter city ("City"), and the following entities that are affiliates
of Turnbridge Equities: SilverRock Hotel Owner LLC, a Delaware limited liability company
("SR Hotel"); SilverRock 1A Condo Owner LLC, a Delaware limited liability company
("SR1A Condo"); SilverRock 1A Resi Owner LLC, a Delaware limited liability company
("SR1A Resi"), all "Permitted Transferees" (pursuant to the "Reinstated Development
Agreement" defined below) of TBE RE Acquisition Co II LLC, a Delaware limited liability
company and affiliate of Turnbridge Equities (collectively, SR Hotel, SR1A Condo, and
SR1A Resi are referred to herein as the "Developer" and, City and Developer are
individually referred to as 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),
WHICH ARE NORTH AND WEST OF THE CANAL, AND EXCLUDE PARCEL WITH
PUBLIC GOLF CLUBHOUSE / DEFINITION OF "TOT COVENANT PROPERTY"
INTENDED FOR CLARITY WHEN COMPARED TO DEFINITION OF "PROPERTY" IN
REINSTATED DEV AGREEMENT]
B. On October 7, 2025, the La Quinta City Council adopted Ordinance No. 626,
approving pursuant to applicable State and City laws that certain Reinstated and
Amended Development Agreement, with reference date November 6, 2025, between City
and Developer (the "Reinstated Development Agreement"). Among other terms and
06981015610-0207
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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
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:
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)")1 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
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").
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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 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:
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");
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,
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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 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. 759], 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
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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 TERMS
FROM THE BANKRUPTCY COURT ORDER FOR SALE OF
DEBTORS PROPERTY MAY BE CONSULTED BY REVIEWING
SAID ORDER]
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
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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.
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:
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.
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"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.
"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.
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"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.
"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.
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"Phase 1A 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.
"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.
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"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,
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 (Le., 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.
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
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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
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.
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2.2 Final and Bindinq 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
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 Dwellinnc' (`mmnlefinn anri r)ncra+inn a
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
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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.
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
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governing regulations. Precautionary measures shall be employed recognizing
that many areas are conditionally accessible to the public.
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.
3A 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
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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
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,
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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
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.
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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,
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
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(90%) of the Transient Occupancy Tax for that Quarter that is generated by the uses on
the TOT Covenant Property.
(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
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against the subsequent Covenant Payment in the event City has overpaid a prior
Covenant Payment).
(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
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Developer's performance of its obligations set forth in Article 3 of this Covenant
Agreement during such Quarter.
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 5.11 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
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(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
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
Q) 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
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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
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
0698/015610-0207
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in addition to all rights and remedies provided by law from time to time and the exercise
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.
06981015610-0207
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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
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).
06981015610-0207
22796270.2 a11122125 -24-
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
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
0698/015610-0207
22796270.2 al1122/25 -25-
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").
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.
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
0698/015610-0207
22798270.2 a11l22/25 -26-
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
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.
8.1 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.
06981015610-0207
22798270.2 al 1122125 -27-
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.
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 Maieure. 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.
0698/01501 M207
22798270.2 a11/22/25 -28-
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,
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: City of La Quinta
78-495 Calle Tampico
La Quinta, California 92253
Attn: City Clerk
With a copy to: Rutan & Tucker, LLP
18575 Jamboree Road, 9t" Floor
Irvine, California 92612
Attn: William H. Ihrke
Email: bihrke@rutan.com
To Developer: SilverRock Hotel, 1A Condo, and 1A Resi
Owners LLCs
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 a.us.dlapiper.com
with a copy to:
Procopio
200 Spectrum Center Drive, Suite 1650,
Irvine, CA 92618
Attn: James Vaughn
Email: james.vaughn(a�procopio.com
Any written notice, demand or communication shall be deemed received
immediately if personally delivered or delivered by delivery service, and shall be
0698/015610-0207
227982702 a11/22/25 -29-
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
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.
06981015610-0207
22798270.2 a11/22125 -30-
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.
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]
0698/0156M0207
22798270.2 al 1/22125 -31-
Date: ��P 2025
"Developer"
SILVERROCK HOTEL OWNER LLC, a
Delaware limited liability company, an
affiliate of Turnbridge Equities
By:
Name: Andrew o Ion
Title: Authorized Signatory
SILVERROCK 1A CONDO OWNER
LLC, a Delaware limited liability
company, an affiliate of Turnbridge
Equities
Date: '" 2025 By:
02-
Name: Andrew , olilon
Title: Authorized Signatory
SILVERROCK 1A RESI OWNER LLC,
a Delaware limited liability company,
an affiliate of Turnbridge Equities
Date: 2025 By:(k/
Name: Andrew dUon
Title: Authorized Signatory
[end of signatures]
[Signature Page - La Quinta - Transient Occupancy Tax (TOT) Revenue Sharing Agreement]
IN WITNESS WHEREOF, the Parties have executed this Covenant Agreement to
be effective as of the Effective Date.
"C ity"
CITY OF LA QUINTA,
a California municipal corporation
Date: 2 ,% , 2025 By:
n cMillen, City Manager
ATTEST:
By:
Monika Radevd, City rk
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
By a..�
�, �,/ � �
William H. Ihrke, City Attorney
[signatures continue on next page]
0698/015610-0207
22798270.2 a11/22/25 -32-
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 Los Angeles
On 1/124 43 , before me,
V 2 A-k9 i:� i 261L-r2&ty
_crosertnam and title of the officer)
Notary Public, personally appeared /�L�-(�2� 6,✓ �= ,ir Lc2�
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.
