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KSL/Land Use SilverRock 03LAND USE LICENSE AGREEMENT THIS LAND USE LICENSE AGREEMENT (the "Agreement") is made effective this day of October 2003, by and between the La Quinta Redevelopment Agency ("Agency") and KSL Desert Resorts Inc. ("Licensee"). RECITALS WHEREAS, Agency is the owner of certain real property approximately 10,000 square feet in size located in the City of La Quinta, California, depicted as the "Clipping Pile" on Exhibit "A" attached hereto (the "License Property"); WHEREAS, Licensee will be conducting overseeding operations on its golf courses from October 6 through October 20, 2003; WHEREAS, Licensee desires to utilize the License Property to store grass clippings resulting from overseeding operations until the clippings can be hauled away; and WHEREAS, subject to the terms, covenants and conditions of this Agreement, Agency is willing to grant Licensee permission of access for ingress and egress over the License Property owned by Agency, and permission to use the License Property for the limited purpose of storage for grass clippings (the "Land Use") in consideration of certain undertakings with respect to the License Property by Licensee. NOW THEREFORE, in consideration of the Recitals, the mutual promises and obligations contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. GRANT; LIMITATION OF RIGHTS. Agency hereby grants to Licensee a non- exclusive, revocable license for access, ingress and egress over the License Property. Licensee hereby warrants and represents to Agency that Licensee shall return the License Property to a condition substantially as existed on the date that Licensee first took possession of the License Property. 2. TERM. The right of use granted by this Agreement shall commence October 6, 2003, and shall expire October 21, 2003, unless terminated earlier. The obligations of Licensee under this Agreement shall continue in full force and effect until all obligations of Licensee have been fully completed. 3. USE OF LICENSE PROPERTY. The parties acknowledge and agree that Licensee may access the License Property in conjunction with its overseeding operation. In this regard, during the license period only, Licensee shall have a temporary revocable license to enter upon the License Property for the purposes of placement, storage, and removal of grass clippings. In this regard, Licensee agrees that will coordinate its use of the License Property with Agency's designated representative, Mark Weiss, at (760) 777-703 5, and will not disturb, damage or contaminate the License Property or interfere in any manner with other activities on the License Property. 4. LICENSEE'S DUTIES/PERMITTED ACTIVITIES. (a) Licensee agrees to be fully financially responsible for any damage or injury to the License Property and/or to any person which may arise in connection with Licensee's or its subLicensee's use of the License Property. (b) Licensee shall thoroughly clean, install soil stabilizer, and make all necessary repairs and replacements, if any, to the License Property in order to return the License Property to a condition as existed on the date the Licensee first took possession of the License Property, as reasonably determined by Agency or its designated representative. In addition, Licensee agrees not to conduct or cause to be conducted on the License Property any repair, maintenance and/or refueling of any vehicles and equipment. (c) Licensee agrees to be responsible for the clean-up of any new environmental contamination, and/or aggravation of existing contamination, which occurs as a result of, or arises in connection with, any activities conducted by Licensee, its employees, agents, subLicensees or representatives, under this Agreement and to indemnify and hold Agency and the City of La Quinta harmless from and against any and all claims, losses, damages and injuries of any nature whatsoever resulting from or arising out of Licensee's activities under this Agreement, except to the extent resulting from the gross negligence or willful misconduct of Agency, its employees, agents, Licensees or representatives. Licensee's obligation to observe and perform this covenant shall survive the expiration or other termination of this Agreement. If any toxic or chemical Hazardous Materials attributable to Licensee, its agents, employees, on - site subLicensees, or invitees, or the activities of any of them, are found in the soil, air surface or ground water on, under or about the License Property, Licensee, at its sole expense, shall promptly take any and all actions necessary to return the License Property to the condition existing prior to the introduction of such Hazardous Materials to the License Property in accordance with applicable laws and the requirements of all governmental agencies with jurisdiction, provided that Agency's approval of such actions shall first be obtained, which approval shall not be unreasonable withheld. If Licensee causes or permits a significant release of Hazardous Materials or is in material noncompliance with any applicable law or requirement of this Section, Agency may make a reasonable demand for action upon Licensee. If Licensee does not respond within thirty (30) days (unless there is an emergency, in which case Licensee shall be required to respond as soon as practicable), Agency may, at its option, take reasonable actions to remedy the release or noncompliance at Licensee's sole expense, which sums shall be immediately due and payable to Agency. At any time during the term of this Agreement, Licensee shall, if required by any governmental agency, promptly take whatever steps are necessary to investigate and remedy any contamination by Hazardous Materials caused by Licensee, its agents, employees, on -site subLicensees or invitees. (d) Licensee shall be responsible for obtaining all permits and approvals from all applicable governmental authorities necessary in connection with the Land Use on the License Property. Licensee shall comply with all laws, rules, and regulations in carrying out its use and clean up of the Licensed Property. (e) Licensee agrees that any and all costs incurred with regard to the Land Use and/or use of License Property or any claims of third parties for liens, personal injury or property damage with respect to the use of the License Property by Licensee or its subLicensee shall be borne by Licensee at Licensee's sole cost and expense. Licensee agrees to indemnify and hold Agency harmless from and against any claim, loss, cost or liability of any nature whatsoever arising out of or incurred in connection with the Land Use. (f) Licensee shall not cause, suffer or permit any mechanic's, materialman's or other liens to attach to or be recorded against the License Property in connection with work performed by Licensee. (g) In the event that Licensee, or its subLicensees, breach any of the foregoing covenants regarding the License Property and/or any facilities or systems located on the License Property, Licensee agrees to be responsible for all damages caused by such breach. 