10 Option to Purchase Real Property - TurnbridgeOPTION TO PURCHASE REAL PROPERTY
THIS OPTION TO PURCHASE REAL PROPERTY (this "Agreement" or "Option
Agreement") is entered into as of the day ofeQm.x�., 2025 (the "Reference
Date"), by and between the CITY OF LA QUINTA, a California municipal corporation and
charter city ("City"), and TBE RE Acquisition Co II LLC, a Delaware limited liability
company, an affiliate of Turnbridge Equities ("Optionee" or "Developer"). City and
Optionee are sometimes each referred to individually herein as a "Party" and collectively
as the "Parties."
RECITALS
A. City currently owns fee title to that certain real property comprised of approximately
193+/- acres, identified as APN(s): 777-490-047, 777-490-043, 777-490-049, portion of
776-150-030, 777-060-074, and 777-060-079, and more specifically described on
Exhibit A-1 attached hereto and incorporated herein by this reference (the "Phase 2
Property"). The Phase 2 Property that is subject to Optionee's right to purchase pursuant
to this Option Agreement expressly excludes the approximately 24+/- acre SilverRock
Park and adjacent Flood Control/Water Retention Basin (collectively, the "Park And
Retention Basin Property"), also owned by City, which are adjacent to the Option
Property and located in the SilverRock Resort Area (defined below). The Phase 2
Property, excluding the Park and Retention Basin Property, is referred to in this Option
Agreement as the "Option Property" or "Property"). [NOTE: APNs AND LEGAL
DESCRIPTION TO MATCH "Phase 2 Property" (i.e., "City -Owned Option Property" IN
THE REINSTATED DEVELOPMENT AGREEMENT].
B. The Option Property is in close proximity to certain real property owned by
Optionee (referred to herein as the "Developer -Owned Property") and is subject to that
certain Reinstated and Amended Development Agreement by and between the City and
Optionee, adopted by City Council Ordinance No. 626 on October 7, 2025, and recorded
as Document No. 202-IF-5- 016 261 (the "Reinstated Development Agreement")
on or about even date as the Memorandum of Option Agreement (as defined below in
this Option Agreement) in the Official Records of the Office of the County Recorder of
Riverside, California (the "Recorder's Office") providing for the development of the
Developer -Owned Property as provided therein (referred to therein and herein as the
"Developer's Project").
C. Prior to City and Optionee entering into this Option Agreement and the Reinstated
Development Agreement (among other agreements and instruments), the following
relevant history is hereby recited:
Except for portions of land transferred to SilverRock Development Company,
LLC, a Delaware limited liability company (or one of its affiliated companies or
tenants -in -common, which are referred to herein collectively as "SDC" or
698/015610-0207
22798455.5 al1/23/25
"Debtor(s)")' as explained below in the next Recital Paragraph, City owns fee
title to that certain real property of approximately 525 acres located at the
southwest intersection of Jefferson Street and Avenue 52, in the City of La
Quinta, California, generally referred to as the "SilverRock Resort Area" and
subject to a Specific Plan adopted by the La Quinta City Council and
enforceable as a land use governing document pursuant to the Planning and
Zoning Law, California Government Code section 65000 et seq. (the
"SilverRock Specific Plan");
2. On or about November 19, 2014, City and SDC entered into that certain
Purchase, Sale, and Development Agreement (the "Original SDC PSDA"),
pursuant to which, among other terms and conditions, City agreed to sell to
SDC and SDC agreed to purchase from City specified parcels and planning
areas (PAs) to thereafter construct, complete, and operate thereon a
commercial project containing a luxury resort hotel and spa and associated
branded luxury residential units, a lifestyle hotel and associated lifestyle
branded residential units, a conference and shared service facility, a temporary
and permanent clubhouse for the SilverRock Resort's Arnold Palmer Classic
Golf Course, a mixed use village, a resort residential village, and associated
amenities, all as further described in the Original SDC PSDA and referred to as
various project components, as more particularly described therein.
Concurrent with the Original SDC PSDA, on or about November 19, 2014, City
and SDC entered into Development Agreement 2014-1001 (the "Original SDC
Development Agreement") pursuant to the Development Agreement Act and
Development Agreement Ordinance (as defined in the Reinstated
Development Agreement), which agreement, among other terms and
conditions, required SDC to develop the planning areas and project
components in accordance with the SDC PSDA, vested with SDC specified
development obligations, memorialized the potential for the future acquisition
of additional City -owned property in the SilverRock Resort Area as
incorporated vis-a-vis the SDC PSDA, and subjected SDC to City's rights and
oversight for those portions of the SilverRock Resort Area to be conveyed to
SDC. After entering into the Original SDC PSDA and Original SDC
Development Agreement, the following relevant events, very briefly
summarized, occurred:
Pursuant to the Original PSDA, City and SDC had the authority to amend
' Debtors were SilverRock Development Company, LLC and affiliated entities that, on
August 5, 2024, filed for voluntary bankruptcy protection under chapter 11 of the U.S.
Bankruptcy Code, with case number(s) identified in the Title of this Agreement along with
the last four digits of each Debtor's federal tax identification number, as applicable, are:
SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock
Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury
Residences, LLC (6598) and SilverRock Phase I, LLC (2247) (collectively, referred to
herein as the "Bankruptcy Lawsuit" in the "Bankruptcy Court").
698/015610-0207
22798455.5 a11/23/25 -2-
the Original PSDA by mutual agreement of the parties. Between October
29, 2015, and November 16, 2023, City and SDC entered into five
amendments thereto, dated October 29, 2015 ("First Amendment"), April
18, 2017 ("Second Amendment"), November 28, 2018 ("Third
Amendment"), October 12, 2021 ("Fourth Amendment"), and November
16, 2023 ("Fifth Amendment," and the Original PSDA as amended by all
five amendments is referred to herein as the "SDC PSDA");
ii. Pursuant to the SDC PSDA and consistent with boundaries established by
applicable subdivision maps and lot line adjustments, City conveyed to
SDC the Property for the pre -development, development, operation, and
use of a project that was eventually re -named "Talus" and consisted of the
following project components (all as defined in the SDC PSDA): Luxury
Hotel, Luxury Branded Residential Development, Lifestyle Hotel, Lifestyle
Branded Residential Development, Conference and Shared Services
Facility (including spa and other amenities), Permanent Golf Clubhouse,
Promenade Mixed -Use Village/Resort Residential Village (on Planning
Areas 7,8,9), as well as a specified Golf Course Realignment and
corresponding Master Site Infrastructure Improvements (MSII). These
project components on the Property, pursuant to the SDC PSDA, were
divided into Phase 1A project components on the Phase 1A Property and
the Phase 1 B project components on the Phase 1 B Property respectively,
as described in the SDC PSDA;
iii. Pursuant to the Third and Fourth Amendments to the SDC PSDA, SDC
commenced pre -development and development on the Property for the
Phase 1A project components, which as of the Reference Date of this
Agreement, in various degrees, were partially constructed after SDC failed
to continue to make payments to various contractors, subcontractors, and
other interested parties in the development of the Talus project. Multiple
lawsuits, including lawsuits seeking payments pursuant to mechanic's lien
or various loan or investment agreements, and a City lawsuit against SDC
for unlawful and unapproved conveyances in secured interests or
mechanic's liens, were filed against SDC;
iv. On August 5, 2024, SDC (Debtors) filed the Bankruptcy Lawsuit, and,
pursuant to Bankruptcy Court -approved Bid Procedures, Debtors retained a
Chief Restructuring Officer (Douglas Wilson Companies) and marketing
professional (JLL) for the purposes of, among other items, marketing the
sale of the Debtors estate (which and is primarily comprised of the
SDC-Held Property(ies)) and soliciting proposals for the: (a) acquisition of
the Debtors estate, (b) use, re -use, and/or substitution of the partially
constructed improvements on the Phase 1A Property, (c) potential
replacement project for a world -class hotel and residential destination
resort with related amenities on the SDC-Held Property(ies) that
complement the existing Arnold Palmer Golf Course surrounding the
SDC-Held Property and owned by City, and (d) possible acquisition in the
698/015610-0207
22798455.5 a11123/25 -3-
future of the Option Property in the SilverRock Resort Area (referred to as
the Future Option Property in the PSDA and generally referred to in the
Bankruptcy Lawsuit and marketing materials as the "Phase 2 Property") for
possible future development that would also complement a world -class
hotel and residential destination resort;
3. Pursuant to Bankruptcy Court order [Bankruptcy Lawsuit Docket No. 759],
among other provisions: (i) Optionee was authorized to purchase the
Developer -Owned Property, (ii) the Original SDC Development Agreement
was reinstated and amended and memorialized by the Reinstated
Development Agreement (as defined above), and (iii) An escrow to facilitate
the purchase and sale of the Debtors' estate (which includes the
Developer -Owned Property) was authorized, which, among other terms and
conditions, included the transfer of funds and recording of documents (such as
the Reinstated Development Agreement) as more particularly set forth in the
Debtor PSA (as defined in the Reinstated Development Agreement). [NOTE:
OTHER RELEVANT ITEMS FROM THE BANKRUPTCY COURT ORDER
FOR SALE OF DEBTORS PROPERTY MAY BE INSERTED PRIOR TO
FINAL (SECOND) READING OF ORDINANCE FOR THIS AGREEMENT].
D. Optionee (as Developer) submitted a proposal in response to the marketing
materials, and, pursuant to the Bankruptcy Court -approved Bid Procedures, Debtors and
City approved Optionee's proposal, which, among other terms and conditions, includes a
modified project (referred above as the Developer's Project) on the Developer -Owned
Property as well as possible acquisition in the future of the "Option Property" as defined in
this Option Agreement for possible future development that would also complement a
world -class hotel and residential destination resort. The approximately 193+/- acres
owned by the City that Optionee has a right to purchase pursuant to this Option
Agreement as the Option Property includes raw land and an existing driving range, but
Option Property expressly excludes approximately 24+- acres that comprises the Park
And Retention Basin Property (as defined above), with the Option Property and Park And
Retention Basin Property depicted in the Site Maps attached to this Option Agreement as
Exhibit A-2 and incorporated herein by this reference (the "Site Maps").
E. As part of Optionee's (as Developer) proposal, Optionee covenanted to prepare
for construction, construct, and open for use and occupancy of a flagship luxury hotel
consisting of approximately 150 rooms with amenities, as more particularly described in
the Reinstated Development Agreement (the "Luxury Hotel").
F. Developer's acquisition of the Developer -Owned Property was conditioned on the
final negotiation and approval of certain "La Quinta Amended Development
Documents" as referenced in the Bankruptcy Lawsuit, which included (among other
agreements) this Option Agreement, and separate agreements that include the
Reinstated Development Agreement (which includes as exhibits certain "Reinstated and
Amended Covenants Affecting Real Property" relating to Golf Course Use and
Ahmanson Ranch House (the "Reinstated Covenant Affecting Real Property (Golf
Course Use)" and "Reinstated Covenant Affecting Real Property (Ahmanson Ranch
698/015610-0207
22798455.5 a11/23/25 -4-
House)," respectively)) and a "Transient Occupancy Tax (TOT) Revenue Sharing
Covenant," and various land use covenants.
G. As more particularly set forth herein, City and Optionee desire to enter into this
Option Agreement for Optionee's potential acquisition of the Option Property in
connection with Optionee's acquisition of the Developer -Owned Property and timely
performance and completion of specified obligations in the Reinstated Development
Agreement for Developer's Project.
H. All actions taken by City have been duly taken in accordance with all applicable
legal requirements, including the California Environmental Quality Act (Public Resources
Code Section 21000, et seq.) ("CECIA"), and all other requirements for notice, public
hearings, findings, votes and other procedural matters.
I. Pursuant to Government Code section 65402, the La Quinta Planning
Commission has determined the disposition of the Option Property, if Optionee exercises
the Option pursuant to this Agreement, is and would be in conformity with the City's
General Plan because, as of the date of this Option Agreement, Optionee has no
proposed specific entitlement applications for development of the Option Property and
has represented that, as of the date of this Option Agreement, the intended future
development and use of the Option Property would be consistent with the authorized
uses in the existing SilverRock Specific Plan.
J. This Option Agreement is intended to be interpreted and implemented in
accordance and consistent with the Reinstated Development Agreement. Any
capitalized words not otherwise defined in this Option Agreement shall have the
meanings ascribed to them in the Reinstated Development Agreement.
K. City and Optionee desire to enter into this Agreement to provide for City to grant to
Optionee and for Optionee to obtain from City an option to purchase the Option Property
upon the terms and conditions more particularly set forth in this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS,
WHICH ARE INCORPORATED HEREIN BY THIS REFERENCE, AND THE MUTUAL
PROMISES CONTAINED IN THIS AGREEMENT, THE PARTIES AGREE AS
FOLLOWS:
AGREEMENT
1. Pre -Option Provisions: Grant of Option
(a) Memorandum of Option Agreement. On the same day as the
recording in the Recorder's Office of the Reinstated Development Agreement, but to be
recorded after the Reinstated Development Agreement, the City shall record (or cause to
be recorded) a memorandum of this Option Agreement, fully executed and notarized by
the Parties hereto, in a form substantially similar to the "Memorandum of Option
Agreement" attached hereto as Exhibit B and, upon recording, all of the terms and
698/015610-0207
22798455.5 a11/23/25 -5-
conditions of this Option Agreement (and any amendments hereto) shall be incorporated
by reference into the Memorandum of Option Agreement as though set forth in full.
(b) Option Effective Date. The Option to purchase the Option Property
shall not commence until the following date that corresponds to the potential transfer of
other City -owned real property in the SilverRock Resort Area (specifically, the
City -Owned Golf Course Property and City -Owned Ahmanson Ranch Property) as
provided in Section 6.1.2 of the Reinstated Development Agreement:
(i) The Date when construction of the Luxury Hotel Project
Component (as defined in the Reinstated Development Agreement) has
been substantially completed (which may not be later than the completion
date in the Schedule of Performance (as a Project Milestone)) as set forth
and defined in the Reinstated Development Agreement and as evidenced
by the issuance by the City of a temporary or permanent certificate of
occupancy, and the Luxury Hotel has been open to the general public or
other designated guests (such as designated guests for a "soft opening"
followed by an opening to the general public) with expectation of or actual
payments to be received on a regular basis from guest of the Luxury Hotel
(the "Option Effective Date"). The Option Effective Date shall be
memorialized in a written addendum, executed by the Parties hereto, which
shall be incorporated into this Option Agreement.
(ii) In the event Optionee fails to substantially complete the
Luxury Hotel Project Component (as defined in the Reinstated
Development Agreement) by the completion date in the Schedule of
Performance (as a Project Milestone) as set forth and defined in the
Reinstated Development Agreement, so that the Option Effective Date is
never realized, then this Option Agreement shall automatically terminate,
without the need of any notice or documentation, and neither Party shall
have any further rights or obligations hereunder except for: (i) any
indemnification obligations hereunder, all of which shall survive the
termination hereof, and (ii) executing with notarization a notice of
termination of this Option Agreement to be recorded by the City in the
Recorder's Office, referencing the termination of this Option Agreement,
Memorandum of Option Agreement, and City Repurchase Option
Agreement.
(c) Option. Commencing on the Option Effective Date, City hereby
grants to Optionee the option (the "Option") to purchase the Option Property on the terms
and conditions set forth in this Agreement.
(d) Form of Purchase and Sale Agreement. In the event Optionee
exercises the Option, Optionee's purchase of the Option Property from City shall occur
pursuant to an Agreement for Purchase and Sale and Escrow Instructions in the form of
Exhibit D attached hereto and incorporated herein by this reference (the "PSA" or
"Purchase/Sale Agreement"), subject only to non -material deviations approved by both
698/015610-0207
22798455.5 a11/23/25 -6-
Parties to reflect the substance of the purchase contemplated herein. Among other terms
and conditions specified therein, the PSA shall provide at a minimum for:
(i) The purchase and sale of the Option Property shall be
serviced through an escrow, with the closing of escrow and the transaction
contemplated therein no later than an outside date specified therein ("PSA
Outside Closing Date");
(ii) The purchase price of the Option Property in the amount of
Seventeen Million Dollars ($17,000,000.00) (the "Option Property Base
Purchase Price"), subject to increases for each 1-Year Extension Period
as set forth below;
(iii) Among other conditions precedent to either City's or
Optionee's obligation to sell and purchase the Option Property and close
the escrow for the acquisition of the Option Property, Optionee shall have
submitted any and all permit, licensing, and entitlement applications (it
being agreed that Optionee shall submit the same before or after the Option
is exercised so that said applications may be processed by the closing of
escrow as provided in the PSA, and the City will use its best efforts to
expedite consideration thereof) in accordance with applicable California
and City law for another "phase" of the Developer's Project (the "Potential
Future Development Phase" and, as applicable, any "Potential Future
Development Phase Permit Application(s)" for the Option Property,
which is referenced as "Planning Area (PA) 8" in the Reinstated
Development Agreement). Provided that Optionee (as Developer) has
completed or has caused the completion of the construction of the "Public
Golf Clubhouse Project Component" as defined in and in accordance with
the Reinstated Development Agreement, and provided further that
Optionee is not in MAE Default (as hereinafter defined) under this Option
Agreement, the Reinstated Development Agreement, the PSA, or any of
the other Required City Land Use Agreements (as defined below), escrow
shall close and fee title to the Option Property shall transfer to Optionee on
the date that is the earlier of either: (A) ninety (90) days following the date
on which the City has issued any and all Permits (as hereinafter defined) for
the Potential Future Development Phase, or (B) twenty-four (24) months
from the date Optionee delivers to City the Option Notice (as defined
below); provided, however, such Permits being issued by City shall be a
condition to Optionee's obligation to close escrow under the PSA and,
provided further, that City shall transfer fee title of the Option Property to
Optionee no later than ninety (90) days following the satisfaction (or waiver)
of all of City's and Optionee's respective conditions precedent to closing the
escrow as provided in the PSA. For the purposes hereof, "Permits" shall
mean final approval by the City (after all appeal periods and legal challenge
periods shall have expired) of a Development Agreement or amendment to
the Reinstated Development Agreement applicable to the Option Property
(as described in Section 6.2.2 of the Reinstated Development Agreement),
698/015610-0207
22798455.5 al1/23/25 -7-
a parcel map subdividing the Phase 2 Property to exclude the Park And
Retention Basin Property from the Option Property, a tentative tract map for
the number and type of residential dwellings Optionee proposes to be
subdivided on all or a portion of the Option Property, and one or more site
development permits for the Potential Future Development Phase, as
designed by Optionee. In the event that any condition precedent to the
closing under the PSA is not satisfied, the Earnest Money Deposit (as
defined in the PSA) may be refunded pursuant to the terms and conditions
in the PSA.
(iv) Also as a condition precedent to either City's or Optionee's
obligation to sell and purchase the Option Property and close the escrow for
the sale and acquisition of the Option Property, Optionee and City shall
have fully executed and have notarized, in a form suitable for recording and
recorded immediately after the Development Agreement or amendment to
the Reinstated Development Agreement applicable to the Option Property
on the date of the close of escrow for the Option Property under the PSA, a
repurchase option for the benefit of the City in a form substantially similar to
the "City Repurchase Option Agreement" attached hereto as Exhibit C
and incorporated herein by this reference. As more particularly set forth in
the City Repurchase Option Agreement, upon the full execution and
recording of the City Repurchase Option Agreement, City shall have the
right to repurchase all or any portion of the Option Property in the event
Optionee (as Developer) remains in MAE Default (as hereinafter defined).
(v) As a condition of exercising the Option and entering into the
PSA, Optionee shall obtain, at its sole cost, a standard preliminary title
report for the Option Property prepared no more than three (3) months prior
to the date Optionee exercises the Option by delivery of the Option Notice
(defined below). The PSA will contain additional conditions precedent
including without limitation that there be no taking or condemnation of all or
any portion of the Option Property, and the Option Property not being
subject to any delinquent tax or other monetary liens that are not approved
by Optionee as exceptions to title insurance.
(e) No Default on La Quinta Amended Development Agreements.
Notwithstanding any provisions in this Option Agreement to the contrary, prior to and as a
condition of exercising the Option as provided herein, Optionee shall have entered into
with City, and once entered into, Optionee shall not be in MAE Default, on the date
Optionee exercises the Option by delivery of the Option Notice (defined below), of any of
these La Quinta Amended Development Documents: this Option Agreement, the
Reinstated Development Agreement, the Transient Occupancy Tax (TOT) Revenue
Sharing Covenant, and/or the Reinstated and Amended Covenants Affecting Real
Property relating to Golf Course Use and the Ahmanson Ranch House (the Reinstated
Covenant Affecting Real Property (Golf Course Use and Reinstated Covenant Affecting
Real Property (Ahmanson Ranch House), respectively) (collectively referred to herein as
the "Required City Land Use Agreements"). If Optionee commits a MAE Default under
698/015610-0207
22798455.5 a11123/25 -8-
any of the aforementioned Required City Land Use Agreements as of the date of delivery
of the Option Notice, then Section 9 of this Agreement shall apply.
2. Term of Option.
(a) Term. The term of the Option (i.e., the time during which the Option
may be exercised) shall be for a period commencing on the Option Effective Date and
expiring at 5:00 p.m. (California time) on the date (the "Expiration Date") that is five (5)
years from the Option Effective Date (the "Term"). The Term and Expiration Date shall be
memorialized in a written addendum, executed by the Parties hereto, which shall be
incorporated into this Option Agreement. The Option shall expire at the end of the Term
unless extended pursuant to the following:
(i) Extension Periods. Optionee shall have the right to extend
the Term up to five (5) times for successive one (1) year extension periods
(each, a A -Year Extension Period" and collectively, the "Extension
Periods") with the aggregate totaling no more than five (5) years after the
Expiration Date. For the avoidance of doubt, and in explanation of the
preceding sentence, the right to exercise the Option granted by this Option
Agreement shall expire, if not earlier terminated or expired, no later than ten
(10) years after the Option Effective Date;
(ii) Notice to Exercise Right to Extension Period(s). In the event
Optionee wants to extend the Term for one or more Extension Periods,
Optionee shall deliver to City (pursuant to Section 7 below) written notice
thereof (each, an "Option Extension Notice") no later than sixty (60) days
prior to the expiration of the Term or, as applicable, no later than sixty (60)
days prior to the expiration of the then operative 1-Year Extension Term.
Optionee shall not be in MAE Default of this Agreement or of any Required
City Land Use Agreements on the date Optionee delivers to City any Option
Extension Notice. If Optionee is in MAE Default of this Agreement or any of
the aforementioned Required City Land Use Agreements as of the date of
delivery of the Option Extension Notice, then City shall have the right, in its
sole and absolute discretion, to deny the 1-Year Extension Period
requested by Optionee, to return to Optionee any Additional Option
Consideration Payment (defined below) delivered to City with the Option
Extension Notice within thirty (30) days after receipt of the Option Extension
Notice, and to terminate the Option and this Option Agreement, in which
case City shall deliver to Optionee written notice (pursuant to Section 7
below) of the termination of the Option and this Option Agreement, and the
Option shall thereafter automatically terminate, without the need of any
further notice or documentation, and neither Party shall have any further
rights or obligations hereunder except for: (a) any indemnification
obligations hereunder, all of which shall survive the termination hereof, and
(b) executing with notarization a notice of termination of the Option
Agreement, to be recorded by the City in the Recorder's Office, referencing
the termination of this Option Agreement and Memorandum of Option
698/015610-0207
22798455.5 a11/23/25 -9-
Agreement;
(iii) Additional Option Deposits. In the event Optionee wants to
extend the Term for one or more Extension Periods, Optionee shall deposit
with City, for each 1-Year Extension Period and concurrently with the
applicable Option Extension Notice, an additional deposit of an amount of
One Million Dollars ($1,000,000.00) (each $1,000,000.00 is referred to as
the "Additional Option Consideration Payment' and collectively, referred
to as the "Total Additional Option Consideration Payments"). While
each Additional Option Consideration Payment shall remain
non-refundable to Optionee (except as provided in Sections 12, 15, or
elsewhere in the PSA), the Additional Option Consideration Payment shall
be credited towards the Option Property Base Purchase Price, as increased
pursuant to Subsection 2(a)(iv) below;
(iv) Additional Amount to Option Property Base Purchase Price.
For each 1-Year Option Extension exercised by Optionee in accordance
with this Agreement, the Option Property Base Purchase Price shall
increase in the amount of Two Million Dollars ($2,000,000.00), payable at
the closing of escrow for the acquisition of the Option Property pursuant to
the PSA. By way of example, in the event Optionee elects to extend the
Term by one (1) year, Optionee, at the time of making said election, shall
pay a deposit to City in the amount of the $1,000,000.00 Additional Option
Consideration Payment, and the amount of the Option Property Base
Purchase Price shall increase from $17,000,000.00 to $19,000,000.00, with
the Option Property Base Purchase Price (as increased) being paid at close
of escrow for the acquisition of the Option Property and the $1,000,000
Additional Option Consideration Payment being credited towards that
increased Option Property Base Purchase Price. Additionally, for the
avoidance of doubt, the $2,000,000 payment defined below as the Option
Consideration, paid to City at the closing of escrow when Optionee
purchased the Developer -Owned Property, shall be applied to the Option
Property Base Purchase Price on the close of escrow for the acquisition of
the Option Property; provided, however, in the event that the closing under
the PSA does not occur, then the Option Consideration shall remain
non-refundable to Optionee, except as provided in Sections 12, 15, or
elsewhere in the PSA.
(b) Exercise of Option; Notice Thereof. At any time during the Term
(and including any duly exercised 1-Year Extension Period), and provided Optionee is not
in MAE Default under this Option Agreement or any of any Required City Land Use
Agreements, Optionee may exercise the Option by giving written notice to City of its
exercise of the Option pursuant to Section 7 below (the "Option Notice"). Promptly after
the exercise of the Option, Optionee and City shall execute and deliver the PSA.
(c) Term of Option and PSA Outside Closing Date. Notwithstanding any
provisions in this Option Agreement to the contrary, the Term of the Option (and any
698/015610-0207
22798455.5 a11/23/25 -1 0-
Extension Periods pursuant hereto) shall terminate no later than the PSA Outside Closing
Date together with the termination of the PSA.
3. Option Consideration.
(a) The Option is granted in consideration of Optionee's payment to City
of the sum of Two Million Dollars ($2,000,000.00) (the "Option Consideration"), payable
to City concurrent with the close of escrow on the transaction resulting in Optionee's
acquisition of the Developer -Owned Property from Debtors and the execution and
delivery of all Required City Land Use Agreements. The Option Consideration shall be
non-refundable to Optionee (unless the conditions precedent to the closing of escrow for
Developer's acquisition from Debtors (SDC) of the Phase 1A Property and Phase 1 B
Property Developer's acquisition are not satisfied and Developer does not acquire fee title
to the Phase 1A Property and Phase 1 B Property or as otherwise provided in Sections 12,
15, or elsewhere in the PSA), but, in the event Optionee exercises the Option granted
herein and closes escrow on the acquisition of the Option Property pursuant to this
Agreement and the PSA, then the Option Consideration shall be applied to the Option
Property Base Purchase Price (as may be increased for each 1-Year Extension Period as
set forth herein). Optionee shall pay City the Option Consideration in legal tender, United
States dollars by wire transfer pursuant to separate wire instructions delivered to
Optionee from City.
(b) If Optionee exercises its right to extend the Term of the Option,
Optionee shall pay to City any and all Additional Option Consideration Payment(s)
pursuant to Section 2 of this Agreement.
(c) City and Optionee shall cooperate to submit any and all necessary
and proper instructions and supplemental instructions to the escrow officer/holder,
responsible for the purchase and sale of the Developer -Owned Property, conveying
same from Debtors to Optionee, to effectuate payment to City of the Option Consideration
as well as execute and deliver, and implement the relevant terms and conditions of, this
Option Agreement as they pertain to that transaction.
