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HomeMy WebLinkAbout7/30/2008 - STAFF REPORTS - 1.F. �Ot p A LM Sa9 4 ry n V N rreett^• rgtrFaRN`a COMMUNITY REDEVELOPMENT AGENCY/CITY COUNCIL STAFF REPORT DATE: JULY 30, 2008 JOINT PUBLIC HEARING SUBJECT: APPROVAL OF A DISPOSITION AND DEVELOPMENT AGREEMENT WITH O & M HR, LLC, A DELAWARE LIMITED LIABILITY CORPORATION, FOR A 5.7+ ACRE AGENCY-OWNED PARCEL AT THE SOUTHEAST CORNER OF CALLE EL SEGUNDO AND ANDREAS ROAD, MERGED REDEVELOPMENT PROJECT AREA #2, FOR THE DEVELOPMENT OF A 490-ROOM HARD ROCK HOTEL, AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE ALL DOCUMENTS RELATED TO THE AGREEMENT FROM: David H. Ready, Executive Director BY: Community & Economic Development Department SUMMARY This action approves a Disposition and Development Agreement with O & M HR, LLC, a Delaware Limited Liability Corporation (the 'Developer') for a 5.7+ acre parcel at Calle El Segundo and Andreas Road for the purpose of developing a 490-room Hard Rock Hotel. The Agency originally awarded an Exclusive Agreement to Negotiate (ENA) for the parcel at the October 5, 2005 meeting to Nexus Development Corporation-Central Division, a California Corporation, and extended it to December 31, 2007; the Agency and Nexus entered an Assignment and Assumption Agreement on July 18, 2007, granting O & M HR, LLC the rights under the ENA; finally, the ENA was extended in December, 2007 until December 31, 2008. The Developer has proceeded with the design and development of the project, receiving the entitlement on the project by the City in October, 2007, and has completed the acquisition of the two adjacent parcels to assemble the 10 acre site. As part of the terms of the DDA, the Developer will pay the Agency fair market value for the parcel and develop and construct the project according to the Scope of Development. The Agency will provide for some of the site preparation prior to conveyance. r ITEM NO. �- CRA/City Council Staff Report July 30, 2008 -- Page 2 C & M HR, LLC DDA RECOMMENDATION: 1. Adopt Resolution No. "A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY COUNCIL APPROVAL OF A DISPOSITION AND DEVELOPMENT AGREEMENT WITH O & M HR, LLC, A DELAWARE LIMITED LIABILITY CORPORATION, FOR A 5-7+ ACRE AGENCY-OWNED PARCEL AT THE SOUTHEAST CORNER OF CALLE EL SEGUNDO AND ANDREAS ROAD, MERGED REDEVELOPMENT PROJECT AREA #2, FOR THE DEVELOPMENT OF A 490 ROOM HARD ROCK HOTEL, AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE ALL DOCUMENTS RELATED TO THE AGREEMENT" 2. Adopt Resolution No. "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, CONCURRING WITH THE AGENCY'S APPROVAL OF A DISPOSITION AND DEVELOPMENT AGREEMENT WITH 0 & M HR, LLC, FOR A 5.7+ ACRE AGENCY-OWNED PARCEL AT THE SOUTHEAST CORNER OF CALLE EL SEGUNDO AND ANDREAS ROAD, MERGED REDEVELOPMENT PROJECT AREA #2, FOR THE DEVELOPMENT OF A 490-ROOM HARD ROCK HOTEL" FISCAL IMPACT The appraised value of the Agency parcel is $3,625,000, which the Agency will receive when the hotel construction gets underway. The project's value is estimated at more than $200 million, which will provide considerable tax increment to Merged Project Area #2. The project will also generate significant transient occupancy and sales taxes. Most importantly, the supply of First Class Hotel rooms in proximity and available to the Convention Center will help ensure the success of that facility, which is critical to the overall tourism economy of the City. Q 11 L17) ue_) - John . Ra nd, Director of Thomas J- Wilson,/Assistant City Co unity Economic Development Manager, Development Services 1 David H. Ready, E Director Attachments: Agency Resolution City Resolution Disposition and Development Agreement Summary Report 000002 RESOLUTION NO. A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY COUNCIL APPROVAL OF A DISPOSITION AND DEVELOPMENT AGREEMENT WITH O & M HR, LLC, A DELAWARE LIMITED LIABILITY CORPORATION, FOR A 5.7+ ACRE AGENCY- OWNED PARCEL AT THE SOUTHEAST CORNER OF CALLE EL SEGUNDO AND ANDREAS ROAD, MERGED REDEVELOPMENT PROJECT AREA #2, FOR THE DEVELOPMENT OF A 400-ROOM HARD ROCK HOTEL, AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE ALL DOCUMENTS RELATED TO THE AGREEMENT WHEREAS, the Community Redevelopment Agency of the City of Palm Springs, California ("Agency") is constituted under the Community Redevelopment Law (California Health and Safety Code Section 33000 et. seer.) to carry out the purpose as the redevelopment in the City of Palm Springs ("the City"); and WHEREAS, O & M HR, LLC ("Developer") has received Planned Development r District approval from the City of Palm Springs to develop a First Class Hotel on a 5.7+ acre Agency-owned parcel, combined with 4.3 acres of Developer-owned land (the "Project Site") under the terms of an Exclusive Agreement to Negotiate; and WHEREAS, expansion of the hotel inventory in proximity to the City's Convention Center, especially in the First Class Hotel category, is an objective of the City and Agency to increase the vitality of the downtown area, the Convention Center, and the tourism industry; and WHEREAS, Section 33430 of the Community Redevelopment Law allows that an agency may, for purposes of redevelopment, sell, lease, exchange, subdivide, transfer, assign, pledge, encumber by mortgage or deed of trust, or otherwise dispose of any real or personal property or any interest in property; and WHEREAS, the Agency has considered the staff report, and all the information, testimony and evidence provided during the Agency public meeting on July 30, 2008. aoaaoa NOW, THEREFORE, BE IT RESOLVED by the Community Redevelopment Agency of the City of Palm Springs as follows: SECTION 1. The above recitals are true and correct and incorporated herein. SECTION 2. Pursuant to the California Environmental Quality Act (CEQA), the Community Redevelopment Agency finds as follows: In connection with the approval of the Planned Development District application, a Mitigated Negative Declaration was prepared in compliance with CEQA, the State CEQA Guidelines and the City's CEQA procedures. The Community Redevelopment Agency finds that there are no changes in the effects of the proposed project or the circumstances in which it is being carried out, which require any modification of the Environmental Assessment/Mitigated Negative Declaration and finds that it adequately discusses the potential significant environmental effects of the proposed project (land use, traffic/circulation, parking, air quality, noise, aesthetics, geology/soils, water quality, drainage, public utilities, public safety, archaeological/historic resources and light and glare). The Community Redevelopment Agency further finds that the Environmental Assessment/Mitigated Negative Declaration reflects its independent judgment. a) The Developer proposes to construct a Hard Rock Hotel consisting of at least 490 hotel rooms on the Site. The Developer shall construct all of the improvements at Developer's sole cost. b) The Developer shall pay to Agency the appraised value for the Agency's parcels, the sum of Three Million Six Hundred Twenty Five Thousand Dollars ($3,625,000). c) The Agency finds that the Developer's Project on the Site is not a public work under the applicable provisions of California Labor Code Sections 1720 et seq. SECTION 3. The Agency may undertake certain street improvements in keeping with City codes. Such offsite improvements are imperative to this project and include reconstructing streets, curbs, gutters, and sidewalks along Andreas Road and Calle El Segundo, undergrounding utilities; and providing drainage around the project. This project improves a corner of Merged Project Area #2 and will increase tax increment to the Agency. SECTION 4. The Agency hereby finds and determines as follows: a) The property is currently developed as a Convention Center Parking Lot and serves as an overflow lot for the Spa Resort Casino. The Convention Center is a major community tourism asset and was completed and dedicated December 31, 1987 and contained approximately 110,000 square feet. In 1992, the City completed a 47,000 square foot expansion to the facilities. The City expanded the Convention Center once again in 2004-2005, adding another 100,000 square feet. b) The DDA advances the purposes of the Community Redevelopment Law by reversing or alleviating any serious physical, social, and economic burden on the Community which cannot reasonably be expected to be reversed or alleviated by private enterprise acting alone. The sale of the property will facilitate the development and upgrade of the property, placing the property in the hands of a first class hotel operator, in order to develop new transient occupancy and sales tax revenue, and attract additional commercial development within the City, increasing the City's tax base. c) The DDA advances the purposes of the Community Redevelopment Law by eliminating blight and promoting the health, safety and general welfare of the people of Palm Springs. SECTION 5. The proposed project is consistent with the Implementation Plan for Merged Redevelopment Project Area #2, insofar as this project will increase tax increment and increase the City's tourist business by developing a destination resort and creating an architecturally inviting project adjacent to a significant community tourism asset. SECTION 6. Based on foregoing reasons, this DDA is hereby approved and incorporated herein by this reference. 000025 SECTION 7. The Executive Director of the Agency, or his designee, is authorized to execute all necessary documents, in a form approved by the Agency Counsel. PASSED, APPROVED, AND ADOPTED THIS DAY OF JULY, 2008. STEVE POUGNET, CHAIRMAN ATTEST: James Thompson, City Clerk 00809F CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, do hereby certify that Resolution No. is a full, true and correct copy, and was adopted at a regular meeting of the Palm Springs City Council on the day of , 2008, by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California 08060 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, CONCURRING WITH THE AGENCY'S APPROVAL OF A DISPOSITION AND DEVELOPMENT AGREEMENT WITH O & M FIR, LLC, FOR A 5.7+ ACRE AGENCY-OWNED PARCEL AT THE SOUTHEAST CORNER OF CALLS EL SEGUNDO AND ANDREAS ROAD, MERGED REDEVELOPMENT PROJECT AREA #2, FOR THE DEVELOPMENT OF A 490- ROOM HARD ROCK HOTEL NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm Springs that it concurs with the Community Redevelopment Agency's Approval of a Disposition and Development Agreement with O & M HR, LLC for a 5.7+ Acre Parcel at the Southeast Corner of Calle El Segundo and Andreas Road, Merged Redevelopment Project Area #2, for the Development of a Hard Rock Hotel with 490 Rooms. PASSED, APPROVED, AND ADOPTED THIS DAY OF JULY, 2008. STEVE POUGNET, CHAIRMAN ATTEST: James Thompson, City Clerk oao0C, a CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) Ss- CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, do hereby certify that Resolution No. is a Full, true and correct copy, and was adopted at a regular meeting of the Palm Springs City Council on the day of , 2008, by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California 0000�© SUMMARY REPORT: DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE PALM SPRINGS COMMUNITY REDEVELOPMENT AGENCY AND 0 & M HR, LLC, A DELAWARE LIMITED LIABILITY CORPORATION FOR A 5.7+ ACRE AGENCY-OWNED PARCEL AT THE SOUTHEAST CORNER OF CALLE EL SEGUNDO AND ANDREAS ROAD FOR THE PURPOSE OF DEVELOPING A 490-ROOM HARD ROCK HOTEL IN THE CITY OF PALM SPRINGS MERGED REDEVELOPMENT PROJECT AREA #2 July 2008 o��Q�Q INTRODUCTION Before real property acquired by a Community Redevelopment Agency with tax increment proceeds may be sold or leased,the transaction must be approved by the Agency Board in accordance with California Health and Safety Code Section 33433. This Section requires a "Summary Report", which describes and specifies certain information in regard to the proposed transaction, be available for public inspection. DESCRIPTION OF THE PROPOSED AGREEMENT Site and Interests to be Conveyed The Project Site consists of approximately 10.0 acres. The Project Site consists of approximately 4.3 acres acquired by the Developer For the project located along Tahquitz Canyon Way, and the Agency's 5.7 acres is in two parcels which extend along Andreas Road between Calle El Segundo and the Wyndham Hotel. The Agency plans to sell its two parcels at appraised value to the Developer for a new hotel project for $3,625,000. Proposed Development The Developer shall construct a four star Hard Rock Hotel of at least four hundred ninety (490) rooms. A"four star" hotel means a full service hotel comparable to other hotels in the Hard Rock Hotel Group in operation as of the date of this Agreement. The hotel will contain at least fifteen thousand (15,000) square feet of group meeting space, plus restaurants, spa facilities. The hotel shall provide the Palm Springs Convention Center with a two hundred fifty(250) room block commitment underthe Convention Center's Committable Rooms Program. The Developer shall also construct on-site parking to meet that meets the City's requirements for the hotels. Financing The Developer will privately finance the construction of the new facilities through a combination of equity and debt. Agency Responsibilities The Agency agrees to sell the Developer 5.7 acres for the appraised value of$3,625,000. Developer Responsibilities The Developer has received approval of the Preliminary and Planned Development District application, and certification of the environmental action under CEQA from the City of Palm Springs. The Developer commits to fully developing the project as approved in compliance 000011 with the Agency's other standard terms and conditions, including non-discrimination and maintenance covenants, and all other terms and conditions as provided in the Disposition and Development Agreement. COST OF AGREEMENT TO THE AGENCY The Agency shall receive an amount of $3,625,000 from the Developer for the parcel, which is the price determined by a fair market value for the appraisal. In addition, the Agency will undertake certain public improvements in the vicinity of the project at a cost not to exceed $3,000,000. ODf➢012 CITY OF PALM SPRINGS PUBLIC HEARING NOTIFICATION (a CITY CLERK'S DEPARTMENT James Thompson, City Clerk Meeting Date: July 30, 2008 Subject: DDA - O & M HR, LLC - Hard Rock AFFIDAVIT OF PUBLICATION 1, Kathie Hart, Chief Deputy City Clerk, of the City of Palm Springs, California, do hereby certify that a copy of the Notice of Joint Public Hearing was published in the Desert Sun on July 19 and July 26, 2008. 1 declare under penalty of perjury that the foregoing is true and correct. Kathie Hart, CMC Chief Deputy City Clerk AFFIDAVIT OF POSTING 1, Dolores Strickstein, Secretary, of the City of Palm Springs, California, do hereby certify that a copy of the Notice of Joint Public Hearing was posted at City Hall, 3200 E. Tahquitz Canyon Drive, on the exterior legal notice posting board and in the Office of the City Clerk on July 18, 2008. 1 declare under penalty of perjury that the foregoing is true and correct. Lam. Dolores Strickstein Secretary OO��I� PROOF OF PUBLICATION Til s is space for County Clerk's Filing Stamp (2015.5.C.C.P) STATE OF CALIFORNIA County of Riverside I am a citizen of the United States and a resident of Proof of Publication of the County aforesaid;T am over(he age of eighteen ----------------------------------- years,and not a party to or interested in the above-entitled matter.I am the principal cleric of a printer of the,DESERT SUN PUBLISHING COMPANY a newspaper of general circulation, printed and published in the city of Palm Springs, County of Riverside,and which newspaper has been No 2550 —"--- -- -- adjudged a newspaper of general circulation by the CITY OF PALM SPRINGS AND Superior Court of the County of Riverside,State of COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS California under the date of March 24, 1983.Case NOTICE OF JOINT PUBLIC NEARING Number 191236;that the notice,of which the annexed is ff rimed c0 NOTICB IS HEREBY GIVEN that top City Council p copy(set in type not smaller City") and Community R(Onvolopmont Agency than non parcel,has been published in each regular Aganubfc a ')f et City ofp mal,nWeengW�lllhold iyJ�,I and entire issue of said newspaper and not in any 2008, in the Council Charnbor at 3200 t.Tahgwn, CanyDn way,Palm Springs,California 92262, supplement thereof on the following dotes,to wit; The ppurpose of the h2/umg is to consider a Disposition inn❑Ovoloplhont Agreement('DDA)with O&M HR Sul 19°",26`",2008 LLC for an appmxlmate 5 7 acre situ on the east aide Y of Calls El S0 undo and the south aide of Antlroaa Road,bounds by Calls El Se unto on lice west and Andreas Road on the north. we 'Agency"will sell at fair market voluo lho site approved for the devolopmunt of the Hard Rock Hotel The Agoney will convey the —____—...—............—__—__.......... parcel to the Developer onfl in exchange,the Develop- All in the year 2008 er agrees ID c0oslruct the hotel project on Inn gild The"A ancy"pioposoa to enter into a"DDA"with o& M HP,4LC In order to approve this DDA,Iho'Aqan- I certify(or declare)under penalty of perjury that the cy' and ^o era and Safety m rnakc cenam Ii i ngs ppursueN to Health find Sa101y Cade Sections 33421 1, foregoing is true and correct. 