MAIN FITZGERALD
WITNESS my hand and official seal. Notary Public
Commission M 24,94/94
My Comm. Expires Nov 1, 2026
Signature Seal
[Notary Page - La Quinta - Transient Occupancy Tax (TOT) Revenue Sharing Agreement]
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 i before me, )w 6
(insert name and title of the officer)
Notary Public, personally appeared _ 01n lac \1�
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. Modiiu
.otary Pudic -RnOEva 011Irfor1,ia
County
WITNESS my hand nd official seal. Commission e02500684
G.V Comm. Expires Ott 22, 2029
Signature (Seal)
0698/015610-0207
22798270.2 a11/22/25 —34—
A Notary Public or other officer completing this certificate verifies only a identity of the
individual who signed the document to which this certificate is att hed, and not the
truthfulness, accuracy, or validity of that document.
State of California )
County of Riverside )
On before me,
name
Notary Public, personally appeared
who proved to me on the basis of satisfactory idence to be the person(s) whose
name(s) is/are subscribed to the within instr ent and acknowledged to me that
he/she/they executed the same in his/her/th r authorized capacity(ies), and that by
his/her/their signature(s) on the instrument a person(s), or the entity upon behalf of
which the person(s) acted, executed the in rument.
I certify under PENALTY OF POJURY under the laws of the State of California
that the foregoing paragraph is true a d correct.
WITNESS my hand and off6ial seal.
(Seal)
06981018610-0207
22798270.2 a11122128 -35-
EXHIBIT NO. 1
LEGAL DESCRIPTION OF TOT COVENANT PROPERTY
[Attached]
0698/015610-0207
22798270.2 a11122125 EXHIBIT NO. 1
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 I 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 I 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.
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 EXHBIT NO. 1
22798270.2 a11122125 -2-
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 I 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 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 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.
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 EXHIBIT NO. 1
22798270.2 a11/22125 -3-
PARCEL
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 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 1AAND 1B
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 I 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]
O6981015610-0207 EXHBIT NO. 1
22798270.2 al 1/22/25 -4-
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
IA 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, 777-490-078, 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]
0686/015610-0207 EXHBIT NO. 1_
22798270.2 a11/22/25 -5-
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
IA 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 1B
PROPERTY IN SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE
OR ENJOYMENT OF THE PHASE 1AAND 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.
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 EXHBIT NO. 1
2279827o.2 al 1/22125 -6-
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 IA AND 1B 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 1B
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.
PORTION APN: 777-490-079
(OLD APN PORTION of 777-490-045)
[continues on next page]
0698/015610.0207 EXHBIT NO. 1
22798270.2 al 1/22125 -7-
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
0698i015690-0207 EXHBIT NO, 1
22798270.2 al 1122/25 -8-
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 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, 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 EXHBIT NO. 1
22798270.2 a11/22125 '9-
.. ill M'..
PETER ALDANA Recorder
P.O. Box 751
COUNTY OF RIVERSIDE Riverside, CA 92502-0751
ASSESSOR -COUNTY CLERK -RECORDER (951)486-7000
wH•rti .rivcrsideacr.com
CERTIFICATION
Pursuant to the provisions of Government Code 27361.7, 1 certify under the penalty of perjury
that the following is a true copy of illegible wording found in the attached document:
(Print or type the page number(s) and wording below):
Date: 1 QA ,
Signature:
Print Name:
ACR 601 (Rev. 09/2005) Available in Alternate Formats
EXHIBIT NO. 2
ANNOTATED SITE MAP
(2025 SilverRock Master Plan)
Residential Lo
29 tots
Avg Lot SF: 14,'
Luxury Hotel
keys: 150
Spa SF: 21,000
Lobby SF: 25.00
Luxury
Brande
8 Club
Brande
Public
1�7
LPhase
i
L Phase
Gott Clubhouse
Clubhouse: 16,200st
Hotel Banquet / BOH
Banquet: 21,600 st
BOH: 26,000 st
Condominiums
70 Condos (Avg 3.000 st)
Clubhouse (15,000 st)
Residential Lots
)3 lots
1vg Lot SF: 20k
Pursuant to this Covenant Agreement, the "TOT Covenant Property" means that real
property, any improvements thereon, that corresponds to "Phase 1K 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
22798270.2a11/22/25 EXHIBIT NO. 2
EXCLUDED PARCELS from TOT COVENANT PROPERTY:
PARCEL1:
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
1AAND 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 18
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 777-060-083
[continues on next page]
0698/015610-0207 EXHBIT NO. 2
22798270.2 a11/22126 -2-
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 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 I 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]
EXHBIT NO. 2
06981015610-0207
22798270.2 a11/22125 -3-
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
IA 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 I 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 1AAND 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]
06981015610-0207 EXHBIT NO.
22798270.2 a11/22/25 -4-
PARCEL4.
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 1 B 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 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.
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.
EXHBIT NO. 2
0698/015BM0207
22798270.2 a11122/25 -5-