4. Due Diligence. From and after the date that the Memorandum of Option
Agreement is recorded through the expiration of the Term (including any duly exercised
1-Year Extension Period), Optionee and its employees, contractors, agents,
representatives, architects, engineers, consultants and other invitees (collectively, the
"Optionee Entities"), at Optionee's sole cost and expense, shall have the right to enter
and inspect the Option Property, make surveys and conduct such soils, engineering,
hazardous or toxic material, pollution, seismic or other tests, studies and investigation as
Optionee may require (each an "Inspection," and collectively, the "Inspections"),
pursuant to the terms of this Section 4:
(a) Optionee shall cause the Inspections to be conducted at times
reasonably acceptable to City, upon not less than seventy-two (72) hours' prior written
notice to City in each instance, and in a manner that does not materially adversely affect
698/015610-0207
22798455.5 al 1 /23/25 -11 -
the Option Property or Park And Retention Basin Property. City may have the right to
have a representative of City present at any Inspections of the Option Property.
(b) In conducting its Inspections at the Option Property, Optionee, its
affiliates and affiliated entities, and the Optionee's officers, directors, employees, agents,
consultants, engineers, and other agents (collectively, "Optionee Entities"): (i) shall not
damage any part of the Option Property (other than invasive testing conducted in
accordance with Sections 4(c) and (d) below) or any personal property located on or
adjacent to the Option Property; (ii) promptly repair any damage to the Option Property
resulting directly or indirectly from the entry by Optionee or the Optionee Entities or from
any such Inspections; (iii) not injure or otherwise cause bodily harm to City, or its tenants,
agents, guests, invitees, contractors and employees; (iv) comply with all applicable laws;
and (v) not permit any liens to attach to the Option Property and/or Park And Retention
Basin Property by reason of the exercise of Optionee's rights hereunder.
(c) Notwithstanding anything to the contrary in this Section 4, Optionee
shall not undertake any invasive testing, including, without limitation, taking samples of
any kind or type from the Option Property, until such time as Optionee has submitted to
City and obtained City's prior written approval of Optionee's proposed work plan, which
work plan shall include Optionee's sampling and testing procedures, as well as the
specific locations proposed to be accessed. City's approval pursuant to this Section 4
shall not be unreasonably withheld, conditioned, or delayed.
(d) Promptly upon completion of each Inspection, Optionee shall cause
the portion of the Option Property subject to such Inspection to be restored to the
condition existing immediately prior to such Inspection, provided, however, Optionee
shall have no obligation to remediate any pre-existing environmental condition
discovered by Optionee in connection with any Inspection, so long as such Inspection has
not exacerbated the pre-existing environmental condition. If this Option Agreement or the
PSA is terminated prior to the closing of escrow on the Option Property pursuant to this
Option Agreement and the PSA, Optionee shall provide to City, if City requests and at no
additional charge and without representation or warranty of any kind or liability with
respect to the use thereof, a copy(ies) of any final report(s) (excluding market studies and
architectural renderings, if any) prepared by third parties for Optionee in connection with
the Inspections so long as the City reimburses Optionee for the actual costs to Optionee
paid to a third party(ies) for the final report(s) requested by City within thirty (30) calendar
days of the City's written request therefor and Optionee's receipt of such reimbursement.
(e) Optionee hereby indemnifies, defends (with counsel of City's
choosing in its reasonable discretion), and holds harmless City and City's officers,
officials, members, employees, agents, representatives, contractors, and volunteers
(collectively, the "City and City Personnel"), from and against any and all claims,
damages, liabilities, demands, injury, actions, liens, stop notices, losses, costs and
expenses (including without limitation reasonable attorneys' fees and court costs) to the
extent arising from or as a result of the conducting of Inspections, except that the City and
City Personnel shall not be indemnified to the extent any claim, loss or damage (i) is
caused by the City and City Personnel's gross negligence, recklessness or intentional
698/015610-0207
22798455.5 a11/23/25 -1 2-
misconduct (ii) for any matter to the extent arising directly from the discovery of any
pre-existing condition at the Option Property, or (iii) as a result of the City and City
Personnel's material breach of this Agreement.
(f) Optionee's obligations under this Section 4 shall survive the
expiration or termination of this Agreement.
5. Insurance. Without limiting Optionee's indemnification obligations under
this Agreement, Optionee shall procure and maintain, at its sole cost and for the duration
of this Agreement, insurance coverage as provided below, against all claims for injuries
against persons or damages to property which may arise from or in connection with the
performance of the work under Section 4 hereunder. In the event that Optionee
subcontracts any portion of the work, the contract between Optionee and such
subcontractor shall require the subcontractor to maintain the same types (with the same
endorsements) and amounts of insurance that Optionee is required to maintain pursuant
to this Section.
A. Commercial General Liability Insurance which affords coverage
at least as broad as Insurance Services Office "occurrence" form CG 00 01 including
completed operations and contractual liability, with limits of liability of not less than One
Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) annual
aggregate for liability arising out of Optionee's performance of this Agreement, including
without limitation Optionee's conducting of the Inspections. Such insurance shall be
endorsed to:
(1) Name the City and City Personnel as additional insureds for
claims arising out of Optionee's performance of this
Agreement, including without limitation Optionee's conducting
of the Inspections.
(2) Provide that the insurance is primary and non-contributing
with any other valid and collectible insurance or
self-insurance available to City.
B. Automobile Liability Insurance with a limit of liability of not less
than One Million Dollars ($1,000,000) combined single limit. Such insurance shall include
coverage for all "owned," "hired" and "non -owned" vehicles, or coverage for "any auto."
Such insurance shall be endorsed to name the City and City Personnel as additional
insureds.
C. Workers' Compensation Insurance in accordance with the
California Labor Code and covering all employees of Optionee providing any service in
the performance of this Agreement. Such insurance shall be endorsed to:
(1) Waive the insurer's right of subrogation against the City and
City Personnel.
D. Evidence of Insurance: Optionee shall provide to City a
698/015610-0207
22798455.5 al1/23/25 -1 3-
Certificate(s) of Insurance evidencing such coverage, together with copies of the required
policy endorsements, no later than three (3) days prior to commencement of any
Inspections and prior to the expiration of any policy. Statements on an insurance
certificate will not be accepted in lieu of the actual endorsements required. Coverage
shall not be cancelled, without thirty (30) days prior written notice thereof given by the
insurer to City by U.S. mail, or by personal delivery, except for nonpayment of premiums,
in which case ten (10) days prior notice shall be provided .
E. Acceptability of Insurers. Each policy shall be from a company
with current A.M. Best's rating of A- VII or higher and authorized to do business in the
State of California, or otherwise allowed to place insurance through surplus lines brokers
under applicable provisions of the California Insurance Code or any federal law. Any
other rating must be approved in writing by City.
6. City's Cooperation in Seeking Permits and Approvals. From and after the
date that the Memorandum of Option Agreement is recorded through the expiration of the
Term (including any duly exercised 1-Year Extension Period), Optionee may meet with all
governmental entities, including City to discuss Optionee's proposed development of,
and other matters relating to, the development of the Option Property and may obtain all
project approvals that Optionee may deem necessary or advisable in connection
therewith. Provided City does not incur any liabilities or out-of-pocket costs except those
authorized by City and without binding the Option Property prior to the execution and
delivery of the PSA in any way, City agrees to cooperate with Optionee in any such
matters and execute any and all documents or join in any applications that may be
required to obtain all such project approvals in connection with the development of the
Option Property. However, the Parties agree that this Agreement shall not be binding on
the City Council, the Planning Commission, or any other entitlement approval body of the
City regarding any approvals required by such bodies pursuant to Federal, State, or City
law. Optionee acknowledges and agrees, and hereby accepts that Optionee obtains no
right to develop the Option Property or any portion thereof (or any other project or portion
thereof on the Option Property) by virtue of this Agreement.
7. Notices. All notices or other communications made pursuant to this
Agreement shall be in writing and shall be served to the Parties at the following addresses
(i) mailed by certified mail, postage prepaid, return receipt requested; (ii) sent by express
delivery service, such as FedEx, charges prepaid with a delivery receipt; (iii) personally
delivered with a delivery receipt:
City: City of La Quinta
78-495 Calle Tampico
La Quinta, California 92253
Attn.: City Manager
AND: City of La Quinta
78-495 Calle Tampico
La Quinta, California 92253
Attn.: City Clerk
698/015610-0207
22798455.5 a11/23125 -14-
With a copy to: Rutan & Tucker, LLP
18575 Jamboree Road, 9th Floor
Irvine, CA 92612
Attn: William H. Ihrke, Esq.
Email: bihrke@rutan.com
Optionee: TBE RE Acquisition Co II LLC
c/o Turnbridge Equities
4 Bryant Park, Suite 200
New York, NY 10018
Attn: Michael Gazzano and General Counsel
Email: mg@turnbridgeeq.com-, jw@turnbridgeeq.com
With a copy to: DLA Piper LLP
1251 Avenue of the Americas
New York, NY 10020
Attn: Todd Eisner
Email: todd.eisner@us.dlapiper.com
With a copy to: Procopio
200 Spectrum Center Drive, Suite 1650,
Irvine, CA 92618
Attn: James Vaughn
Email: james.vaughn@procopio.com
All notices shall be deemed received on the date shown on the delivery receipt as
the date of delivery, the date delivery was refused, or the date the notice was returned as
undeliverable. Either Party may change its address for the purposes of this paragraph by
giving prior written notice of the change to the other Party in the manner provided in this
Section.
8. Transfers and Assignment. Optionee may not transfer or assign its rights or
obligations under this Option Agreement, and may not transfer or assign any interest
Optionee has in the Option Property pursuant to this Agreement, without the prior written
consent of City, which may be granted or denied in City's sole and absolute discretion
except for such transfers and assignments as are "Permitted Transfers" pursuant to the
Reinstated Development Agreement, and memorialized by an Assignment and
Assumption Agreement (as and when required under and pursuant to the Reinstated
Development Agreement) executed and recorded in the Recorder's Office.
9. Defaults and Remedies.
(a) The occurrence of any of the following shall be deemed a default
under this Agreement (each, a "Default" or "default"): (a) The failure or delay by any
Party to perform any obligation set forth in this Agreement if such failure is not cured,
corrected or remedied within any specific time period set forth in this Agreement; (b) If no
698/015610-0207
22798455.5 a11/23/25 -1 5-
other specific time period is set forth herein for the cure of a default, the failure to cure a
monetary default under this Agreement (other than any monetary defaults specifically
listed in this Section 9) within fifteen (15) days after the nonperforming Party's receipt of
written notice from another Party specifying the nature of the default; (c) If no other
specific time period is set forth herein for the cure of a default, the failure to cure a
non -monetary default under this Agreement (other than any non -monetary defaults
specifically listed in this Section 9) within thirty (30) days after the nonperforming Party's
receipt of written notice from the other Party specifying the nature of the default, provided,
however, that if the failure cannot reasonably be corrected within such period, it shall not
constitute a default if the failure is correctable, and if corrective action is instituted by the
non -performing Party within such 30-day period and diligently pursued until the failure is
corrected, and provided further that any such failure is cured within ninety (90) days of
receipt of notice of such failure; (d) Any of the warranties or representations made by any
Party herein are or become false, incorrect, or misleading in any material respect, and to
the extent capable of being cured are not cured within the cure period set forth in
subsection (c) above; (e) Any Party files for any relief under the federal Bankruptcy Act or
is sought by or against any Party, or if a receiver is appointed to take charge of the assets
or affairs of any Party or if any Party should make an assignment for the benefit of
creditors, or if any Party should become insolvent, or upon any liquidation or termination
of any Party; provided, however, that if any such proceeding is brought involuntarily
against a Party, such Party shall have ninety (90) days to obtain the dismissal of such
proceeding; or (f) As of the date of delivery of the Option Notice, Optionee is in MAE
Default of the Required City Land Use Agreements without having cured said MAE
Default pursuant to the applicable Required City Land Use Agreement(s). A material
Default that is not cured within such cure periods as provided in this Option Agreement is
referred to herein as a "MAE Default" of this Option Agreement.
(b) Upon any uncured MAE Default, the defaulting Party shall be in
breach of this Option Agreement and, in addition to any other rights or remedies available
at law or in equity, the non -defaulting Party may, subject to any limitations as provided in
this Option Agreement, terminate this Agreement and/or institute legal action to cure,
correct, or remedy any MAE Default or to obtain any other remedy consistent with the
purposes of this Option Agreement.
(c) It is expressly understood and agreed by the Parties that the cure
provisions set forth in this Section 9 are not available to, and shall not apply, to any of the
following actions which are deemed to have firm deadlines: (i) The ability for Optionee to
exercise the Option pursuant to Section 2(b) of this Option Agreement; and (ii) The ability
for Optionee to exercise its right to any 1-Year Extension Period pursuant to Section 2(a)
of this Option Agreement.
(d) In the event of an uncured MAE Default by City of the terms of this
Option Agreement, Optionee, at its option, may institute legal action in law or in equity to
cure, correct, or remedy such MAE Default, enjoin any threatened or attempted violation,
or enforce the terms of this Option Agreement; provided, however, that in no event shall
Optionee be entitled to recover damages of any kind from City, but if Optionee is the
prevailing Party in any action consistent with the provisions of this Option Agreement,
698/015610-0207
22798455.5 a11/23/25 -1 6-
Optionee may be entitled to an award of attorney's fees as set forth in this Option
Agreement.
(e) The Parties acknowledge agree that City would not have entered
into this Agreement if City were to be liable in monetary damages of any kind whatsoever,
including compensatory (whether special or general) damages, punitive damages,
consequential damages, incidental damages, and/or future damages, under or with
respect to this Agreement. As such, the Parties agree that, except as expressly set forth
in Subsection 9(d) above, declaratory and injunctive relief, writ of mandate, and specific
performance shall be Optionee's sole and exclusive judicial remedies against City with
respect to enforcement of the terms and conditions of this Agreement. In amplification of
the preceding sentence, and not by way of limitation, in no event whatsoever shall City be
liable to Optionee for, or Optionee be entitled to an award of damages from City, for
economic loss, lost profits, or any other economic or consequential damages of any kind.
10. City Approvals and Actions. City shall maintain authority to implement this
Option Agreement through the City Manager. The City Manager shall have the authority
to make approvals, issue interpretations, waive provisions, negotiate and enter into
amendments to this Option Agreement and/or negotiate and enter into implementing
agreements or documents on behalf of City so long as such actions do not materially or
substantially change the business terms of this Option Agreement or the uses or
development permitted on the Option Property, or materially or substantially add to the
costs incurred or to be incurred by City as specified herein. Such approvals,
interpretations, waivers, amendments, and/or implementing agreements or documents
may include extensions of time to perform as specified in this Option Agreement, except
that City Manager shall not have the authority to waive or extend the times for
performance for any of the following actions which are deemed to have firm deadlines: (a)
The ability for Optionee to exercise the Option pursuant to Section 2(b) of this Option
Agreement, and (b) The ability for Optionee to exercise its right to any 1-Year Extension
Period pursuant to Section 2(a) of this Option Agreement. Furthermore, any and all other
material and/or substantial interpretations, waivers, or amendments shall require the
consideration, action and written consent of the City Council. Furthermore, the City
Manager may seek review and approval by the City Council on any approval,
interpretation, wavier, amendment, document, or any other matter that, pursuant to this
Section 10, City Manager otherwise has authority to act upon on behalf of City. Nothing in
this Section 10 does or shall be deemed to authorize the City Manager to take any action
that is otherwise required to be reviewed and decided by the City Council, Planning
Commission, or other reviewing board, commission, or public official, pursuant to any
applicable Federal, State, or City law.
11. Binding Effect. This Option Agreement and its terms and conditions shall
be binding upon and inure to the benefit of the Parties to this Option Agreement and their
respective successors and permitted assigns.
12. Time of the Essence. Time is of the essence of this Option Agreement and
of each and every term and provision hereof, it being understood that the parties hereto
have specifically negotiated the dates for the completion of each obligation herein.
698/015610-0207
22798455.5 a 11 /23/25 -1 7-
13. Nonliability of City Officials and Employees. No officer, official, employee,
agent, or representative of City shall be personally liable to Optionee or any successor in
interest, in the event of any default or breach by City, or for any amount which may
become due to Optionee or its successor, or for breach of any obligation of the terms of
this Option Agreement.
14. Further Documents. Upon the reasonable request of the other Party, each
Party will execute, acknowledge and deliver or cause to be executed, acknowledged and
delivered, such further instruments and documents as may be reasonably necessary in
order to carry out the intent and purpose of this Option Agreement, including escrow
instructions.
15. Exhibits. All exhibits attached to this Option Agreement and referred to in
this Option Agreement are incorporated into this Option Agreement by this reference as
though they were fully set forth in this Option Agreement.
16. Brokers Commission. Each Party to this Agreement represents to the other
Party that it has not engaged or used the services of any person, firm or corporation that
may claim a broker's commission or finder's fee upon execution of this Option Agreement,
the exercise of the Option or the execution of the PSA, and each Party hereto agrees to
hold the other Party harmless from any loss, damage, expense or liability, including
attorney's fees, resulting from any claim by any person, firm or corporation based upon its
having acted as broker or finder on behalf of said indemnifying Party.
17. Captions. The captions of the sections/paragraphs of this Option
Agreement are for convenience and reference only, and the words contained in the
captions shall in no way be held to explain, modify, amplify or aid in the interpretations,
constructions or meaning of the provisions of this Option Agreement.
18. Counterparts. This Option Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together shall constitute
one and the same Option Agreement.
19. Attorney's Fees. In any action between Optionee and City to enforce or
interpret any of the terms of this Option Agreement , the prevailing Party shall be entitled
to recover its costs and expenses, including, without limitation, reasonable attorneys' fees
and expert witness fees.
20. Choice of Laws; Litigation Matters. This Agreement shall be governed by
the internal laws of the State of California and any question arising hereunder shall be
construed or determined according to such law. The Superior Court of the State of
California in and for the County of Riverside, or such other appropriate court in such
county, shall have exclusive jurisdiction of any litigation between the parties concerning
this Agreement. Service of process on the City shall be made in accordance with
California law. Service of process on Optionee shall be made in any manner permitted by
California law and shall be effective whether served inside or outside California.
21. Waivers and Amendments. All waivers of the provisions of this Option
698/015610-0207
22798455.5 a11/23/25 -1 8-
Agreement must be in writing and signed by the appropriate authorities of the Party to be
charged, and all amendments and modifications hereto must be in writing and signed by
the appropriate authorities of City and Optionee. No waiver of any provision of this Option
Agreement shall be effective unless in writing and signed by a duly authorized
representative of the Party against whom enforcement of a waiver is sought and referring
expressly to this Section. No delay or omission by either Party in exercising any right or
power accruing upon non-compliance or failure to perform by the other Party under any of
the provisions of this Option Agreement shall impair any such right or power or be
construed to be a waiver thereof, except as expressly provided herein. No waiver by
either Party of any of the covenants or conditions to be performed by the other Party shall
be construed or deemed a waiver of any succeeding breach or nonperformance of the
same or other covenants and conditions hereof.
22. Estoppel Certificate. Either Party may, at any time, deliver written notice to
any other Party requesting such Party to certify in writing that, to the best knowledge of
the certifying Party, (i) this Option Agreement is in full force and effect and a binding
obligation of such Party, (ii) this Option Agreement has not been amended or modified
either orally or in writing, or if so amended, identifying the amendments, (iii) the
requesting Party is not in default in the performance of its obligations under this Option
Agreement, or if in default, describing the nature and amount of any such defaults, and
(iv) any other reasonable information requested. A Party receiving a request hereunder
shall execute and return such certificate within thirty (30) days following delivery of the
written request. The City Manager or authorized designee is authorized to sign and
deliver an estoppel certificate on behalf of City. City acknowledges that a certificate
hereunder may be relied upon by transferees and mortgagees.
23. Time Period Computations. All periods of time referred to in this Option
Agreement shall include all Saturdays, Sundays and California state or national holidays
unless the reference is to "business days," in which event such weekends and holidays
shall be excluded in the computation of time and provide that if the last date to perform
any act or give any notice with respect to this Option Agreement shall fall on a Saturday,
Sunday or California state or national holiday, such act or notice shall be deemed to have
been timely performed or given on the next succeeding day which is not a Saturday,
Sunday or California state or national holiday.
24. No Liens or Encumbrances Against the Phase 2 Property Prior to
Acquisition of Fee Title by Optionee of Option Property. Optionee shall not record, and
shall not authorize or allow the recording, in the Recorder's Office of any mortgage, deed
of trust, encumbrance, or any other instrument that is defined as a "Lien" in the Reinstated
Development Agreement against the Phase 2 Property (or any portion thereof, which
includes the Option Property) unless Optionee acquires fee title to the Option Property,
pursuant to this Option and the PSA.
25. Entire Agreement. This Option Agreement, along with the Restated
Development Agreement and other Required City Land Use Agreements, contain the
entire agreement between the Parties respecting the matters set forth herein, and
supersedes all prior agreements between the Parties respecting such matters.
698/015610-0207
22798455.5 a11/23/25 -� 9-
26. Mortgagee Protections. Notwithstanding anything else to the contrary
contained herein, the notice and cure periods and other rights and protections granted to
Lenders (as defined in the Reinstated Development Agreement) in the Reinstated
Development Agreement shall apply in all respects to this Option Agreement and the
Reinstated Development Agreement, mutatis mutandis, and shall be deemed to be
incorporated by reference into this Option Agreement with such Lenders having the full
right to enforce such rights and protections in the same manner as if such Lenders were a
direct party hereto.
[END OF AGREEMENT - SIGNATURES ON FOLLOWING PAGE]
698/015610-0207
22798455.5 al 1/23125 -20-
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.
"OPTIONEE" & "DEVELOPER"
TBE RE Acquisition Co II LLC, a Delaware
limited liability company, an affiliate of
Turnbridge Equities
Date: , 2025 By:
Name: Ardrbw Joblon
Title: Authorized Signatory
"CITY"
CITY OF LA QUINTA, a California municipal
corporation and charter city
SIGNED IN COUNTERPART
Date: 2025 By:
Jon McMillen, City Manager
ATTEST:
SIGNED IN COUNTERPART
Monika Radeva, City Clerk
APPROVED AS TO FORM
RUTAN & TUCKER, LLP
SIGNED IN COUNTERPART
William H. Ihrke, City Attorney
[Signature Page - La Quinta - Option to Purchase Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.
Date:
2025
Date: , 2025
ATTEST:
Monika Radeva, City Clerk
APPROVED AS TO FORM
RUTAN & TUCKER, LLP
iam H. Ihrke, City Attorney
"OPTIONEE" & "DEVELOPER"
TBE RE Acquisition Co II LLC, a Delaware
limited liability company, an affiliate of
Turnbridge Equities
SIGNED IN COUNTERPART
Name: Andrew Joblon
Title: Authorized Signatory
"CITY"
CITY OF LA QUINTA, a California municipal
corporation and charter city
By:
JaFr cMillen, City Manager
698/015610-0207
22798455.5 al1/23/25 -2 1 -
EXHIBIT A-1
DESCRIPTION OF THE PROPERTY
All that certain property located in the City of La Quinta, County of Riverside, State of
California, described as follows:
PARCEL 1:
Parcels 13, 14, and 15 of Parcel Map No. 37207, in the City of La Quinta, County of
Riverside, State of California, as shown by a Map filed for Record May 3, 2017 in Book
242, Pages 72 through 87, inclusive of Parcel Maps, in the Office of the County Recorder
of said County.
PARCEL 2-
Parcel 16 of Parcel Map No. 37207, in the City of La Quinta, County of Riverside, State of
California, as shown by a Map filed for Record May 3, 2017 in Book 242, Pages 72
through 87, inclusive of Parcel Maps, in the Office of the County Recorder of said County.
[end of legal description]
NOTE: NOTWITHSTANDING THE ABOVE -REFERENCED LEGAL DESCRIPTION
FOR PARCEL 16 ABOVE, THE PHASE 2 PROPERTY DOES NOT INCLUDE
SILVERROCK PARK AND RETENTION BASIN, AS SET FORTH IN THIS OPTION
AGREEMENT AND THE REINSTATED DEVELOPMENT AGREEMENT, RECITAL D
AND DEFINITIONS OF "PHASE 2 PROPERTY" / "CITY OWNED OPTION PROPERTY"
698/015610-0207
22798455.5 al 1 /23/25 EXHIBIT A-1
EXHIBIT A-2
SITE MAPS DEPICTING THE PHASE 2 PROPERTY
AND PARK AND RETENTION BASIN PROPERTY
[ attached ]
698/015610-0207
227984555au/23/25 EXHIBIT A-2
PA1-Golf Course
(—sting)
PA2-LuwryB and.
(29lote)
PA3- Luwry Hotel
(154 gueat rooms. 1,
resteurarn.. retail.
BOH, etc. toteling2
SITE MAP BY PLANNING AREAS (PAs)
(2025 SilverRock Master Plan)
[Site Maps Continue on Next Page]
6981015610-0207
22798455.5a11/23/25 EXHIBIT A-2
PAd- Pubbc Golf Clubhouse
(17,000s1)
PAS- Luwry Hotel Banquet 6
Beck of House Functions
(Banquet: 25.000sf)
(BOH: 30,00O0)
PAs- Lawry Branded Cond—mi. re
(70 units)
ReeideM Clubhouse 6 F—btres
(20,000sf)
PA7 - Luwry Branded Residences
(93lot.)
PAO - Ftrl— Golf, Res.dermal,
end Commercial
(18-holeiva private golf course. 253
rea.de�at aana, and ,L0,000V
cemmmarcial)
SITE MAP OF PHASE 2 PROPERTY
(2025 SilverRock Master Plan)
Orange area is Phase 2 Property (i.e., City -Owned Option Property) appx. 193+/- acres
[Site Maps Continue on Next Page]
698/015610-0207
22798455.5a11/23/25 EXHIBIT A-2
SITE MAP OF EXISTING SILVERROCK PARK AND RETENTION BASIN PROPERTY
(Not Included in the Phase 2 Property)
SilverRock Park and Retention Basin, appx. 24+/- acres
a.
Y Vk
Ok
1Ilk
^ �� _'%.. rya} ti y`�� •�'
b
[End of Exhibit A-2 - Site Maps]
698/015610-0207
22798455.5a11/23/25 EXHIBIT A-2
EXHIBIT B
FORM OF MEMORANDUM OF OPTION AGREEMENT
[see attached]
698/015610-0207
22798455.5a11/23/25 EXHIBIT B
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO
City of La Quinta
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Citv Clerk
Space Above This Line for Recorder's Use
(Exempt from Recording Fee per Gov't Code §6103 and
§27383)
MEMORANDUM OF OPTION AGREEMENT
This MEMORANDUM OF OPTION AGREEMENT ("Memorandum") is entered
into this day of , 2025, by and between the CITY OF LA QUINTA,
a California municipal corporation and charter city ("City"), and TBE RE Acquisition Co II
LLC, a Delaware limited liability company, an affiliate of Turnbridge Equities ("Optionee"
and "Developer"),
This Memorandum is made with reference to the following:
1. On or about , 2025, City and Optionee entered into that
certain OPTION TO PURCHASE REAL PROPERTY (the "Option Agreement") pursuant
to which Optionee, upon satisfaction of terms and conditions therein, has an "Option" (as
defined in the Option Agreement) to purchase from City the Option Property (as defined in
the Option Agreement and herein below). The Option Property is a portion of that certain
real property owned by the City, comprised of approximately 193+/- acres, identified as
APN(s): 777-060-047, 777-060-048, 777-060-049, portion of 776-150-030, 777-060-074,
and 777-060-079, and more specifically described in Attachment No. 1 hereto and
incorporated herein by this reference (the "Phase 2 Property"). The Phase 2 Property
that is subject to Optionee's right to purchase pursuant to the Option Agreement
expressly excludes the approximately 24+/- acre SilverRock Park and adjacent Flood
Control/Water Retention Basin (collectively, the "Park And Retention Basin Property"),
also owned by City, which Park And Retention Basin Property is adjacent to the Option
Property and located in the SilverRock Resort Area (as defined in the Option Agreement).
The Phase 2 Property, excluding the Park and Retention Basin Property, is referred to
and defined in the Option Agreement as the "Option Property." The Option Property and
Park And Retention Basin Property are depicted in the Site Maps attached to this
Memorandum as Attachment No A-2 and incorporated herein by this reference (the "Site
Maps").