33433 and 33445 and prior to makln Ihaso findings_a Public Hearing must or,hold to racePve.public inWron� - -- Dated at Palm Springs,California this----2901, --day the mutter Response-to this nonce may ba inado vorb,tlly n the Public Hearing-anryor in writing before the hearing Wrmrri comment,mayy be made to the"Agency and Of-------- July -----,2008 City Council by letter(for mail or hind dolivory)to James Thorn8jon Assistant Secretary/City Clerk 320E.Tahgultz Canyyon Way . ., Palm Springs,CA g2262 �a O Any ehalluri of the proposed project In court my bo limited to raising Only those Issues raised at the public _ hearing described in this notice, or in written cone- C'L 1 ure spondonoe rhAvutud to the City Clerk at,or puoi,to too ppublic hearing (Government Coda Section L,j p"' ,.,� 65000(b)(2)). ^tl_7 '� LLI An opportunity will be given at said hearing for ell Intow wtcd persons to be said pueetions r?srtinp this case-inay be dhecfed lu Juhq S-Royrnond Dirac of t Communllryry&Economle Do-olopmenl(7Q 323-8226. C 1 >- C I �) (°"„ Further infannatien,including a copy of the DDA And Liz . r. It h, Ro,olution prepared In accordsten with Nu.tlth and _ t wli SafeN Cade Section 33d3a,Is available in the Office of O � the C ty Clerk at Iho above address. 7- CC < Si recasts ayude con fists calla,podavor Ilame a lei Cludad tie Pat,5 rings y ousts hoofer can Nauipe Fieger telefono(768)323-9241 Jame-Thomv.;on Assistant Socmtary/City,perk CITY OF PALM SPRINGS AND COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS NOTICE OF JOINT PUBLIC HEARING NOTICE IS HEREBY GIVEN that the City Council ("City") and Community Redevelopment Agency ("Agency") of the City of Palm Springs will hold a Joint Public Hearing at 6:00 p.m., Wednesday, July 30, 2008, in the Council Chamber at 3200 E. Tahquitz Canyon Way, Palm Springs, California 92262. The purpose of the hearing is to consider a Disposition and Development Agreement ("DDA") with 0 & M HR, LLC for an approximate 5.7 acre site on the east side of Calle El Segundo and the south side of Andreas Road, bounded by Calle El Segundo on the west and Andreas Road on the north. The "Agency' will sell at fair market value the site approved for the development of the Hard Rock Hotel, The Agency will convey the parcel to the Developer and in exchange, the Developer agrees to construct the hotel project on the site. The "Agency' proposes to enter into a "DDA" with 0 & M HR, LLC. In order to approve this DDA, the "Agency' and ""City' are required to make certain findings pursuant to Health and Safety Code Sections 33421.1, 33433 and 33445 and prior to making those findings, a Public Hearing must be held to receive public input on the matter. Response to this notice may be made verbally at the Public Hearing and/or in writing before the hearing. Written comments may be made to the "Agency' and City Council by letter (for mail or hand delivery) to: James Thompson, Assistant Secretary/City Clerk 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Any challenge of the proposed project in court may be limited to raising only those issues raised at the public hearing described in this notice, or in written correspondence delivered to the City Clerk at, or prior, to the public hearing. (Government Code Section 65009(b)(2)). An opportunity will be given at said hearing for all interested persons to be heard. Questions regarding this case may be directed to John S. Raymond, Director of Community & Economic Development (760) 323-8228. Further information, including a copy of the DDA and Resolution, prepared in accordance with Health and Safety Code Section 33433, is available in the Office of the City Clerk at the above address. Si necesita ayuda con esta carta, porfavor Ilame a la Ciudad de Palm Springs y puede hablar con Nadine Fiegertelefono (760) 323-8241. mes Thompson ssistant Secretary/City Clerk 000014 DISPOSITION AND DEVELOPMENT AGREEMENT By and Between COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS and O &MHR, LLC A DELAWARE LIMITED LIABILITY COMPANY PALM SPRINGS MERGED REDEVELOPMENT PROJECT AREA NO. 2 5994701 Dnpu�.5 TABLE OF CONTENTS I. [§1001 SUBJECT OF AGREEMENT..........................................................................I A. [§1011 -Purpose of This Agrccment ........I..........I..........I...11.1-1-111-1-1-------I B. [§102] The Redevelopment Plan........................................ I C- [§1031 The Proiect Area.................................................. I D. [§104] The Site.......................................................................................2 E. [§105] Parties to This Agreement...........................................................2 F- [§1081 Deposit.................................................... ......-............................) ji. [§2001 DISPOSITION OF THE SITE........................... .............................................4 A. [§2011 Sale and Purchase -----------------------------------------------—.....................4 B. [§202] Escrow------------------------------------------------ ...--...-............................4 C. [§2031 Conveyance of Title and Delivery of Possession .......................7 D. [§2041 Conditions Precedent..................................................................7 E. [§2051 Form of Deed---------------------------------------------------- ----.--.............10 F. [§2061 Condition of Title............ .........................................................10 G. [§207] Time for and Place ol'Delivery of Deed...................................I I H. [§208] Payment of the Purchase Price and Recordation of Deed.........I I 1. [§209] Title Insurance .........................................................-...............I I ,1- [§2101 Taxes and Assessments.............................................................12 K. [§211] Conveyance Free of Possession................................................12 L. [§212] Inspections: Conditions of the Agency Parcel..........................12 M- (§2131 Zoning of the Site......................................................................14 N. [§214] Condition of the Agency Parcel................................................14 O. [§215] Preliminary Work by the Develotamer.........................................14 P. [§2161 Submission of Evidence of Equity Capital and Financinv .................................................15 III. [§300] DEVELOPMENT OF THE SITE .................. ..................15 A. [§301] Development ofihc Site by the Developer...............................15 B, [§3131 Responsibilities of the Ancne .................................................19 C- [§314] Taxes. Assessments. Encumbrances and Liens.......................20 D. [§315J Prohibition Against Transfer of Agency Parcel the Buildings or Structures Thereon and Asshmment of Agreement .• . .. . .. ...........................................20 E. [§3161 Security Financing; Rights of I-lolders......................................21 F. [§322] Right of the Agency to Satisfy Other Liens on the Site AfterTitle Passes--------------------------------......................................24 G- [§3231 Certificate of Completion .........................................................24 K [§3241 Prevailing Wages......................................................................25 IV. [§4001 USE Of, THE SITE................ .......................................................................26 A- [§401] lJses...........................................................................................26 B- [§4021 I-lotelOperator ...................................................................26 C. [§4031 Obligation to Refrain From Discrimination..............................27 D. [§404] Form of Nondiscrimination and Nonsegreaation Clauses........27 E. [§4051 Effect and Duration of Covenants.............................................28 V. [§500] DEFAULTS, REMEDIES AND TERMINATION.......................................29 A. [§501] Defaults—General ....................................................................29 B. [§502] Legal Actions . •...........................................................00 C. [§506] Rights and Remedies are Cumulative............ .................30 s�ea�n i 000017 VI. [§600] GENERAL PROVISIONS..............................................................................i t A. [§601] Notices. Demands and Communications Between the Parties.........................................................•-----•---•--------------------)1 B. [§602] Conflicts of Interest..................................................................31 C. [§603] [Reserved.]................................................................................31 D. [§604] Enforced Delay: Extension of Times of Performance............. 1 E- [§605] Inspection of Books and Records.............................................32 F- [§606] Plans and Data................ .......................................32 G- [§607] Attorneys' Pees . • •..............................................................32 VII. [§700] SPECIAL PROVISIONS............................ • -- --- . . 37 A. [§701] Amendment of Redevelopment Plan.......................................32 B. [§702] Submission of Documents to the ALrency for A 33 C. [§703] Amendments to this Agreement................................................33 D. [§704] Conflicis....................................................................................33 VIII [§800] ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS .......................33 IX. [§900] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY......................34 Attachments Attachment No. I Map of the Site Attachment No- 2 Legal Description of the Site Attachment No. 3 Schedule of Performance Attachment No. 4 Scope of Development Attachmem No. 5 Form of Grant Deed 5047V 1 0099.18 DISPOSITION AND DEVELOPMENT AGREEMENT THIS AGREEMENT is entered into as of the day of 2008, by and between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS (the "Agency"), and O & M HR, LLC, a Delaware limited liability company(the "Developer"). The Agency and the Developer agree as follows: I. [§100] SUBJECT OF AGREEMENT A. [§101 J Purpose of This Agreement The purpose of this Agreement is to cffectuatc the Amended and Restated Redevelopment Plan approved and adopted on May 26, 2000, by the City Council of the City of Patin Springs by Ordinance No. 1583 for the Palm Springs Merged Redevelopment Project Area No. 2 (as amended, the "Redevelopment Plan") and adopted plans and politics of the City of Palm Springs ("City"), including the restoration and rehabilitation of private and public properties, elimination of blight, the renewal and enhancement of a vibrant commercial and tourist core near the City's downtown area, and ensuring the availability of conference and hotel uses near the Convention Center by providing for the disposition and development of certain real property (the "Site") included within the boundaries described in the Redevelopment Plan (the "Project Area") and the development of a hotel thereon. The development shall include a Hard Rock hotel which shall include not less than 400 hotel (and/or condominium, if applicable) rooms, at least 15,000 square feet Of "under-roof' meeting space and on-site parking which meets the requirements of the City (the "Developer Improvements" or "Hotel"). The development of the Hotel pursuant to this Agreement and the fulfillment generally of this Agreement are in the vital and best interests of the City, and the health, safety, morals and welfare of its residents and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements. B, [§102] The Redevelopment Plan This Agreement is subject to the provisions of the Redevelopment Plan. The Redevelopment Plan, as it now exists and as it may be subsequently amended pursuant to Section 701, is incorporated herein by reference and made a part hereof as though fully set forth herein. The Agency is entering into this Agreement to carry out the provisions of the Redevelopment Plan. C. [§103] The Proiect Area The Project Area is located in the City of Palm Springs, California, and the exact boundaries thereof are specifically described in the Redevelopment Plan. 5fl'149n I oaaa13 D. [§I04] The Site The Site is that portion of the Project Area shown on the Map of the Site (Attachment No. 1) and is more particularly described in the Legal Description of the Site (Attachment No. 2). The Agency owns an approximately 6 acre portion of the Site ("Agency Parcel"). The Agency Parcel is currently used as a public parking lot. The Agency shall convey in fee all of the Agency Parcel to the Developer in accordance with the terms and provisions of this Agreement. 'file Developer owns an approximately 4 acre portion of the Site adjacent to the south of the Agency Parcel ("Developer Parcel"). The Developer Parcel and the Agency Parcel collectively comprise the Site. The Developer intends to develop the Hotel on the Site, all as discussed in Section 101 above. The Agency Parcel and the Developer Parcel are each shown on the Map of the Site (Attachment No. 1). C. [§105] Parties to]'his Agreement 1. [§106] The Af4ency The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 el seq.). The office of the Agcncy is located at 3200 Cast Tahquitz Canyon Way, Palm Springs, CA 92263. "Agency" as used in this Agreement, includes the Redevelopment Agency of the City of Palm Springs and any assignee of or successor to its rights, powers and responsibilities. 2. [§107] The Develou_er The Developer is O & M HR, LLC, a Delaware limited liability company_ 'file principal office of the Developer is located at I MacArthur Place, Suite 300, Santa Ana, CA 92707. Wherever the term "Developer" is used herein, such term shall include any permitted assignee or successor in interest, as herein provided. The qualifications and identity of the Developer are of particular concern to the Agency, and it is because of such qualifications and concerns that the Agency has entered into this Agreement with the Developer. No voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein. This Agreement may be terminated by the Agency if there is any significant change (voluntary or involuntary) in the management or control of the Developer prior to the completion of development of the Hotel Parcel, as evidenced by the issuance of a Certificate of Completion therefor. Notwithstanding the foregoing, the Developer may assign one time only its interest in this Agreement upon prior written notice to the Agency, but without the Agency's consent, to a single purpose entity owned and controlled by the Developer ("Permitted Transferee"). ss�4�u i nn ry r� Any proposed buyer, transferee, conveyee, assignee or lessee shall have the qualifications and financial responsibility necessary and adequate, as may be reasonably determined by the Agency, to fulfill the obligations undertaken in this Agreement by the Developer. Any such proposed buyer, transferee, conveyce, assignee or lessee, by instrument in writing satisfactory to the Agency and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of the Agency, shall expressly assume all of the obligations of the Developer under this Agreement and agree to be subject to all conditions and restrictions to which the Developer is subject. There shall be submitted to the Agency for review all instruments and other legal documents proposed to effect any such sale, transfer, conveyance, assignment or lease, and, if approved by the Agency, such approval shall be indicated to the Developer in writing. In the absence of specific written agreement by the Agency, no sale, transfer, conveyance, assignment or lease, or the approval thereof by the Agcncy, shall be deemed to relieve the Developer or any other party from any obligations under this Agreement. F. [§108] Deposit Developer and Agency hereby acknowledge and agree that pursuant to Section 5 of that certain Exclusive Agreement to Negotiate dated December 8, 2005 (as the same may have been assigned, amended, supplemented or otherwise modified, the "ENA"), by and between Developer (as successor-in-interest to Nexus Development Corporation — Central Division) and the Agency, Developer previously deposited with Agency an amount equal to FIFTY THOISAND DOLLARS ($50,000), as an initial "Good Faith Deposit" (the "Deposit"). pursuant to the ENA, as a supplement to the initial Deposit previously paid by Developer to Agency, it was contemplated that the Developer would deliver an additional deposit of FIFTY-EIGHT THOUSAND SEVEN HUNDRED FIFTY DOLLARS (558,750) (the "Second Deposit") (i.e., for a total deposit of$108,750, or 3.0%of the Purchase Price). Upon termination of this Agreement by the Agency as a result of a Default by the Developer, the Deposit shall be retained by the Agency as liquidated damages as provided herein. Upon termination of this Agreement by either party for any other reason, the Deposit shall be returned to the Developer(which such obligation of the Agency shall survive the termination ofthis Agreement). If this Agreement shall not have been theretofore cancelled or terminated prior to close of escrow, the Deposit shall be applied to the Purchase Price at the close of escrow. 