5. INSURANCE AND LICENSES. At all times during the Term of this Agreement, Licensee shall carry and maintain, in full force and effect, at its sole cost and expense, the following insurance policies with insurance companies satisfactory to Agency. Such policies shall include a provision requiring a minimum of thirty (30) days notice to Agency of any change or cancellation. The Agency and the City of La Quinta, their officers, employees and agents, shall be named as additional insureds on the policies listed in Subsections 5(a) and (b). (a) Comprehensive general liability insurance in an occurrence format in an amount of five million dollars ($5,000,000) per occurrence, including the following coverages: contractual liability, personal injury, broad form property damage, independent Licensees and premises operations. (b) Business auto coverage form insurance on all vehicles used in connection with this License and/or on the License Property in an amount of five hundred thousand dollars ($500,000) combined single limits for bodily injury and property damage per occurrence. (c) Workers' Compensation insurance in accordance with the provisions of the Workers' Compensation Act of the State of California for all employees, subLicensees and any subLicensee's employees engaged in connection with this Agreement. (d) Licensee agrees to provide Agency with certificates of insurance evidencing the policies listed above upon execution of this License as a condition to commencing any of the activities contemplated by this Agreement. 6. INDEMNITY. (a) Licensee shall indemnify, defend, and hold Agency and City of La Quinta, their subsidiaries and affiliates, their respective officers, directors, agents and employees ("Indemnified Parties") and the License Property free, clear and harmless from any and all demands, claims, causes of action, damages, liabilities, liens, losses, costs, charges, penalties, obligations, judgments, fines and expenses (including, without limitation, attorney's fees) of any kind whatsoever in connection with, arising out of, or by reason of any breach, violation or nonperformance by Licensee, its agents, servants, employees, subLicensees or invitees, of any covenant or provisions of this Agreement or any law, ordinance, rule, regulation or order or by reason of any damage, harm or loss to the License Property, including, without limitation, any damage to the License Property and any liability to any third party incurred by reason of any acts or omission of, or any commission of, any negligent or tortious acts by Licensee, its agents, servants, employees, subLicensees or invitees. In the event the Indemnified Parties are made a party to any action, lawsuit, or other adversarial proceeding in any way involving such claims, Licensee shall provide a defense to the Indemnified Parties, or at the Agency's option, reimburse the Indemnified Parties their costs of defense, including reasonable attorney's fees, incurred in defense of such claim. In addition, Licensee shall be obligated to promptly pay any final judgment or portion thereof rendered against the Indemnified Parties. (b) The provisions of this section shall not be ready to limit in any respect whatsoever Licensee's obligations as provided in this Agreement. 7. TERMINATION. The Agency shall have the right to terminate this Agreement at any time with or without cause by giving Licensee twenty-four (24) hours written notice. 8. NOTICES. Any notice to be given to Agency or Licensee shall be in writing and shall be deemed to have been properly delivered when directed to such addressee as follows: To Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attention: Mark Weiss Facsimile: (760) 777-7101 To Licensee: KSL Desert Resorts, Inc. 50-905 Avenida Bermudas La Quinta, CA 92253 Attention: Dean Miller Facsimile: (760) 771-0546 With a copy to: KSL Desert Resorts, Inc. 50-905 Avenida Bermudas La Quinta, CA 92253 Attention: Legal Department Facsimile: (760) 564-8003 Any party may change the address to which such communications are to be directed to it by giving a written notice to the other party in the manner provided in this paragraph. Any notice given pursuant to this paragraph shall be deemed to be delivered when addressed to the addressee as set forth therein, (i) at the time a written notice by mail is deposited in the United States mail, postage prepaid, or (ii) the time any other written notice, including facsimile, telegram or other electronic mail message, is personally delivered to the recipient or is delivered to a common carrier for transmission or actually transmitted by the person giving the notice by electronic means, to the recipient. 9. ASSIGNMENT/SUBLICENSEES. This agreement shall not be assignable by Licensee. In the event any portion of the activities is performed by a subLicensee, Licensee warrants that all such subLicensees shall abide by all terms and conditions of this Agreement, including, without limitation, furnishing the insurance coverages and the indemnification. Licensee warrants each such subLicensee's compliance with the terms and conditions of this Agreement. 10. MISCELLANEOUS. (a) No amendment, alteration, modification of or addition to this Agreement shall be valid or binding unless expressed in writing and signed by the party or parties to be bound thereby. This Agreement is the result of negotiations of the parties and shall be construed as jointly drafted. (b) The Agreement shall be governed by and interpreted in accordance with the laws of the State of California. (c) This Agreement contains the entire agreement and understanding between the parties regarding the Licensee's use of the License Property and there are no terms, covenants or conditions which exist other than those contained herein. (d) If any party hereto shall bring any suit or action against another for relief, declaratory or otherwise, arising out of this Agreement, the prevailing party shall have and recover against the other party, in addition to all court costs and disbursements, such sum as the court may adjudge to be reasonable attorney's fees. The parties have executed this Agreement on the dates indicated below to be effective the date first above written. "AGENCY" "LICENSEE" LA QUINTA REDEVELOPMENT AGENCY KSL DESERT RESORTS, INC. By: By: - Dated: //%— %— D Dated: 4.3o3 ATTEST: LA QUINTA REDEVELOPMENT AGENCY APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: /)).'I /C/.,z - M. Ka erine Jens n, Agency Counsel A