2. The Option Property is in close proximity to certain real property owned by
Optionee (referred to in the Option Agreement as the "Developer -Owned Property") that
is subject to that certain Reinstated and Amended Development Agreement by and
698/015610-0207
22798455.5a11/23/25 EXHIBIT B
between the City and Optionee (as Developer), adopted by City Council Ordinance
No. 626 on October 7, 2025, and recorded as Document No. (the
"Reinstated Development Agreement") on or about even date as this Memorandum in
the Official Records of the Office of the County Recorder of Riverside, California (the
"Recorder's Office"). The Reinstated Development Agreement provides, among other
terms and conditions, for the development of the Developer -Owned Property as provided
therein (referred to in the Option Agreement as the "Developer's Project"). As more
specifically set forth in the Reinstated Development Agreement and Option Agreement,
the Developer's Project includes the possible acquisition and development of the Option
Property in addition to the Developer -Owned Property. The Option Agreement and
Reinstated Development Agreement are public records and available for inspection
during regular business hours in the Clerk's Office at City Hall for the City of La Quinta, at
the address: 78-495 Calle Tampico, La Quinta, CA 92253, and may be accessed at the
City's Internet web site: www.laquintaca.gov.
3. The Option Agreement provides for City and Optionee to enter into this
Memorandum and to record the same in the Recorder's Office to provide notice to all
persons of the existence of said Option Agreement and to cause the Option Agreement to
run with the Option Property and be binding on Optionee and Optionee's
successors -in -interest as more particularly permitted and set forth in the Option
Agreement.
4. This Memorandum may be executed in several counterparts, and all so
executed shall constitute one agreement binding on both parties hereto, notwithstanding
that both parties are not signatories to the original or the same counterpart.
[ signatures on next page ]
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT B
IN WITNESS WHEREOF, Optionee and City have executed this
Agreement as of the recording date hereof.
"DEVELOPER"
TBE RE Acquisition Co II LLC, a Delaware
limited liability company, an affiliate of
Turnbridge Equities
Date: , 2025 By:
Name: Andrew Joblon
Title: Authorized Signatory
"CITY"
CITY OF LA QUINTA, a California municipal
corporation and charter city
Date: , 2025 By:
Jon McMillen, City Manager
ATTEST:
Monika Radeva, City Clerk
APPROVED AS TO FORM
RUTAN & TUCKER, LLP
William H. Ihrke, City Attorney
698/015610-0207
22798455.5a11/23/25 EXHIBIT B
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of Riverside
On before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of Riverside
On
before me, ,
(insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
698/015610-0207
22798455.5a11/23/25 EXHIBIT B
(Seal)
ATTACHMENT NO. 1
TO MEMORANDUM OF OPTION AGREEMENT
DESCRIPTION OF THE PROPERTY
All that certain property located in the City of La Quinta, County of Riverside, State of
California, described as follows:
PARCEL 1
Parcels 13, 14, and 15 of Parcel Map No. 37207, in the City of La Quinta, County of
Riverside, State of California, as shown by a Map filed for Record May 3, 2017 in Book
242, Pages 72 through 87, inclusive of Parcel Maps, in the Office of the County Recorder
of said County.
PARCEL 2
Parcel 16 of Parcel Map No. 37207, in the City of La Quinta, County of Riverside, State of
California, as shown by a Map filed for Record May 3, 2017 in Book 242, Pages 72
through 87, inclusive of Parcel Maps, in the Office of the County Recorder of said County.
[end of legal description]
NOTE: NOTWITHSTANDING THE ABOVE -REFERENCED LEGAL DESCRIPTION
FOR PARCEL 16 ABOVE, THE PHASE 2 PROPERTY DOES NOT INCLUDE
SILVERROCK PARK AND RETENTION BASIN, AS SET FORTH IN THIS OPTION
AGREEMENT AND THE REINSTATED DEVELOPMENT AGREEMENT, RECITAL D
AND DEFINITIONS OF "PHASE 2 PROPERTY" / "CITY OWNED OPTION PROPERTY"
698/015610-0207
22798455.5a11/23/25 EXHIBIT B
ATTACHMENT NO. 2
TO MEMORANDUM OF OPTION AGREEMENT
SITE MAPS DEPICTING THE PHASE 2 PROPERTY
AND PARK AND RETENTION BASIN PROPERTY
[ attached ]
698/o15510-0207
22798455.5 al 1/23125 EXHIBIT B
PAl -Goff Course
(enreNng)
PA2- Luwry &end,
(29let.)
PA3 - Luwry Hotel
(154 guest rooms. Ir
reeteurams, retail,.
GOH, etc. totaling 2
SITE MAP BY PLANNING AREAS (PAs)
(2025 SilverRock Master Plan)
[Site Maps Continue on Next Page]
698/015610-0207
22798455.5 a11/23/25 EXHIBIT B
-Public Golf Clubhouse
00un
-Luwry Hotel Benquet &
k of House Functions
tquet: 25.000sf)
H: 30,000sf)
- Luwry &ended Condominiums
.ruts)
idem Clubhouse 6 Fealdos
000A
-Luwry &ended Res,dencee
lot.)
-Future Gelf, Ftesidamial,
Comitterciat
hole pnvate golf course. 253
dential ands, and 40,000sf
tmerciel)
SITE MAP OF PHASE 2 PROPERTY
(2025 SilverRock Master Plan)
Orange area is Phase 2 Property (i.e., City -Owned Option Property) appx. 193+/- acres
[Site Maps Continue on Next Page]
698/015610-0207
22798455.5a11/23/25 EXHIBIT B
SITE MAP OF EXISTING SILVERROCK PARK AND RETENTION BASIN PROPERTY
(Not Included in the Phase 2 Property)
SilverRock Park and Retention Basin, appx. 24+/- acres
[End of Attachment No. 2 - Site Maps]
698/015610-0207
22798455.5a11/23125 EXHIBIT B
EXHIBIT C
FORM OF CITY REPURCHASE OPTION AGREEMENT
[see attached]
698/015610-0207 EXHIBIT C
22798455.5 al1/23/25
ACTIVE\1622842580.9
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of La Quinta
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Citv Clerk
Space Above This Line for Recorder's Use
(Exempt from Recording Fee per Gov't Code § 6103 and 27383)
REPURCHASE OPTION AGREEMENT
(PHASE 2 PROPERTY)
(SilverRock Resort Area)
This REPURCHASE OPTION AGREEMENT (PHASE 2 PROPERTY — SilverRock
Resort Area) ("Repurchase Option Agreement") is made this _ day of ,
20_ (the "Repurchase Option Agreement Effective Date"), by and between TBE RE
Acquisition Co II LLC, a Delaware limited liability company, an affiliate of Turnbridge
Equities ("Developer"), and the CITY OF LA QUINTA, a California municipal corporation
and charter city ("City"). City and Developer are hereinafter sometimes referred to
individually as a "Party" and collectively as the "Parties."
A. On 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 and recorded on as Document No. (the
"Reinstated Development Agreement") in the Official Records of the Office of the
County Recorder of Riverside, California (the "Recorder's Office"). Among other terms
and conditions, the Reinstated Development Agreement vests development and use
rights to Developer, prescribes rights and obligations of Developer for the resumption and
completion of construction, and the continuous operation and use, of specified "Project
Components" that include, among others, a luxury hotel with related ancillary amenities
and luxury single-family detached and condominium residential dwellings available for
use as short-term vacation rentals, on certain real property comprised of approximately
134+/- acres and defined therein as the "Phase 1 Property" (consisting the "Phase 1A
Property" and "Phase 1113 Property") as more particularly described therein as more
particularly set forth therein. The Reinstated Development Agreement also references
the possible acquisition in the future by Developer of certain unimproved real property
owned by the City in the SilverRock Resort Area and defined therein as the "Phase 2
Property" for possible future development that would also complement a world -class
hotel and residential destination resort on the Phase 1 Property.
B. On or about even date of the Reinstated Development Agreement was
entered into and recorded in the Recorder's Office, City and Developer entered into that
certain OPTION TO PURCHASE REAL PROPERTY (the "Phase 2 Property Option
Agreement"), pursuant to which Developer purchased an option for right to acquire, and
698/015610-0207
22798455.5a11/23/25 EXHIBIT C
for the City to sell, the Phase 2 Property upon the satisfaction of specified conditions
(which generally included the completion of construction of a luxury hotel project
component and related amenities on the Phase 1A Property), as more particularly set
forth therein. A Memorandum of the Phase 2 Property Option Agreement, dated on or
about even as the Phase 2 Property Option Agreement, which incorporated by reference
the Phase 2 Property Option Agreement, was recorded in the Recorder's Office on
as Document No. (the "Phase 2 Property
Option Agreement Memorandum"). Pursuant to the Phase 2 Property Option
Agreement, if Developer timely and validly exercised the option to acquire the Phase 2
Property, then this Repurchase Option Agreement for the benefit of the City was to be
executed, notarized, and recorded against the Phase 2 Property with the closing of the
escrow servicing the purchase and sale transaction. Furthermore, pursuant to the
Reinstated Development Agreement, if Developer acquired the Phase 2 Property
pursuant to the Phase 2 Property Option Agreement, then the Reinstated Development
Agreement had to be amended to include, among any other necessary or proper terms
and conditions, a scope of work, schedule of performance and phasing of development,
and the authorized uses (with necessary and appropriate covenants, conditions, and
restrictions) for the Phase 2 Property; in the alternative to amending the Reinstated
development Agreement, Developer could have applied for a new development
agreement governing only the Phase 2 Property, which was to be processed and
reviewed in accordance with the Development Agreement Act and Development
Agreement Ordinance, and had to include, among any other necessary or proper terms
and conditions, a scope of work, schedule of performance and phasing of development,
and the authorized uses (with necessary and appropriate covenants, conditions, and
restrictions) for the Phase 2 Property. Developer opted to [
INSERT HERE WHETHER DEVELOPER AMENDED THE 2025 REINSTATED
DEVELOPMENT AGREEMENT OR ENTERED INTO A NEW A DEVELOPMENT
AGREEMENT FOR PHASE 2 PROPERTY; AND IDENTIFY ORDINANCE ADOPTING
EITHER AMENDMENT OR NEW D.A. ], and on the La
Quinta City Council adopted Ordinance No. , adopting said [
INSERT EITHER "AMENDMENT TO THE REINSTATED DEVELOPMENT
AGREEMENT" or "NEW DEVELOPMENT AGREEMENT"], which is referred to in this
Repurchase Option Agreement as the "Development Agreement For The Phase 2
Property."
C. As of the Repurchase Option Agreement Effective Date, Developer owns
fee title to the Phase 2 Property, also defined for purposes of this Repurchase Option
Agreement as the "Repurchase Option Property" that is legally described and depicted
in Exhibit "A", which is attached hereto and incorporated herein by this reference. [NOTE
— LEGAL DESCRIPTION SHOULD INCLUDE ONLY PHASE 2 PROPERTY FOR THIS
REPURCHASE OPTION AGREEMENT]
D. Prior to City and Developer entering into this Repurchase Option
Agreement, the prior Reinstated Development Agreement, and other agreements and
instruments, the following relevant history is hereby recited:
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
Except for portions of land previously transferred to SilverRock
Development Company, LLC, a Delaware limited liability company
(or one of its affiliated companies, which are referred to herein
collectively as "SDC" or "Debtor(s)")2 as explained below in the next
Recital Subparagraph, City owns fee title to that certain real property
of approximately 525 acres located at the southwest intersection of
Jefferson Street and Avenue 52, in the City of La Quinta, California,
generally referred to as the "SilverRock Resort Area" and subject to
a Specific Plan adopted by the La Quinta City Council and
enforceable as a land use governing document pursuant to the
Planning and Zoning Law, California Government Code section
65000 et seq. (the "SilverRock Specific Plan"),
On or about November 19, 2014, City and SDC entered into that
certain Purchase, Sale, and Development Agreement (the "Original
SDC PSDA"), pursuant to which, among other terms and conditions,
City agreed to sell to SDC and SDC agreed to purchase from City
specified parcels and planning areas (PAs) to thereafter construct,
complete, and operate thereon a commercial project containing a
luxury resort hotel and spa and associated branded luxury
residential units, a lifestyle hotel and associated lifestyle branded
residential units, a conference and shared service facility, a
temporary and permanent clubhouse for the SilverRock Resort's
Arnold Palmer Classic Golf Course, a mixed use village, a resort
residential village, and associated amenities, all as further described
in the Original SDC PSDA and referred to as various project
components, as more particularly described therein. Concurrent
with the Original SDC PSDA, on or about November 19, 2014, City
and SDC entered into Development Agreement 2014-1001 (the
"Original SDC Development Agreement") pursuant to the
Development Agreement Law, which agreement, among other terms
and conditions, required SDC to develop the planning areas and
project components in accordance with the SDC PSDA, vested with
SDC specified development obligations, memorialized the potential
for the future acquisition of additional City -owned property in the
SilverRock Resort Area as incorporated vis-a-vis the SDC PSDA,
and subjected SDC to City's rights and oversight for those portions of
2 Debtors were SilverRock Development Company, LLC and affiliated entities that, on
August 5, 2024, filed for voluntary bankruptcy protection under chapter 11 of the U.S.
Bankruptcy Code, with case number(s) identified in the Title of this Agreement along with
the last four digits of each Debtor's federal tax identification number, as applicable, are:
SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock
Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury
Residences, LLC (6598) and SilverRock Phase I, LLC (2247) (collectively, referred to
herein as the "Bankruptcy Lawsuit" in the "Bankruptcy Court").
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
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"),
ii. Pursuant to the SDC PSDA and consistent with boundaries
established by applicable subdivision maps and lot line
adjustments, City conveyed to SDC the Phase 1 Property for
the pre -development, development, operation, and use of a
project that was eventually re -named "Talus" and consisted of
the following project components (all as defined in the SDC
PSDA): Luxury Hotel, Luxury Branded Residential
Development, Lifestyle Hotel, Lifestyle Branded Residential
Development, Conference and Shared Services Facility
(including spa and other amenities), Permanent Golf
Clubhouse, Promenade Mixed -Use Village/Resort
Residential Village (on Planning Areas 7,8,9), as well as a
specified Golf Course Realignment and corresponding
Master Site Infrastructure Improvements (MSII). These
project components on the Phase 1 Property, pursuant to the
SDC PSDA, were divided into Phase 1A project components
on the Phase 1A Property and the Phase 1 B project
components on the Phase 1 B Property respectively, as
described in the SDC PSDA;
iii. Pursuant to the Third and Fourth Amendments to the SDC
PSDA, SDC commenced pre -development and development
on the Phase 1 Property for the Phase 1A project
components, which as of the Reference Date of this
Agreement, in various degrees, were partially constructed
after SDC failed to continue to make payments to various
contractors, subcontractors, and other interested parties in
the development of the Talus project. Multiple lawsuits,
including lawsuits seeking payments pursuant to mechanic's
lien or various loan or investment agreements, and a City
lawsuit against SDC for unlawful and unapproved
698/015610-0207
22798455.5 a11/23/25 EXHIBIT C
conveyances in secured interests or mechanic's liens, were
filed against SDC;
iv. On August 5, 2024, SDC (Debtors) filed the Bankruptcy
Lawsuit, and, pursuant to Bankruptcy Court -approved Bid
Procedures, Debtors retained a Chief Restructuring Officer
(Douglas Wilson Companies) and marketing professional
(JLL) for the purposes of, among other items, marketing the
sale of the Debtors estate (which is primarily comprised of the
Phase 1 Property) and soliciting proposals for the: (a)
acquisition of the Debtors estate, (b) use, re -use, and/or
substitution of the partially constructed improvements on the
Phase 1 Property, (c) potential replacement project for a
world -class hotel and residential destination resort with
related amenities on the Phase 1 Property that complement
the existing Arnold Palmer Classic Golf Course surrounding
the Phase 1 Property and real property owned by the City,
and (d) possible acquisition in the future of the City -Owned
Option Property in the SilverRock Resort Area (previously
referred to as the Future Option Property in the SDC PSDA
and generally referred to in the Bankruptcy Lawsuit and
marketing materials [and for this Repurchase Option
Agreement] as the Phase 2 Property) for possible future
development that would also complement a world -class hotel
and residential destination resort;
iii. Pursuant to Bankruptcy Court order [Bankruptcy Lawsuit Docket
No. 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) [INSERT IF ANY OTHER RELEVANT
ITEMS FROM THE BK COURT ORDER FOR SALE OF PHASE 1 PROPERTY]
E. Developer submitted a proposal in response to the marketing materials,
and, pursuant to the Bankruptcy Court -approved Bid Procedures, Debtors and City
approved Developer's proposal, which, among other terms and conditions, included a
modified "Project" (as more particularly defined and memorialized in the Reinstated
Development Agreement) on the Phase 1 Property (comprised of the Phase 1A Property
and Phase 1 B Property) as well as possible acquisition in the future of the Repurchase
Option Property (also referred to therein as the Phase 2 Property) for possible future
development that would also complement a world -class hotel and residential destination
resort, all as more particularly set forth in the Reinstated Development Agreement.
F. The Reinstated Development Agreement and Specific Plan, among other
land use governing documents, permits, and entitlements, are centered around the
existing use and enjoyment, by residents, guests of the City, and members of the public,
of the Golf Course in the SilverRock Resort Area.
698/015610-0207
22798455.5al1/23/25 EXHIBIT C
G. As of the Repurchase Option Agreement Effective Date, the Repurchase
Option Property (i.e., Phase 2 Property) is unimproved vacant land. Pursuant to the
Development Agreement For The Phase 2 Property, Developer has proposed and
agreed to develop and have for use on the Repurchase Option Property (i.e., the Phase 2
Property) a [INSERT "PROJECT COMPONENTS" FOR PHASE 2
PROPERTY, WHICH ARE UNKNOWN AS OF THE PHASE 2 PROPERTY OPTION
AGREEMENT DATE BUT MAY BE PROPOSED AFTER COMMENCEMENT OF PHASE
1AAND PHASE 1 B, AND CAN BE DESCRIPTING IN THE MANNER AS THE PHASE 1A
AND PHASE 1 B PROJECT COMPONENTS WERE DEFINED ], and the "Master Site
Infrastructure Improvements Project Component," all as more particularly described in
the Development Agreement For The Phase 2 Property (each, a "Phase 2 Property
Project Component," and collectively, the "Phase 2 Property Project Components").
H. The Phase 2 Property Project Components are to be developed,
constructed, and operated on the Repurchase Option Property in accordance with all of
the requirements set forth in the Development Agreement For The Phase 2 Property.
This Repurchase Option Agreement is intended to grant to City:
An option to purchase the Repurchase Option Property, or certain
portions thereof, from Developer if an MAE Default (as such term is
defined in the Repurchase Option Agreement) has occurred and is
continuing and Developer (a) fails to commence, continuously
proceed with, or complete construction of the Master Site
Infrastructure Improvements pursuant to the Development
Agreement For The Phase 2 Property within certain specified time
frames, (b) fails to commence, continuously proceed with, or
complete construction of any Phase 2 Property Project Component
pursuant to the Development Agreement For The Phase 2 Property
within certain specified time frames, or (c) transfers the Repurchase
Option Property, or any portion thereof, in violation of the terms and
conditions of the Development Agreement For The Phase 2
Property;
ii. A right of first offer to purchase the Repurchase Option Property, or
any portion thereof, if an MAE Default has occurred and is continuing
and (1) City's option under (i)(a), (i)(b), or (i)(c) above has been
triggered, (11) City decides not to exercise or does not timely exercise
the option, (III) the MAE Default which gave rise to City's option has
not been cured by Developer, and (IV) Developer has determined to
sell or otherwise transfer the Repurchase Option Property, all as
further described in this Repurchase Option Agreement.
I. This Repurchase Option Agreement also memorializes the City's right to
exercise the power of termination pursuant to Civil Code Sections 885.010 et seq.,
exercisable by the City in its sole and absolute discretion, to terminate the fee interest of
the Developer in the Phase 2 Property and/or any improvements to the Phase 2 Property
and revest such fee title in the City and take possession of all or any portion of such real
698/015610-0207
22798455.5 al v23/25 EXHIBIT C
property and improvements, upon the occurrence and during the continuance of an MAE
Default.
J. Unless otherwise expressly defined in this Repurchase Option Agreement,
capitalized terms used in this Repurchase Option Agreement, including in the foregoing
Recitals, shall have the meanings ascribed to them in the Development Agreement For
The Phase 2 Property or, in not defined therein, then the meanings ascribed to them in
the Reinstated Development Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and incorporating the above Recitals and
all of the terms and conditions contained in the Development Agreement For The Phase 2
Property, Developer hereby grants to City the following purchase options:
1. Option I - Failure to Commence Construction of Master Site Infrastructure
Improvements on the Phase 2 Property
Subject to Section 7(f) hereof, Developer hereby grants to City an exclusive option
("Option I") to purchase any or all of the subdivided parcels of the Repurchase Option
Property that remain subject to this Repurchase Option Agreement as of the date the
Option I is exercised (the "Option I Property"), if an MAE Default has occurred and is
continuing and Developer fails to commence construction of the Master Site
Infrastructure Improvements Project Component on the Phase 2 Property in accordance
with the Development Agreement For The Phase 2 Property. For the purposes of this
Section 1, the term "commence construction" shall mean the start date in accordance with
"Schedule of Performance" set forth in the Development Agreement For The Phase 2
Property. For purposes of this Repurchase Option Agreement, Option I applies to those
subdivided parcels of the Repurchase Option Property that, pursuant to the Schedule of
Performance and Development Agreement For The Phase 2 Property, have Master Site
Infrastructure Improvements to be constructed and installed independently from the
development and construction of any other Project Component on the Phase 2 Property.
[NOTE: SCHEDULE OF PERFORMANCE SHOULD HAVE A MSII START AND END
DATE BUT WOULD BE SUBORDINATE IF MSII ATTACHES TO A PROJECT
COMPONENT AND THAT PROJECT COMPONENT, WHICH IS GOVERNED BY
OPTIONS III AND IV)
In the event of the continuance of an MAE Default and Developer's failure to
commence construction of the Master Site Infrastructure Improvements Project
Component within the time period described above, and such failure is not cured within
the cure period provided for under Sections 7(b) and 7(c) below, then City shall be
entitled to exercise, but is not obligated to exercise, the foregoing option for a period of
sixty (60) days following the final determination of the "Fair Market Value" for the Option
Property (as set forth in Section 1(b), Subparagraphs (A)-(D) below) and after the
expiration of such cure period (the "Option I Period").
698i015610-0207
22798455.5al1/23/25 EXHIBIT C
(a) Exercise of Option
City shall exercise Option I by giving written notice to Developer ("City's Notice of
Option I Exercise"), in accordance with Section 8 of this Repurchase Option Agreement,
prior to the expiration of the Option I Period. Failure of City to exercise Option I shall
constitute a waiver of City's right to exercise Option I only with respect to Developer's
failure to commence construction of a phase of the Master Site Infrastructure
Improvements Project Component by the identified start date in the Schedule of
Performance in the Development Agreement For The Phase 2 Property, but no other
phase or other Project Component, and shall not constitute a waiver by City of
Developer's breach of its obligation to commence construction of any other Project
Component, or any other phase of the Master Site Infrastructure Improvements, on the
Phase 2 Property for which the start date has not yet occurred as of the date of the
Developer's receipt of City's Notice of Option I Exercise, nor shall constitute a waiver by
City of any remedies City may have under the terms of the Development Agreement For
The Phase 2 Property or under any other agreement for Developer's failure to timely
commence construction of the Master Site Infrastructure Improvements Project
Component on the Phase 2 Property pursuant to the start dates identified in the Schedule
of Performance in the Development Agreement For The Phase 2 Property.
(b) Purchase Price - Option I
City's purchase price for the Repurchase Option Property ("Option I Purchase
Price"), shall be the lesser of: (i) the amount of the purchase price for the Phase 2
Property that Developer paid City upon close of escrow for the Phase 2 Property pursuant
to the Phase 2 Property Option Agreement and purchase and sale agreement attached to
said Phase 2 Property Option Agreement, or (ii) the Fair Market Value of the Option I
Property (as defined below).
For purposes of this Section 1, the term "Fair Market Value" of the Option I
Property shall be the current appraised fair market value of the land and improvements
thereon (if any) taking into account for purposes of valuation not the highest and best use
of the Option I Property but rather the existing conditions (such as having no or only
partially completed improvements) and only those uses authorized as of the date of the
MAE Default giving rise to City's ability to exercise Option I. If City and Developer are
unable to agree upon the Fair Market Value of the Option I Property on or before the date
that is the end of the cure period for the "Option Triggering Event" as defined in
Section 7(b) of this Repurchase Option Agreement giving rise to Option I (i.e., on or
before the date that commences the Option I Period), then the Option I Period during
which City has the right to exercise Option I shall be extended, in addition to the 60-days
following the expiration of such cure period, for an additional sixty (60) days for City and
Developer to resolve and agree upon the Fair Market Value. If no agreement on Fair
Market Value is reached, then, in the absence of another method agreed upon by City
and Developer to resolve the Fair Market Value, the following process (in Subparagraphs
(A)-(D) below) shall be used and binding upon the Parties:
698/015610-0207
22798455.5 al1/23125 EXHIBIT C
A. City and Developer shall jointly attempt to agree on the appointment
of a real estate appraiser who is a member of the Appraisal Institute
or successor thereto (or, in the event the Appraisal Institute or any
successor shall not then be in existence, a disinterested real estate
appraiser having appropriate qualifications to appraise real estate
similar to the Option I Property), with at least ten (10) years
professional experience in Southern California in appraising land
and improvements similar to the Option I Property. All appraisers
selected pursuant to the provisions hereof shall be impartial and
unrelated, directly and indirectly, so far as employment of services is
concerned, to either of the Parties hereto or their successors, and
the appraiser(s) shall be required to so certify as a condition to being
designated and accepting the appraisal assignment. The cost of the
services performed by such appraiser shall be borne equally by the
Parties. The single appraiser jointly appointed by the Parties shall
determine the Fair Market Value of the Option I Property and shall
render his or her appraisal opinion within sixty (60) days after said
appraiser has been selected or as soon as practical if such longer
period is needed for the appraisal to be completed.
B. If City and Developer are unable to jointly agree on a single appraiser
to determine the Fair Market Value of the Option I Property, then City
and Developer shall each, within fifteen (15) days of the date that is
the end of the cure period for the "Option Triggering Event" as
defined in Section 7(b) of this Repurchase Option Agreement giving
rise to Option I (i.e., fifteen (15) days after the date that commences
the Option I Period), separately at its own cost designate an
appraiser meeting the qualifications stated in Subparagraph (A)
above. If two appraisers are appointed and they concur on the Fair
Market Value of the Option I Property, then the Fair Market Value
determined by them shall be the Fair Market Value of the Option
Property for purposes of this Repurchase Option Agreement. If the
two appraisers do not concur but the difference between their
appraisal numbers is an amount less than ten percent (10%) of the
amount of the higher determination of Fair Market Value, the mean
average of the two determinations shall be the Fair Market Value of
the Option I Property for purposes of this Repurchase Option
Agreement. The two appraisers shall render their respective
appraisals within sixty (60) days after said appraisers have been
selected or as soon as practical if such longer period is needed for
the appraisal to be completed. If the difference between the two
appraisers' determinations exceeds the ten percentage (10%)
amount specified in this Subparagraph (B), the two appraisers shall
jointly select a third appraiser meeting the qualifications set forth in
Subparagraph (A) above. If the two appraisers are unable to agree
on a third appraiser, then the third appraiser shall be selected as
follows: first, the Parties each shall select the names of two (2) new
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
appraisers meeting the criteria in Subparagraph (A) above, second,
the names of the four (4) new appraisers shall be grouped together
blindly such that only one (1) name will be chosen at random, such
as by writing the four (4) names on separate pieces of paper of equal
size and then placing the four (4) names in an enclosed box and then
having one (1) name selected; third, the selection of the one (1) new
appraiser's name shall be witnessed with a representative from the
City, Developer, and the two appraisers who could not agree upon
the third appraiser. The name of the appraiser selected blindly shall
be the third appraiser.