3 59911701 oo0®�h' II. 1§2001 DISPOSITION OF THE SITE A. [§201] Sale and Purchase In accordance with and subject to all the terms, covenants and conditions of this Agreement, the Agency agrees to sell, and the Developer agrees to Purchase the entire Agency Parcel for the sum of Three Million Six Hundred Twenty Five Thousand Dollars ($3,625,000) (the "Purchase Price"). The Developer acknowledges and understands that the Agency Parcel will be conveyed to the Developer for purposes of development pursuant to this Agreement and not for speculation in undeveloped land- B. [§202] Escrow The Agency agrees zo open an escrow with First American Title Insurance Company, or any other escrow company approved by the Agency and the Developer, as escrow agent (the "Escrow Agent"), in Palm Springs, California, within the time established in the Schedule of Performance (Attachment No_ 3) for the purpose of conveying fee title to the Agency Parcel to the Developer. This Agreement constitutes the joint escrow instructions of the Agency and the Developer, and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of escrow_ The Agency and the Developer shall provide such additional escrow instructions as shall be necessary and consistent with this Agreement. The Escrow Agent hereby is empowered to act under this Agreement and, upon indicating its acceptance of the provisions of this Section in writing, delivered to the Agency and to the Developer within five (5) days after the opening of the escrow, shall carry out its duties as Escrow Agent hereunder. The Developer shall deposit with the Escrow Agent an amount equal to the Purchase Price (less the amount of the Deposit) in accordance with the provisions of Section 208 of this Agreement. The Developer shall also pay in escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified the Developer of the amount of such fees, charges and costs, but not earlier than one (1) business day prior to the scheduled date for the close of escrow: l. One-half(1/2) of the escrow fee; and 2. The portion of the premium for the title insurance policies or special endorsements to be paid by the Developer as set forth in Section 209 of this Agreement_ The Agency shall timely and properly execute, acknowledge and deliver a deed conveying to the Developer fee title to the Agency Parcel in accordance with the requirements of Section 203 of this Agreement, together with an estoppel certificate q 589,170 1 certifying that the Developer has completed all acts (except deposit of the Purchase Price (less the amount of the Deposit) necessary to entitle the Developer to such conveyance, if such be the fact. The Agency shall pay in escrow to the Escrow Agent the following fees, charges and costs promptly after the Escrow Agent has notified the Agency of the amount of such fees, charges and costs, but not earlier than one (1) business day prior to the scheduled date for the close of escrow: 1. Costs necessary to place the title to the Agency Parcel in the condition for conveyance required by the provisions of this Agreement; 2. One-half(1/2) of the escrow fee; 3. Cost of drawing the deed; 4. Recording fees; 5. Notary fees; 6. The premium for an A.L.T.A. standard title insurance owners policy to be paid by the Agency as set forth in Section 209 of this Agreement and the cost for a corresponding A.L.T.A. Survey; 7. All taxes and assessments (including special taxes and supplemental assessments), if any, upon the Agency Parcel for any time prior to conveyance of title; and S. Any state, county or city documentary transfer tax. Upon delivery of the deed to the Escrow Agent by the Agency pursuant to Section 205 of this Agreement, the Escrow Agent shall record such deed when title can be vested in the Developer in accordance with the terms and provisions of this Agreement. The Escrow Agent shall buy, affix and cancel any transfer stamps required by law and pay any transfer tax required by law. The Escrow Agent is authorized to: 1. Pay and charge the Agency and the Developer, respectively, for any fees, charges and costs payable under this Section. Before such payments are made, the Escrow Agent shall notify the Agency and the Developer of the fees, charges and costs necessary to clear title and close the escrow pursuant to closing statement(s) mutually acceptable to Agency and Developer; s sae��n i 000023 2. Disburse funds and deliver the deed and other documents to the parties entitled thereto when the conditions of this escrow have been fulfilled by the Agency and the Developer; 3. Record any instruments delivered through this escrow, if necessary or proper, to vest title in the Developer in accordance with the terms and provisions of this Agreement; and 4. Deliver to the Developer the title insurance owners policy in confom-Lity with Section 209 of this Agreement. All finds received in this escrow shall be deposited by the Escrow Agent in an interest-bearing account or accounts with any state or national bank doing business in the State of California_ All disbursements shall be made by check or wire transfer of the L-;scrow Agent. All adjustments shall be made on the basis of a thirty (30) day month. If this escrow is not in condition to close before the Outside Closing Date (as established in Section 203 of this Agreement), either party then not in breach or Default of this Agreement may, in writing, terminate this Agreement in the manner set forth in Section 204 hereof and demand the return of its monies, papers or documents. Thereupon all obligations and liabilities of the parties under this Agreement shall cease and terminate in the manner set forth in Section 204 hereof. Unless otherwise agreed to in writing by the parties, no termination or demand for return shall be recognized until ten (10) days alter the tenninating party or the Escrow Agent shall have mailed copies of such demand to the other party or parties at the address of its or their principal place or places of business. If any objections are raised within the ten (10) day period, the Escrow Agent is authorized to hold all monies. papers and documents with respect to the Agency Parcel until instructed in writing by both the Agency and the Developer or upon determination thereof by a court of competent jurisdiction. If no such demands are made, the escrow shall be closed as soon as possible_ Nothing in this Section shall be construed to impair or affect the rights or obligations of the Agency or the Developer to specific performance. Any amendment of these escrow instructions shall be in writing and signed by both the Agency and the Developer. At the time of any amendment, the F,scrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. All communications from the Escrow Agent to the Agency or the Developer shall be directed to the addresses and in the manner established in Section 601 of this Agreement for notices, demands and communications between the Agency and the Developer. The liability of the Escrow Agent under this Agreement is limited to performance of the obligations imposed upon it tinder Section 202 of this Agreement. 6 5V,170 1 000024 Neither the Agency nor the Developer shall be liable for any real estate commissions or brokerage fees that may arise herefrom. The Agency and the Developer each represent that neither has engaged any broker, agent or finder in connection with this transaction. C. 1§203 1 Conveyance of Title and Delivery of Possession Provided that the Developer is not in Default under this Agreement and all conditions precedent to such conveyance have occurred, and subject to any mutually agreed upon extensions of time, conveyance to the Developer of fee title to the Agency Parcel shall be completed on or prior to the date specified in the Schedule of Performance (Attachment No. 3) (the "Outside Closing Date"). The Agency and the Developer agree to perform all acts necessary for conveyance of title in sufficient time for title to be conveyed in accordance with the foregoing provisions. Possession shall be delivered to the Developer concurrently with the conveyance of title (except that limited access may be permitted before conveyance of title as permitted in Section 215 of this Agreement). The Developer shall accept title and possession on or before said date- D. [§204] Conditions Precedent I. Agency Conditions Close of escrow shall be subject to the fulfillment or waiver by the Agency of each of the conditions precedent described below. Each of the following conditions are solely for the benefit of the Agency and shall be fulfilled or waived in writing prior to close of escrow: a. Developer shall have submitted to Agency evidence reasonably satisfactory to Agency that developer has obtained commitments for the equity capital and financing necessary to finance the Developer Improvements, which evidence may be provided in the form of a letter or letters of intent. b. Developer has provided the confirmation and the abstract required pursuant to Section 402. C. Developer shall not be in Default of any of its obligations under the terms of this Agreement. d. '['here shall be no litigation pending with respect to the Agreement or any City approvals related to the Hotel, the Outcome of which could materially interfere with the construction of the Developer Improvements- 7 589,170 1 000025 e. Developer has obtained or will obtain all discretionary permits and land use approvals required for the Hotel, excepting a final planned development permit and a final map and ministerial permits such as grading and building permits. 2. Developer Conditions Close of escrow is subject to the fulfillment or waiver by the Developer of each of the conditions precedent described below, which are solely for the benefit of the Developer and which shall be fulfilled or waived in writing prior to close of escrow: a. Developer's approval of the condition of title pursuant to Section 206, and the Title Company's commitment to issue the title insurance owners policy in conformity with Section 209 of this Agreement. b. The Developer has obtained binding commitments for the equity capital and financing necessary to acquire the Agency Parcel and finance the Developer Improvements. c. Developer has obtained or will obtain all discretionary permits and land use approvals required for the Hotel, excepting a final planned development permit and a final map, and ministerial permits such as grading and building permits. d. The Agency shall not be in Default of any of its obligations contained herein and all representations and warraniies of the Agency contained herein shall be true and correct in all material respects. e. If the Developer elects to proceed with marketing and sale of the Hotel (or portions thercot) as a Condominium Hotel (as hereinafter defined), the City shall have adopted the Condominium Hotel Ordinance(as hereinafter defined). f. Developer shall have provided Agency with written notice that it has satisfied itself as to the suitability of the soils for the Developer Improvements. g. There shall have been no material, adverse new facts or changes to the financial or physical condition of the Agency Parcel since the date of this Agreement. 8 589yyp 1 Q9d02a I Termination for Failure of Condition In the event that, prior to the Outside Closing Date, there is a failure of one or more conditions described in Section 204 that is noz waived by the benefited party, the party for whose benefit the condition is established may terminate this Agreement by written notice to the other party and Escrow Agent (subject to the provisions of Section 202 above). In the event of such a termination, the Agency ahall return the Deposit to the Developer and no party shall have any further rights or liabilities to the other under this Agreement, other than those obligations which expressly survive the termination of this Agreement- 4- Liquidated Damages IN TI-IF EVENT OF A DEFAULT OF THE DEVELOPER PRIOR TO CLOSE OF ESCROW, THEN, PROVIDED NO DEFAULT ON BEHALF OF AGENCY HAS OCCURRED, AGENCY SHALL HAVE THE RIGHT, AS ITS SOLE AND EXCLUSIVE REMEDY, TO TERMINATE THIS AGREEMENT AND RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES AND AS ITS PROPERTY WITHOUT ANY DEDUCTION, OFFSET OR RECOUPMENT WHATSOEVER. IF THE DEVELOPER SHOULD DEFAULT UPON ITS OBLIGATIONS, MAKING IT NECESSARY FOR THE AGENCY TO TERMINATE THIS AGREEMENT AND TO PROCURE ANOTHER PARTY OR PARTIES TO REDEVELOP THE SITE IN SUBSTANTIALLY THE MANNER AND WITHIN THE PERIOD THAT SUCII STTF WOULD BE REDEVELOPED UNDER THE TERMS OF THIS AGREEMENT, THEN THE DAMAGES SUFFERED BY THE AGENCY BY REASON THEREOF WOULD BE UNCERTAIN. SUCH DAMAGES WOULD INVOLVE SUCH VARIABLE FACTORS AS THE CONSIDERATION THAT SUCH PARTY WOULD PAY FOR THE SITE; THE EXPENSES OF CONTINUING THE OWNERSHIP AND CONTROL OF THE SITE; OF INTERESTED PARTIES AND NEGOTIATING WITH SUCH PARTIES; POSTPONEMENT OF TAX REVENUES "THEREFROM 'THE COMMUNITY; AND THE FAILURE OF THE AGENCY TO EFFECT ITS PURPOSES AND OBJECTIVES WITHIN A REASONABLE TIME, RESULTING IN ADDITIONAL IMMEASURABLE DAMAGE AND LOSS TO THE AGENCY AND THE COMMUNITY. IT IS IMPRACTICABLE AND EXTREMELY DIFFICULT TO FIX THE AMOUNT OF SUCH DAMAGES TO THE AGENCY, BUT THE PARTIES ARE OF THE OPINION, UPON THE BASIS OF ALL INFORMATION AVAILABLE TO THEM, THAT SUCH DAMAGES WOULD APPROXIMATELY EQUAL THE AMOUNT OF THE DEPOSIT, AND THE AMOUNT OF SUCH DEPOSIT SHALL. BE RETAINED BY THE AGENCY UPON ANY SUCH OCCURRENCE AS THE TOTAL OF ALL LIQUIDATED DAMAGES FOR ANY AND ALL SUCH DEFAULTS AND NOT AS A PENALTY. 9 ss�a�n i 000027 THE DEVELOPER AND THE AGENCY SPECIFICALLY ACKNOWLEDGE THIS LIQUIDATED DAMAGES PROVISION BY `HEIR SIGNATURES HERE: By: David 1-1. Ready, Executive Director By: For Developer E. [§205] Form of Deed The Agency shall convey to the Developer fee title to the Agency Parcel in the condition provided in Section 206 of this Agreement by grant deed in substantially the foram set forth in Attachment No. 5. F. [§206] Condition of Title Within the times set forth in the Schedule of Performance (Attachment No. 3), the Agency shall submit a Preliminary Title Report for the Agency Parcel to the Developer for approval, together with legible copies of all documents referenced therein. Developer shall have the right to disapprove of any exceptions to title by written notice to the Agency delivered within twenty (20) business days from the Developer's receipt of the Preliminary Title Report and a copy of all documents referred to therein (the "Title Review Period"). If the Title Company subsequently discloses any additional exceptions to title which are not shown on the Preliminary Title Report, then the Developer shall have until the later to occur of(a) ten 0 0) business days after receipt of written notice of the existence of such additional exception or (b) the expiration of the Title Review Period, to review and object to such additional exception by written notice to the Agency and Escrow Agent. Failure by the Developer to timely provide written notice of the Developer's disapproval of any exception (or additional exception) to title shall be deemed Developer's approval of such exception (or additional exception). If the Developer timely notifies the Agency in writing that the Developer objects to any exceptions (or additional exception) to title, the Agency shall have ten (10) days following receipt of the Developer's written notice to (i) cure or eliminate or commit to the cure or elimination of the objectionable exceptions (or additional exceptions) to title or (ii) refuse to cure or eliminate the objectionable exceptions (or additional exceptions) to title, and, in either case, notify the Developer and Escrow Agent of the same. If the Agency fails to notify the Developer in writing of its election within said ten (10) day period, then the Agency shall be deemed to have refused to cure or eliminate the objectionable exceptions (or additional exceptions) to title. If the Agency refuses (or is deemed to have refused) to cure or eliminate the objectionable exceptions (or additional exceptions) to title, then the Developer shall have the right to terminate this Agreement pursuant to Section 204. Notwithstanding the foregoing, the Agency shall remove all monetary liens and encumbrances other than a lien for taxes not yet due and payable. to 5y'1470 1 The Agency shall convey to the Developer fee simple title to the Agency Parcel free and clear of all recorded liens, encumbrances, assessments, leases, and taxes except as are consistent with this Agreement and as approved by the Developer pursuant to this Section. G. [§207] Time for and Place of Delivery of Deed Subject to any mutually agreed upon extensions of time, the Agency shall deposit the grant deed for the Agency Parcel with the Escrow Agent on or before the date established for close of escrow in the Schedule of performance (Attachment No. 3), H. [§208] Payment of the Purchase Price and Recordation of Deed The Developer shall deposit the Purchase Price (less the amount of the Deposit) and other sums required hereunder with the Escrow Agent prior to the close of escrow, provided that the Escrow Agent shall have notified the Developer in writing that the grant deed, properly executed and acknowledged by the Agency, has been delivered to the Escrow Agent and that title is in condition to be conveyed in conformity with the provisions of Section 206 of this Agreement. Upon the close of escrow, the Escrow Agent shall file the grant deed for recordation among the land records in the Office of the County Recorder of Riverside County, shall deliver the corresponding portion of the Purchase Price and other required sums to the Agency and shall deliver to the Developer a title insurance policy insuring title in conformity with Section 209 of this Agreement. I. [§209] Title Insurance Concurrently with recordation of the grant deed, First American Title Insurance Company, or some other title insurance company satisfactory to the Agency and the Developer having equal or greater financial responsibility ("Title Company"), shall provide and deliver to the Developer one or more title insurance policies issued by the Title Company insuring that title is vested in the Developer in the condition required by Section 206 of this Agreement. The Title Company shall provide the Agency with a copy of the title insurance policies, and the title insurance policies shall be in an amount equal to the Purchase Price or such other amount reasonably determined by Developer- The Agency shall pay only for that portion of the title insurance premium attributable to an A.L.T.A. standard owners form policy of title insurance in the amount of the Purchase Price. The Developer shall pay for all other premiums for title insurance coverage or special endorsements. Concurrently with close of escrow, the Title Company shall, if requested by the Developer, provide the Developer with an endorsement to insure the amount of the Developer's estimated development costs of the improvements to be constructed upon the Agency Parcel. The Developer shall pay the entire premium for any such increase in coverage requested by it. n 589-170 1 000029 J. [§210] Taxes and Assessments All taxes and assessments (including special taxes and supplemental assessments) on the Agency Parcel, if any, and taxes upon this Agreement or any rights hereunder, levied. assessed or imposed for any period commencing prior to conveyance of title shall be borne by the Agency. All such taxes and assessments levied or imposed for any period commencing after closing of the escrow shall be paid by the Developer. K. [§211] Conveyance Free of Possession Except as otherwise provided in the Scope of Development (Attachment No.4), the Agency Parcel shall be conveyed Gee of any possession or right of possession by any person except that of the Developer and the casements of record approved by Developer pursuant to Section 206. L. [§212] Inspections: Conditions of the Agency Parcel I. Inspections Developer has conducted a Phase I Environmental Study and Soils Analysis of the Agency Parcel and is satisfied with its condition. No further environmental or soils analysis or studies of the Agency Parcel are required. 2 "As Is" Developer agrees it will rely solely on its own investigation and agrees to purchase the Agcncy Parcel "as is," in its current physical condition, with no warranties, express or implied, as to the physical condition thereof or the presence or absence of any latent or patent condition thereon or therein, including, without limitation, any Hazardous Materials (as defined herein) thereon or therein. 3. FIntentionally Omitted 4" Release and Waiver The Developer hereby releases and waives all rights, causes of action and claims Developer has or may have in the future against the Agency and its officers, beneficiaries, employees, agents, attorneys, representatives, legal successors and assigns ("Releasees") arising out of or in connection with any Hazardous Materials (as defined herein), at, on, in, beneath or from the Agency Parcel, unless the presence of such Hazardous Materials at, on, in, beneath or from the Agency Parcel is caused in whole or in part by any of the Releasees. In furtherance of the intentions set 12 5tl1]0 I r] ((�p 000020 forth herein, Developer acknowledges that it is familiar with Section 1542 of the Civil Code of the State of California which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Developer hereby waives and relinquishes any right or benefit which it has or may have under Section 1542 of the Civil Code of the State of California or any similar provision of the statutory or nonstatutory law of any other applicable jurisdiction to the full extent that it may lawfully waive all such rights and benefits pertaining to the subject matter of this Section. 5. Definitions As used in this Agreement, the term "Hazardous Materials" means any Substance, material or waste which is (1) defined as a "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous waste," "restricted hazardous waste," "pollutant" or any other terms comparable to the foregoing terms under any provision of California law or federal law; (2) petroleum; (3) asbestos; (4) polychlorinated biphenyls; (5) radioactive materials; or (6) determined by California, federal or local governmental authority to be capable of posing a risk of injury to health, safety or property_ 6. Materiality Developer acknowledges and agrees that the foregoing release and waiver by Developer for the benefit of the Agency set forth in this Agreement are a material element of the consideration to the Agency for the performance of its obligations under this Agreement, and that the Agency would not have entered into this Agreement unless Developer's obligations were as provided for herein. Developer further acknowledges and agrees that the provisions of this Section which extend representations, warranties, indemnifications, and/or covenants of Developer to the benefit of the Agency shall not be satisfied, waived or otherwise extinguished by Agency's issuance of any Certification of Completion under Section 323 of this Agreement. 13 56947111 IDOQ©e�"n 7 M. [§213] Zoning of the Site The Agency and the Developer agree that on October 3, 2007, the City approved Resolution Nos. 22047 and 22048, pursuant to which the City approved the development and construction of the Developer Improvements in accordance with the provisions of this Agreement; provided, however, Agency and the Developer acknowledge that, concurrently herewith, Developer is seeking the City's approval of certain modifications to the approved development and construction of the Developer Improvements, which such modifications the Agency hereby approves of-and consents to. N. [§214] Condition of the Agency Parcel Except as may be otherwise specifically provided in the Scope of Development (Attachment No. 4), the Agency Parcel shall be conveyed from the Agency to the Developer in an "as is" condition. Except as provided in Section 313 below and in the Scope of Development, the Agency shall not be responsible for any items of site work. It shall be the sole responsibility of the Developer, at the Developer's sole expense, to investigate and determine the soil conditions of the Agency Parcel and the suitability of such soil conditions for the improvements to be constructed by the Developer. If the soil conditions are not in all respects entirely suitable for the use or uses to which the Agency Parcel will be put, then it is the sole responsibility and obligation of the Developer to take such action as may be necessary to place the soil conditions in a condition suitable for development or to terminate this Agreement pursuant to Section 204. O. [§215] Preliminary Work by the Developer Prior to the conveyance of title from the Agency, representatives of the Developer shall have the right of access to the Agency Parcel at all reasonable times for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement. The Developer shall hold the Agency harmless from any injury or damages arising out of Developer's investigation and preliminary work described in this Section, except to the extent arising from the gross negligence or willful misconduct of the Agency_ The Developer shall have access to all data and information on the Site available to the Agency, but without warranty or representation by the Agency as to the completeness, correctness or validity of such data and information. Any preliminary work undertaken on the Agency Parcel by the Developer prior to conveyance of title thereto shall be done only after written consent of the Agency and at the sole expense of the Developer. The Developer shall save and protect the Agency against any claims resulting from Developer's preliminary work, access or use thereof, except to the extent arising from the gross negligence or willful misconduct of the Agency. Copies of data, Surveys and tests obtained or made by the Developer shall 14 58�4�n I Q�t"7�7�G be filed with the Agency. Any preliminary work by the Developer shall be undertaken only after securing any necessary permits from the appropriate governmental agencies. P. [§216] Submission of Evidence of Equity Capital and Financing No later than the time specified in the Schedule of Performance (Attachment No. 3), the Developer shall submit to the Agency evidence satisfactory to the Agency that the Developer has obtained the equity capital and commitments for financing necessary to finance the Developer Improvements, which evidence may be provided in the form of letter or letters of intent. III. [§300] DEVELOPMENT OF THE SITE A- [§301] Development of the Site by the_Developer 1- [§302] Scope of Development The Site shall be developed as provided in the Scope of Development(Attachment No. 4), 2- [§303] Preliminary Planned Development Developer has previously prepared and submitted to the City and the City approved schematic drawings and an entitlement application (collectively a "Final Planned Development"). The Site shall be developed as generally established in the Final Planned Development and related documents except as changes may be mutually agreed upon between the Developer and the Agency (or as amended by the City). Any such changes shall be within the limitations of the Scope of Development (Attachment No. 4). 3. [§304] Construction Plans. Drawing s and Related Documents The Developer shall prepare and submit construction plans, drawings and related documents to the Agency for architectural and site planning review and written approval as and at the times established in the Schedule of Performance (Attachment No. 3), The construction plans, drawings and related documents shall be submitted in two stages: preliminary and final working drawings and plans- Final working drawings and plans are hereby defined as those in sufficient detail to obtain a building permit. Agency acknowledges and agrees that notwithstanding anything herein or on the Schedule of Performance (Attachment No. 3), to the contrary, on or prior to the date of this Agreement, Developer has provided the preliminary working drawings and plans to Agency. The Developer shall also prepare and submit to the Agency for its approval preliminary and final landscaping and finish grading plans for the Site. Such final plans shall be prepared and submitted within the times established in the Schedule of Performance (Attachment No- 3), subject to extensions as are authorized herein or as 15 san,nu 1 QQQQ� � mutually agreed to by the parties hereto. Agency acknowledges and agrees that notwithstanding anything herein or on the Schedule of Performance (AtiachmenL No. 3), to the contrary, on or prior to the date of this Agreement, Developer has provided the preliminary landscaping and finish grading plans for the Site to Agency. During the preparation of all final drawings and plans, Agency staff and the Developer shall hold regular progress meetings to coordinate the preparation Of, submission to and review of construction plans and related documents by the Agency. The Agency and the Developer shall communicaLe and consult informally as frequently as is necessary to insure that the formal submittal of any documents to the Agency can receive prompt and speedy consideration_ ff any revisions or corrections of plans approved by the Agency shall be required by any government official, agency, department or bureau having jurisdiction, or any lending institution involved in financing, the Developer and the Agency shall cooperate in efforts to obtain a waiver of such requirements or to develop a mutually acceptable alternative. For purposes of this Section 304, any matters requiring Agency approval shall be deemed to have been approved by the Agency to the extent the same are approved by the City. 1. [y305] Agency Approval of Plans. Drawings and Related Documents Subject to the terms of this Agreement, the Agency shall have the right of architectural and site planning review of all plans and drawings, including any changes therein. The Agency shall approve or disapprove the plans, drawings and related documents referred to in Section 304 of this Agreement within the times established in the Schedule of Performance (Attachment No. 3). Once an aspect of the plans, drawings and related documents has been approved by the Agency, a later rendering of such aspect, or a more detailed iteration of such aspect, shall be deemed approved by the Agency absent a material change thereto. Failure by the Agency to either approve or disapprove within the times established in the Schedule of Performance shall be deemed an approval. Any disapproval shall state in writing with reasonable specificity the reasons for disapproval and the changes that the Agency requests be made. Such reasons and such changes must be consistent with the Scope of Development (Attachment No. 4) and any items previously approved or deemed approved hereunder by the Agency. The Developer, upon receipt of a disapproval based upon powers reserved by the Agency hereunder, shall revise such plans, drawings and related documents and resubmit them to the Agency as soon as possible after receipt of the notice of disapproval, provided that in no case shall the Agency be entitled to require changes inconsistent with the Scope of Development and any previously approved items. IG 5891170 1 If the Developer desires to make any substantial change in the construction plans after their approval by the Agency, the Developer shall submit the proposed change to the Agency for its approval. I f the construction plans, as modified by the proposed change, conform to the requirements of Section 304 of this Agreement, the approvals previously granted by the Agency under this Section and the Scope of Development (Attachment No. 4), the Agency shall approve the proposed change and notify the Developer in writing within thirty (30) days after submission to the Agency. Such change in the construction plans shall, in any event. be deemed approved by the Agency unless rejected, in whole or in part. by written notice thereof by the Agency to the Developer setting forth in detail the reasons therefor, and such rejection shall be made within said thirty (30) day period. For purposes of this Section 305, any matters requiring Agency approval shall be deemed to have been approved by the Agency to the extent the same are approved by the City. 5. [§306] Cost of Construction The cost of developing the Site and constructing all Developer Improvements thereon shall be borne by the Developer, except for work expressly set forth in this Agreement to be performed or paid for by the Agency or others (including, without limitation, as set forth in Section 313 below). The Agency and the Developer shall each pay the costs necessary to administer and carry oui their respective responsibilities and obligations under this Agreement. 6. [§307] Construction Schedule After close of escrow, the Developer shall promptly begin and thereafter diligently prosecute to completion the construction of the Developer Improvements and the development of the Site within the times specified in the Schedule of Performance (Attachment No. 3) or such reasonable extension of said dates as may be granted by the Agency or as provided in Section 604 of this Agreement. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing between the Developer and the Agency. During the period of construction, but not more frequently than once a month, the Developer shall submit to the Agency a written progress report of the construction when and as requested by the Agency. The report shall be in such form and detail as may reasonably be required by the Agency and shall include a reasonable number of construction photographs taken since the last report submitted by the Developer. 17 SS�A90 I QQQQ� ;2 7, [§308] BodilyIniury_ Property Damage and, _Workers' Compensation Insurance Prior to the commencement of construction on the Site or any portion thereof, the Developer shall Furnish or cause to be furnished to the Agency duplicate originals or appropriate certificates of bodily injury and property damage insurance policies in the amount of at least ONE MILLION DOLLARS ($1,000,000) for any person, FIVE MILLION DOLLARS (S5,000,000) for any occurrence and FIVE HUNDRED THOUSAND DOLLARS ($500,000) property damage, naming the Agency as an additional or coinsured. The Developer shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that any contractor with whom it has contracted for the performance of work on the Site carries workers' compensation insurance as required by law. The obligations set forth in this Section shall remain in effect only until a final Certificate of Completion has been issued with respect to the Developer Improvements as hereinafter provided in Section 323. 