C. Within fifteen (15) days from the date of selection of the third
appraiser, if applicable, all three appraisers shall meet and the first
two appraisers shall present to the third appraiser all of their findings,
data, and conclusions as to the Fair Market Value of the Option
Property. The third appraiser shall review all of such findings, data,
and conclusions, and shall determine which of the two appraisers'
respective determinations of the Fair Market Value is the most
reasonable determination under the criteria set forth above. The
third appraiser shall not be permitted to make any other independent
determination of the Fair Market Value of the Option I Property. The
appraiser's determination found by the third appraiser to be the most
reasonable determination shall be the Fair Market Value of the
Option I Property for purposes of determining the Option I Purchase
Price pursuant to Section 1(b) of this Repurchase Option
Agreement. The third appraiser's conclusion shall be reached within
thirty (30) days from the selection of the third appraiser or as soon as
practical if such longer period is needed for the appraisal to be
completed. The expenses related to the selection and services of
the third appraiser shall be shared equally by City and Developer.
D. The Fair Market Value determined in accordance with these
procedures set forth in Subparagraphs (A)-(D) shall be binding and
conclusive on the Parties for purposes of determining the Option I
Purchase Price pursuant to Section 1(b) of this Repurchase Option
Agreement.
(c) City Election to Purchase Plans
City may elect to purchase, pursuant to Section 7(I) below, either the Phase 2
Property Master Site Infrastructure Improvements or the Project Components comprising
the Phase 2 Property Project Components, or both. If City elects to purchase said Plans
(to the extent permitted by the applicable third party contracts relating to such Plans), City
shall pay the cost of such Plans in addition to the Option I Purchase Price.
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
(d) City Reservation of Rights for Power of Termination
In addition to City's right to exercise Option I pursuant to this Section 1, City
reserves its right to exercise a power of termination pursuant to Civil Code section
885.010 et seq., as provided for in Section 7(n) of this Repurchase Option Agreement.
2. Option II - Failure to Continuously Proceed With Construction of the Master
Site Infrastructure Improvements or to Complete Construction of the Master
Site Infrastructure Improvements
Developer hereby grants to City an exclusive option ("Option II") to purchase any
or all of the subdivided parcels of the Repurchase Option Property that remain subject to
this Repurchase Option Agreement as of the date that Option II is exercised (the "Option
II Property") if an MAE Default has occurred and is continuing and after commencement
of construction of the Master Site Infrastructure Improvements on the Phase 2 Property,
Developer fails to continuously proceed with construction of the Master Site Infrastructure
Improvements in accordance with the Schedule of Performance in the Development
Agreement For The Phase 2 Property, or to complete the Master Site Infrastructure
Improvements in accordance with the Schedule of Performance in the Development
Agreement For The Phase 2 Property, as evidenced by acceptance of such Master Site
Infrastructure Improvements by the La Quinta City Council, within the applicable time
period(s) set forth in the Schedule of Performance in the Development Agreement For
The Phase 2 Property to finish such phase of Master Site Infrastructure Improvements
(each, as applicable, a "Master Site Infrastructure Improvements Phase Completion
Deadline"). For purposes of this Section 2, the term "continuously proceed with
construction" shall mean construction that is interrupted, if at all, for periods of no longer
than ninety (90) days, subject to Force Majeure. For purposes of this Repurchase Option
Agreement, Option II applies to those subdivided parcels of the Repurchase Option
Property that, pursuant to the Schedule of Performance and Development Agreement For
The Phase 2 Property, have Master Site Infrastructure Improvements to be constructed
and installed independently from the development and construction of any other Project
Component on the Phase 2 Property. [NOTE: SCHEDULE OF PERFORMANCE
SHOULD HAVE A MSII START AND END DATE BUT WOULD BE SUBORDINATE IF
MSII ATTACHES TO A PROJECT COMPONENT AND THAT PROJECT COMPONENT,
WHICH IS GOVERNED BY OPTIONS III AND IV)
In the event of the continuance of an MAE Default and Developer's failure to
continuously proceed with construction of the Master Site Infrastructure Improvements, or
to complete construction of the Master Site Infrastructure Improvements by the applicable
Master Site Infrastructure Improvements Phase Completion Deadline, and such failure is
not cured within the cure period provided for under Sections 7(b) and 7(c) below, then City
shall be entitled to exercise, but is not obligated to exercise, the foregoing option for a
period of sixty (60) days following the date on which the later occurs: (i) the completion of
the "Master Site Infrastructure Improvements Cost Audit" (as that term is defined in
Section 2(b) below) and after expiration of such cure period, or (ii) the final determination
of the "Fair Market Value" for the Option II Property (as set forth in Section 2(b),
Subparagraphs (A)-(D) below) and after the expiration of such cure period ("Option II
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
Period")
Notwithstanding anything to the contrary in this Section 2, Option II shall not apply
to, and the Option II Property shall not include, those subdivided parcels of the
Repurchase Option Property for which construction of the Project Component(s)
designated pursuant to the Development Agreement For The Phase 2 Property to be
constructed thereon has commenced and the Master Site Infrastructure Improvements
are attached to the development of the Project Component(s). Such subdivided parcels
are addressed in Section 4 below.
(a) Exercise of Option II
City shall exercise Option II by giving written notice to Developer ("City's Notice of
Option II Exercise"), in accordance with Section 8 of this Repurchase Option
Agreement, prior to the expiration of the Option II Period. Failure of City to exercise
Option II shall constitute a waiver by City of City's right to exercise Option II only with
respect to Developer's specific incidence of failure to continuously proceed with
construction of the Master Site Infrastructure Improvements on the Phase 2 Property that
gave rise to Option II or of Developer's failure to complete construction of the Master Site
Infrastructure Improvements on the Phase 2 Property by the Master Site Infrastructure
Improvements Phase Completion Deadline (as applicable), but shall not constitute a
waiver by City of Developer's breach of its obligation on any other Project Component, or
to continuously proceed with construction of the Master Site Infrastructure Improvements
or to complete construction of the Master Site Infrastructure Improvements by the Master
Site Infrastructure Improvements Phase Completion Deadline (as applicable) or of any
remedies City may have under the terms of the Development Agreement For The Phase
2 Property or under any other agreement for Developer's failure to continuously proceed
with construction of the Master Site Infrastructure Improvements or to complete
construction of the Master Site Infrastructure Improvements by the Master Site
Infrastructure Improvements Phase Completion Deadline (as applicable).
(b) Purchase Price - Option II
City's purchase price for the Option II Property ("Option II Purchase Price"), shall
be the lesser of: (i) the amount of the purchase price for the Phase 2 Property that
Developer paid City upon close of escrow for the Phase 2 Property pursuant to the Phase
2 Property Option Agreement and purchase and sale agreement attached to said Phase
2 Property Option Agreement plus Developer's MSII Construction Costs (if any, and as
defined below), or (ii) the Fair Market Value of the Option II Property (as defined below).
For purposes of this Section 2, the term "Developer's MSII Construction Costs"
shall mean the construction costs, if any, actually incurred by Developer for construction
of the Master Site Infrastructure Improvements on the Option II Property on or after the
Repurchase Option Agreement Effective Date to the date of the Developer's receipt of
City's Notice of Option II Exercise, as determined by an independent audit (the "Option II
MSII Construction Cost Audit"), performed by an independent auditor who shall be
selected by City and approved by Developer and be a partner at a nationally recognized
698/015610-0207
22798455.5at1/23/25 EXHIBIT C
firm of accountants with experience in auditing large-scale, mixed use construction
projects (the "Auditor"), which costs shall consist only of: (I) the amount(s) paid by
Developer to the contractor or contractors performing the construction, (II) reasonable
inspection, supervision, and testing costs paid by Developer to independent third party
engineers, architects, or consultants in conjunction with said construction, and (III) any
amounts paid by Developer to material suppliers and equipment suppliers in connection
with the construction (including any so-called "soft costs" incurred in the planning,
environmental review, or design of the Master Site Infrastructure Improvements
constructed on the Option II Property, but not including any costs, fees, charges, or profits
allocated to Developer's own internal administrative, payroll, or overhead expenses or to
any person or entity affiliated with Developer). Developer shall promptly provide City and
the Auditor with all records and documentation necessary for the Auditor to perform the
Option II MSII Construction Cost Audit. In the event that there are any outstanding
mortgages or deeds of trust that have been approved by City (to the extent approval was
required) pursuant to the Development Agreement For The Phase 2 Property (any of the
foregoing, a "Valid Lien") and that are recorded against the Option 11 Property at the time
that Option II is exercised, Developer and City agree that the Option II Purchase Price
shall be paid to the lender on any such Valid Lien (any such lender with a Valid Lien, a
"Lender"), up to the then outstanding balance due under same including, without
limitation, the outstanding principal balance, all accrued and unpaid interest, and any
prepayment fees and costs (collectively, the "Outstanding Balance"). Any portion of the
Option II Purchase Price not so needed to extinguish a Valid Lien shall be paid to
Developer.
For purposes of this Section 2, the term "Fair Market Value" of the Option II
Property shall be the current appraised fair market value of the land and improvements
thereon (if any) taking into account for purposes of valuation not the highest and best use
of the Option II Property but rather the existing conditions (such as having no or only
partially completed improvements) and only those uses authorized as of the date of the
MAE Default giving rise to City's ability to exercise Option 11. If City and Developer are
unable to agree upon the Fair Market Value of the Option 11 Property on or before the date
that is the end of the cure period for the "Option Triggering Event" as defined in
Section 7(b) of this Repurchase Option Agreement giving rise to Option II (i.e., on or
before the date that commences the Option II Period), then the Option II Period during
which City has the right to exercise Option II shall be extended, in addition to the 60-days
following the expiration of such cure period, for an additional sixty (60) days for City and
Developer to resolve and agree upon the Fair Market Value. If no agreement on Fair
Market Value is reached, then, in the absence of another method agreed upon by City
and Developer to resolve the Fair Market Value, the following process (in Subparagraphs
(A)-(D) below) shall be used and binding upon the Parties:
A. City and Developer shall jointly attempt to agree on the appointment
of a real estate appraiser who is a member of the Appraisal Institute
or successor thereto (or, in the event the Appraisal Institute or any
successor shall not then be in existence, a disinterested real estate
appraiser having appropriate qualifications to appraise real estate
similar to the Option II Property), with at least ten (10) years
698/015610-0207
22798455.5 at 1/23/25 EXHIBIT C
professional experience in Southern California in appraising land
and improvements similar to the Option II Property. All appraisers
selected pursuant to the provisions hereof shall be impartial and
unrelated, directly and indirectly, so far as employment of services is
concerned, to either of the Parties hereto or their successors, and
the appraiser(s) shall be required to so certify as a condition to being
designated and accepting the appraisal assignment. The cost of the
services performed by such appraiser shall be borne equally by the
Parties. The single appraiser jointly appointed by the Parties shall
determine the Fair Market Value of the Option II Property and shall
render his or her appraisal opinion within sixty (60) days after said
appraiser has been selected or as soon as practical if such longer
period is needed for the appraisal to be completed.
B. If City and Developer are unable to jointly agree on a single appraiser
to determine the Fair Market Value of the Option II Property, then
City and Developer shall each, within fifteen (15) days of the date
that is the end of the cure period for the "Option Triggering Event" as
defined in Section 7(b) of this Repurchase Option Agreement giving
rise to Option II (i.e., fifteen (15) days after the date that commences
the Option II Period), separately at its own cost designate an
appraiser meeting the qualifications stated in Subparagraph (A)
above. If two appraisers are appointed and they concur on the Fair
Market Value of the Option II Property, then the Fair Market Value
determined by them shall be the Fair Market Value of the Option II
Property for purposes of this Repurchase Option Agreement. If the
two appraisers do not concur but the difference between their
appraisal numbers is an amount less than ten percent (10%) of the
amount of the higher determination of Fair Market Value, the mean
average of the two determinations shall be the Fair Market Value of
the Option II Property for purposes of this Repurchase Option
Agreement. The two appraisers shall render their respective
appraisals within sixty (60) days after said appraisers have been
selected or as soon as practical if such longer period is needed for
the appraisal to be completed. If the difference between the two
appraisers' determinations exceeds the ten percentage (10%)
amount specified in this Subparagraph (B), the two appraisers shall
jointly select a third appraiser meeting the qualifications set forth in
Subparagraph (A) above. If the two appraisers are unable to agree
on a third appraiser, then the third appraiser shall be selected as
follows: first, the Parties each shall select the names of two (2) new
appraisers meeting the criteria in Subparagraph (A) above; second,
the names of the four (4) new appraisers shall be grouped together
blindly such that only one (1) name will be chosen at random, such
as by writing the four (4) names on separate pieces of paper of equal
size and then placing the four (4) names in an enclosed box and then
having one (1) name selected; third, the selection of the one (1) new
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
appraiser's name shall be witnessed with a representative from the
City, Developer, and the two appraisers who could not agree upon
the third appraiser. The name of the appraiser selected blindly shall
be the third appraiser.
C. Within fifteen (15) days from the date of selection of the third
appraiser, if applicable, all three appraisers shall meet and the first
two appraisers shall present to the third appraiser all of their findings,
data, and conclusions as to the Fair Market Value of the Option II
Property. The third appraiser shall review all of such findings, data,
and conclusions, and shall determine which of the two appraisers'
respective determinations of the Fair Market Value is the most
reasonable determination under the criteria set forth above. The
third appraiser shall not be permitted to make any other independent
determination of the Fair Market Value of the Option II Property. The
appraiser's determination found by the third appraiser to be the most
reasonable determination shall be the Fair Market Value of the
Option II Property for purposes of determining the Option
II Purchase Price pursuant to Section 2(b) of this Repurchase Option
Agreement. The third appraiser's conclusion shall be reached within
thirty (30) days from the selection of the third appraiser or as soon as
practical if such longer period is needed for the appraisal to be
completed. The expenses related to the selection and services of
the third appraiser shall be shared equally by City and Developer.
D. The Fair Market Value determined in accordance with these
procedures set forth in Subparagraphs (A)-(D) shall be binding and
conclusive on the Parties for purposes of determining the Option II
Purchase Price pursuant to Section 2(b) of this Repurchase Option
Agreement.
(c) City Election to Purchase Plans
City may elect to purchase, pursuant to Section 7(I) below, either the Phase 2
Property Master Site Infrastructure Improvements or the Project Components comprising
the Phase 2 Property Project Components, or both. If City elects to purchase said Plans
(to the extent permitted by the applicable third party contracts relating to such Plans), City
shall pay the cost of such Plans in addition to the Option II Purchase Price.
(d) City Reservation of Rights for Power of Termination
In addition to City's right to exercise Option II pursuant to this Section 2, City
reserves its right to exercise a power of termination pursuant to Civil Code section
885.010 et seq., as provided for in Section 7(n) of this Repurchase Option Agreement.
698/015610-0207
22798455.5 a 11/23/25 EXHIBIT C
3. Option III - Failure to Commence Construction of One or More Project
Components.
Developer hereby grants to City an exclusive option ("Option III") to purchase any
or all of the subdivided parcels of the Repurchase Option Property that remain subject to
this Repurchase Option Agreement as of the date that Option III is exercised (the "Option
III Property") if an MAE Default has occurred and is continuing and Developer fails to
commence construction of any of the Project Components designated pursuant to the
Development Agreement For The Phase 2 Property to be constructed on a portion of the
Option III Property on or prior to the start date for commencement of such Project
Component set forth in the Schedule of Performance in the Development Agreement For
The Phase 2 Property, subject to Force Majeure. For purposes of this Section 3, the term
"commence construction" shall mean the date specified in the Schedule of Performance
by which a specified Project Component on the Phase 2 Property shall have construction
commence.
In the event of the continuance of an MAE Default and Developer's failure to
commence construction of any of the Project Components designated pursuant to the
Development Agreement For The Phase 2 Property to be constructed on a portion of the
Option III Property within the time period described above (subject to Force Majeure), and
such failure is not cured within the cure period provided for under Sections 7(b) and 7(c)
below, then City shall be entitled to exercise, but is not obligated to exercise, the
foregoing option for a period of sixty (60) days following the date on which the later
occurs: (i) the completion of the "Master Site Infrastructure Improvements Cost
Audit" (as that term is defined in Section 3(b) below) and after expiration of such cure
period, or (ii) the final determination of the "Fair Market Value" for the Option I II Property
(as set forth in Section 3(b), Subparagraphs (A)-(D) below) and after the expiration of
such cure period (the "Option III Period").
Notwithstanding anything to the contrary in this Section 3, Option III shall not apply
to, and the Option III Property shall not include, those subdivided parcels of the
Repurchase Option Property for which construction of the Project Component(s)
designated pursuant to the Development Agreement For The Phase 2 Property to be
constructed thereon has commenced. Such subdivided parcels are addressed in
Section 4 below.
(a) Exercise of Option III
City shall exercise Option III by giving written notice to Developer ("City's Notice
of Option III Exercise"), in accordance with Section 8 of this Repurchase Option
Agreement, prior to the expiration of the Option III Period. Failure of City to exercise
Option III shall constitute a waiver by City of City's right to exercise Option III only with
respect to Developer's specific incidence of failure to timely commence construction of
one or more Project Component(s) designated pursuant to the Development Agreement
For The Phase 2 Property to be constructed on a portion of the Option III Property within
the time period described above in this Section 3, but shall not constitute a waiver by City
of Developer's breach of its obligation to continuously proceed with construction and
698/015610-0207
22798455.5 a 11/23/25 EXHIBIT C
complete one or more Project Components, or obligation to commence construction of
said Project Component(s) or any other Project Component(s), or of any remedies City
may have under the terms of the Development Agreement For The Phase 2 Property or
under any other agreement for Developer's failure to commence construction of a Project
Component(s) within the time period described above in this Section 3.
(b) Purchase Price - Option III
City's purchase price for the Option III Property ("Option III Purchase Price"),
shall be the lesser of: (i) the amount of the purchase price for the Phase 2 Property that
Developer paid City upon close of escrow for the Phase 2 Property pursuant to the Phase
2 Property Option Agreement and purchase and sale agreement attached to said Phase
2 Property Option Agreement plus Developer's MSII Construction Costs (if any, and as
defined below), or (ii) the Fair Market Value of the Option III Property (as defined below).
For purposes of this Section 3, the term "Developer's MSII Construction Costs"
shall mean the construction costs, if any, actually incurred by Developer for construction
of the Master Site Infrastructure Improvements on the Option III Property on or after the
Repurchase Option Agreement Effective Date to the date of Developer's receipt of City's
Notice of Option III Exercise, as determined by an independent audit (the "Option III MSII
Construction Cost Audit"), performed by the Auditor, which costs (if any) shall consist
only of (1) the amount(s) paid by Developer to the contractor or contractors performing the
construction, (II) reasonable inspection, supervision, and testing costs paid by Developer
to independent third party engineers, architects, or consultants in conjunction with said
construction, and (III) any amounts paid by Developer to material suppliers and
equipment suppliers in connection with the construction (including any so-called "soft
costs" incurred in the planning, environmental review, or design of the Master Site
Infrastructure Improvements constructed on the Option III Property, but not including any
costs, fees, charges, or profits allocated to Developer's own internal administrative,
payroll, or overhead expenses or to any person or entity affiliated with Developer).
Developer shall promptly provide City and the Auditor with all records and documentation
necessary for the Auditor to perform the Option III MSII Construction Cost Audit. In the
event that there are any Valid Liens recorded against the Option III Property at the time
that Option III is exercised, Developer and City agree that the Option III Purchase Price
shall be paid to the Lender on any such Valid Lien, up to the then Outstanding Balance
due under same. Any portion of the Option III Purchase Price not so needed to extinguish
a Valid Lien shall be paid to Developer.
For purposes of this Section 3, the term "Fair Market Value" of the Option III
Property shall be the current appraised fair market value of the land and improvements
thereon (if any) taking into account for purposes of valuation not the highest and best use
of the Option III Property but rather the existing conditions (such as having no or only
partially completed improvements) and only those uses authorized as of the date of the
MAE Default giving rise to City's ability to exercise Option III. If City and Developer are
unable to agree upon the Fair Market Value of the Option III Property on or before the
date that is the end of the cure period for the "Option Triggering Event" as defined in
Section 7(b) of this Repurchase Option Agreement giving rise to Option III (i.e., on or
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
before the date that commences the Option III Period), then the Option III Period during
which City has the right to exercise Option III shall be extended, in addition to the 60-days
following the expiration of such cure period, for an additional sixty (60) days for City and
Developer to resolve and agree upon the Fair Market Value. If no agreement on Fair
Market Value is reached, then, in the absence of another method agreed upon by City
and Developer to resolve the Fair Market Value, the following process (in Subparagraphs
(A)-(D) below) shall be used and binding upon the Parties:
A. City and Developer shall jointly attempt to agree on the appointment
of a real estate appraiser who is a member of the Appraisal Institute
or successor thereto (or, in the event the Appraisal Institute or any
successor shall not then be in existence, a disinterested real estate
appraiser having appropriate qualifications to appraise real estate
similar to the Option III Property), with at least ten (10) years
professional experience in Southern California in appraising land
and improvements similar to the Option III Property. All appraisers
selected pursuant to the provisions hereof shall be impartial and
unrelated, directly and indirectly, so far as employment of services is
concerned, to either of the Parties hereto or their successors, and
the appraiser(s) shall be required to so certify as a condition to being
designated and accepting the appraisal assignment. The cost of the
services performed by such appraiser shall be borne equally by the
Parties. The single appraiser jointly appointed by the Parties shall
determine the Fair Market Value of the Option III Property and shall
render his or her appraisal opinion within sixty (60) days after said
appraiser has been selected or as soon as practical if such longer
period is needed for the appraisal to be completed.
B. If City and Developer are unable to jointly agree on a single appraiser
to determine the Fair Market Value of the Option III Property, then
City and Developer shall each, within fifteen (15) days of the date
that is the end of the cure period for the "Option Triggering Event" as
defined in Section 7(b) of this Repurchase Option Agreement giving
rise to Option III (i.e., fifteen (15) days after the date that commences
the Option III Period), separately at its own cost designate an
appraiser meeting the qualifications stated in Subparagraph (A)
above. If two appraisers are appointed and they concur on the Fair
Market Value of the Option III Property, then the Fair Market Value
determined by them shall be the Fair Market Value of the Option III
Property for purposes of this Repurchase Option Agreement. If the
two appraisers do not concur but the difference between their
appraisal numbers is an amount less than ten percent (10%) of the
amount of the higher determination of Fair Market Value, the mean
average of the two determinations shall be the Fair Market Value of
the Option III Property for purposes of this Repurchase Option
Agreement. The two appraisers shall render their respective
appraisals within sixty (60) days after said appraisers have been
698/015610-0207
22798455.5 a 11/23/25 EXHIBIT C
selected or as soon as practical if such longer period is needed for
the appraisal to be completed. If the difference between the two
appraisers' determinations exceeds the ten percentage (10%)
amount specified in this Subparagraph (B), the two appraisers shall
jointly select a third appraiser meeting the qualifications set forth in
Subparagraph (A) above. If the two appraisers are unable to agree
on a third appraiser, then the third appraiser shall be selected as
follows: first, the Parties each shall select the names of two (2) new
appraisers meeting the criteria in Subparagraph (A) above; second,
the names of the four (4) new appraisers shall be grouped together
blindly such that only one (1) name will be chosen at random, such
as by writing the four (4) names on separate pieces of paper of equal
size and then placing the four (4) names in an enclosed box and then
having one (1) name selected; third, the selection of the one (1) new
appraiser's name shall be witnessed with a representative from the
City, Developer, and the two appraisers who could not agree upon
the third appraiser. The name of the appraiser selected blindly shall
be the third appraiser.
C. Within fifteen (15) days from the date of selection of the third
appraiser, if applicable, all three appraisers shall meet and the first
two appraisers shall present to the third appraiser all of their findings,
data, and conclusions as to the Fair Market Value of the Option III
Property. The third appraiser shall review all of such findings, data,
and conclusions, and shall determine which of the two appraisers'
respective determinations of the Fair Market Value is the most
reasonable determination under the criteria set forth above. The
third appraiser shall not be permitted to make any other independent
determination of the Fair Market Value of the Option III Property.
The appraiser's determination found by the third appraiser to be the
most reasonable determination shall be the Fair Market Value of the
Option III Property for purposes of determining the Option III
Purchase Price pursuant to Section 3(b) of this Repurchase Option
Agreement. The third appraiser's conclusion shall be reached within
thirty (30) days from the selection of the third appraiser or as soon as
practical if such longer period is needed for the appraisal to be
completed. The expenses related to the selection and services of
the third appraiser shall be shared equally by City and Developer.
D. The Fair Market Value determined in accordance with these
procedures set forth in Subparagraphs (A)-(D) shall be binding and
conclusive on the Parties for purposes of determining the Option III
Purchase Price pursuant to Section 3(b) of this Repurchase Option
Agreement.
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
(c) City Election to Purchase Plans
City may elect to purchase, pursuant to Section 7(I) below, either the Phase 2
Property Master Site Infrastructure Improvements or the Project Components comprising
the Phase 2 Property Project Components, or both. If City elects to purchase said Plans
(to the extent permitted by the applicable third party contracts relating to such Plans), City
shall pay the cost of such Plans in addition to the Option III Purchase Price.
(d) City Reservation of Rights for Power of Termination
In addition to City's right to exercise Option IIII pursuant to this Section 3, City
reserves its right to exercise a power of termination pursuant to Civil Code section
885.010 et seq., as provided for in Section 7(n) of this Repurchase Option Agreement.
4. Option IV - Failure to Continuously Proceed With Construction of one or
more Project Components or to Complete Construction of one or more
Project Components
Developer hereby grants to City an exclusive option ("Option IV") to purchase any
or all of the subdivided parcels of the Repurchase Option Property that remain subject to
this Repurchase Option Agreement as of the date that Option IV is exercised (the "Option
IV Property") if an MAE Default has occurred and is continuing and after commencement
of construction of any Project Component(s) designated pursuant to the Development
Agreement For The Phase 2 Property to be constructed on a portion of the Option IV
Property, Developer fails to continuously proceed with construction of said Project
Component(s) and/or to complete construction of said Project Component(s) within the
time period for completion of such Project Component(s) set forth in the Schedule of
Performance in the Development Agreement For The Phase 2 Property, subject to Force
Majeure, as evidenced by either City's issuance of a certificate of occupancy or by the
recording of a "Certificate of Completion" (as defined in the Development Agreement
For The Phase 2 Property, or if not defined therein, the Reinstated Development
Agreement), whichever event occurs earlier, for such Project Component(s) (the "Option
IV Project Component(s) Completion Deadline"). For purposes of this Section 4, the
term "continuously proceed with construction" shall mean construction that is interrupted,
if at all, for periods of no longer than ninety (90) days, subject to Force Majeure.
In the event of the continuance of an MAE Default and Developer's failure to
continuously proceed with construction of any Project Component(s) designated
pursuant to the Development Agreement For The Phase 2 Property to be constructed on
a portion of the Option IV Property, or Developer's failure to complete construction of any
of said Project Component(s) by the applicable Option IV Project Component(s)
Completion Deadline, subject to Force Majeure, and such failure is not cured within the
cure period provided for under Sections 7(b) and 7(c) below, then City shall be entitled to
exercise, but is not obligated to exercise, the foregoing option for a period of sixty
(60) days following the date on which the later occurs: (i) the completion of the "Option
IV Project Component(s) Cost Audit" (as that term is defined in Section 4(b) below)
and after expiration of such cure period, or (ii) final determination of the "Fair Market
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
Value" for the Option IV Property (as set forth in Section 4(b), Subparagraphs (A)-(D)
below) and after the expiration of such cure period ("Option IV Period").
Notwithstanding anything in this Repurchase Option Agreement to the contrary,
City is not obligated and shall not be deemed obligated to purchase any portions of the
Option IV Property on which construction of the Project Component designated pursuant
to the Development Agreement For The Phase 2 Property to be constructed thereon has
commenced.