8. [§309] City and Other Governmental Agency Permits Before commencement of construction or development of any buildings, structures or other work of improvement upon the Site (unless such construction, development or work is to be commenced before the conveyance of title), the Developer shall, at its own expense, secure or cause to be secured any and all permits that may be required by the City or any other governmental agency affected by such construction, development or work. 9. [§310] RiehtsofAccess For the purposes of assuring compliance with this Agreement, representatives of the Agency and the City shall have the reasonable right of access to the Site without charges or fees and at normal construction hours during the period of construction for the purposes of this Agreement, including, but not limited to, the inspection of the work being performed in constructing the Developer Improvements. Such representatives of the Agency or the City shall be those who are so identified in writing by the Executive Director of the Agency. The Agency and the City shall indemnify and defend the Developer and hold it harmless from any damage caused or liability arising out of this right to access, which such obligation shall survive the expiration or earlier tenninalion of this Agreement, 10. [§311] Local, State and Federal Laws The Developer shall carry out the construction of the Developer Improvements in conformity with all applicable laws, including all applicable federal and state labor standards. Is 589470 1 11. [§312] Antidiscrimination During Construction The Developer, for itself and its successors and assigns, agrees that in the construction of the Developer Improvements provided for in this Agreement, the Developer will not discriminate against any employee or applicant for employment because of race, color, creed, religion, sex, marital status, ancestry or national origin. B. [§313] Responsibilities ofthe Agency The Agency, without expense to the Developer or assessment or claim against the Site, shall cause to be performed all work specified herein and in the Scope of Development (Attachment No. 4) for the Agency to perform within the times specified in the Schedule of Performance (Attachment No. 3). In addition, the Agency shall reimburse the Developer for all Costs (as defined below) incurred by the Developer in connection with completing the "Public Improvement Work" set forth in the Scope of Development (Attachment No. 4), completion of which has been imposed on the Developer as a condition of approval in connection with the entitlements for the Developer Improvements; provided, however, the Agency shall not be required to reimburse the Developer for any Costs in excess of $3,000,000, and any Costs incurred by the Developer in connection with such Public Improvement Work in excess of$3,000,000 shall be borne by the Developer. in connection with the foregoing, from time to time during completion of the Public Improvement Work, the Developer may submit to the Agency a written request for reimbursement of Costs incurred by the Developer with respect to such Public Improvement Work completed as of the date of submission (each, a "Reimbursement Request"). Each Reimbursement Request shall include a copy of supporting bills and invoices and a certification from the general contractor that the amount set forth in the Reimbursement Request has been paid or is due and owing. The Agency shall reimburse the Developer for the Costs set forth in the Reimbursement Request within thirty (30) days following submission of a Reimbursement Request. The presentation of the Reimbursement Request shall constitute a representation on the part of the Developer that the funds referred to therein have been used solely for paying only the permitted Costs incurred by the Developer in connection with completing the Public Improvement Work. For purposes of this Agreement, "Costs" shall mean, collectively, the actual hard and soft costs and expenses incurred in connection with completing the Public Improvement Work, including, without limitation, (a) the costs for design and construction of the Public Improvement Work, including all labor, materials, equipment costs, project staff and general conditions, and payment, performance and/or maintenance bonds, (b) the costs for preparing and revising any conceptual drawings, plans and specifications, and change orders, for preparing and recording any applicable conveyance documents, and for any and all studies, inspections, reports and tests as might be reasonably necessary or required, including by the Agency, the City or any other governmental authority, (c) all fees paid to the Agency, the City or any other 19 ssmnui 003E- 1 governmental authority in connection with the Public Improvement Work, including for the issuance of permits, approvals, or licenses, (d) any costs associated with the investigation or remediation of any hazardous materials, (e) professional fees and legal costs associated with the design and construction of the Public Improvement Work, and (0 a general contractor's fee not to exceed live percent (5%) of the total Costs for the Public Improvement Work (excluding the portion of the Costs attributable to clause (e) above and this clause (t)) payable to Nexus Construction Services, Inc. (an affiliate of the Developer and the general contractor to be engaged by the Developer in connection with the Hotel). C. [§314] Taxes. Assessments, Encumbrances and Liens The Developer shall pay when due all real estate taxes and assessments assessed and levied on the Site for any period subsequent to conveyance of title to Developer. Prior to the issuance of a Certificate of Completion for the Developer Improvements, the Developer shall not place or allow to be placed on the Site any mortgage, trust deed, or financial encumbrance or lien unauthorized by this Agreement. The Developer shall remove or have removed any levy or attachment made on the Site (or any portion thereof), or shall assure the satisfaction thereof, within a reasonable time, but in any event prior to a sale thereunder. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax, assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. D. [§315] Prohibition Against Transfer of Agency Parcel. the,Buildines or Structures Thereon and Assiamnent ofAarcement The qualifications and identity of the Developer are of particular concern to the Agency, and it is because of such qualifications and concerns that the Agency has entered into this Agreement with the Developer. Accordingly, after close of escrow of the Agency Parcel and prior to the issuance by the Agency of a Certificate of Completion with respect to the Developer Improvements pursuant to Section 323, with the exception of Permitted Transferees (as defined below), the Developer shall not, except as expressly permitted by this Agreement, sell, transfer, convey, assign or lease the whole or any part of the buildings or Developer Improvements thereon without the prior written approval of the Agency, not to be unreasonably withheld, conditioned or delayed. This prohibition shall not apply subsequent to the issuance of the Certificate of Completion for the Developer Improvements. Any proposed assignee or successor-in-interest shall have the qualifications and financial responsibility necessary and adequate. as may be reasonably determined by the Agency, to fulfill the obligations undertaken in this Agreement by the Developer. Any such proposed assignee or successor-in-interest, by instrument in writing satisfactory to the Agency and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of the Agency, shall expressly assume all of the obligations of the Developer under this Agreement and agree to be subject to all conditions and restrictions to which the Developer is subject. There shall be submitted to the Agency for review all instruments and other legal documents proposed 20 5xo,nn 1 0000211 ,17 to effect any such assignment, and, if approved by the Agency, such approval shall be indicated to the Developer in writing. This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Agency Parcel. Notwithstanding anything to the contrary contained herein, the Developer may sell, transfer, convey, assign or lease the whole or any part of the buildings or Developer Improvements thereon without the prior written approval of the Agency to any of the following "Permitted Transferees": a. An entity affiliated with the Developer; b. A buyer of a condominium unit; C. A grantee, licensee or permittec pursuant to a conveyance or dedication of any portion of the Site to the City or other governmental entity or the granting of easements, licenses or permits to facilitate construction of the Developer Improvements; d. A third-party institutional lender who has provided financing in connection with the Hotel, and who, upon foreclosure, trustee's sale or deed in-lieu of foreclosure, either (i) acquires fee simple title to the Site or any portion thereof (e.g., financing secured by a deed of trust encumbering the real property comprising the Site or any portion thereof), (ii) acquires, directly or indirectly, the equity interests in the Developer (c.g., mezzanine loan secured by the equity interests in the Developer) and/or (iii)takes assignment of this Agreement by foreclosure, deed in lieu of foreclosure; and/or e. The Managcr. In the absence of specific written agreement by the Agency, no such transfer, assignment or approval by the Agency prior to the issuance of the Certificate of Completion for the Developer Improvements shall be deemed to relieve the Developer or any other party from any obligations under this Agreement until completion of development of the Developer Improvements as evidenced by the issuance of a Certificate of Completion therefor- E. [§316] Security Financing: Rights of Holders 1. [§317] No Encumbrances Except Mortgages. Deeds of Trust, Sales and Lease-Racks or Other Financing for Hotel Notwithstanding Sections 314 and 315 of this Agreement, mortgages, deeds of trust, mezzanine indebtedness, sales and lease-backs, grant of zi SRQ47o I security interests or any other form of conveyance required for any reasonable method of financing are pernmitted before issuance of a Certificate of Completion for the Developer Improvements, without the Agency's consent, but only for the purpose of securing loans of funds to be used for financing the acquisition or development of the Site, the construction of improvements on the Developer Improvements, and any other expenditures necessary and appropriate to develop the Site under this Agreement. The Developer shall notify the Agency in advance of any mortgage, deed of trust, mezzanine indebtedness, sale and lease-back, grant of security interest or other form of conveyance for financing if the Developer proposes to enter into the same before issuance of a Certificate of Completion for the Developer Improvements. Unless such lender is a third- party institutional lender, the Developer shall not enter into any such conveyance for financing without the prior written approval of the Agency, which approval the Agency agrees to give if any such conveyance is given to a responsible financial or lending institution or other acceptable person or entity. Such lender shall be deemed approved unless rejected in writing by the Agency within ten (10) days after notice thereof to the Agency by the Developer. In any event, the Developer shall promptly notify the Agency of any mortgage, deed of trust, mezzanine indebtedness, lease-back, grant of security interest or other financing conveyance, encumbrance or lien that has been created or attached thereto prior to completion of the construction of the Developer Improvements on the Site whether by voluntary act of the Developer or otherwise. The words "mortgage" and "deed of trust," as used herein, include all other appropriate modes of financing real estate acquisition, construction and land development. 2. [§318] Holder Not Obligated to Construct Improvemems The holder of any mortgage, deed of trust or other security interest authorized by this Agreement shall in no way be obligated by the provisions of this Agreement to construct or complete the Developer Improvements or to guarantee such construction or completion, nor shall any covenant or any other provision in the grant deed for the Agency Parcel be construed so to obligate such holder_ Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site to any uses or to construct any improvements thereon other than those uses or improvements provided for or authorized by this Agreement. 3. [§319] Notice of Default to Mortgage. Deed of Trust or Other Security Interest Holders: Right to Cure Whenever the A!•ency shall deliver any notice or demand to the Developer with respect to any breach or Default by the Developer in completion of construction of the Developer Improvements, the Agcncy shall at the same time deliver a COPY of such notice or demand to each holder of record of any mortgage, deed of trust or other security interest authorized by this Agreement who has previously made a written request to the Agency therefor. Each such holder shall (insofar as the rights of the Agency are concerned) have the right, at its option, within ninety (90) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such Default; provided that if such cure or remedy requires possession, then such holder shall have 22 $$94911� �('�p y^F 9(c�� Qa00 such additional time as may be reasonably necessary to secure possession. In the event there is more than one such holder, the right to cure or remedy a breach or Default of the Developer under this Section shall be exercised by the holder first in priority or as the holders may otherwise agree among themselves, but there shall be only one exercise of such right to cure and remedy a breach or Default of the Developer under Lhis Section_ Nothing contained in this Agreement shall be deemed to require, permit or authorize such holder to undertake or continue the construction or completion of the Developer Improvements (beyond the extent necessary to conserve or protect the Developer Improvements or construction already made) without first having expressly assumed the Developer's obligations to the Agency by written agreement satisfactory to the Agency_ The holder in that event must agree to complete, in the manner provided in this Agreement, the Developer improvements to which the lien or title of such holder relates. Any such holder properly completing such improvements shall be entitled, upon written request made to the Agency, to a Certificate of Completion from the Agency. 4. [§320] Failure of Holder to Complete Improvements In any case where, six (6) months after Default by the Developer in completion of construction of the Developer Improvements under this Agreement, the holder of any mortgage, deed of trust or other security interest creating a lien or encumbrance upon the Site or any portion thereof has not exercised the option to construct, or if it has exercised the option and has not proceeded diligently with construction, the Agency may purchase the mortgage, deed of trust or other security interest by payment to the holder of the amount of the unpaid debt, plus any accrued and unpaid interest and all other amounts due Linder the loan secured thereby including, without limitation, any prepayment obligation. If ownership has vested in the holder, the Agency, if it so desires, shall be entitled to a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: a. The unpaid mortgage, deed of trust or other security interest debt at the time title became vested in the holder and all other amounts due under the loan (less amounts resulting from collection and application of rentals and other income received during foreclosure proceedings); b. All expenses with respect to foreclosure; C. The net expenses, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent management of the Site or portions thereof; d. The costs of any authorized improvements made by such holder; and e. An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such 23 ssa�;u.i Goode amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by the Agcncy. 5_ [§321 J Right of Agenev to Cure Morts�aae Deed of Trust or Other Security Interest Default In the event of a default or breach by the Developer of a mortgage, deed of trust or other security interest with respect to the Site or any portion thereof prior to the completion of the Developer Improvements, and the holder has not exercised its option to complete the Developer Improvements, the Agency may cure the default prior to completion of any foreclosure. In such event, the Agency shall be entitled to reimbursement from the Developer of all costs and expenses reasonably incurred by the Agency in curing the default. The Agency shall also be entitled to a lien upon the Site or applicable portion thereof to the extent of such costs and disbursements. Any such lien shall be subject to mortgages, deeds of trust or other security interests executed for the sole purpose of obtaining funds to purchase and develop the Site as authorized herein. F. [§322] Right of the Agency to Satisty Other Liens on the Site Alter Title Passes After the close of escrow and prior to the issuance of a Certificate of Completion for construction and development on the Developer Improvements, and after the Developer has had a reasonable time to challenge, cure or satisfy any liens or encumbrances on the Site, upon written notice to the Developer and a failure by the Developer to cure the same within fifteen (15) days following such notice, the Agency shall have the right to satisfy any Such liens or encumbrances, provided, however, that nothing in this Agreement shall require the Developer to pay or make provision for the payment of any tax, assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Site to forfeiture or sale. G. [§323] Certificate of Completion Promptly after completion and satisfactory inspection by the Agency of the Developer Improvements, the Agency shall furnish the Developer with a Certificate of Completion. Such Certificate of Completion shall be in such form as to permit it to be recorded in the Office of the County Recorder of Riverside County. A Certificate of Completion shall be, and shall so state, conclusive determination of satisfactory completion of the construction of the Developer Improvements required by this Agreement and of full compliance with the terms hereof. After issuance of such Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement, except that such party shall be bound by any covenants contained in the grant 24 58'i9"/li I oaa ©M � deed, in accordance with the provisions of Sections 401-405 of this Agreement. Except as otherwise provided herein, after the issuance of a Certificate of Completion for the Developer Improvements, neither the Agency nor any other person shall have any rights, remedies or controls with respect to the Site or the Developer Improvements that it would otherwise have or be entitled to exercise under this Agreement as a result of a Default in or breach of any provision of this Agreement, and the respective rights and obligations of the parties shall be as set forth in the grant deed. The Agency shall not unreasonably withhold a Certificate of Completion. If the Agency refuses or fails to furnish a Certificate of Completion for the Developer Improvements after written request from the Developer, the Agency shall, within ten (10) days after receipt of such written request, provide the Developer with a written statement of the reasons the Agency refused or failed to furnish a Certificate of Completion. The statement shall also contain the Agency's opinion of the action the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate unavailability of specific items or materials for landscaping, the Agency will issue its Certificate of Completion upon the posting of a bond by the Developer with the Agency in an amount representing a fair value of the work not yet completed. if the Agency shall have failed to provide such written statement within said ten (10) day period,the Developer shall be deemed entitled to the Certificate of Completion. Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage or any insurer of a mortgage securing money loaned to finance the improvements or any part thereof. Such Certificate of Completion is not notice of completion as referred to in California Civil Code Section 3093 or a Certificate of Occupancy- H. (§324] Prevailing Wages When improvements which are considered to be public works under State law are constructed, the Developer is required to (i) pay and to cause its contractor and Subcontractors to pay, prevailing wages for the construction of the improvements as those wages are determined pursuant to Labor Code Sections 1720 et seq. and (ii) implement regulations of the Department of Industrial Relations and (iii) comply with the other applicable provisions of Labor Code Sections 1720 el seq. Except with respect to the Public Improvement Work set forth in the Scope of Development (Attachment No. 4) (and referenced in Section 313 above), neither Agency nor Developer believe that the project to be developed on the Site is a public work for purposes of State law. Agency and Developer do believe, however, that the Public Improvement Work component of the project to be developed on the Site constitutes a public work for purposes of State law, pursuant to Labor Code Section 1720(c)(2). In connection with the foregoing, the Developer hereby represents, warrants and covenants to the Agency that Developer will abide by the applicable prevailing wage provisions of Labor Code Sections 1720 et,seq. Without limiting the foregoing, the Developer shall indemnify, hold harmless and defend (with counsel reasonably acceptable to the Agency) the Agency against any claim for 25 SP47b I OQ@Q42 damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including Developer, its contractors and subcontractors) to pay prevailing wages as required by law or to comply with the other applicable provisions of Labor Code Sections 1720 et seq. or to implement regulations of the Department of Industrial Relations in connection with construction of the Public Improvement Work. IV. [§4001 USE. OF THE SITE A. [§4011 Uses The Developer covenants and agrees for itself, its successors, its assigns and every successor in interest that the Developer and its successors and assignees shall use, operate and maintain the Site and the improvements thereon only for a Hard Rock hotel and meeting space with parking and related uses, including no less than 400 hotel (and condominium, if applicable) rooms and 15,000 square feet of"under-roof' meeting- space or similar quality hotel resort property; provided, however, the Developer shall have the right, subject 10 the adoption by the City of an ordinance permitting the sale of individual hotel rooms as condominium units (the "Condominium Hotel Ordinance"), to market and sell the Hotel (or portions thereof) as a condominium hotel project ("Condominium Hotel"). The Developer shall use the Site and the improvements thereon for no purpose other than hotel and condominium related use,; without the prior written consent of the Agency. The foregoing covenant shall run with the land. B. [§4021 Hote]_Manager The Developer and the Agency hereby acknowledge and agree that the Developer(as successor-by-assignment to O&M Indian Canyon, LLC) has engaged Hard Rock Hotel Licensing, Inc., a Florida corporation, as the "Manager," to manage and promote the business, services, marketing and sales of the Hotel pursuant to that certain Management Agreement Relating to the Palm Springs Hard Rock Hotel dated as of November 27, 2006 (the "Hard Rock Management Agreement"). Agency hereby approves of the Hard Rock Managcmcnt Agreement and the Developer's engagement of Hard Rock Hotel Licensing, Inc. as the "Manager" as of the Hotel. To the extent the Developer hereafter engages a new Manager which is not affiliated with Hard Rock Hotel Licensing, Inc., such new Manager shall be satisfactory to the Agency, in its reasonable discretion and shall have a reputation, experience and qualifications for managing a Hard Rock hotel or similar hotel in size and quality. Prior to conveyance of the Agency Parcel to the Developer, the Developer shall provide to the Agency written confirmation that the Hard Rock Management Agreement is still in full force and effect (or that the Developer has entered into a new Hotel Management Agreement with a new Manager, if applicable), together with an abstract of the Hard Rock Management Agreement (or such new Hotel Management Agreement, if applicable) which identifies the material terms and provisions contained therein. ?6 50470.1 00004- 3 Any change in the identity of the Manager from that of Hard Rock I lotel Licensing, Inc. prior to issuance of a Certificate of Completion (other than to an affiliate of I-lard Rock Hotel Licensing, Inc.) shall require the prior written approval of the Agency to the extent such new Manager is not a publicly traded company or entity, which approval shall not be unreasonably withheld or delayed if the new Manager meets the qualifications set forth in this Agreement. As used herein 'change in the identity of Manager " shall mean any change in fifty percent (50%) or more of the ownership or control of the Manager or in a general partner, managing partner or other entity having the controlling interest in Operator. C. [§403] Obligation to Refrain From Discrimination The 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 Section 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 Site, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land- D. [§404] Form of Nondiscrimination and Nonsef�regation Clauses The Developer shall refrain from restricting the rental, sale or lease of the Site on any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Section 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 129552 of the Government Code. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Section 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, ?7 589470 1 0000424 location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions_ That there shall be no discrimination against or segregation of any person or group of persons on any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Section 12926, 12926-1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference zo the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein leased." 3- In contracts: "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 Section 12926, 12926.1, Subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." E. [§4051 Effect and Duration of Covenants Except as otherwise provided, the covenants contained in Section 401 of this Agreement and the grant deed shall remain in effect until ,July 19, 2024 (the termination date of the Redevelopment Plan), and the covenants contained in Section 402 of this Agreement shall remain in effect until the Hotel opens for business. The covenants against discrimination shall remain in effect in perpetuity. The covenants established in this Agreement and the grant deed shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its 28 599410 1 ry^ 00004,5 successors and assigns, the Agency and any successor in interest to the Site or any part thereof. The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. '['his Agreement and the covenants shall run in favor of the Agency without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Site, any parcel or subparcel, or in the Agency Parcel. Subject to Section 500 below, Agency shall have the right, if this Agreement or the covenants are breached, to exercise all rights and remedies and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and the covenants may be entitled. V. [§500] DEFAULTS,REMEDIES AND TERMINATION A. [§501] Defaults—General Subject to the extensions of time set forth in Section 604, failure or delay by either party to perform any term or provision of this Agreement shall constitute a breach of this Agreement and, following written notice by the other party and failure to cure as hereinafter described, shall constitute a "Default" under this Agreement. The party who so fails or delays must immediately commence to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence following written notice of such failure or delay and during any period of curing shall not be in Default. The injured party shall give written notice of a breach to the party in breach specifying the breach complained of by the injured party. The injured party may not institute proceedings against the party in breach until and unless the breaching party is in Default. Failure or delay in giving such notice shall not constitute a waiver of any breach nor shall it change the time of breach. Upon a failure by the breaching party to commence to cure, correct or remedy such breach within the foregoing 30-day time period, or having commenced the same, having failed to complete the same with reasonable diligence, such breaching party shall be deemed in Default. Except as otherwise expressly provided in this Agreement, any failure or delay by either party in asserting any of its rights or remedies as to any breach shall not operate as a waiver of any breach or Default or of any such rights or remedies or deprive such party of its right to institute and maintain any actions or proceedings that it may deem necessary to protect, assert or enforce any such rights or remedies. 98`47(l I 000046 B. [§502] Legal Actions 1. [§503] Institution of Legal Actions In addition to any other rights or remedies, but subject to Section 204(4), either party may institute legal action to cure, correct or remedy any Default, or recover actual damages for any Default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court or the County of Riverside, State of California_ Notwithstanding anything to the contrary contained in this Agreement, however, each party hereby waives the right to sue the other party for incidental damages, consequential damages, punitive damages or lost profits in connection with any Default by such other party hereunder. 2. [§504] Applicable Law; Interpretation The laws of the State of California shall govern the interpretation and enforcement orlhis Agreement. This Agreement has been negotiated at arm's length and between persons sophisticated and knowledgeable in the matters dealt with herein. In addition, each party has been represented by experienced and knowledgeable legal counsel. Accordingly, any rule of law (including California Civil Code Section 1654) or legal decision that would require interpretation of any ambiguities in this Agreement against the party that has drafted it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the purposes of the parties and this Agreement. [§505] Acceptance of Service of Process In the event that any legal action is commenced by the Developer against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Developer, service of process on the Developer shall be made by personal service upon the Developer or in such other manner as may be provided by law and shall be valid whether made within or without the State of California. C. [§506] Rights and Remedies are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of such rights or remedies shall not preclude the exercise by it, at the same time or different times, of any other rights or remedies for the same Default or any other Default by the other party. 30 58N70 1 Q V ®Q M l V1. [§600[ GENERAL PROVISIONS A. [§601] Notices. Demands and Communications Between the Parties Formal notices, demands and communications between the Agency and the Developer shall be sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Agency and the Developer as set forth in Section 601 hereof. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail. B_ [§602] Conflicts of Interest No official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any such official or employee participate in any decision relating to this Agreement that affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. The Developer warrants that it has not paid or given, and will not pay or give, any third person any money or other consideration for obtaining this Agreement. C. [§603] Nonliability No official, officer, director, employee, partner, member or shareholder of either party shall be personally liable to the other party in the event of any Default by Agency or Developer, as applicable, or for any amount that may become due to the Agency or Developer, as applicable, or on any obligations under the terms of this Agreement. In connection therewith, each party hereby waives all rights to proceed against any such official, officer, director, employee, partner, member or shareholder. D. [§604] Enforced Delay: Extension of Times of Performance In addition to the specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in breach where delays or breaches are due to war; act of terrorism; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts of another party; acts or the failure to act of any public or governmental agency or entity (except that acts or the failure to act of the Agency shall not excuse performance by the Agency); or any other causes beyond the control or without the fault of the party claiming an extension of time to perform_ An extension of time for any such cause shall only be for the period of the enforced delay, which period shall commence to run from the time of the commencement of the cause. If, however, notice by the party claiming such extension is sent to the other parties more 31 ssnq,p� than thirty (30) days after the commencement of the cause, the period shall commence to run only thirty (30) days prior to the giving of such notice. Times of performance under this Agreement may also be extended in writing by the Agency and the Developer. E. [§605] Inspection of Books and Records The Agency has the right, upon not less than seventy-two (72) hours notice, at all reasonable times, to inspect the books and records of the Developer pertaining to the Site as pertinent to the purposes of this Agreement. The Developer also has the right, upon not less than seventy-two (72) hours notice, at all reasonable times, to inspect the books and records of the Agency pertaining to the Site as pertinent to the purposes of this Agreement- F. [§606] Plans and Data Where the Developer does not proceed with the purchase of the Agency Parcel and development thereof, and when this Agreement is terminated as a result of a Default by the Developer, the Developer shall deliver to the Agency any and all plans and data concerning the Agency Parcel, without any representation or warranty of any kind, and subject to the rights of the preparers of such plans and data, and the Agency or any other person or entity designated by the Agency shall be free to use such plans and data, including plans and data previously delivered to the Agency, for any reason whatsoever without cost. G_ [§607] Attorneys' Fees Should any action be brought arising out of this Agreement including, without limitation, any action for declaratory or injunctive relief, the prevailing party shall be entitled to reasonable attorneys' fees and costs and expenses of investigation incurred, including those incurred in appellate proceedings or in any action or participation in, or in connection with, any case or proceeding under Chapter 7, 11 or 13 of the Bankruptcy Code or any successor statutes, and any judgment or decree rendered in any such actions or proceedings shall include an award thereof. VII. [§700] SPECIAL PROVISIONS A. [§701] Amendment of Redevelopment Plan Pursuant to provisions of the Redevelopment Plan for modification or amendment thereof, the Agency agrees that no amendment that changes the uses or development pennitted on the Site or changes the restrictions or controls that apply to the Site shall be made or become effective without the prior written consent of the Developer, which may be granted or withheld by Developer in its sole discretion. 32 00004S9 13. [§702] Submission of Documents to the Agency for Approval Whenever this Agreement requires the Developer to submit plans, drawings or other documents to the Agency for approval, which shall be deemed approved if not acted on by the Agency within a specified time, said plans, drawings or other documents shall be accompanied by a letter stating that they are being submitted and will be deemed approved unless rejected by the Agency within the stated time. If there is no time specified herein for such Agency action, the Developer may submit a letter requiring Agency approval or rejection of documents within thirty (30) days after submission to the Agency or such documents shall be deemed approved. C. [§703] Amendments to this_Agreement The Developer and the Agency agree to mutually consider reasonable requests for amendments to this Agreement that may be made by any of the parties hereto, lending institutions or bond counsel or financial consultants to either party, provided such requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. D. [§704] Conflicts In the event of a conflict between the terns and provisions of this Agreement and the teams and provisions of the Attachments, the terns and provisions of the Attachments shall control_ VIII. [§800] ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS This Agreement is executed in four (4) duplicate originals, each of which is deemed to be an original. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Agency and the Developer, and all amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the Developer. If, at any time after the date on which this Agreement is approved, the Agency and/or City approves an agreement for any hotel project in the City (including, but not limited to, the Hard hock Hotel project being proposed as of the date of this Agreement) which is reasonably comparable to the Hotel and which agreement contains terms or provisions that are materially more favorable to the Developer than the terms and provisions contained herein, then the Developer shall have the right by written demand to 33 53n470 1 a®� 1Y�41 the Agency to require that this Agreement be amended to include all or any portion of such favorable terns and provisions. IX. 1§9001 'PIMP,FOR ACCEPTANCE OF AGREEMENT BY AGENCY This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency within sixty (60) days after the date of signature by the Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to further extensions of time for the authorization, execution and delivery of this Agreement. The effective date of this Agreement shall be the date when this Agreement has been signed by the Agency. [Signature Page Follows] sen,nu i 00af�� IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date(s) set forth below. 