(a) Exercise of Option IV
City shall exercise Option IV by giving written notice to Developer ("City's Notice
of Option IV Exercise"), in accordance with Section 8 of this Repurchase Option
Agreement, prior to the expiration of the Option IV Period. Failure of City to exercise
Option IV shall constitute a waiver by City of City's right to exercise Option IV only with
respect to Developer's specific incidence of failure to continuously proceed with
construction of the Project Component(s) designated pursuant to the Development
Agreement For The Phase 2 Property to be constructed on a portion of the Option IV
Property that gave rise to Option IV, or failure to complete construction of said Project
Component(s) by the applicable Option IV Project Component(s) Completion Deadline
that gave rise to Option IV, but shall not constitute a waiver by City of Developer's breach
of its obligation to continuously proceed with construction of said Project Component(s),
or to complete construction of said Project Component(s) by the applicable Option IV
Project Component(s) Completion Deadline (as applicable), or of any remedies City may
have under the terms of the Development Agreement For The Phase 2 Property or under
any other agreement for Developer's failure to continuously proceed with construction of
said Project Component(s), or to complete construction of said Project Components by
the Option IV Project Component(s) Completion Deadline (as applicable).
(b) Determination of Purchase Price - Option IV
City's purchase price for the Option IV Property ("Option IV Purchase Price"),
shall be the lesser of: (i) the amount of the purchase price for the Phase 2 Property that
Developer paid City upon close of escrow for the Phase 2 Property pursuant to the Phase
2 Property Option Agreement and purchase and sale agreement attached to said Phase
2 Property Option Agreement plus Developer's Option IV Project Component(s)
Construction Costs (if any, and as defined below), or (ii) the Fair Market Value of the
Option IV Property (as defined below).
For purposes of this Section 4, the term "Developer's Option IV Project
Component(s) Construction Costs" shall mean the construction costs, if any, actually
incurred by Developer for construction of (1) the portion of the Master Site Infrastructure
Improvements constructed on the Option IV Property on or after the Repurchase Option
Agreement Effective Date to the date of Developer's receipt of City's Notice of Option IV
Exercise, and (II) the portion of the Project Component(s) designated pursuant to the
Development Agreement For The Phase 2 Property to be constructed on the Option IV
Property to the date of Developer's receipt of City's Notice of Option IV Exercise, all as
698/015610-0207
22798455.5a11/23/25 EXHIBIT C
determined by an independent audit (the "Option IV Project Component(s) Cost
Audit"), performed by the Auditor, which costs (if any) shall consist only of (i) the
amount(s) paid by Developer to the contractor or contractors performing the construction,
(ii) reasonable inspection, supervision, and testing costs paid by Developer to
independent third party engineers, architects, or consultants in conjunction with said
construction, and (iii) any amounts paid by Developer to material suppliers and
equipment suppliers in connection with the construction (including any so-called "soft
costs" incurred in the planning, environmental review, or design of the Master Site
Infrastructure Improvements constructed on the Option IV Property or the Project
Component(s) designated pursuant to the Development Agreement For The Phase 2
Property to be constructed on the Option IV Property, but not including any costs, fees,
charges, or profits allocated to Developer's own internal administrative, payroll, or
overhead expenses or to any person or entity affiliated with Developer). Developer shall
promptly provide City and the Auditor with all records and documentation necessary for
the Auditor to perform the Option IV Project Component(s) Cost Audit. In the event that
there are any Valid Liens recorded against the Option IV Property at the time that Option
IV is exercised, Developer and City agree that the Option IV Purchase Price shall be paid
to the Lender on any such Valid Lien, up to the then outstanding balance due under
same. Any portion of the Option IV Purchase Price not so needed to extinguish a Valid
Lien shall be paid to Developer.
For purposes of this Section 4, the term "Fair Market Value" of the Option IV
Property shall be the current appraised fair market value of the land and improvements
thereon (if any) taking into account for purposes of valuation not the highest and best use
of the Option IV Property but rather the existing conditions (such as having no or only
partially completed improvements) and only those uses authorized as of the date of the
MAE Default giving rise to City's ability to exercise Option IV. If City and Developer are
unable to agree upon the Fair Market Value of the Option IV Property on or before the
date that is the end of the cure period for the "Option Triggering Event" as defined in
Section 7(b) of this Repurchase Option Agreement giving rise to Option IV (i.e., on or
before the date that commences the Option IV Period), then the Option IV Period during
which City has the right to exercise Option IV shall be extended, in addition to the 60-days
following the expiration of such cure period, for such time as required for City and
Developer to resolve and agree upon the Fair Market Value. In the absence of another
method agreed upon by City and Developer to resolve the Fair Market Value, the
following process (in Subparagraphs (A)-(D) below) shall be used and binding upon the
Parties:
A. City and Developer shall jointly attempt to agree on the appointment
of a real estate appraiser who is a member of the Appraisal Institute
or successor thereto (or, in the event the Appraisal Institute or any
successor shall not then be in existence, a disinterested real estate
appraiser having appropriate qualifications to appraise real estate
similar to the Option IV Property), with at least ten (10) years
professional experience in Southern California in appraising land
and improvements similar to the Option IV Property. All appraisers
selected pursuant to the provisions hereof shall be impartial and
698/015610-0207
22798455.5a11/23/25 EXHIBIT C
unrelated, directly and indirectly, so far as employment of services is
concerned, to either of the Parties hereto or their successors, and
the appraiser(s) shall be required to so certify as a condition to being
designated and accepting the appraisal assignment. The cost of the
services performed by such appraiser shall be borne equally by the
Parties. The single appraiser jointly appointed by the Parties shall
determine the Fair Market Value of the Option IV Property and shall
render his or her appraisal opinion within sixty (60) days after said
appraiser has been selected or as soon as practical if such longer
period is needed for the appraisal to be completed.
B. If City and Developer are unable to jointly agree on a single appraiser
to determine the Fair Market Value of the Option IV Property, then
City and Developer shall each, within fifteen (15) days of the date
that is the end of the cure period for the "Option Triggering Event" as
defined in Section 7(b) of this Repurchase Option Agreement giving
rise to Option IV (i.e., fifteen (15) days after the date that commences
the Option IV Period), separately at its own cost designate an
appraiser meeting the qualifications stated in Subparagraph (A)
above. If two appraisers are appointed and they concur on the Fair
Market Value of the Option IV Property, then the Fair Market Value
determined by them shall be the Fair Market Value of the Option IV
Property for purposes of this Repurchase Option Agreement. If the
two appraisers do not concur but the difference between their
appraisal numbers is an amount less than ten percent (10%) of the
amount of the higher determination of Fair Market Value, the mean
average of the two determinations shall be the Fair Market Value of
the Option IV Property for purposes of this Repurchase Option
Agreement. The two appraisers shall render their respective
appraisals within sixty (60) days after said appraisers have been
selected or as soon as practical if such longer period is needed for
the appraisal to be completed. If the difference between the two
appraisers' determinations exceeds the ten percentage (10%)
amount specified in this Subparagraph (B), the two appraisers shall
jointly select a third appraiser meeting the qualifications set forth in
Subparagraph (A) above. If the two appraisers are unable to agree
on a third appraiser, then the third appraiser shall be selected as
follows: first, the Parties each shall select the names of two (2) new
appraisers meeting the criteria in Subparagraph (A) above; second,
the names of the four (4) new appraisers shall be grouped together
blindly such that only one (1) name will be chosen at random, such
as by writing the four (4) names on separate pieces of paper of equal
size and then placing the four (4) names in an enclosed box and then
having one (1) name selected; third, the selection of the one (1) new
appraiser's name shall be witnessed with a representative from the
City, Developer, and the two appraisers who could not agree upon
698/015610-0207
22798455.5al1/23/25 EXHIBIT C
the third appraiser. The name of the appraiser selected blindly shall
be the third appraiser.
C. Within fifteen (15) days from the date of selection of the third
appraiser, if applicable, all three appraisers shall meet and the first
two appraisers shall present to the third appraiser all of their findings,
data, and conclusions as to the Fair Market Value of the Option IV
Property. The third appraiser shall review all of such findings, data,
and conclusions, and shall determine which of the two appraisers'
respective determinations of the Fair Market Value is the most
reasonable determination under the criteria set forth above. The
third appraiser shall not be permitted to make any other independent
determination of the Fair Market Value of the Option IV Property.
The appraiser's determination found by the third appraiser to be the
most reasonable determination shall be the Fair Market Value of the
Option IV Property for purposes of determining the Option IV
Purchase Price pursuant to Section 4(b) of this Repurchase Option
Agreement. The third appraiser's conclusion shall be reached within
thirty (30) days from the selection of the third appraiser or as soon as
practical if such longer period is needed for the appraisal to be
completed. The expenses related to the selection and services of
the third appraiser shall be shared equally by City and Developer.
D. The Fair Market Value determined in accordance with these
procedures set forth in Subparagraphs (A)-(D) shall be binding and
conclusive on the Parties for purposes of determining the Option IV
Purchase Price pursuant to Section 4(b) of this Repurchase Option
Agreement.
(c) City Election to Purchase Plans
City may elect to purchase, pursuant to Section 7(I) below, either the Phase 2
Property Master Site Infrastructure Improvements or the Project Components comprising
the Phase 2 Property Project Components, or both. If City elects to purchase said Plans
(to the extent permitted by the applicable third party contracts relating to such Plans), City
shall pay the cost of such Plans in addition to the Option IV Purchase Price.
(d) City Reservation of Rights for Power of Termination
In addition to City's right to exercise Option IV pursuant to this Section 4, City
reserves its right to exercise a power of termination pursuant to Civil Code section
885.010 et seq., as provided for in Section 7(n) of this Repurchase Option Agreement.
5. Option V - Transfer of the Repurchase Option Property, or Portion Thereof,
Prior to Completion of Project Components on Phase 2 Property
Developer hereby grants to City an exclusive option ("Option W) to purchase any
or all of the subdivided parcels of the Repurchase Option Property that remain subject to
698/01561.0-0207
22798455.5 al 1/23/25 EXHIBIT C
this Repurchase Option Agreement as of the date that Option V is exercised (the "Option
V Property"), if, prior to the time Developer completes all of the Project Components on
the Repurchase Option Property as evidenced by either City's issuance of a certificate of
occupancy or by the recording of a "Certificate of Completion" (as defined in the
Development Agreement For The Phase 2 Property, or if not defined therein, the
Reinstated Development Agreement), an MAE Default has occurred and is continuing
and Developer transfers, enters into a transaction for an anticipated transfer (an
"anticipated transfer"), or suffers an involuntary transfer of the Repurchase Option
Property or portion thereof in violation of the terms of the Development Agreement For
The Phase 2 Property.
In the event of the continuance of an MAE Default and Developer's transfer of the
Repurchase Option Property or any portion thereof in violation of the Development
Agreement For The Phase 2 Property or if not defined therein, the Reinstated
Development Agreement (an "Unauthorized Transfer") and such Unauthorized Transfer
is not cured within the cure period provided under Sections 7(b) and 7(c) below, then, City
shall be entitled to exercise, but is not obligated to exercise, the foregoing option for sixty
(60) days following the date on which the last event occurs: (i) the date of the
Unauthorized Transferthat gives rise to Option V; (ii) City's discovery of the anticipated or
actual Unauthorized Transfer that gives rise to Option V; (iii) for Option V Property subject
to the same purchase price provisions as the Option I Purchase Price pursuant to
Section 5(b) below, the final determination of the "Fair Market Value" for the Option V
Property as if it were Option I Property (as set forth in Section 1(b), Subparagraphs
(A)-(D)), and after the expiration of the cure period for the Option V Triggering Event in
Sections 7(b) and 7(c) of this Repurchase Option Agreement; (iv) for Option V Property
subject to the same purchase price provisions as the Option II Purchase Price pursuant to
Section 5(b) below, the later to occur of either the completion of the "Master Site
Infrastructure Improvements Cost Audit" (as that term is defined in Section 2(b) of this
Repurchase Option Agreement) or the final determination of the "Fair Market Value" for
the Option V Property as if it were Option II Property (as set forth in Section 2(b),
Subparagraphs (A)-(D)), and after the expiration of the cure period for the Option V
Triggering Event in Sections 7(b) and 7(c) of this Repurchase Option Agreement; (v) for
Option V Property subject to the same purchase price provisions as the Option III
Purchase Price pursuant to Section 5(b) below, the later to occur of either the completion
of the "Master Site Infrastructure Improvements Cost Audit" (as that term is defined in
Section 3(b) of this Repurchase Option Agreement) or the final determination of the "Fair
Market Value" for the Option V Property as if it were Option III Property (as set forth in
Section 3(b), Subparagraphs (A)-(D)), and after the expiration of the cure period for the
Option V Triggering Event in Sections 7(b) and 7(c) of this Repurchase Option
Agreement; or (vi) for Option V Property subject to the same purchase price provisions as
the Option IV Purchase Price pursuant to Section 5(b) below, the later to occur of either
the completion of the "Option IV Project Component(s) Cost Audit" (as that term is defined
in Section 4(b) of this Repurchase Option Agreement) or the final determination of the
"Fair Market Value" for the Option V Property as if it were Option IV Property (as set forth
in Section 4(b), Subparagraphs (A)-(D)), and after the expiration of the cure period for the
Option V Triggering Event in Sections 7(b) and 7(c) of this Repurchase Option
Agreement (the "Option V Period"). Notwithstanding anything to the contrary in this
698/015610-0207
22798455.5 a11/23/25 EXHIBIT C
Section 5, (a) Option V shall not apply to, and the Option V Property shall not include,
those portions of the Repurchase Option Property that are not or were not the subject of
an Unauthorized Transfer, and (b) City shall not be obligated to purchase any portion of
the Option V Property on which construction of the Project Component designated
pursuant to the Development Agreement For The Phase 2 Property to be constructed
thereon has commenced.
(a) Exercise of Option V
City shall exercise Option V by giving written notice to Developer ("City's Notice
of Option V Exercise"), in accordance with Section 8 of this Repurchase Option
Agreement, prior to the expiration of the Option V Period. Failure of City to exercise
Option V shall constitute a waiver by City of City's right to exercise Option V only with
respect to the specific Unauthorized Transfer that gave rise to Option V, but shall not
constitute a waiver by City of Developer's breach of the transfer provisions in the
Development Agreement For The Phase 2 Property or pursuant to this Repurchase
Option Agreement, or of any remedies City may have under the terms of the Development
Agreement For The Phase 2 Property, the Reinstated Development Agreement, or under
any other agreement for Developer's transfer or sufferance of an involuntary transfer of
the Repurchase Option Property or portion thereof.
(b) Purchase Price - Option V
City's purchase price for the Option V Property ("Option V Purchase Price") shall
be as follows:
(i) In the event Developer has not yet commenced construction
of the Master Site Infrastructure Improvements to be constructed on the Option V
Property at the time City exercises Option V, the Option I Purchase Price as set forth in
Section 1(b) of this Repurchase Option Agreement;
(ii) In the event Developer has commenced but not yet
completed construction of the Master Site Infrastructure Improvements to be constructed
on the Option V Property at the time City exercises Option V, the Option II Purchase Price
as set forth in Section 2(b) of this Repurchase Option Agreement; provided, however, that
if Developer commenced construction of the Master Site Infrastructure Improvements
concurrent with a Project Component or Project Components subject to this Option V, the
Option V Purchase Price shall be the Option IV Purchase Price as set forth in Section 4(b)
of this Repurchase Option Agreement;
(iii) In the event Developer has not yet commenced construction
of the Project Component or Project Components to be constructed on the Option V
Property at the time City exercises Option V, the Option III Purchase Price as set forth in
Section 3(b) of this Repurchase Option Agreement; and
(iv) In the event Developer has commenced but not yet
completed construction of the Master Site Infrastructure Improvements to be constructed
698/015610-0207
22798455.5a11/23/25 EXHIBIT C
on the Option V Property at the time City exercises Option V, the Option IV Purchase
Price as set forth in Section 4(b) of this Repurchase Option Agreement.
In the event that there are any Valid Liens recorded against the Option V Property
at the time that Option V is exercised, Developer and City agree that the Option V
Purchase Price shall be paid to the Lender on any such Valid Lien, up to the then
Outstanding Balance due under same. Any portion of the Option V Purchase Price not so
needed to extinguish a Valid Lien shall be paid to Developer.
In the event that an Unauthorized Transfer has been completed such that a
transferee of the Unauthorized Transfer claims to have a right or interest under the
Repurchase Option Property and/or the Development Agreement For The Phase 2
Property and/or any other agreement relating to the Project (including this Repurchase
Option Agreement), Developer shall have the obligation, to the extent possible, to rescind
immediately the prior transaction that led to the Unauthorized Transfer so that City's rights
under this Section 5 may be exercised.
(c) City Election to Purchase Plans
City may elect to purchase, pursuant to Section 7(1) below, either the Phase 2
Property Master Site Infrastructure Improvements or the Project Components comprising
the Phase 2 Property Project Components, or both. If City elects to purchase said Plans
(to the extent permitted by the applicable third party contract relating to such Plans), City
shall pay the cost of such Plans in addition to the Option V Purchase Price.
(d) City Reservation of Rights for Power of Termination
In addition to City's right to exercise Option V pursuant to this Section 4, City
reserves its right to exercise a power of termination pursuant to Civil Code section
885.010 et seq., as provided for in Section 7(n) of this Repurchase Option Agreement.
6. City's Right of First Offer
Developer hereby grants to City a right of first offer ("City's Right of First Offer")
to purchase any or all of the subdivided parcels of the Repurchase Option Property that
remain subject to this Repurchase Option Agreement as of the date that City exercised
the Right of First Offer (the "Right of First Offer Property"), in accordance with the terms
and conditions in this Section 6, in the event that (i) City has had the right to exercise any
of Option I, Option II, Option III, Option IV, or Option V and has elected not to exercise
Option I, Option II, Option III, Option IV, or Option V (as applicable) in accordance with the
terms of this Repurchase Option Agreement and Developer's MAE Default that gave rise
to Option I, Option II, Option III, Option IV, or Option V (as applicable) has not been cured,
and (ii) Developer intends or is otherwise compelled to sell or otherwise transfer the
Repurchase Option Property or portion thereof. Notwithstanding anything to the contrary
in this Section 6, (a) the Right of First Offer Property shall not include any portion of the
Repurchase Option Property that is not included in "Developer's Sale Notice" (as that
term is defined in Section 6(a) below), and (b) in the event City elects to exercise City's
Right of First Offer, City may elect to purchase only those portions of the Right of First
698/015610-0207
22798455.5al1/23/25 EXHIBIT C
Offer Property that City was authorized and desires to purchase pursuant to the terms of
Option I, Option II, Option III, Option IV, or Option V (as applicable). The portions of the
Right of First Offer Property City acquires hereunder shall be hereinafter referred to as the
"Right of First Offer City Acquisition Property".
(a) Developer's Notice to City; City's Election
In the event that the circumstances described in clauses (i) and (ii) of the
immediately preceding paragraph exist, then prior to entering into any transaction with a
third party concerning the sale of any of the Right of First Offer Property, Developer shall
provide City with written notice of Developer's intent to sell such Right of First Offer
Property, and Developer's proposed sale price for the same ("Developer's Sale
Notice"). City shall have sixty (60) days after receiving Developer's Sale Notice to notify
Developer, in writing, of City's election to exercise City's Right of First Offer to acquire the
Right of First Offer City Acquisition Property, at the price noted in Developer's Sale Notice
("City's Election to Exercise"); provided, however, that if the Right of First Offer City
Acquisition Property does not comprise all of the Right of First Offer Property, then City's
acquisition price shall be the amount that would have been payable under this
Repurchase Option Agreement by City to Developer if such portion of the Right of First
Offer City Acquisition Property would have been purchased by City pursuant to Option I,
Option II, Option III, or Option IV as applicable depending upon the status of construction
upon such portion of the Right of First Offer City Acquisition Property as of the date that
the Right of First Offer is exercised by City.
(b) City's Failure to Exercise
City's failure to deliver to Developer City's Election to Exercise within such sixty
(60) day period shall be deemed City's election not to exercise City's Right of First Offer
and, except as provided below, City's Right of First Offer with respect to the Right of First
Offer City Acquisition Property shall then terminate and City shall have no further right of
first offer with respect to the Right of First Offer City Acquisition Property. If City elects not
to exercise (or is deemed to have elected not to exercise) City's Right of First Offer then
Developer may sell the Right of First Offer City Acquisition Property to a third party
purchaser; provided, however, that in the event Developer determines to sell the Right of
First Offer City Acquisition Property at a price that is more than ten percent (10%) less
than the price set forth in Developer's Sale Notice, Developer shall provide City with a
written notice of Developer's intent to sell the Right of First Offer City Acquisition Property,
with Developer's new proposed sale price for the same ("Developer's Second Sale
Notice"), and City's Right of First Offer shall again apply with respect to the Right of First
Offer City Acquisition Property, in accordance with the process outlined in Subparagraph
(a) above and this Subparagraph (b).
(c) Transfer Restrictions of Reinstated Development Agreement
Notwithstanding any of the provisions in Option V (Section 5 above) or this Section
6 to the contrary, nothing in this Repurchase Option Agreement is intended to or shall
have the effect of waiving the transfer restrictions set forth in the Reinstated Development
698/015610-0207
22798455.5 a, 1/23/25 EXHIBIT C
Agreement, the Development Agreement For The Phase 2 Property, any of City's rights
related thereto in the Reinstated Development Agreement and/or Development
Agreement For The Phase 2 Property, or any other agreements between City and
Developer relating to the Repurchase Option Property, and any proposed sale or transfer
by Developer shall be effected in accordance with the same.
(d) City Reservation of Rights for Power of Termination
In addition to City's right to exercise its Right of First Offer pursuant to this
Section 6, City reserves its right to exercise a power of termination pursuant to Civil Code
section 885.010 et seq., as provided for in Section 7(n) of this Repurchase Option
Agreement.
7. Additional Terms Applicable to the Purchase Options
The following additional terms shall apply to Option I, Option II, Option III, Option
IV, Option V, and City's Right of First Offer:
(a) Successors and Assigns. Option I, Option II, Option III, Option IV,
Option V, and City's Right of First Offer created hereby shall be irrevocable by Developer
and shall be binding upon the successors and assigns of Developer and on the
Repurchase Option Property.
(b) Developer's Right to Cure Certain Defaults. Notwithstanding
anything in this Repurchase Option Agreement to the contrary, (A) City shall not be
entitled to exercise Option I, Option II, Option III, or Option IV until City has provided a
written notice to Developer regarding Developer's failure to commence construction,
continuously proceed with construction, or to complete construction, as applicable (with
any of the above failures referred to hereinafter as an "Option Triggering Event"), and
Developer has not, within sixty (60) days after receipt of such notice, cured, corrected, or
remedied such Option Triggering Event or, for those Option Triggering Events that cannot
reasonably be cured, corrected, or remedied within sixty (60) days, commenced to cure,
correct or remedy such Option Triggering Event within said sixty (60) day period, and
diligently prosecute the same to completion within one hundred twenty (120) days of the
commencement of cure, and (B) City shall not be entitled to exercise Option V until City
has provided a written notice to Developer regarding an anticipated and/or actual
Unauthorized Transfer (an "Option V Triggering Event") and Developer has not, within
thirty (30) days after receipt of such notice, cured, corrected or remedied such Option V
Triggering Event.
(c) Notice of Default to Mortgagee or Deed of Trust Holders: Right to
Cure. With respect to any mortgage or deed of trust granted by Developer, whenever City
may deliver any notice or demand to Developer with respect to an Option Triggering
Event (including, but not limited to, an Option V Triggering Event), City shall at the same
time deliver a copy of such notice or demand to each holder of record of any mortgage or
deed of trust, if such holder has previously requested to City such notice in writing and
City has actual notice off such holder requesting such notice. Each such holder shall
698/015610-0207
22798455 . 5 al 1/23/25 EXHIBIT C
(insofar as the rights granted by City are concerned) have the right, at its option, within
sixty (60) days after the receipt of the notice (except in the event of an Option V Triggering
Event, in which case the cure period shall be thirty (30) days), to cure or remedy or
commence to cure or remedy and thereafter to pursue with due diligence the cure or
remedy of any such MAE Default within one hundred twenty (120) days of
commencement of cure and to add the cost thereof to the mortgage debt and the lien of its
mortgage. It is understood that a holder shall be deemed to have satisfied the sixty
(60) day time limit set forth above for commencing to cure or remedy a Developer MAE
Default which requires title and/or possession of the Repurchase Option Property (or
portion thereof) if and to the extent any such holder has within such sixty (60) day period
commenced proceedings to obtain title and/or possession and thereafter the holder
diligently pursues such proceedings to completion and cures or remedies the MAE
Default within one hundred twenty (120) days after obtaining title and/or possession of the
applicable portion of the Repurchase Option Property coved by said mortgage or deed of
trust. The City and Developer shall modify this clause (c) as reasonably requested by a
mortgagee, so long as such modifications do not materially and adversely affect the City,
including, without limitation, by adding additional mortgagee protections included in
Section 9 of the Reinstated Development Agreement.
(d) No City Obligation: Purchase of Whole Project Components.
(i) Notwithstanding any covenant, term, or provision in this
Repurchase Option Agreement to the contrary, City shall not be obligated to exercise
Option I, Option 11, Option III, Option IV, Option V, or City's Right of First Offer.
(ii) Notwithstanding anything to the contrary in this Repurchase
Option Agreement, if City elects to purchase any part of a Project Component pursuant to
Option IV, Option V, or City's Right of First Offer, then City shall be obligated to purchase
all of such Project Component that remains subject to this Repurchase Option Agreement
as of date of such election. For purposes of determining a Project Component subject to
this provision, a Project Component shall be the specific Project Component as defined
and described in the Development Agreement For The Phase 2 Property, coupled with
the specific subdivided parcels for which the specific Project Component is situated and
to be developed upon.
(e) Release of Repurchase Option Agreement Upon Completion of
Project Component. In the event that Developer commences and completes construction
of a Project Component, as evidenced by City's issuance of a temporary or final certificate
of occupancy for such Project Component, and City has not exercised Option I, Option 11,
Option III, Option IV, Option V or City's Right of First Offer with respect to such Project
Component or the subdivided parcels on which such Project Component is situated
pursuant to the Development Agreement For The Phase 2 Property, then, City's issuance
of that temporary or final certificate of occupancy for such Project Component shall act to
automatically release this Repurchase Option Agreement with respect to said Project
Component and the subdivided parcels on which such Project Component is situated,
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
with no further action required by City or Developer, provided, however, upon request of
Developer, City shall execute and record a termination and release of this Repurchase
Option Agreement applicable to such Project Component. Notwithstanding the foregoing
to the contrary, City shall, at or prior to the close of escrow for the bona -fide sale of any
fully constructed residential dwelling unit to a third party buyer for any residential dwelling
units on the Repurchase Option Property, cause this Repurchase Option Agreement to
be terminated with respect to such residential dwelling unit. Within thirty (30) days
following City's receipt of written notice from Developer of a pending escrow for the sale of
any such residential dwelling unit, City shall (i) execute and have notarized a termination
and release, and/or such other document(s), required by the applicable escrow holder to
evidence the termination of this Repurchase Option Agreement with respect to such
residential dwelling unit being sold, and (ii) deposit the original of such executed and
notarized document(s) into such escrow.
(f) Enforced Delay Pursuant to Development Agreement For The
Phase 2 Property. Notwithstanding anything to the contrary herein, in the event
performance by Developer under the Development Agreement For The Phase 2 Property
is extended pursuant to an event of "Force Majeure" as defined in the Development
Agreement. For The Phase 2 Property (or, if not defined therein, as defined in the
Reinstated Development Agreement), such that the time by which Developer is required
thereunder to commence construction of the Master Site Infrastructure Improvements,
complete construction of the Master Site Infrastructure Improvements, commence
construction of one or more Project Components designated pursuant to the
Development Agreement For The Phase 2 Property to be constructed on a portion of the
Repurchase Option Property, or complete construction of one or more Project
Components designated pursuant to the Development Agreement For The Phase 2
Property to be constructed on a portion of the Repurchase Option Property, is extended,
such extensions shall automatically apply to this Repurchase Option Agreement so as to
(as applicable) extend the time by which Developer is required to commence construction
of the Master Site Infrastructure Improvements, complete construction of the Master Site
Infrastructure Improvements, commence construction of one or more Project
Components designated pursuant to the Development Agreement For The Phase 2
Property to be constructed on a portion of the Repurchase Option Property, or complete
construction of one or more Project Components designated pursuant to the
Development Agreement For The Phase 2 Property to be constructed on a portion of the
Repurchase Option Property, by the same time as extended under the Development
Agreement For The Phase 2 Property.