2008 COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic By: David H. Ready Executive Director "AGENCY" Approved as to form: Abcncy Counsel , 2008 0 & M HR, LLC, a Delaware limited liability company By: Name: Title. "DEVELOPER" 35 sxai;n i POR S112NW114 SEC 14745,674E MIS MAP 15 FOR A ":SSI'Ek'7 PUf'PUScS o121' Q3 • i i , '' L. i I —__._� _—___ _ _ _" _ __i �' /PG3ti r.rr0.eT �• wr.el :..u,^ to uQ�_ I_I /_ __ .�_ _.' s , 1 1 ♦r:c9.a]f rY Pr � ' n T ]ores —_ 161 A bL.5.8s' av o 1 r ��':ar.59 OJCI 't\1� �CG yYl19 A.1 R.N' ] i F i I I l +•a�.a�'� 18P11 s li y Pi. --i� 'vl� �crr 3vlo ���� •"a� nfF rrla--- � ' - — -- — _ J —i L _ _ q � V �7 all 8`a 0 F 01 o tvr.Gs j Fa q. l a ivlj,s P! q 1s x .er•so.�e.z . / ,7a I 0 7.66 Ac, ' ' ' i € t�j1y � �.so. !� 1.x •i ` ' Is.1e '� I � H _i i___ ___ __ i F _/3/.sr � oT3.Gf�H!}OBl-Y ~ ¢ lc.'D � € ', �Sryf.zs vP.xy I >—• "^ K8P°fC•a]•d• __.__._.,,___ S _. _ ._ ._ _ .__ _ — _. _ _ d�� —+ '— — —_ !d3 " � _ y 1 ncA.33 � s :Alxl' PH B6/!� eae 2G fbe6/ _- 0.� 056 PaG m € Lae I ° V Par. ! 3 7 i (e(r�nau-OivnedPmc is ex " 0�l AJ PI ! lJ 0 d 5.05 Ac. �3gyp f d°.� to Al la1 1� r U.kf%l1TYll ri= ". Q I.� q,�,hi_•AC. Il '�; 4 Purcell Parcel 2 ° lµ I rs � 1is1 rvxse/rOJ es8 rs crr es/reu � _'..� � � � to F n�e9 rr wpas r.r.r�l � . , Id li N8 P•33•s3k ll ]� _ _—eru.;-- �..� .� �.. ._.._ _.__ ._ ..l..> :f Csq yl !: 14._N6P`s8'a5.S_'r._ 'I 1L. _ •SSe6E :'.S.6P n1 ._.._— � Jfn ATTACHMENT 2 Legal Description of Site All that certain real property situated in the County of Riverside, State of California, described as follows: AGENCY PARCELS Parcel 1: Those portions of Blocks 7, 8 and 111 as shown on Supplemental Plats of Section 14, Township 4 South,Range 4 East, San Bernadino Base and Meridian, accepted by the U.S. Dcpartmeni of Interior, GencraJ Land Office on September 27, 1927 and June 27, 1956,respectively described as follows: Commencing at the Northwest comer of said Block 111, said point lying 30,00 feet Southerly of the centerline of Andreas Road and 25.00 feet Easterly of the centerline on Calle E1 Segundo; Thence South 89'44' 45"East, parallel with and 30,00 feet Southerly of the centerline of the centerline of said Andreas Road, a distance of 40,13 feet to the true point of begahamng, Thence continuing South 89°44' 43" East a distance of 433.52 feet; Thence South 00'03' 09"East, a distance of 363.53 feet to a point on the Southerly line of said Block 8; Thence North 89°55' 59"West, along the Southerly lines of Block 8 and Block 7, a distance of 478.64 feet; Thence North 00°03' 9"West,parallel with and 40.00 feet Easterly of,the centerline of said Calle El Segundo, a distance of 339.97 feel to the beginning of the tangent curve, concave Southeasterly,having a radius of 25.00 feet; Thence Northeasterly a]ong the arc of said curve through a central angle of 90° 18' 24" an arc distance of 39,40 feet to the point of beginning. Parcel 2: Those portions of Blocks 8, 111 and vacated Calle Alvarado as shown on Supplemental Plats of Section 14, Township 4 South,Range 4 East, San Bernadino Base and Meridian, accepted by the U.S. Department of Interior, General Land Office on September 27, 1927 and June 27, 1956,respectively described as follows: Beginning at the point of intersection of the ccnterlinc of vacated Calle Alvarado and the Southerly right of way of Andreas Road, said right of way being parallel with and 30.00 feet South of the ccnterlinc of Andreas Road,- Thence South 00'06' 03"East, a distance of 362 89 feet along said centerline of vacated Calle Alvarado to a point of intersection with the Easterly prolongation of the Southerly line of said Block 8; Thence North 89'55' 59" West, a distance of 197.00 feet along said Easterly prolongation and said Southerly line of Block 8; Thence North 00'03' 09"West, a distance of 363.53 feet to a point on aforementioned Southerly right of way line of Andreas Road; Thence South 89'44' 45" East, a distance of 196.70 feet along said Southerly right of way to the point of beginning. 00005� ATTACI3MENT 2 Legal Description of Site DEVE LOPER PARCELS: Parcel 1: The land referred to in this policy is situated in the State of California,County of Riverside and is described as follows: Block 10 in the South half of the Northwest quarter of Section 14,Township 4 South, Range 4 East, San Bomadino Base Meridian, according to the official plat of said land in the District Office on June 1I, 1927 as supplemented on May 12, 1960. Parcel 2: In the City of Palm Springs, County of Riverside, State of California,being those portions of Block 9 and vacated Calle Alvarado as shown on Resolution No. 15302 recorded December 19, 1984 as Instrument No. 270713 of official records of said County and supplemental plats of Section 14,Township 4 South, Range 4 East, San Bemadino Base and Meridian,accepted by the United States Department of the hnterior, General Land Use Office on September 7, 1927 and June 27, 1956,respectively more particulary described as follows: Commencement point being the centerline intersection of said Calle Alvarado with the East-West quarter section line of said Section 14 as shown on Tract No. 16043 recorded in Book 116,Pages 88 and 89 of maps, in the office of the County Recorder of said County; Thence proceeding coincident with said quarter section line South 89'58' 36"West, 30.01 feet; Thence South 00'0I' 24"East, 5.59 feet to the Southeast corner of said Block 9 and the true point of beginning; Thence proceeding coincident of the Westerly line of said Block 9 North 00'04' 33" West,264.11 feet to the Northwest corner of said Block 9, also being a point on the Southerly line of Parcel I as shown in Grant Deed to Community Redevelopment Agency of the City of Palm Springs, recorded January 24, 1993 as Jnstrument No. 021208 of official records of said County; Thence proceeding coincident with the last said line, also being the Northerly line of said Block 9,the Southerly line of Parcel 2 as shown on said Grant Deed and the Easterly prolongation of the Northerly line of said Block 9 South 89°56' 24"East, 360,31 feet to a point of intersection with the centerline of said Calle Alvarado,- Thence proceeding coincident with the centerline of Calle Alvarado South 00' 06' 04" East, 198.74 feet to the Westerly prolongation of the Northerly line of Tahquitz Canyon Way as shown on amended map Tract No. 20485 recorded in Book 200,Pages 47 and 48 of maps, in the office of the County Recorder of said County; Thence proceeding coincident with last said line South 89°58' 36"West 30.00 feet to the Easterly line of said Block 9; Thence proceeding coincident with last said line of South 000 06' 04"East, 6559 feet to the true point of beginning. 00� 55 ATTACHMENT 3 Schedule of Performance It to,Be Preformed...,:.:..* � _ , �� �,.::: �Time for-Perfnrmance Agreement Estimated� Reference Date: The Developer executes and delivers DDA to Agency. On or before 06/15/08 ^ The Agency approves or disapproves DDA and, if approves, On or before 08/31/08 executes DDA. Submission- Certificate of insurance -The Developer shall 30 Days prior to Section 308 furnish to the Agency duplicate originals or appropriate commencement of certificates of bodily injury and property insurance policies- construction Approval - Certificates of Insurance- The Agency shall Within 10 days after Section 308 approve or disapprove Developer's submission of appropriate receipt thereof by the certificates of bodily injury and property damage insurance Agency policies. Submission_-Final Planned Development District/Final Section 204 Subdivision Ma A lication - The Developer shall prepare and submit to the City Planning and) ngincering Departments for review and approval the Final PDD/Final Subdivision Map and related documents containing the overall plan for development of the site. The City process includes the Architectural Advisory Committee, PIanning Commission, and City Council approval. Such final PDD application shalt include final Site Plan, Architectural Plans, Landscaping and Grading Plans,Lighting Plans, and other plans necessary to approve the Planned Development District, Submission-Evidence of Bguity Capital and Mortgage Within 30 months after Section 216 Financing- The Developer shall submit to the Agency for execution of this review and approval, evidence of equity capital and mortgage Agreement by the financing necessary for acquisition of the Conveyance parcel Agency and Developer. and development of the site. Approval_-Evidence of Equiry Capital and Moitamre Within 30 days after Section 216 Financhnngg-The Agency shall approve or disapprove the receipt thereof by the Developer's evidence of equity capital and mortgage Agency. fmancin _ Approval-Final Planned Development District and Final Within 60 days after Section 203 Subdivision Map- The City shall approve or disapprove the receipt thereof by the Developer's Final PDD/Final Subdivision Map submissions City. and related documents. Opening of Escrow- The Agency shall open an escrow for Within 30 days after Section 202 conveyance of the Conveyance Parcel to the Developer the City approves Developer's Final PDD/Final Map submissions and related documents. ATTACHMENT 3 Schedule of Performance Ztemi to Bc Piefoi-med;; Tune for:i'erfor anae. .A.greement .EsEimated Reference Date j. Title Report The Agency delivers to the Developer Within 30 days after Preliminary Title Report. opening Escrow Approval of Title Exceptions - The Developer approves or Within 15 days alter disapproves title exceptions. delivery of Preliminary Title Report to Developer. The Agency delivers notice to the Developer as to whether it Within 15 days after will cure disapproved exceptions. receipt of Developer's notice. Submission -Hotel Conshvction {Building) Plans and Within 270 days after Section 304 Grading Plans- The Developer shall prepare and submit to approval by the City of the City for review and approval Final Hotel Building Plans the Final PDD/Final and Grading Plans for the site. Map. Approval„:Hotel_Construction (Building)Plans and Grading Within 60 days after Section 305 Plans- The City shall approve or disapprove Final Hotel receipt thereof by the Building Plans and Grading Plans. Agency. Submission-Hotel Management Agreement- The At least 45 days prior Section 402 Developer shall submit the Hotel Management Agreement to to flee scheduled close the Agency for review and a roval. of escrow. Approval -Hotel Management Agreement- The Agency Within 30 days after Section 402 shall approve or disapprove the Developer's Hotel receipt thereof by the Management Agreement. Agency. Deposit-Purchase Price and Other Required Sums- The Upon demand of Section 208 Developer shall deposit the purchase price of Agency Parcel escrow. and other required suns into escrow. Deposit-Grant Deed- The Agency shall deposit the Grant At least 15 days prior Section 207 Deed for the Conva ante Parcel into escrow. to close of escrow. Escrow-Fees and Charges- Escrow Agent gives notice of One(1)week prior to fees.charges and costs to close escrow. closing. Close of Escrow-Recordation and Delivery of Documents- As soon as possible The Agency shall convey fee title to the Agency Parcel to the upon receipt of all Developer,and the Developer shall accept such conveyance. documents required to The Escrow Agent shall cause the Grant Deed and Deed of close. Trust to be recorded with the Riverside County Recorder. Land Use -Approvals and Permits- The,Developer shall Within 60 days after Section 311 furnish evidence that all discretionary land use or rogulalory close of escrow and approvals and permits for the development of the site. issuance of permits- Commencement of Construction of Developer's Within 30 days Section 307 Improvements ements=The Developer shall commence construction following close of of the improvements to be constructed on the site. escrow. 0©Q057 ATTACHMENT 3 Schedule of Performance Tteiri to;Be Pi formed Time.far'Performauce i Agne,'emcri ',Estimate3 Lefererice Date Completion of Construction of Developer's Tnlurovements, Within 30 months' Section 307 The Developer shall complete construction of the following improvements to be constructed on the site. commencement of construction. Issuance Certificate of Completion-The Aocney shall Promptly after Section 323 furnish the Developer with a Certificate of Completion on the completion of all hotel development. construction required to be completed by the Developer on the site and upon written request thereof by the Developer. It is understood that the foregoing Schedule of Performance is subject to all of the terms and conditions set forth in the text of the Agreement. The summary of the items of performance in this Schedule of Performance is not intended to supersede or modify the more complete description in the text; in the event of any conflict or inconsistency between this Schedule of Performance and the text of the Agreement,time text shall govern. The time periods set forth in this Schedule of Performance may be altered or amended only by written agreement signed by both the Developer and thu Agency. A failure of any party to enforce a breach of any particular time provision shall not be construed as a Waiver of any other tithe provision. The Executive Director of the Agency shall have the authority to approve extensions of time without Agency Board action not to exceed a cumulative total of ISO days as provided in Section 903. Ooa®581 ATTACUMENT NO. 4 SCOPE OF DEVELOPMENT Private Development The Site shall be developed in accordance with Planned Development District 339. The Hotel shall include not less than 400 and up to 499 hotel rooms and/or condominiums, nine (9) stories in height, including the following amenities and related uses: a minimum of 15,000 square feet of meeting and banquet space;three restaurants ranging from approximately 3,000 to 8,000 square feel each; ancillary retail space; night club; approximately 15,000 square foot spa and fitness center; an approximate 3 acre pool/recreation deck; and an adjacent 530-space above ground parking structure. .Public Improvement Work In addition to the Private Development work set forth above, the Developer shall perform, or cause to be performed, within the time established in the Schedule of Performance (Attachment No. 3) the following work in connection with the development of the Site (collectively, the "Public Improvement Work"): a_ Demolition of the existing publicly-owned parking lot, including but not limited to the removal of all pavement, sidewalk, driveway, curb and gutter, landscaping, lighting, block wall and related costs associated thereto. b. Demolition of existing improvements within the public right of way, including pavement, sidewalk, curb, gutter and driveways. c. Construction of new improvements within the public right of way, including but not limited to the following and as further summarized in Schedule A attached hereto: a. Pavement replacement and repair b. Curb, gorier, sidewalk, driveways c. Enhanced intersection pavement d. Pavement striping and signing e. Median construction and landscape f Landscaping and irrigation within the public right of way g. Landscaping, irrigation, hardscape within Calle Alvarado h. Street lighting per Section 14 Plan i. Traffic signalization (shared cost or installation) j. Water, sewer and storm drain connections to the property line The precise nature, scope and specifications relating to the Public Improvement Work shall be included as part of the drawings, plans and related documents to be prepared and submitted by the Developer to the Agency for review and approval pursuant to Sections 301 through 305 of the Agreement. ALLachmcnt No,4. Pagc I 5B941n 1 00®0,1` 9 As provided in Section 313 of the Agreement, the Agency shall reimburse the Developer for all Costs relating to the Public Improvement Work (but not to exceed $3,000,000). Attachment No.4,Pale 2 5B9G90 1 Schedule A to Attachment No. 4 Attachment No 4.Page i s�ea�n i OOQ�� � ATTACHMENT NO. 5 FORM OF GRANT DEED RF.CORDIN6 REQIIES'I'ED BY AND WHEN RECORDED MAIL TO GRANT DEED For valuable consideration,the receipt of which is hereby acknowledged, THE REDEVELOPMENT AGENCY OF TNT CITY OF PALM SPRINGS, a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 el seg.) (herein called "Grantor"), acting to carry out the Redevelopment Plan (herein called "Redevelopment Plan") for the Palm Springs Merged Redevelopment Project Area No. 2, under the Community Redevelopment Law, hereby grants to LOFTPARTNERS PALM SPRINGS, L-C, a Delaware limited liability company (herein called "Grantee"), the real property (the "Site") legally described in the document attached hereto, labeled Exhibit A, and incorporated herein by this reference. 1. The Site is conveyed subject to the Amended and Restated Redevelopment Plan and pursuant to a Disposition and Development Agreement (the "DDA") entered into by and between the Grantor and the Grantee. The Site is also conveyed subject to easements of record. 