(g) Subordination. City may, but is not obligated to, subordinate this
Repurchase Option Agreement upon Developer's written request for subordination in
connection with an "Infrastructure Loan" or "Construction Loan" (as those terms are
defined in the Reinstated Development Agreement and Development Agreement For The
Phase 2 Property) if such loan is to be secured by a mortgage or deed of trust. Upon
City's receipt of Developer's written request for subordination of this Repurchase Option
Agreement, City shall deliver to Developer a written decision to approve or disapprove
such subordination, which decision shall be based on City's reasonable discretion taking
into account, among other criteria for project financing in the Reinstated Development
698/015610-0207
22798455.5a11/23/25 EXHIBIT C
Agreement and Development Agreement For The Phase 2 Property, the Lender (source)
of the proposed financing, the amount of such loan, and the then -applicable loan -to -value
and/or loan -to -cost ratio applicable to the Project Component(s) to be financed with such
loan. If City approves subordination of this Repurchase Option Agreement, City and
Developer shall enter into with the Lender a subordination or similar agreement that
provides at a minimum the following: (i) the Lender to notify City, in writing, of any default
by Developer under the Lender's loan documents concurrently with its notification to
Developer of such default, (ii) the Lender to provide City with a copy of any Notice of
Default (each, a "Notice of Default") recorded against the title to the Repurchase Option
Property in the Official Records of the County of Riverside, State of California (the
"Official Records") concurrently with its delivery of such Notice of Default to Developer;
(iii) the right of City to cure the default at any time prior to the foreclosure (or recording of
a deed in lieu thereof) on the Lender's deed of trust, (iv) the right of City to negotiate with
the Lender regarding the default at any time prior to the foreclosure (or recording of a
deed in lieu) on the Lender's deed of trust, and (v) the Lender's agreement that Lender
shall not conduct a foreclosure sale (or exercise a power of sale or record a deed in lieu of
foreclosure or any similar action that would result in the ownership and vesting of title in
the name of Lender or its assignee or transferee) prior to the date that is at least six
(6) months after the Lender delivers written notice of the default to City and Developer
pursuant to clause (i) above. The foregoing provisions in clauses (i)-(v), and any other
additional terms and conditions that City, Developer, and Lender may deem necessary or
appropriate, shall be in any subordination or other agreement as may be requested or
required by either the Lender or Developer, which agreement would result in this
Repurchase Option Agreement having lower priority from a mortgage or deed of trust that
is executed on behalf of and for the benefit of the Lender, and to be recorded in the
Official Records.
(h) City's and City's Assignee's Investigation of Repurchase Option
Property.
(i) City shall have a period of forty-five (45) days commencing on
the date of an event that triggers City's ability to exercise any of Option I, Option II, Option
III, Option IV, Option V, or City's Right of First Offer, to enter upon the Repurchase Option
Property (or applicable portion thereof) to conduct any tests, inspections, investigations,
or studies of the condition of the Repurchase Option Property (or applicable portion
thereof) (the "Option Agreement Tests and Investigations"). Developer shall permit
City access to the Repurchase Option Property (or applicable portion thereof) for such
purposes at reasonable times upon reasonable notice; provided, however, City will not be
permitted to perform any such inspection unless and until City delivers to Developer
reasonably satisfactory evidence that City has obtained such insurance as Developer
shall reasonably require in connection with any such inspection, which insurance shall
name Developer as an additional insured. In no event shall City be permitted to conduct
any drilling or other invasive testing without the prior written consent of Developer. City
hereby agrees to repair and restore any portion of the Repurchase Option Property
damaged as a result of any inspection of the Repurchase Option Property by City. City's
obligation to close "Escrow" (as that term is defined in Section 7(i) below) shall be
subject to City's approval of any environmental and other site testing conducted by City in
698/015610-0207
22798455.5 a 11 /23/25 EXHIBIT C
City's reasonable discretion. City shall indemnify, defend, and hold harmless Developer
and its officers, directors, shareholders, employees, agents, and representatives from
and against all claims, liabilities, or damages, and including expert witness fees and
reasonable attorney's fees and costs, arising out of any such testing, inspection, or
investigatory activity on the Repurchase Option Property (or applicable portion thereof),
which indemnity shall survive any closing pursuant to this Agreement or earlier
termination of this Agreement.
(ii) In the event City assigns its rights under this Repurchase
Option Agreement, City's assignee shall have the right to enter upon the Repurchase
Option Property (or applicable portion thereof) during the period commencing on the date
of City's assignment of this Repurchase Option Agreement to said assignee and ending
on the "Closing Date" (as that term is defined in Section 7(i) below) to conduct any
Option Agreement Tests and Investigations elected by the assignee. Developer shall
permit City's assignee access to the Repurchase Option Property (or applicable portion
thereof) for such purposes, provided that, prior to any entry upon the Repurchase Option
Property by such assignee or its employees, agents, representatives or consultants, City
shall cause such assignee to provide Developer with evidence that it has a liability
insurance policy that names Developer as an additional insured, which policy shall have
limits of coverage and be on terms reasonably acceptable to Developer. City hereby
agrees to cause any such assignee to repair and restore any portion of the Repurchase
Option Property damaged as a result of any inspection of the Repurchase Option
Property by such assignee. City's obligation to close "Escrow" (as defined in Section 7(i)
below) shall be subject to City's assignee's approval of any environmental and other site
testing conducted by said assignee in said assignee's discretion. City shall cause said
assignee to indemnify, defend, and hold harmless Developer and its officers, directors,
shareholders, employees, agents, and representatives from and against all claims,
liabilities, or damages, and including expert witness fees and reasonable attorney's fees
and costs, arising out of any such testing, inspection, or investigatory activity on the
Repurchase Option Property (or applicable portion thereof), which indemnity shall survive
any closing pursuant to this Agreement or earlier termination of this Agreement.
Escrow Provisions.
(i) Within five (5) business days after City has exercised Option I,
Option II, Option III, Option IV, Option V, or City's Right of First Offer (as applicable), or as
soon thereafter as reasonably practicable, an escrow shall be opened ("Escrow") with an
escrow company at a national title company selected by City and approved by Developer
("Escrow Holder") for the conveyance to City of the portions of the Repurchase Option
Property to be acquired by City pursuant to this Repurchase Option Agreement. Escrow
shall be deemed opened on the date that a fully executed copy of this Repurchase Option
Agreement and a notice of exercise of option prepared by City are delivered to Escrow
Holder ("Opening of Escrow"). Escrow Holder shall notify Developer and City in writing
of the date of the Opening of Escrow promptly following the opening of the Escrow.
(ii) Escrow shall close on or before the following date, as
applicable: (A) for Option I Property, six (6) months after the expiration of the Option I
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
Period; (B) for Option II Property, six (6) months after the expiration of the Option II
Period; (C) for Option III Property, six (6) months after the expiration of the Option III
Period; (D) for Option IV Property, six (6) months after the expiration of the Option IV
Period. (E) for Option V Property, six (6) months after the expiration of the Option V
Period; and (F) for Right of First Offer Property, six (6) months after the City's Election to
Exercise after delivery of Developer's Sale Notice pursuant to Section 6(a) of this
Repurchase Option Agreement, unless extended by mutual agreement by Developer and
City and/or extended to allow for the completion or waive of any conditions to closing
required by City or any assignee of City to acquire the Repurchase Option Property (or
portion thereof) ("Close of Escrow" or "Closing Date"). The terms "Close of Escrow"
and "Closing Date" shall mean the date the grant deed (in a form approved by City)
conveying fee title to City is recorded in the Official Records. Possession of the portions
of the Repurchase Option Property conveyed to the City pursuant to this Repurchase
Option Agreement shall be delivered to City at the Close of Escrow.
(iii) This Repurchase Option Agreement, together with any
standard instructions of Escrow Holder, shall constitute the joint escrow instructions of
Developer and City to Escrow Holder as well as an agreement between Developer and
City. In the event of any conflict between the provisions of this Repurchase Option
Agreement and Escrow Holder's standard instructions, this Repurchase Option
Agreement shall prevail.
(iv) The Escrow shall be subject to City's approval of a
then -current preliminary title report. Any monetary lien(s) or encumbrance(s) shown on
such preliminary title report that were concurrent with or after the close of escrow that
conveyed the Repurchase Option Property from City to Developer shall be removed by
Developer at its sole expense prior to the Close of Escrow pursuant to this Section 7(i)
unless such exception(s) is (are) accepted by City in its sole and absolute discretion;
provided, however, that City shall accept the following exceptions to title: (i) current taxes
not yet delinquent, (ii) matters affecting title existing on the date of recordation of the grant
deed conveying from City to Developer the Repurchase Option Property (or applicable
portion thereof), and (iii) matters shown as printed exceptions in the standard form ALTA
policy of title insurance. In the event the Repurchase Option Property (or any portion
thereof) is encumbered by a Valid Lien, City shall be permitted to unilaterally instruct
Escrow Holder to satisfy the indebtedness secured thereby out of the proceeds payable
to Developer through the Escrow. Any additional amount necessary to satisfy such Valid
Lien, including, without limitation, the amount of the unpaid indebtedness secured by
such Valid Lien, including principal and interest and all other sums secured by the Valid
Lien, including, without limitation, any prepayment fees and costs, shall be paid by City (or
City's assignee) at the Closing.
(v) On or before 1:00 p.m. on the last business day preceding the
scheduled Closing Date, City shall deposit in Escrow (i) the applicable of the Option I
Purchase Price, the Option II Purchase Price, the Option III Purchase Price, the Option IV
Purchase Price; the Option V Purchase Price, or the price noted in Developer's Sale
Notice or Developer's Second Sale Notice (the last two are referred to herein as the
"Right of First Offer Purchase Price"); (ii) one-half (1/2) of the escrow fees; (iii) the
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
portion of the title insurance premium attributable to any extra or extended coverages, or
any additional charge resulting from City's request that the amount of insurance be higher
than the applicable of the Option I Purchase Price, the Option II Purchase Price, the
Option III Purchase Price, the Option IV Purchase Price, the Option V Purchase Price, or
the Right of First Offer Purchase Price; and (iv) any and all additional instruments or other
documents required from City (executed and acknowledged if appropriate) as may be
necessary in order to effect the transfer of the Repurchase Option Property, or applicable
portion thereof, to City. On or before 1:00 p.m. on the last business day preceding the
scheduled Closing Date, Developer shall deposit in Escrow (i) a grant deed, in a form
approved by City, executed and acknowledged by Developer conveying fee title to the
Repurchase Option Property (or applicable portion thereof) to City; (ii) one-half (1/2) of
the escrow fees; and (iii) any and all additional instruments or other documents required
from Developer (executed and acknowledged if appropriate) as may be necessary in
order to effect the transfer of the Repurchase Option Property, or applicable portion
thereof, to City. Developer shall also be required to pay for documentary tax stamps and
recording fees, if any, and for an ALTA standard form owner's policy of title insurance in
the amount of the Option I Purchase Price, the Option II Purchase Price, the Option III
Purchase Price, the Option IV Purchase Price, the Option V Purchase Price, or the Right
of First Offer Purchase Price (as applicable), showing title vested in City free and clear of
all liens and encumbrances except those permitted by subparagraph (iv) above (the "Title
Policy"). City's receipt of the Title Policy shall be a condition to the Close of Escrow. Any
other costs and expenses shall be allocated between the Parties in the manner
customary for a commercial property conveyance in Riverside County.
(vi) If, on or before the Closing Date, Escrow Holder has received
all of the documents and funds listed in subparagraph (v) above, and Escrow Holder is in
a position to cause the Title Policy to be issued to City, and provided City has approved of
the condition of the Repurchase Option Property, or applicable portion thereof, Escrow
Holder shall close the Escrow by taking the following actions: (a) recording in the Official
Records the grant deed, in a form approved by City, executed and acknowledged by
Developer conveying fee title to the Repurchase Option Property (or applicable portion
thereof) to City, and delivering said recorded grant deed to City; (b) causing the
Title Policy to be issued to City; and (c) delivering the portion of the applicable of the
Option I Purchase Price, the Option II Purchase Price, the Option III Purchase Price, the
Option IV Purchase Price, the Option V Purchase Price, or the Right of First Offer
Purchase Price remaining after payment of all Valid Liens, if any, to Developer.
(vii) In accordance with Section 10 this Repurchase Option
Agreement, and for avoidance of any doubt, City shall have the right to assign its rights to
purchase the Repurchase Option Property (or applicable portion thereof) and acquisition
thereof through the Escrow pursuant to the terms and conditions of this Repurchase
Option Agreement, upon providing prior written notice to Developer pursuant to Section 8
of this Repurchase Option Agreement, and thereafter entering into an assignment and
assumption agreement with such assignee; Developer shall cooperate with City and/or
Escrow Holder to the extent necessary or appropriate to facilitate any such assignment,
including but not limited to executing any supplemental instructions or consent to an
assignment and assumption agreement with such assignee.
698/015610-0207
22798455.5a11/23/25 EXHIBIT C
0) City's Right to Acquire the Repurchase Option Property.
Notwithstanding anything herein to the contrary, upon City?s exercise of Option I, Option
II, Option III, Option IV, Option V, or City's Right of First Offer, Developer's
commencement to cure the MAE Default that led to City's exercise shall not affect City's
right to close the Escrow and acquire the Repurchase Option Property (or applicable
portion thereof).
(k) City's Purchase of Uncompleted Portions of the Residential Project
Components on the Repurchase Option Property. Notwithstanding anything herein to the
contrary, in the event that, as a result of City exercising Option III, Option IV or Option V,
City acquires the Repurchase Option Property, or portion thereof, if Developer has
obtained from City a certificate of occupancy and has sold to bone -fide purchaser a fully
constructed residential dwelling unit for any residential dwelling units on the Repurchase
Option Property that have been fully constructed pursuant to the Development
Agreement For The Phase 2 Property, the provisions of this Repurchase Option
Agreement shall apply only to those portions of the Repurchase Option Property which
have not been sold to bona -fide purchasers of fully constructed residential dwelling units
(the "Uncompleted Portion Of The Residential Project Component") and any
calculations for determining the Option III Purchase Price, the Option IV Purchase Price
or the Option V Purchase Price (as applicable) shall be based solely upon the
Uncompleted Portion Of The Residential Project Component.
(1) City's Right to Purchase Plans. To the extent permitted pursuant to
the applicable third party contracts, at the time City exercises any of Option I, Option II,
Option III, Option IV, Option V, or City's Right of First Offer, City shall also have the right,
which City may exercise in its sole and absolute discretion, to purchase from Developer
for the actual cost Developer incurred in preparing the same, all (but not less than all) of
the plans, blueprints, drawings, sketches, specifications, tentative or final subdivision
maps, landscape plans, utilities plans, soils reports, noise studies, environmental
assessment reports, grading plans and any other materials (collectively, the "Plans")
relating to (i) all of the Master Site Infrastructure Improvements designated pursuant to
the Development Agreement For The Phase 2 Property to be constructed on the portions
of the Repurchase Option Property to be acquired by City, and/or (b) all or any of the
Project Components designated pursuant to the Development Agreement For The Phase
2 Property to be constructed on the portions of Repurchase Option Property to be
acquired by City, together with copies of all of the Plans, as have been prepared for the
development of the Repurchase Option Property as of the date of City's exercise of
Option I, Option II, Option III, Option IV, or City's Right of First Offer (as applicable).
Notwithstanding the foregoing, however, Developer does not covenant to convey to City
the copyright or other ownership rights of third parties. City's acquisition or use of the
Plans or any of them shall be without any representation or warranty by Developer as to
the accuracy or completeness of any such Plans, and City shall assume all risks in the
use of the Plans.
(m) City's Purchase Price Reflects Reasonable Approximation of
Damages. City and Developer agree that City has the right to proceed with its remedies
under the Development Agreement For The Phase 2 Property, the Reinstated
698/015610-0207
22798455.5a11/23/25 EXHIBIT C
Development Agreement, and other agreements between City and Developer relating to
the Repurchase Option Property, or to exercise Option I, Option 11, Option III, Option IV, or
Option V. Notwithstanding anything to the contrary herein or in the Development
Agreement For The Phase 2 Property or in the Reinstated Development Agreement, in
the event that City exercises Option I, Option II, Option III, Option IV, or Option V (as
applicable) to acquire the Repurchase Option Property, or a portion thereof, City shall be
deemed to have elected to waive the remedies to which it would otherwise be entitled
under the Development Agreement For The Phase 2 Property, Reinstated Development
Agreement, and other agreements between City and Developer relating to the
Repurchase Option Property. City and Developer agree that City will incur damages by
reason of the MAE Default that gave rise to City's ability to exercise Option I, Option II,
Option III, Option IV, or Option V (as applicable), which damages shall be impractical and
extremely difficult, if not impossible, to ascertain. City and Developer, in a reasonable
effort to ascertain what City's damages would be in the event of such MAE Default by
Developer, have agreed that considering all of the circumstances existing on the date of
this Repurchase Option Agreement, including the relationship of the sum to the range of
harm to City that reasonably could be anticipated, including without limitation the potential
loss of tax revenue to the City of La Quinta, and the anticipation that proof of actual
damages would be costly or inconvenient, the exercise by City of Option I, Option II,
Option III, Option IV, or Option V (as applicable), and the payment by City of the Option I
Purchase Price, the Option II Purchase Price, the Option III Purchase Price, the Option IV
Purchase Price, or the Option V Purchase Price (as applicable) and the conveyance of
the Repurchase Option Property, or applicable portion thereof, by Developer to City, is
fair and reasonable. City and Developer agree that the Option I Purchase Price, Option II
Purchase Price, Option III Purchase Price, Option IV Purchase Price, or Option V
Purchase Price (as applicable) reflect a reasonable estimate of City's damages under the
provisions of California Civil Code section 1671 and shall operate as liquidated damages
to City if City exercises Option I, Option II, Option III, Option IV, or Option V (as
applicable). If City does not exercise Option I, Option II, Option III, Option IV, or Option V,
then City shall retain and may exercise any and all of its rights and remedies as set forth in
any other agreement, including, but not limited to, the Reinstated Development
Agreement and the Development Agreement For The Phase 2 Property.
(n) City Power of Termination and Reversionary Rights.
Subject to the notice and right to cure provisions set forth in Sections7(b) and 7(c)
of this Repurchase Option Agreement, whereby Developer shall have a right to cure any
alleged MAE Defaults prior to the commencement of City's right under this Section 7(n),
City hereby reserves a power of termination pursuant to Civil Code Sections 885.010 et
seq., exercisable by the City, in its sole and absolute discretion, if Developer fails to cure
the Option Triggering Event (or, as applicable, Option V Triggering Event) and City
decides not to exercise, as applicable: Option I by the expiration of the Option I Period;
Option II by the expiration of the Option II Period; Option III by the expiration of the
Option III Period; Option IV by the expiration of the Option IV Period; or Option V by the
expiration of the Option V Period. If City so decides not to exercise the applicable option
as provided in the previous sentence, then, upon sixty (60) days written notice to the
Developer referencing this Section 7(n), City shall have the right to terminate the fee
698/015610-0207
22798455.5a11/23/25 EXHIBIT C
interest of the Developer in the Repurchase Option Property and/or any improvements to
the Repurchase Option Property and revest such fee title in the City and take possession
of all or any portion of such real property and improvements, for the purchase price
specified for the applicable option pursuant to Section 1(b), 2(b), 3(b), 4(b) or 5(b) (as
applicable), Developer, upon the occurrence of an MAE Default by Developer following
Developer's acquisition of the Phase 2 Property and prior to the issuance of the final
Certificate of Completion (as defined in the Development Agreement For The Phase 2
Property or, in not defined therein, as defined in the Reinstated Development Agreement)
for the entire Phase 2 Property.
The sixty (60) calendar day written notice specified in the paragraph above shall
specify the MAE Default by Developer triggering City's exercise of its power of
termination. City shall proceed with its remedy set forth in this Section 7(n) only if
Developer continues in MAE Default for a period of sixty (60) days following such notice
or, upon commencing to cure such MAE Default, fails to diligently and continuously
prosecute said cure to satisfactory conclusion within one hundred (120) days of City's
written notice to Developer specifying the MAE Default.
(i) The rights of City under this Section 7(n) shall be subject and
subordinate to, shall be limited by and shall not defeat, render invalid or limit the following:
(A) Each Valid Lien recorded against the Repurchase Option Property and specifically
authorized as a "Permitted Transfer" pursuant to the Development Agreement For The
Phase 2 Property (or, if not defined in the Development Agreement For The Phase 2
Property, as defined in the Reinstated Development Agreement); and (B) Any leases,
declarations of covenants, conditions and restrictions, easement agreements or other
recorded documents or interests applicable to the Repurchase Option Property and
specifically authorized as a "Permitted Transfer" pursuant to the Development Agreement
For The Phase 2 Property (or, if not defined in the Development Agreement For The
Phase 2 Property, as defined in the Reinstated Development Agreement), or otherized
pursuant to the Phase 2 Property Option Agreement and/or at the close of escrow for
Developer's acquisition of the Phase 2 Property pursuant to the purchase and sale
agreement attached to the Phase 2 Property Option Agreement, or any other agreement
between City and Developer for the development and use of the Phase 2 Property.
(ii) Upon the City's exercise of its power of termination pursuant
to this Section 7(n), Developer or its successors or assigns shall convey by grant deed (in
a form approved by City) to the City title to the Repurchase Option Property, as specified
in the City's written notice issued pursuant to this Section 7(n), and all improvements
thereon, in accordance with Civil Code Section 1109, as such code section may hereafter
be amended or renumbered, (from time to time). Such conveyance shall be duly
acknowledged by Developer and a notary in a manner suitable for recordation in the
Recorder's Office. City may enforce its rights pursuant to this Section 7(n) by means of
an injunctive relief or forfeiture of title action filed in a court of competent jurisdiction with
jurisdiction and venue authorized by this Repurchase Option Agreement.
(iii) Upon the revesting in City of title to the Repurchase Option
Property, whether by grant deed or court decree, City shall exercise its reasonable good
698/015610-0207
22798455.5 a11/23'25 EXHIBIT C
faith efforts to resell the Repurchase Option Property at its then fair market value, as soon
and in such manner as the City finds feasible and consistent with the objectives of the
Specific Plan and Development Agreement For The Phase 2 Property, to a qualified and
responsible person or persons (as reasonably determined by the City) who will assume
Developer's obligations to begin and/or complete and/or operate that portion of the
Project located on the Repurchase Option Property, or such other replacement
development acceptable to the City, in its sole and absolute discretion. Upon any such
resale of the Repurchase Option Property (or any portion thereof), the proceeds to the
City from such sale shall be applied as follows:
A. First, to pay to a Lender any and all amounts required to
release and fully reconvey any Valid Lien recorded against all
or any portion of the Repurchase Option Property; and
B. Second, to reimburse City on its own behalf or on behalf of
City for all actual third -party costs and expenses previously or
currently incurred by City related to the Repurchase Option
Property, the Project, or this Repurchase Option Agreement,
including, but not limited to, customary and reasonable fees
or salaries to third -party personnel engaged in such actions,
in connection with the recapture, management and resale of
the Repurchase Option Property (or portion thereof); all taxes,
assessments and utility charges paid by City with respect to
the Repurchase Option Property (or portion thereof); any
payment made or necessary to be made to discharge or
prevent from attaching or being made any subsequent
encumbrances or liens due to obligations incurred by
Developer with respect to the acquisition of the Phase 2
Property or the construction of the Project thereon according
to the Phase 2 Property Development Agreement; and
amounts otherwise owing to City by Developer or its
successors or assigns pursuant to the terms of this
Repurchase Option Agreement; and
C. Third, to the extent that any proceeds from such resale are,
thereafter, available, taking into account any prior
encumbrances with a claim thereto, to reimburse Developer,
or its successors in interest to the equal to the sum of: (1) the
amount of the purchase price for the Phase 2 Property that
Developer paid City upon close of escrow for the Phase 2
Property pursuant to the Phase 2 Property Option Agreement
and purchase and sale agreement attached to said Phase 2
Property Option Agreement; and (II) the third -party costs
actually incurred and paid by Developer regarding the
development of the Project located on the Phase 2 Property,
including, but not limited to, pro rata costs of carrying costs,
taxes, and other items as set forth in a cost certification to be
698/015610-0207
22798455.5a11/23/25 EXHIBIT C
made by Developer to City prior to any such reimbursement,
which certification shall be subject to City's reasonable
approval, provided, however, that Developer shall not be
entitled to reimbursement for any expenses to the extent that
such expenses relate to any loans, Valid Liens or other
encumbrances that are paid by City pursuant to the provisions
of Subparagraphs (A) and (B) above; and
D. Any portion of the proceeds from the resale of the
Repurchase Option Property remaining after the foregoing
applications in Subparagraphs (A)-(C) above shall be
retained by the City as its sole and exclusive property.
(iv) IMMEDIATELY FOLLOWING THE SIXTY (60) DAY PERIOD
SPECIFIED IN SECTION 7(n) ABOVE, CITY, ITS EMPLOYEES AND AGENTS SHALL
HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF THE REPURCHASE
OPTION PROPERTY AND ANY IMPROVEMENTS THEREON, WITHOUT FURTHER
NOTICE OR COMPENSATION TO THE DEVELOPER. BY INITIALING BELOW,
DEVELOPER HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT
ALLOWED BY LAW, ANY AND ALL RIGHTS THAT DEVELOPER MAY HAVE UNDER
CALIFORNIA CIVIL CODE SECTION 791 AND CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 1162, AS THOSE STATUTES MAY BE AMENDED OR
RENUMBERED FROM TIME TO TIME, OR UNDER ANY OTHER STATUTES OR
COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
Developer's Initials
(v) DEVELOPER ACKNOWLEDGES AND AGREES THAT
CITY'S EXERCISE OF ITS POWER OF TERMINATION AND RIGHT OF REENTRY
PURSUANT TO THIS SECTION 7(n) MAY WORK A FORFEITURE OF THE ESTATE IN
THE DEFAULTED PORTION OF THE PHASE 2 PROPERTY CONVEYED TO
DEVELOPER BY CITY THROUGH THE GRANT DEED CONVEYING FEE TITLE
PURSUANT TO THE PHASE 2 PROPERTY OPTION AGREEMENT. DEVELOPER
HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW,
ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT DEVELOPER MAY HAVE
TO SUCH FORFEITURE, INCLUDING, BUT NOT LIMITED TO, THE DEFENSES OF
LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR
COMPENSABLE DAMAGES. DEVELOPER FURTHER EXPRESSLY WAIVES, TO
THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS AND
DEFENSES THAT DEVELOPER MAY HAVE UNDER CALIFORNIA CIVIL CODE
SECTION 3275 OR ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF
SIMILAR EFFECT. DEVELOPER ACKNOWLEDGES THAT THE TERMS AND
CONDITIONS OF THIS REPURCHASE OPTION AGREEMENT REFLECT THE
POSSIBILITY OF FORFEITURE BY VIRTUE OF THE EXERCISE OF CITY'S POWER
OF TERMINATION PROVIDED IN THIS SECTION 7(n) AND FURTHER
ACKNOWLEDGE THAT IT HAS RECEIVED INDEPENDENT AND ADEQUATE
CONSIDERATION FOR ITS WAIVER AND RELINQUISHMENT OF RIGHTS AND
698/015610-0207
22798455.5a11/23/25 EXHIBIT C
REMEDIES PURSUANT TO SECTION 7(n)(iv) AND THIS SECTION 7(n)(v). THESE
WAIVERS DO NOT EXTEND TO ANY RIGHT OF REDEMPTION THAT DEVELOPER
MAY HAVE UNDER APPLICABLE LAW IN THE CASE OF A FORECLOSURE WHICH
ARISES FROM UNPAID MONETARY AMOUNTS.
Developer's Initials
8. Notices, Demands and Communications Between the Parties.
Formal notices, demands, and communications between City and Developer shall
be given either by (i) personal service, (ii) delivery by reputable document delivery
service such as Federal Express that provides a receipt showing date and time of
delivery, or (iii) mailing in the United States mail, certified mail, postage prepaid, return
receipt requested, addressed to:
To City: City of La Quinta
78-495 Calle Tampico
La Quinta, California 92253
Attn: City Manager
With a copy to: Rutan & Tucker, LLP
18575 Jamboree Road, 9th Floor
Irvine, CA 92612
Attn: William H. Ihrke, Esq.
Email: bihrke rutan.com
To Developer: TBE RE Acquisition Co II LLC
c/o Turnbridge Equities
4 Bryant Park, Suite 200
New York, New York 10018
Attention: General Counsel and
Michael Gazzano
Email: jw@turnbridgeeq.com and
mg@turnbridgeeq.com
With a copy to: DLA Piper
1251 Avenue of the Americas
New York, New York 10020
Attention: Todd Eisner
Email: todd.eisnerC@us.dlapiper.com
Procopio
200 Spectrum Center Drive, Suite 1650,
Irvine, CA 92618
Attn-. James Vaughn
Email: james.vaughn(c�procopio.com
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
Notices personally delivered or delivered by document delivery service shall be
deemed effective upon receipt. Notices mailed in the manner provided above shall be
deemed received and effective on the third (31d) business day following deposit in the
United States mail. Such written notices, demands, and communications shall be sent in
the same manner to such other addresses as either Party may from time to time
designate by mail.
9. Applicable Law and Forum, Attorney's Fees
The Superior Court of the State of California in the County of Riverside shall have
the exclusive jurisdiction of any litigation between the Parties arising out of this
Repurchase Option Agreement. This Repurchase Option Agreement shall be governed
by, and construed under, the internal laws of the State of California, without regard to
conflict of law principles. In addition to any other rights or remedies and subject to the
restrictions otherwise set forth in this Repurchase Option Agreement, including without
limitation in this Section 9, either Party may take legal action, in law or in equity, to cure,
correct, or remedy any default, to recover damages for any default, to compel specific
performance of this Repurchase Option Agreement, to obtain declaratory or injunctive
relief, or to obtain any other remedy consistent with the purposes of this Repurchase
Option Agreement. The rights and remedies of the Parties are cumulative and the
exercise by either Party of one or more of such rights or remedies shall not preclude the
exercise by it, at the same or different times, of any other rights or remedies for the same
default or any other default by the other Party. Service of process on City shall be made
in the manner required by law for service on a public entity. Service of process on
Developer shall be made in any manner permitted by law and shall be effective whether
served within or outside of California.
If either Party to this Repurchase Option Agreement is required to initiate or
defend, or is made a party to, any action or proceeding in any way connected with this
Repurchase Option Agreement, the Party prevailing in the final judgment in such action or
proceeding, in addition to any other relief which may be granted, shall be entitled to
reasonable attorney's fees. Attorney's fees shall include reasonable costs for
investigating such action, conducting discovery, retaining expert witnesses, and all other
necessary costs the court allows which are incurred in such litigation.
10. Transfers and Assignments
(a) City Right to Assign.
In the event City has the right to exercise any of Option I, Option II, Option III,
Option IV, Option V, or City's Right of First Offer, City shall have the right to assign its
rights hereunder upon providing prior written notice to Developer pursuant to Section 8 of
this Repurchase Option Agreement, and thereafter entering into an assignment and
assumption agreement with such assignee.
699/015610-0207
22798455.5a11/23/25 EXHIBIT C
(b) Escrow Provisions.
Developer shall not transfer or assign any of its rights or obligations under this
Repurchase Option Agreement without the expressed written consent of City, which may
be granted or denied in City's sole absolute discretion except as permitted pursuant to the
Reinstated Development Agreement; provided, however, that Developer's rights and
obligations under this Repurchase Option Agreement may, upon Developer's request, be
subject to and governed by the provisions in the Reinstated Development Agreement and
the Development Agreement For The Phase 2 Property governing "Transfers" and
"Permitted Transfers" as set forth therein.
11. City Approvals and Actions
Whenever a reference is made in this Repurchase Option Agreement to an action
or approval to be undertaken by the City, the City Manager or his or her authorized
designee is authorized to act on behalf of the City unless this Repurchase Option
Agreement specifically provides otherwise, including but not limited to provisions in this
Repurchase Option Agreement when the City Council must review and take action, or the
law requires otherwise. The City Manager shall have the authority to implement this
Repurchase Option Agreement, including the authority to negotiate and sign on behalf of
the City implementing agreements and other documents, so long as the substantive
provisions of this Repurchase Option Agreement are maintained. Nothing in this Section
limits or precludes the City Manager from presenting to the Planning Commission and/or
City Council, as applicable, for review and consideration any matters to which the City
Manager otherwise may act on behalf of City pursuant to this Section.
12. Nonliability of City Officials and Employees
No officer, official, employee, agent, or representative of City shall be personally
liable to Developer or any successor in interest, in the event of any default or breach by
City, or for any amount which may become due to Developer or its successor, or for
breach of any obligation of the terms of this Repurchase Option Agreement, unless due to
the gross negligence or willful misconduct by such person.
13. Nondiscrimination
Developer covenants by and for itself and any successors in interest that there
shall be no discrimination against or segregation of any person, or group of persons on
any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as
those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1)
of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the
sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Repurchase
Option Property, or any portion thereof, nor shall Developer, or any person claiming under
or through him or her, establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use, or occupancy of
tenants, lessees, subtenants, sublessees or vendees of the Repurchase Option Property,
or any portion thereof. The foregoing covenants shall run with the land.
698/015610-0207
22798455.5 a 11/23/25 EXHIBIT C
14. Interpretation
The terms of this Repurchase Option Agreement shall be construed in accordance
with the meaning of the language used and shall not be construed for or against either
Party by reason of the authorship of this Repurchase Option Agreement or any other rule
of construction which might otherwise apply. The Section headings are for purposes of
convenience only, and shall not be construed to limit or extend the meaning of this
Repurchase Option Agreement.
15. Entire Agreement
This Repurchase Option Agreement and the Reinstated Development Agreement
and the Development Agreement For The Phase 2 Property (and all exhibits and
attachments hereto and thereto) integrate all of the terms and conditions mentioned
herein, or incidental hereto, and supersede all negotiations or previous agreements
between the Parties with respect to all or any part of the subject matter hereof.
16. Waivers and Amendments
All waivers of the provisions of this Repurchase Option Agreement must be in
writing and signed by the appropriate authorities of the Party to be charged, and all
amendments and modifications hereto must be in writing and signed by the appropriate
authorities of City and Developer. All amendments and modifications to this Repurchase
Option Agreement shall be recorded in the Recorder's Office no later than ten (10) days
after complete execution by the Parties of said amendment, and shall be integrated into
this Repurchase Option Agreement.
No waiver of any provision of this Repurchase Option Agreement shall be effective
unless in writing and signed by a duly authorized representative of the Party against
whom enforcement of a waiver is sought and referring expressly to this Section. No delay
or omission by either Party in exercising any right or power accruing upon
non-compliance or failure to perform by the other Party under any of the provisions of this
Repurchase Option Agreement shall impair any such right or power or be construed to be
a waiver thereof, except as expressly provided herein. No waiver by either Party of any of
the covenants or conditions to be performed by the other Party shall be construed or
deemed a waiver of any succeeding breach or nonperformance of the same or other
covenants and conditions hereof.
17. Severability
In the event any section or portion of this Repurchase Option Agreement shall be
held, found, or determined to be unenforceable or invalid for any reason whatsoever, the
remaining provisions shall remain in effect, and the Parties hereto shall take further
actions as may be reasonably necessary and available to them to effectuate the intent of
the Parties as to all provisions set forth in this Repurchase Option Agreement.
698/015610-0207
22798455.5al1/23/25 EXHIBIT C
18. Counterparts
This Repurchase Option Agreement may be executed in counterparts, each of
which, after all the Parties hereto have signed this Repurchase Option Agreement, shall
be deemed to be an original, and such counterparts shall constitute one and the same
instrument.
19. Termination. The City and Developer hereby agree that this Repurchase
Agreement shall terminate with respect to each Project Component of the Phase 2
Property at such time as the City approves the applicable Project Component, as
evidenced by either City's issuance of a certificate of occupancy or by the recording of a
Certificate of Completion.
[ Signature page follows ]
698/015610-0207
22798455.5 a 11/23/25 EXHIBIT C
IN WITNESS WHEREOF, the Parties have executed this Repurchase Option
Agreement as of the date first above written.
Date:
"DEVELOPER"
TBE RE ACQUISITION CO II LLC, a
Delaware limited liability company, an
, 20 affiliate of Turnbridge Equities
By:
Name: Andrew Joblon
Title: Authorized Signatory
"CITY"
CITY OF LA QUINTA, a California municipal
corporation and charter city
Date: , 20 By:
Jon McMillen, City Manager
ATTEST:
Monika Radeva, City Clerk
APPROVED AS TO FORM
RUTAN & TUCKER, LLP
William H. Ihrke, City Attorney
698/015610-0207
22798455.5 a 11/23/25 EXHIBIT C
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California )
County of Riverside )
On , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California )
County of Riverside )
On
before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
698/015610-0207
22798455.5 al 1/23/25 EXHIBIT C
EXHIBIT "A"
LEGAL DESCRIPTION OF THE REPURCHASE OPTION PROPERTY
[To be inserted]
[NOTE: FOR THIS REPURCHASE OPTION AGREEMENT, LEGAL WILL BE
the "OPTION PROPERTY' as defined in the OPTION AGREEMENT, which is a portion of
the PHASE 2 PROPERTY]
698 015610-0207
22798455.5a11/23/25 EXHIBIT C
EXHIBIT D
FORM OF AGREEMENT FOR PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
[see attached]
698/015610-0207
22798455.5a11/23/25 EXHIBIT D
AGREEMENT FOR PURCHASE AND SALE AND
ESCROW INSTRUCTIONS
BY AND BETWEEN
THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND
CHARTER CITY
("SELLER")
AND
TBE RE ACQUISITION CO II LLC
AN AFFILIATE OF
TURNBRIDGE EQUITIES
("BUYER")
698/015610-0207
22798455.5anr3/25 EXHIBIT D
AGREEMENT FOR PURCHASE AND SALE
AND ESCROW INSTRUCTIONS
THIS AGREEMENT FOR PURCHASE AND SALE AND ESCROW
INSTRUCTIONS ("Agreement" or "PSK or "Purchase/Sale Agreement") is made and
entered into as of ("Effective Date") by and between the CITY
OF LA QUINTA, a California municipal corporation and charter city ("Seller"), and TBE RE
Acquisition Co II LLC, a Delaware limited liability company, an affiliate of Turnbridge
Equities ("Buyer"). [NOTE: AFFILIATE OF TURNBRIDGE EQUITIES THAT IS A
PERMITTED TRANSFEREE UNDER THE REINSTATED DEVELOPMENT
AGREEMENT MAY BE "BUYER"]
RECITALS:
A. Seller is the owner of that certain real property located in the City of La
Quinta, County of Riverside, State of California, comprising approximately
acres with Assessor's Parcel Number(s) ("APN") , more
particularly described in the legal description attached hereto as Attachment No. 1 and
incorporated herein by this reference and all rights and privileges appurtenant thereto
(the "Property" or "Option Property"). [NOTE: APNs AND LEGAL DESCRIPTION MUST
ONLY INCLUDE "OPTION PROPERTY" AS DEFINED IN OPTION AGREEMENT,
AFTER SUBDIVISION OF PARCELS]
B. On or about , Seller ("City") and Buyer (as "Optionee")
entered into that certain Option To Purchase Real Property (the "Option Agreement")
pursuant to which Optionee, upon satisfaction of terms and conditions therein, had an
"Option" (as defined in the Option Agreement) to purchase from City the Property. On or
about even date as the Option Agreement, Seller and Buyer entered into a "Memorandum
of Option Agreement" recorded on as Document
No. in the Official Records of the Office of the County Recorder of
Riverside, California (the "Recorder's Office"), which was required to be recorded under,
and provided notice of, the Option Agreement.
C. The Property is in close proximity to certain real property owned by Buyer
(referred to in the Option Agreement as the "Developer -Owned Property") that is subject
to that certain Reinstated and Amended Development Agreement by and between the
City and Optionee (as Developer), adopted by City Council Ordinance No. 626 on
October 7, 2025, and recorded on , 2025, as Document
No. (the "Reinstated Development Agreement") in the Recorder's
Office. The Reinstated Development Agreement provides, among other terms and
conditions, for the development of the Developer -Owned Property as provided therein
(referred to in the Option Agreement as the "Developer's Project"). As more specifically
set forth in the Reinstated Development Agreement and Option Agreement, the
Developer's Project includes the possible acquisition and development of the Property in
addition to the Developer -Owned Property.
EXHIBIT D
698TI 5610-0207
22798455.5 a1123'25 -1 -
D. The Option Agreement included as Exhibit D a form of purchase and sale
agreement to be used for such purpose if Buyer validly exercised the Option and met
other terms and conditions therein. Buyer has validly exercised the Option, and Buyer
and Seller now enter into this Purchase/Sale Agreement to facilitate the purchase and
sale transaction for the Property pursuant to the Option Agreement and this
Purchase/Sale Agreement.
E. Buyer desires to purchase the Property from Seller, and Seller desires to
sell the Property to Buyer, on the terms and conditions set forth herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing recitals and mutual
covenants herein contained, the parties hereto agree as follows-
1 . PROPERTY. Subject to all of the terms, conditions, and provisions of this
Agreement, and for the consideration herein set forth, Seller hereby agrees to sell to
Buyer and Buyer hereby agrees to purchase from Seller the Property.
2. PURCHASE PRICE.
2.1 Amount. The purchase price which Seller agrees to accept, and Buyer
agrees to pay for the Property is the sum of
("Purchase Price") [ TO BE INSERTED — "PROPERTY BASE PURCHASE PRICE" IS
$17,000,000.00, AND MAY INCREASE BASED ON WHEN OPTION IS EXERCISED
PER OPTION AGREEMENT ].
2.2 Earnest Money Deposit. Concurrent with its opening of the Escrow, Buyer
shall deposit into Escrow the earnest money deposit in the amount of
($ ) ("Earnest Money
Deposit"). The Earnest Money Deposit shall be comprised of the following amounts
previously paid to Seller (City) by Buyer (as Optionee) pursuant to the Option Agreement:
$2,000,000.00 as the "Option Consideration" and $ [IF
APPLICABLE, AMOUNT WOULD BE BETWEEN $1,000,000 to $5,000,0001 as the
"Total Additional Option Consideration Payments." [ TO BE INSERTED AND BASED ON
WHEN OPTION IS EXERCISED PER OPTION AGREEMENT. CITY WILL TRANSFER
ALL DEPOSITS RECEIVED UNDER THE OPTION AND ACCRUED INTEREST INTO
ESCROW ]. The Escrow Holder shall deposit the Earnest Money Deposit into an
interest -bearing account. All interest earned on such funds shall be added to the original
principal amount of the Earnest Money Deposit and be considered part of the same. The
Earnest Money Deposit shall be nonrefundable to Buyer upon the Effective Date, except
as otherwise expressly provided herein and in the Option Agreement. Upon the Close of
Escrow, the Earnest Money Deposit shall be credited toward the Purchase Price and paid
to the Seller as part of the Purchase Price. Except as provided in Sections 12, 15, or
elsewhere herein, should Escrow fail to close, then, in accordance with the Option
Agreement, both the Option Consideration and (if applicable) Total Additional Option
Consideration Payments (and accrued interest attached thereto) shall be forfeited by
EXHIBIT D
6981015610-0207
22798455.5 al 1/23 25 -2-
Buyer and shall be returned to the Seller, and any remaining balance that was deposited
by Buyer for the Earnest Money Deposit (and accrued interest attached thereto) shall be
returned to the Buyer, upon the cancelation of Escrow in accordance with this Agreement.
2.3 Deposit of Purchase Price. The Buyer shall deposit the Purchase Price,
less the Earnest Money Deposit, with the Escrow Holder, plus Buyer's closing costs and
subject to adjustment for prorations and other charges, in good funds prior to the "Close of
Escrow" (as defined in Section 6.1 below).
3. ESCROW.
3.1 Opening of Escrow. Closing of the sale of the Property shall take place
through an escrow ("Escrow") to be established within three (3) business days after the
execution of this Agreement by the parties hereto, with [TO
BE A NATIONAL TITLE AND ESCROW COMPANY SELECTED BY MUTUAL
AGREEMENT OF BUYER AND SELLER] ("Escrow Holder"), on which date Seller shall
pay by wire transfer of federal funds the Earnest Money into Escrow, at its office located
at . The opening of
the Escrow (the "Opening of Escrow") shall be deemed to be the date that a fully executed
copy of this Agreement is delivered to the Escrow Holder. Escrow Holder is instructed to
notify Buyer and Seller in writing of the date of the Opening of Escrow.
3.2 Escrow Instructions. This Agreement and the Option Agreement, once
deposited in Escrow, shall constitute the joint escrow instructions of Buyer and Seller to
Escrow Holder. Additionally, if Escrow Holder so requires, Buyer and Seller agree to
execute any reasonable form of escrow instructions that Escrow Holder customarily
requires in real property escrows administered by it. In the event of any conflict or
inconsistency between Escrow Holder's standard instructions and the provisions of this
Agreement or the Option Agreement, the provisions of this Agreement and the Option
Agreement shall supersede and be controlling.
4. TITLE MATTERS. Buyer has obtained a preliminary title report (Order No.:
prepared by
[TO BE
ORDERED FROM A NATIONAL TITLE COMPANY SELECTED BY MUTUAL
AGREEMENT OF BUYER AND SELLER] ("Title Company") describing the state of title of
the Property together with copies of all underlying documents (the "Preliminary Title
Report"). Buyer may, at its sole cost and expense, obtain a current survey of the Property
(a "Survey") no later than ten (10) days from the Opening of Escrow. Notwithstanding
anything herein to the contrary, Seller shall be obligated to remove all monetary liens and
encumbrances against the Property (including monetary liens and encumbrances placed
upon the Property after the execution and delivery of the Option Agreement) (excluding
non -delinquent real property taxes (except as otherwise provided in Section 9 below)
without Buyer objection thereto pursuant to the following process. Buyer shall notify
Seller in writing of any objections Buyer may have to title exceptions contained in the
Preliminary Title Report or matters shown on the Survey (if Buyer has obtained) no later
than the date which is twenty-one (21) days after the later of (i) Opening of Escrow, or (ii)
EXHIBIT D
698/015610-0207
22798455.5 al 1/23/25 -3-
Buyer's receipt of the Survey ("Buyer's Objection Notice"). Buyer's approval or
disapproval of the matters set forth in the Preliminary Title Report (and the Survey, if
applicable) may be granted or withheld in Buyer's sole and absolute discretion. Buyer's
failure to provide Seller with a Buyer's Objection Notice within said period shall constitute
Buyer's approval of all exceptions to title shown on the Preliminary Title Report and all
matters shown on the Survey (if Buyer has obtained). Seller shall have a period of five (5)
days after receipt of Buyer's Objection Notice in which to deliver written notice to Buyer
("Seller's Notice") of Seller's election to either (i) agree to remove the objectionable items
on the Preliminary Title Report or Survey prior to the Close of Escrow, or (ii) decline to
remove any such title exceptions or Survey matters. Seller's failure to provide Buyer with
Seller's Notice within said period shall constitute Seller's election not to remove the
objectionable items on the Preliminary Title Report. If Seller notifies Buyer of its election
not to remove the objectionable items on the Preliminary Title Report or Survey or is
deemed to have elected not to remove the objectionable items on the Preliminary Title
Report or Survey, Buyer shall have the right, by written notice delivered to Seller within
five (5) days after Buyer's receipt of Seller's Notice or the date Seller is deemed to have
elected not to remove the objectionable items on the Preliminary Title Report or Survey,
to elect to terminate the Agreement and Escrow and the rights and obligations of the
Parties hereunder in which event the Earnest Money shall be returned to Buyer, and if
Buyer does not give Buyer's termination notice in such five (5) day period, Buyer shall
take title at the Close of Escrow subject to such objectionable items without any
adjustment to or credit against the Purchase Price. All exceptions to title shown on the
Preliminary Title Report, other than those which Seller may agree to remove pursuant to
this Section 4, shall be deemed to have been approved by Buyer unless Seller is notified
otherwise in writing.
Upon the issuance of any amendment or supplement to the Preliminary
Title Report which adds additional exceptions, including any survey exceptions, the
foregoing right of review and approval shall also apply to said amendment or supplement.
The process set forth above for Buyer's review and Seller's response shall apply to any
review and response with respect to any amendment or supplement to the Preliminary
Title Report, and the Closing shall be extended for such period as is necessary to allow
for that review and response process to be completed. Seller shall not alter the Property
in any manner that would give rise to any changes being made to the Survey after an
inspection thereof by the surveyor.
5. RIGHT OF ENTRY. Beginning on the Effective Date up to and including the
Closing Date, Seller grants Buyer, its agents, contractors, employees, and
representatives, the right to enter into and upon the Property at reasonable times for the
purposes related to Buyer's inspection and proposed acquisition of the Property.
Optionee shall not undertake any invasive testing, including, without limitation, taking
samples of any kind or type from the Option Property, until such time as Optionee has
submitted to City Optionee's scope of work, as well as the specific locations proposed to
be accessed, and obtained Seller's consent, which shall not be unreasonably withheld or
delayed. Any costs, expenses, or charges incurred or related to Buyer's activities under
this right of entry shall be at the sole cost and expense of Buyer and at no cost and
expense to Seller. Buyer shall, at its own cost and expense entirely, repair any damage to
EXHIBIT D
698/015610-0207
22798455.5 al1/23/25 -4-
the Property resulting from any such entry and shall restore the Property to its condition
prior to such entry. Buyer agrees to indemnify, defend (with counsel selected by Seller)
and hold Seller and the Property harmless from any and all claims, liabilities, liens,
actions, judgments, costs, expense, or charges (including without limitation attorneys'
fees and costs) for personal injury or property damage arising from or connected or
related in any way to the right of entry granted under this Agreement.
6. CLOSE OF ESCROW.
6.1 Close of Escrow; Closing Date. Provided that all of the conditions
precedent of this Agreement and the Option Agreement to the "Close of Escrow" (as
hereinafter defined) as set forth in Section 10 below have been satisfied (or waived by the
appropriate party), and this Agreement has not otherwise been terminated, prior to or on
the Closing Date, the Closing of this transaction for the sale and purchase of the Property
shall take place on the earlier of either: (A) ninety (90) days following the date on which
the City has issued any and all Permits (as defined in the Option Agreement), or (B)
twenty-four (24) months from the date Buyer delivered to City the Option Notice under the
Option Agreement ("Outside Closing Date"). Notwithstanding the foregoing, if Buyer and
Seller agree to advance the Closing, and so long as all of "Buyer's Conditions to Closing"
and all of "Seller's Conditions to Closing" (as those terms are defined in Section 10) have
been satisfied (or waived by the appropriate party), Seller and Buyer may elect to
authorize the Closing in writing before the Outside Closing Date. The terms "Close of
Escrow", "Closing Date" and the "Closing" are used herein to mean the time Seller's grant
deed conveying fee title to the Property to Buyer is recorded in the Official Records of the
Office of the County Recorder of Riverside, California ("Recorder's Office").
6.2 Recordation; Release of Funds and Documents.
6.2.1 Escrow Holder is directed, on the Closing Date, to record in the
Recorder's Office, the following documents in the order listed: (i) the grant deed (in the
form attached hereto as Attachment No 2) transferring title to the Property to Buyer
("Grant Deed"); and (ii) the following documents:
(a) As required pursuant to the Reinstated Development Agreement and
Option Agreement, a fully executed and notarized, in recordable form, Development
Agreement or amendment to the Reinstated Development Agreement, between Buyer
and Seller, governing the pre -development, development, and use of the Property upon
Buyer acquiring fee title;
(b) A termination and release, in a form mutually agreeable to Buyer and
Seller, of the Memorandum of Option Agreement ("Termination of Option Agreement and
Memorandum of Option Agreement"), which shall be effective upon Close of Escrow and
the recording thereof in the Recorder's Office; and
(c) Such other and further documents as may be directed jointly by
Buyer and Seller.
6.2.2 Upon the Closing, Escrow Holder shall deliver (i) the Purchase Price
EXHIBIT D
698/015610-0207
22798455.5 a11/23125 -5-
to Seller, less any amount to Closing costs, including property taxes and/or assessments
allocable to Seller pursuant to Section 9 below, and (ii) conformed copies of all recorded
and other closing documents to both Buyer and Seller.
7. DELIVERY OF DOCUMENTS REQUIRED FROM BUYER AND SELLER.
7.1 Buyer's Obligations. Buyer agrees that on or before the Closing Date,
Buyer shall deposit or cause to be deposited with Escrow Holder the following:
(a) The Purchase Price (as prorated pursuant to this Agreement), less
the Earnest Money Deposit;
(b) As required pursuant to the Reinstated Development Agreement and
Option Agreement, a fully executed and notarized, in recordable form, Development
Agreement or amendment to the Reinstated Development Agreement, between Buyer
and Seller, governing the pre -development, development, and use of the Property upon
Buyer acquiring fee title; and
(c) Any and all additional funds, instruments or other documents
required from Buyer (executed and acknowledged where appropriate) as may be
reasonably necessary in order for the Escrow Holder, Seller and Buyer to comply with the
terms of this Agreement and consummate the transaction so long as the same do not
increase Buyer's obligations or decrease its rights from that which is provided herein or in
the Option Agreement.
7.2 Seller's Obligations. Seller agrees that on or before 5:00 p.m. of the last
business day immediately preceding the Closing Date, Seller shall deposit or cause to be
deposited with Escrow Holder each of the following:
(a) The executed and acknowledged Grant Deed, subject only to the
Permitted Exceptions (defined hereafter);
(b) A bill of sale in customary and reasonable form transferring to title
(free of liens and claims) all personal property located on the Property;
(c) A customary title affidavit sufficient to provide for extended coverage
for Buyer as well as the removal of the mechanic's liens and parties in possession
exceptions;
(d) A fully executed and notarized, in recordable form, Development
Agreement or amendment to the Reinstated Development Agreement, between Buyer
and Seller, governing the pre -development, development, and use of the Property upon
Buyer acquiring fee title;
(e) A fully executed and notarized, in recordable form, Termination of
Option Agreement and Memorandum of Option Agreement; and
EXHIBIT D
698/01561.0-0207
22798455.5 al1/23/25 -6-
(f) Any and all additional funds, instruments or other documents
required from Seller (executed and acknowledged where appropriate) as may be
reasonably necessary in order for the Escrow Holder, Seller and Buyer to comply with the
terms of this Agreement and consummate the transaction so long as the same do not
increase Seller's obligations or decrease its rights from that which is provided herein or in
the Option Agreement.
8. TITLE INSURANCE POLICY.
8.1 Title Policy. On the Closing Date, the Title Company, as insurer, shall issue
a [CLTA or ALTA — AT BUYER'S CHOICE] owner's standard coverage policy of title
insurance ("Title Policy"), in favor of Buyer, as insured, for the Property, with liability in the
amount of the Purchase Price, subject only to the following (the "Permitted Exceptions"):
(a) non -delinquent real property taxes, subject to Seller's obligations to
pay certain taxes pursuant to Section 9 below;
(b) covenants, conditions, restrictions and reservations of record that do
not interfere with the Buyer's proposed use of the Property, as determined in the sole and
absolute discretion of Buyer;
(c) title exceptions approved or deemed approved by Buyer pursuant to
Section 4 above;
(d) any other exceptions approved by Buyer; and
(e) the standard printed conditions and exceptions contained in the
[CLTA or ALTA] standard owner's policy of title insurance regularly issued by the Title
Company.
8.2 Payment for Title Policy. Buyer shall be responsible for all charges for the
Title Policy, and Surveys if elected by Buyer.