2. a. The Grantee hereby covenants and agrees, for itself and its successors and assigns, that during construction and thereafter, the Grantee shall use, operate and maintain the Site and the improvements thereon only for a Hard Rock hotel, and related retail uses as further described in the DDA. The Grantee shall use the Site and the improvements thereon for no other purpose without the prior written consent of the Grantor. The foregoing covenant shall run with the land. Attachment No.5,Page 1 589170 1 0000H b_ Following completion of construction of the improvements, Grantee shall maintain in accordance with the Maintenance Standards, as hereinafter defined, the private improvements and public improvements and landscaping to the curbline(s) on the Site. Said improvements shall include, but not be limited to, buildings, sidewalks, pedestrian lighting, landscaping, irrigation of landscaping, architectural elements identifying the Site and any and all other improvements on the Site and in the public right-of-way to the nearest curblinc(s) abutting the Site. To accomplish the maintenance, Grantee shall either staff or contract with and hire licensed and qualified personnel to perform the maintenance work, including the provision of labor, equipment, materials, support facilities, and any and all other items necessary to comply with the requirements of this paragraph. (1) Maintenance Standards. The following standards ("Maintenance Standards") shall be complied with by Grantee and its maintenance staff; contractors and subcontractors: (a) Landscape maintenance shall include, but not be limited to: watering/irrigation; fertilisation; mowing; edging; trimming of grass; tree and shrub pruning; trimming and shaping of trees and shrubs to maintain a healthy, natural appearance, safe road conditions and visibility, and irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. (b) Clean-up maintenance shall include. but not be limited to: maintenance of all sidewalks, paths and other paved areas in clean and weed-free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping prior to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers- (c) All maintenance work shall conform to all applicable federal and state Occupation Safety and Health Act standards and regulations for the performance of maintenance. Attachment No 5.Pagc 2 5994701 0000S3 (d) Any and all chemicals, unhealthful substances, and pesticides used in and during maintenance shall be applied in strict accordance with all governmental requirements. Precautionary measures shall be employed recognizing that all areas are open to public access- (2) Failure to Maintain Improvements. If Grantee does not maintain the private and public improvements on the Site to the curbline(s) in the manner set forth herein and in accordance with the Maintenance Standards, Grantor shall have the right to maintain such private and/or public improvements, or to contract for the correction of such deficiencies, after written notice to Grantee. However, prior to taking any such action, Grantor agrees to notify Grantee in writing if the condition of said improvements does not conform to the Maintenance Standards and to specify the deficiencies and the actions required to be taken by Grantee to cure the deficiencies. Upon notification of any maintenance deficiency, Grantee shall have thirty (30) days within which to commence to correct. remedy or cure the deficiency and thereafter diligently and continuously complete correction, remedy or cure of the deficiency. If the written notification states that the problem is urgent and relates ro the public health and safety, then Grantee shall have forty-eight (48) hours to rectify the problem. In the event Grantee tails to correct, remedy, or cure or has not commenced correcting, remedying or curing such maintenance deficiency after notification and after expirarion of any applicable cure period, then Grantor shall have the right to maintain such improvements. Grantee agrees to pay Grantor such charges and costs upon demand. Until so paid, the Grantor shall have a lien on the Site for the amount of such charges or costs, which lien shall be perfected by the recordation of a "Notice of Claim of Lien" against the Site. Any lien in favor of the Grantor created or claimed hereunder is expressly made subject and subordinate to any mortgage or deed of trust made in good faith and for value. recorded as of the date of the recordation of the Notice of Claim of Lien, and no such lien shall in any way defeat, invalidate, or impair the obligation or priority of any such mortgage or deed of trust, unless the mortgagee or beneficiary thereunder expressly subordinates his interest, of record, to such lien. No lien in favor of the Grantor created or claimed hereunder shall in any way defeat, invalidate, or impair the obligation or priority of any lease, sublease or casement unless such instrument is expressly subordinated to such lien. Grantee acknowledges and agrees that the Grantor and Grantor may also pursue any and all other remedies available in law or equity in the event of a breach of the maintenance obligations and covenants set forth herein. 3. Prior to the issuance of a Certificate of Completion by the Grantor as provided in the DDA, the Grantee shall not, except as permitted by the DDA, sell, transfer, convey, assign or lease the whole or any pain of the Site without the prior written approval of the Grantor. This prohibition shall not apply subsequent to the issuance of the Certificate of Completion with respect to the improvements upon the Hotel Parcel. Attacluncnt No.5.Page 3 5&BA90 I 00006 : This prohibition shall not be deemed to prevent the granting of casements or permits to facilitate the development of the Site or to prohibit or restrict the leasing of any part or parts of a building or structure when said improvements are completed. 4_ Grantee hereby grants to Grantor the option to repurchase the Site hereby conveyed and all improvements subsequently constructed thereon, if prior to the issuance of a Certificate of Completion pursuant to the DDA, Grantee shall: a. Fail to commence construction of approved improvements on the Site within the time established therefor in the DDA, for any reason whatsoever. For purposes of this provision, the Developer shall be deemed to 'commence construction" when and only when the Developer has received City approval of the final plans and specifications lot all improvements provided in this Agreement, completed rough grading on the Site, and commenced installation and construction of improvements provided herein pursuant to permits issued by the City for the construction of such improvements; or b. Once construction has been commenced in accordance with subparagraph 1 above, fail to diligently prosecute construction of the improvements through completion within the time established therefor in the DDA, where such failure has not been cured within three (3) months after written notice thereof from the Grantor; or C. Abandon or substantially suspend construction of the improvements for a period of three (3) months after written notice of such abandonment or suspension from the Grantor; or d. Without the prior written consent of Grantor, directly or indirectly, voluntarily or involuntarily sell, assign, transfer, dispose of or further encumber or agree to sell, assign, transfer, dispose of or further encumber or suffer to exist any other lien against all or any portion of or any interest in the Site, except for any sale, assignment, transfer, disposal or encumbrance that is expressly permitted by the terms of the DDA. For the purpose of this paragraph, the terms "sell" and "transfer" shall include, in addition to the common and ordinary meaning of those terms and without limiting their generality, transfers made to subsidiary or affiliated entities, and any 'change in ownership" as that term is used from time to time in California real property taxation law, irrespective of the fact that the Site may be exempt from such transaction during the period when owned by Grantor. 'Phis option shall be subordinate and subject to and be limited by and shall not defeat, render invalid or limit: Attachment No 5,Pagw 4 5894111 1 000065 a. Any mortgage, deed of trust or other security instrument permitted by the DDA; or b. Any rights or interests provided in the DDA for the protection of the holder of such mortgages, deeds of trust or other security instruments. To exercise its right to repurchase, reenter and take possession with respect to the Site, the Grantor shall pay to the Grantee in cash an amount equal to: a. The cash Purchase Price for the Site paid by the Grantee; plus b. The costs actually incurred by the Developer for "hard" and "soft" costs related to the site and the improvements to be constructed thereon, including, without limitation, architectural, engineering and legal fees, fees paid to any governmental entity, and the cost of all on-site labor and materials for the construction of the improvements existing on the Site at the time of the repurchase, reentry and repossession, exclusive ofameunts financed; less c. Any gains or income withdrawn or made by the Grantee from the Site or the improvements thereon, and less d. The amount of any unpaid assessments and any liens against the Site. 5, The Grantor shall have the additional right, at its option, to terminate the estate conveyed to the Grantee, to reenter and take possession of the Site with all improvements thereon and to revert in the Grantor the estate theretofore conveyed to the Grantee, if after conveyance of title to the Site and prior to issuance of the Certificate of Completion for the Hotel Parcel, the Grantee shall: a. fail to commence construction of approved improvements on the Site within the time established therefor in the DDA, for any reason whatsoever. for purposes of this provision, the Grantee shall be deemed to "commence construction" when and only when the Grantee has received City approval of the final plans and specifications for all improvements provided in this Agreement, completed rough grading on the Site, and commenced installation and construction of improvements provided herein pursuant to permits issued by the City for the construction of such improvements; or b. Once construction has been commenced in accordance with subparagraph a. above, fail to diligently prosecute construction of the improvements through completion within the time established Anachmenc No.5. I'age 5 5R949n 1 00©OB6 therefor in the DDA, where such failure has not been cured within three (3) months after written notice thereof from the Grantor; or C. Abandon or substantially suspend construction of the improvements for a period of three (3) months after written notice of Such abandonment or Suspension from the Grantor; or d. Without the prior written consent of Grantor, directly or indirectly, voluntarily or involuntarily sell, assign, transfer, dispose of or further encumber or agree to sell. assign, transfer, dispose of or further encumber or suffer to exist any other lien against all or any portion of Or any interest in the Site, except for any sale or transfer that is expressly permitted by the terms of the DDA. For the purpose of this paragraph, the terms "sell" and "transfer" shall include, in addition to the common and ordinary meaning of those terins and without limiting their generality, transfers made zo subsidiary or affiliated entities, and any "change in ownership" as that tern is used from time to time in California real property taxation law, irrespective of the fact that the Site may be exempt from Such transaction during the period when owned by Grantor. The interest created pursuant to this paragraph 5 shall be a "power of termination" as defined in California Civil Code Section 885.010, and shall be separate and distinct from Agency's option to repurchase the Site under the same or similar conditions specified in paragraph 4 above. The Grantor's power of termination shall be subordinate and subject to and be limited by and shall not defeat, render invalid or limit: a. Any mortgage, deed of trust or other security instrument permitted by the DDA; or b. Any rights or interest provided in the DDA for the protection of the holder of such mortgages, deeds of trust or other security instruments. Upon revesting title to the Site or any part thereof in the Grantor as provided in this paragraph 5, the Grantor shall use its best efforts to resell the Site or part thereof as soon and in such manner as the Grantor shall find feasible to a qualified and responsible party or parties (as determined by the Grantor) who will assume the obligation of making or completing the improvements, or such other improvements in their stead, as shall be satisfactory to the Grantor and in accordance with the uses specified for the Site or part thereof in the Redevelopment Plan. Upon such resale of the Site, the proceeds thereof shall be applied: a. First, to reimburse the Grantor for all costs and expenses incurred by the Grantor, including, but not limited to, salaries to personnel in connection with the recapture, management and resale of the Site or Attachment No.5.Page G 589,170 1 000Ge' part thereof(but less any income derived by the Grantor from the Site or part thereof in connection with such management); all taxes, assessments and water and sewer charges with respect to the Site or part thereof (or, in the event the Site is exempt from taxation or assessment or such charges during the period of ownership, then such taxes, assessments or charges as determined by the County assessing official as would have been payable if the Site were not so exempt); any payments made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Grantee; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Site or part thereof; and any amounts otherwise owing the Grantor by the Grantee; and b. Second, to reimburse the Grantee the sum of the following: (i) the cash purchase price for the Site paid by the Grantee; plus (H) any cash payments previously made by the Grantee for the development of the Site and for the improvements existing on the Site at the time of the reentry and repossession, exclusive of amounts financed; less (iii) any gains or income withdrawn or made by the Grantee fion the Site or the improvements thereon; and less (iv) the amount of any unpaid assessments against the Site. Any balance remaining after such reimbursements shall be retained by the Grantor as its property. As set forth above, this Section is intended to create and reserve in the Grantor a "power of termination" under California law, and not a forfeiture. The terms and provisions of this Section shall be construed in light of the filet that the Grantor will convey the Site to the Grantee for development pursuant to the Redevelopment Plan, and not for speculation in undeveloped land. 6. The Grantee 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 Section 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 Site, nor shall the Grantee itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Site. SR9690 I nteachn,ent No.5• Page 7 0 Q 0 068 t68 All deeds, leases or contracts made relative to the Site, the improvements thereon or any part thereof shall contain or be subject to substantially the following nondiscrimination clauses: a. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on any basis listed in Subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Section 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Section 12926, 12926.1, subdivision (m) and paragraph (1) Of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." Allochmenl No.5.NEv 8 58�a7iil C. In contracts: "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 Section 12926, 12926.1, subdivision (in) and paragraph (1) Of subdivision (p) of Section 12955, and Section 129552 of the Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises_" 7. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument permitted by the DDA, provided, however, that any successor of Grantee to the Site shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise- 8- Except as otherwise provided, the covenants contained in paragraph 2 of this Grant Deed shall remain in effect until the termination of the Redevelopment Plan. The covenants against discrimination contained in paragraph 6 of this Grant Deed shall remain in perpetuity. The covenants contained in paragraphs 3, 4 and 5 shall remain in effect until issuance of a Certificate of Completion pursuant to the DDA. 9. The covenants contained in paragraphs 2, 3, 4, 5 and 6 of this Grant Deed shall be binding for the benefit of the Grantor, its successors and assigns, and any successor in interest to the Site or any part thereof, and such covenants shall run in favor of the Grantor and such aforementioned parties for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein In which Such covenants relate. The Grantor and such aforementioned parties, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. The covenants contained in this Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor, its successors and such aforementioned parties. 10. In the event of any express conflict between this Grant Deed or the DDA, the provisions of this Grant Deed shall control. 11, Any amendments to the Redevelopment Plan that change the uses or development permitted on the Site or change the restrictions or controls that apply to the Attachment No.5. Page 9 5se470 1 0 Site or otherwise affect the Site shall require the written consent of the Grantee. Amendments to the Redevelopment Plan applying to other property in the Project Area shall not require the consent of the Grantee. IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized this day of , 2008. COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic 13y: Title: "GRANTOR" Approved as to form: Agency Counsel Attachment No.5.1'aG go 10 58047U1 000071 The provisions orthis Grant Deed are hereby approved and accepted. , 2008 O&M FIR, LLC, a Delaware limited liability company By: Title: "GRANTEE" Attachment No,5,Page 11 3801170 1 000672 ACKNOWLEDGMENTS ALWchmcnl No-S.Acknuwlcdgmmu 589470 1 EXHIBIT A LEGAL DESCRIPTION OF THE SITE [To Be Inserted.] Attacluumt NO 5,LxllibiL A 7/25/2008 synl]U I �]