9. REAL PROPERTY TAXES AND ASSESSMENTS. All taxes (general and special)
including real property taxes shall be current and not in default and Seller shall pay any
delinquent real property taxes. Real property taxes shall be prorated to the Closing (with
the Closing Date being treated as if Buyer was the owner). The provisions of this Section
shall survive Close of Escrow. At the Closing, Seller shall be responsible for paying for all
real or personal property taxes or assessments assessed against the Property for any
period prior to the Closing. Buyer shall be responsible for paying for all real or personal
property taxes or assessments assessed against the Property for time periods on or after
the Closing.
10. CONDITIONS PRECEDENT TO CLOSING.
10.1 Conditions Precedent to Buyer's Obligations. The obligations of Buyer
under this Agreement to purchase the Property and close the Escrow shall be subject to
the satisfaction or signed written waiver by Buyer of each and all of the following
EXHIBIT D
698/015610-0207
22798455.5 al 1/23/25 -7-
conditions precedent (collectively, "Buyer's Conditions to Closing"):
(a) On the Closing Date, the Title Company shall be irrevocably
committed to issue the Title Policy pursuant to Section 8.1 above insuring fee title to the
Property as being vested in Buyer, subject only to the Permitted Exceptions;
(b) Escrow Holder holds all instruments and funds required for the
Closing and will deliver to Buyer the instruments and funds, if any, accruing to Buyer
pursuant to this Agreement;
(c) Except as otherwise permitted by this Agreement, all
representations and warranties by the Seller in this Agreement shall be true on and as of
the Closing Date as though made at that time and all covenants of Seller pursuant to this
Agreement shall have been fulfilled by the Closing Date;
(d) Seller is not in material default of any term or condition of this
Agreement or the Option Agreement;
(e) A fully executed and notarized, in recordable form, Development
Agreement or amendment to the Reinstated Development Agreement, between Buyer
and Seller, governing the pre -development, development, and use of the Property upon
Buyer acquiring fee title;
[NOTE: CONDITIONS TO CLOSING FROM OPTION AGREEMENT TO
BE INTEGRATED IN THIS SECTION OF PSA ]
In the event that any of Buyer's Conditions to Closing are not satisfied or waived in
a writing signed by Buyer prior to the expiration of the applicable period for satisfaction or
waiver, Buyer may terminate this Agreement in which event (except as provided in
Sections 12, 15, or elsewhere herein), in accordance with the Option Agreement, both the
Option Consideration and (if applicable) Total Additional Option Consideration Payments
(and accrued interest attached thereto) shall be returned to the Seller, and any remaining
balance that was deposited by Buyer for the Earnest Money Deposit (and accrued
interest attached thereto) shall be returned to the Buyer.
10.2 Conditions Precedent to Seller's Obligations. The obligations of Seller
under this Agreement shall be subject to the satisfaction or signed written waiver by Seller
of each and all of the following conditions precedent ("Seller's Conditions to Closing"):
(a) Escrow Holder holds the Purchase Price and all other instruments
and funds required to be delivered by Buyer for the Closing and has been directed in
writing by Buyer to deliver to Seller the instruments and funds, including but not limited to
the Purchase Price (less any offsets and prorations against Seller specifically provided for
hereunder) less the amount of the Earnest Money;
(b) Except as otherwise permitted by this Agreement, all
representations and warranties by the Buyer in this Agreement shall be true on and as of
EXHIBIT D
698/015610-0207
22798455.5 at 1/23/25 -8-
the Closing Date as though made at that time and all covenants of Buyer pursuant to this
Agreement shall have been fulfilled by the Closing Date;
(c) As required by the Reinstated Development Agreement and Option
Agreement, Buyer (as Developer) has completed or has caused the completion of the
construction of the "Public Golf Clubhouse Project Component" as defined in and in
accordance with the Reinstated Development Agreement;
(d) As required pursuant to the Reinstated Development Agreement, a
fully executed and notarized, in recordable form, Development Agreement or amendment
to the Reinstated Development Agreement, between Buyer and Seller, governing the
pre -development, development, and use of the Property upon Buyer acquiring fee title;
(e) Buyer is not in material default of any term or condition of this
Agreement or the Option Agreement,-
[NOTE- CONDITIONS TO CLOSING FROM OPTION AGREEMENT TO
BE INTEGRATED IN THIS SECTION OF PSA]
In the event that any of Seller's Conditions to Closing are not satisfied or waived in
a writing signed by Seller prior to the expiration of the applicable period for satisfaction or
waiver, Seller may terminate this Agreement, in which event (except as provided in
Sections 12, 15, or elsewhere herein), in accordance with the Option Agreement, both the
Option Consideration and (if applicable) Total Additional Option Consideration Payments
(and accrued interest attached thereto) shall be returned to the Seller, and any remaining
balance that was deposited by Buyer for the Earnest Money Deposit (and accrued
interest attached thereto) shall be returned to the Buyer.
11. NOTICE OF DEFAULT. Upon a default by either Seller or Buyer under this
Agreement, the non -defaulting party shall notify the defaulting party and Escrow Holder in
writing of such default. If the non -defaulting party gives such notice, the notice shall set
forth with specificity the alleged default and the defaulting party shall have ten (10) days
to cure the default. If the defaulting party does not cure the default within ten (10) days of
the receipt of such notice, the non -defaulting party may elect to terminate this Agreement
and pursue the remedies provided in Section 12 below.
12. WAIVER OF DAMAGES, SPECIFIC PERFORMANCE, LIQUIDATED DAMAGES.
Except as provided in the paragraphs immediately below, in the event a party defaults
under this Agreement, the non -defaulting party's sole and exclusive remedy will be for
specific performance of this Agreement. EACH PARTY HEREBY WAIVES ANY RIGHT
TO PURSUE DAMAGES RESULTING FROM A DEFAULT OR BREACH OF THIS
AGREEMENT, AND IN NO EVENT SHALL THE DEFAULTING PARTY BE LIABLE FOR
DAMAGES FOR A DEFAULT OR BREACH OF DEFAULTING PARTY'S OBLIGATION
UNDER THIS AGREEMENT, ALL OF WHICH RIGHTS ARE HEREBY WAIVED AND
RELINQUISHED BY THE NON -DEFAULTING PARTY. The parties agree that the
foregoing limitation on their respective remedies and measure of damages is reasonable
under all of the circumstances of this Agreement, and is a material consideration for the
EXHIBIT D
698/015610-0207
22798455.5 at 1/23/25 -9-
parties entering into this Agreement.
Seller's Initials Buyer's Initials
NOTWITHSTANDING THE PREVIOUS PARAGRAPH, IF BUYER SHOULD DEFAULT
UNDER THIS AGREEMENT, SELLER AND BUYER AGREE THAT SELLER WILL
INCUR DAMAGES BY REASON OF SUCH DEFAULT WHICH DAMAGES SHALL BE
IMPRACTICAL AND EXTREMELY DIFFICULT, IF NOT IMPOSSIBLE, TO
ASCERTAIN. THEREFORE, SELLER AND BUYER, IN A REASONABLE EFFORT TO
ASCERTAIN WHAT SELLER'S DAMAGES WOULD BE IN THE EVENT OF SUCH
DEFAULT BY BUYER HAVE AGREED BY PLACING THEIR INITIALS BELOW THAT
THE EARNEST MONEY DEPOSIT SHALL CONSTITUTE A REASONABLE
ESTIMATE OF SELLER'S DAMAGES UNDER THE PROVISIONS OF
SECTIONS 1671 AND 1677 OF THE CALIFORNIA CIVIL CODE FOR A BREACH
PRIOR TO THE CLOSING. THIS PROVISION DOES NOT APPLY TO OR LIMIT IN
ANY WAY EITHER PARTY'S INDEMNITY OBLIGATIONS.
Seller's Initials Buyer's Initials
NOTWITHSTANDING THE FIRST PARAGRAPH IN THIS SECTION 12, IF SELLER
SHOULD DEFAULT UNDER THIS AGREEMENT, SELLER AND BUYER AGREE
THAT THE EARNEST MONEY DEPOSIT (INCLUDING ALL TOTAL ADDITIONAL
OPTION CONSIDERATION PAYMENTS) SHALL BE PROMPTLY RETURNED TO
BUYER.
Seller's Initials Buyer's Initials
13. POSSESSION. Possession of the Property, free from all tenancies, parties in
possession and occupants and contractual obligations (other than to the Seller as
provided herein, the Option Agreement, or Reinstated Development Agreement), shall be
delivered by Seller to Buyer on the Closing Date, subject only to the Permitted
Exceptions.
14. ALLOCATION OF COSTS.
14.1 Buyer's Costs. Buyer shall pay any escrow fees or similar charges of
Escrow Holder, all charges for the Title Policy, the Preliminary Title Report, and Surveys if
elected by Buyer, and the cost of recording the Grant Deed and any other recording
charges.
EXHIBIT D
698/015610-0207
22798455.5 al1/23'25 -10-
14.2 Miscellaneous Costs. Except to the extent otherwise specifically provided
herein, all other expenses incurred by Seller and Buyer with respect to the negotiation,
documentation and closing of this transaction, including, without limitation, attorneys'
fees, shall be borne and paid by the party incurring the same.
15. CONDEMNATION. In the event that, prior to the Close of Escrow, any
governmental entity (other than the City of La Quinta) shall commence any proceedings
of or leading to eminent domain or similar type proceedings to take all or any portion of the
Property, Buyer and Seller shall promptly meet and confer in good faith to evaluate the
effect of such action on the purposes of this Agreement; provided, however, that Buyer
and Seller shall each have the right to pursue the portion of the award allocable to their
respective interests and either Buyer or Seller shall have the option to terminate this
Agreement by delivery of a termination notice to the other Party prior to the Closing, in
which event the Earnest Money Deposit (including the Option Consideration and (if
applicable) Total Additional Option Consideration Payments (and accrued interest
attached thereto)) shall be returned to the Buyer, upon cancellation of the Escrow.
16. DAMAGE. If the Property is damaged or destroyed by any casualty (a "Casualty")
after the Effective Date, but prior to the Closing, and the costs to repair or restore the
same shall exceed Fifteen Thousand Dollars ($15,000.00) (as reasonably determined by
Seller and Buyer), then Buyer shall have the option to terminate this Agreement by
delivery of a termination notice to Seller prior to the Closing. In the alternative, if a
Casualty shall occur prior to the Closing, and if Buyer does not so exercise its right to
terminate, then Buyer shall proceed with the Closing and upon consummation of the
transaction herein provided, Seller shall assign to Buyer all claims of Seller under or
pursuant to any applicable casualty insurance coverage and all proceeds from any such
casualty insurance received by Seller on account of any such Casualty, the damage from
which shall not have been repaired by Seller prior to the Closing. Seller agrees to execute
any documents reasonably necessary to effectuate the provisions of this Section 16.
17. HAZARDOUS MATERIALS. To the best of Seller's actual knowledge (without any
obligation of Seller to further investigate), the Property has not at any time been used for
the purposes of storing, manufacturing, releasing or dumping Hazardous Materials. For
purposes of this Agreement, the term "Hazardous Materials" shall mean (1) hazardous
wastes, hazardous materials, hazardous substances, hazardous constituents, toxic
substances or related materials, whether solids, liquids or gases, including, but not limited
to, substances deemed as "hazardous wastes," "hazardous materials," "hazardous
substances," "toxic substances," "pollutants," "contaminants," "radioactive materials," or
other similar designations in, or otherwise subject to regulation under, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), 42 U.S.C. § 9601 et seq.; the Toxic Substance Control Act
("TSCA"), 15 U.S.C. § 2601 et seq.; the Hazardous Materials Transportation Act, 49
U.S.C. § 1802; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §
9601, et seq.; the Clean Water Act ("CWK), 33 U.S.C. § 1151 et seq.; the Safe Drinking
Water Act, 42 U.S.C. § 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. § 7401 et seq.;
the Hazardous Waste Control Law, California Health and Safety Code § 25100 et seq.,
the Carpenter -Presley -Tanner Hazardous Substance Account Act, California Health and
EXHIBIT D
698/015610-0207
22798455.5 al1/23/25 -11 -
Safety Code, Division 45, the Hazardous Materials Release Response Plans and
Inventory Act, California Health and Safety Code, Division 20, Chapter 6.95, The
Underground Storage of Hazardous Substances Act, California Health and Safety Code,
Division 20, Chapter 6.7, the Porter -Cologne Water Quality Control Act, California Water
Code § 13000 et seq. and in any permits, licenses, approvals, plans, rules, regulations or
ordinances adopted, or other criteria and guidelines promulgated pursuant to the
preceding laws or other similar federal, state or local laws, regulations, rules or
ordinances now or hereafter in effect relating to environmental matters (collectively the
"Environmental Laws"); and (ii) any other substances, constituents or wastes subject to
any applicable federal, state or local law, regulation, ordinance or common law doctrine,
including any Environmental Law, now or hereafter in effect, including, but not limited to,
(A) petroleum, (B) refined petroleum products, (C) waste oil, (D) waste aviation or motor
vehicle fuel, (E) asbestos, (F) lead in water, paint or elsewhere, (G) radon, (H)
polychlorinated biphenyls (PCB's) and (1) ureaformaldehyde.
18. COVENANTS OF SELLER. Seller agrees that during the period between the
Effective Date of this Agreement and the Closing Date:
(a) Seller shall maintain the Property in not less than the state of repair
as that existing on the Effective Date (excepting ordinary wear and tear);
(b) Seller shall not convey, grant, lease, assign, mortgage, hypothecate,
encumber, bind, or otherwise transfer (on or off record) the Property or any interest
therein;
(c) Prior to the Closing, Seller shall maintain Seller's existing insurance
on the Property;
(d) Prior to the Closing, Seller shall not alter the physical condition of the
Property or introduce or release, or permit the introduction or release, of any Hazardous
Materials in, from, under, or on the Property; and
(e) This Agreement and all agreements, instruments, and documents
herein provided to be executed or to be caused to be executed by Seller are and on the
Closing will constitute legal, valid and binding obligations of Seller enforceable against
Seller in accordance with their terms. This Agreement does not violate any provision of
any material agreement or document to which Seller is a party or to which Seller is bound.
19. COVENANTS OF BUYER. Buyer agrees that during the period between the
Effective Date of this Agreement and the Closing Date:
(a) This Agreement and all agreements, instruments, and documents
herein provided to be executed or to be caused to be executed by Buyer are and on the
Closing will constitute legal, valid and binding obligations of Buyer enforceable against
Buyer in accordance with their terms. This Agreement does not violate any provision of
any material agreement or document to which Buyer is a party or to which Buyer is bound;
EXHIBIT D
698/015610-0207
22798455.5 al1/23/25 -1 2-
(b) As of the date of the Closing, Buyer will have the financial ability to
perform its obligations under this Agreement;
(c) As of the date of the Closing, Buyer is not and will not be in "Default"
or "MAE Default," as those terms are defined and used in the Option Agreement,
Reinstated Development Agreement, and other the Required City Land Use Agreements
(as defined in the Option Agreement);
(d) Except as expressly provided in this Agreement or the Option
Agreement or the Required City Land Use Agreements (as defined in the Option
Agreement), Buyer is purchasing the Property based solely upon Buyer's inspection and
investigation of the Property and all documents related thereto or, its opportunity to do so,
and Buyer is purchasing the Property in an "AS IS, WHERE IS" condition without relying
upon any representations or warranties, express, implied or statutory of any kind.
20. MISCELLANEOUS.
20.1 Assignment. This Agreement shall be binding upon and shall inure to the
benefit of Buyer and Seller and their respective successors and assigns. Neither party to
this Agreement may transfer or assign this Agreement or any interest or right hereunder
or under the Escrow without the prior written consent and approval of the other party,
which consent and approval shall not be unreasonably withheld, and provided, further,
that this Agreement may be assigned by Buyer to a "Permitted Affiliate Assignee" of
Buyer (as that term is defined in and pursuant to the Reinstated Development
Agreement) and said assignment is memorialized by an unrecorded assignment and
assumption agreement that includes the written consent of Seller and the Escrow Holder.
No provision of this Agreement is intended nor shall in any way be construed to benefit
any party not a signatory hereto or to create a third party beneficiary relationship.
20.2 Notices. All notices under this Agreement shall be effective upon personal
delivery, upon delivery by reputable overnight courier service that provides a receipt with
the date and time of delivery, or three (3) business days after deposit in the United States
mail, registered, certified, postage fully prepaid and addressed to the respective parties
as set forth below or as to such other address as the parties may from time to time
designate in writing:
City.. City of La Quinta
78-495 Calle Tampico
La Quinta, California 92253
Attn.: City Manager
AND: City of La Quinta
78-495 Calle Tampico
La Quinta, California 92253
Attn.: City Clerk
EXHIBIT D
698/015610-0207
22798455.5 a11/23/25 -1 3-
With a copy to: Rutan & Tucker, LLP
18575 Jamboree Road, 9th Floor
Irvine, CA 92612
Attn- William H. Ihrke, Esq.
Email: bihrke@rutan.com
Optionee: TBE RE Acquisition Co II LLC
c/o Turnbridge Equities
4 Bryant Park, Suite 200
New York, NY 10018
Attn- Michael Gazzano and General Counsel
Email: mg@turnbridgeeq.com; jw@turnbridgeeq.com
With a copy to: DLA Piper LLP
1251 Avenue of the Americas
New York, NY 10020
Attn: Todd Eisner
Email: todd.eisner@us.dlapiper.com
With a copy to: Procopio
200 Spectrum Center Drive, Suite 1650,
Irvine, CA 92618
Attn- James Vaughn
Email: james.vaughn@procopio.com
20.3 Fair Meaning. This Agreement shall be construed according to its fair
meaning and as if prepared by both parties hereto.
20.4 Headings. The headings at the beginning of each numbered Section of this
Agreement are solely for the convenience of the parties hereto and are not a part of this
Agreement.
20.5 Choice of Laws; Litigation Matters. This Agreement shall be governed by
the internal laws of the State of California and any question arising hereunder shall be
construed or determined according to such law. The Superior Court of the State of
California in and for the County of Riverside, or such other appropriate court in such
county, shall have exclusive jurisdiction of any litigation between the parties concerning
this Agreement. Service of process on Seller shall be made in accordance with California
law. Service of process on Buyer shall be made in any manner permitted by California
law and shall be effective whether served inside or outside California.
20.6 Nonliability of Buyer and Seller Officials. No officer, official, member,
employee, agent, or representative of Buyer or Seller shall be liable for any amounts due
hereunder, and no judgment or execution thereon entered in any action hereon shall be
personally enforced against any such officer, official, member, employee, agent, or
representative.
EXHIBIT D
698/015610-0207
22798455.5 a1 1/23125 ' 1 4'
20.7 Gender; Number. As used in this Agreement, masculine, feminine, and
neuter gender and the singular or plural number shall be deemed to include the others
wherever and whenever the context so dictates.
20.8 Survival. This Agreement and all covenants to be performed after the
Closing, and, except as otherwise set forth herein, all representations and warranties
contained herein, shall survive the Closing Date and shall remain a binding contract
between the parties hereto.
20.9 Time of Essence. Time is of the essence of this Agreement and of each and
every term and provision hereof, it being understood that the parties hereto have
specifically negotiated the dates for the completion of each obligation herein.
20.10 Time Period Computations. All periods of time referred to in this Agreement
shall include all Saturdays, Sundays and California state or national holidays unless the
reference is to "business days," in which event such weekends and holidays shall be
excluded in the computation of time and provide that if the last date to perform any act or
give any notice with respect to this Agreement shall fall on a Saturday, Sunday or
California state or national holiday, such act or notice shall be deemed to have been
timely performed or given on the next succeeding day which is not a Saturday, Sunday or
California state or national holiday.
20.11 Waiver or Modification. A waiver of a provision hereof, or modification of
any provision herein contained, shall be effective only if said waiver or modification is in
writing, and signed by both Buyer and Seller. No waiver of any breach or default by any
party hereto shall be considered to be a waiver of any breach or default unless expressly
provided herein or in the waiver.
20.12 Broker's Fees. Seller and Buyer represent and warrant to the other that
neither Buyer nor Seller has employed any broker and/or finder to represent its interest in
this transaction. Each party agrees to indemnify and hold the other free and harmless
from and against any and all liability, loss, cost, or expense (including court costs and
reasonable attorney's fees) in any manner connected with a claim asserted by any
individual or entity for any commission or finder's fee in connection with the conveyance
of the Property arising out of agreements by the indemnifying party to pay any
commission or finder's fee.
20.13 Duplicate Originals. This Agreement may be executed in any number of
duplicate originals or counterparts (including electronic pdf counterparts), all of which
shall be of equal legal force and effect.
20.14 Severability. If any term, covenant or condition of this Agreement or the
application thereof to any person, entity, or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such term,
covenant, or condition to persons, entities, or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each term, covenant
or condition of this Agreement shall be valid and enforceable to the fullest extent
EXHIBIT D
698/015610-0207
22798455.5 a11/23/25 -1 5-
permitted by law.
20.15 Exhibits. The following exhibits are attached hereto and incorporated
herein by this reference:
Exhibit A Legal Description of Property
Exhibit B Form of Grant Deed
20.16 Authority. The parties executing this Agreement on behalf of each of the
parties hereto represent and warrant that (i) such party is duly organized and existing, (ii)
they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii)
by so executing this Agreement such party is formally bound to the provisions of this
Agreement, and (iv) the entering into this Agreement does not violate any provision of any
other agreement to which such party is bound.
20.17 City Approvals and Actions. City shall maintain authority of this Agreement
and the authority to implement this Agreement through the City Manager. The City
Manager shall have the authority to make approvals, issue interpretations, waive
provisions, negotiate and enter into amendments to this Agreement and/or negotiate and
enter into implementing agreements or documents on behalf of City so long as such
actions do not materially or substantially change the business terms of this Agreement or
the uses or development permitted on the Property, or materially or substantially add to
the costs incurred or to be incurred by City as specified herein. Such approvals,
interpretations, waivers, amendments, and/or implementing agreements or documents
may include extensions of time to perform as specified in this Agreement. Any and all
other material and/or substantial interpretations, waivers, or amendments shall require
the consideration, action and written consent of the City Council. Furthermore, the City
Manager may seek review and approval by the City Council on any approval,
interpretation, waiver, amendment, document, or any other matter that, pursuant to this
Section, City Manager otherwise has authority to act upon on behalf of City. Nothing in
this Section does or shall be deemed to authorize the City Manager to take any action that
is otherwise required to be reviewed and decided by the City Council, Planning
Commission, or other reviewing board, commission, or public official, pursuant to any
applicable Federal, State, or City law.
20.18 Entire Agreement; Amendment. Except as set forth above, this Agreement
and the exhibits incorporated herein, the Option Agreement, the Reinstated Development
Agreement, and the other Required City Land Use Agreements (as defined in the Option
Agreement), contain the entire agreement of Buyer and Seller with respect to the matters
contained herein, and no other prior agreement or understanding pertaining to any such
matter shall be effective for any purpose. No provisions of this Agreement may be
amended or modified in any manner whatsoever except by an agreement in writing
signed by duly authorized officers or representatives of each of the parties hereto.
[END -- SIGNATURE PAGE FOLLOWS]
EXHIBIT D
698/015610-0207
22798455.5 a11123/25 -1 6-
IN WITNESS WHEREOF, Buyer and Seller each hereby represents that it has
read this Agreement, understands it, and hereby executes this Agreement to be effective
as of the day and year first written above.
SELLER:
CITY OF LA QUINTA, a California
municipal corporation and charter city
Jon McMillen, City Manager
ATTEST:
Monika Radeva, City Clerk
APPROVED AS TO FORM:
William H. Ihrke, City Attorney
[signatures continue on next page]
EXHIBIT D
698/015610-0207
22798455.5 al 1 /23/25 -17-
BUYER:
TBE RE Acquisition Co II LLC, a
Delaware limited liability company, an
affiliate of Turnbridge Equities
M
Name: Andrew Joblon
Title: Authorized Signatory
[end of signatures]
EXHIBIT D
698/015610-0207
22798455.5 a11/23/25
. agrees to act as Escrow
Holder in accordance with the terms of this Agreement that are applicable to it.
By: _
Name:
Its:
EXHIBIT D
698/015610-0207
22798455.5 a11/23/25 -19-
Escrow Holder
ATTACHMENT NO. 1
LEGAL DESCRIPTION OF PROPERTY
The real property and improvements thereon situated in the State of California,
County of Riverside, City of La Quinta, are described as follows:
[ TO BE INSERTED AFTER THE SUBDIVISION MAP IS RECORDED THAT
SEPARATES THE "PARK AND RETENTION BASIN PROPERTY" FROM THE
REMAINDER OF THE "PHASE 2 PROPERTY" AS DESCRIBED AND REQUIRED
UNDER THE OPTION AGREEMENT AND REINSTATED DEVELOPMENT
AGREEMENT]
EXHIBIT D
698'015610-0207
22798455.5 al1/23/25 _20_
ATTACHMENT NO. 2
FORM OF GRANT DEED
[SEE ATTACHED]
698/015610-0207
22798455.5 al 1'23125 -21 -
ACTIVE\ 1622770766.4
RECORDING REQUESTED BY AND:
WHEN RECORDED MAIL TO:
City of La Quinta
78495 Calle Tampico
La Quinta, CA 92253
Attn: City Manager
Space above this line for Recorder's Use
Exempt from Recordation Fee per Gov. Code § 27383
MAIL TAX STATEMENTS TO:
City of La Quinta
78495 Calle Tampico
La Quinta, CA 92253
Attn: City Manager
The undersigned declares exemption under the
following:
Exempt from recording fee pursuant to
Government Code Section 27383; recorded by
a municipality
Exempt from documentary transfer tax
pursuant to Revenue and Taxation Code
Section 11922; government agency acquiring
title
GRANT DEED
Order No.
Escrow No.
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
the CITY OF LA QUINTA, a California municipal corporation and charter city
("GRANTOR"), hereby grants, conveys, and transfers to
the real property in the City of La Quinta, County of Riverside, State of California,
described on Sub -Attachment No. 1 attached hereto and incorporated herein by
reference (the "Property"). The Property conveyed hereby is subject to all matters of
record. [NOTE: Final Form of Grant Deed will need to include anti -discrimination
covenants required by state law, and other disclosures may be included relating to
requirements in the Option Property's Development Agreement]
[continued on following page]
EXHIBIT D
698/015610-0207
22798455.5 all/23/25 -22-
IN WITNESS WHEREOF, Seller and Buyer have executed this Grant Deed as of
the date noted herein.
Date: , 20
ATTEST:
Monika Radeva, City Clerk
APPROVED AS TO FORM:
William H. Ihrke, City Attorney
SELLER:
CITY OF LA QUINTA, a California
municipal corporation and charter city
M
Jon McMillen, City Manager
[signatures continue on next page]
EXHIBIT D
698/015610-0207
22798455.5 al1/23/25 -23-
BUYER:
TBE RE Acquisition Co II LLC, a
Delaware limited liability company, an
affiliate of Turnbridge Equities
Date: , 20
By:
Name: Andrew Joblon
Title: Authorized Signatory
[end of signatures]
EXHIBIT D
698/015610-0207
22798455.5 al l/23125 -24-
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of Riverside
On
before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
EXHIBIT D
698/015610-0207
22798455.5 al1/23/25 -25-
(Seal)
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of Riverside
On before me,
(insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
EXHIBIT D
698/015610-0207
22798455.5 a11/23/25 -26-
(Seal)
SUB -ATTACHMENT NO. 1 TO GRANT DEED
LEGAL DESCRIPTION OF REAL PROPERTY
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LA
QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS
FOLLOWS:
[ TO BE INSERTED AFTER THE SUBDIVISION MAP IS
RECORDED THAT SEPARATES THE "PARK AND
RETENTION BASIN PROPERTY" FROM THE REMAINDER
OF THE "PHASE 2 PROPERTY" AS DESCRIBED AND
REQUIRED UNDER THE OPTION AGREEMENT AND
REINSTATED DEVELOPMENT AGREEMENT]
EXHIBIT D
698/015610-0207
22798455.5 a11/23/25 -27-