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HomeMy WebLinkAbout12/19/2007 - STAFF REPORTS - RA.1. 4pALMgA� iy v, e ,r CAC IF RN�p COMMUNITY REDEVELOPMENT AGENCY/CITY COUNCIL STAFF REPORT DATE: DECEMBER 19, 2007 JOINT PUBLIC HEARING SUBJECT: APPROVAL OF A DISPOSITION AND DEVELOPMENT AGREEMENT WITH RE: LOFT PARTNERS PALM SPRINGS, LLC, A DELAWARE LIMITED LIABILITY CORPORATION, FOR A 7.8+ ACRE AGENCY- OWNED PARCEL AT THE NORTHEAST CORNER OF CALLE ALVARADO AND AMADO ROAD, MERGED REDEVELOPMENT PROJECT AREA ##2, FOR THE DEVELOPMENT OF A 200-ROOM MONDRIAN HOTEL, 50 CONDO-HOTEL UNITS AND 150 CONDOMINIUMS, AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE ALL DOCUMENTS RELATED TO THE AGREEMENT FROM: David H. Ready, City Manager BY: Community & Economic Development Department SUMMARY This action is to approve a Disposition and Development Agreement with Re: Loft Partners Palm Springs, LLC (the 'Developer') for a 7.8+ acre parcel across Amado Road from the Palm Springs Convention Center for the development of a 200-room Mondrian Hotel, 50 condo-hotel units, and up to 150 condominiums. The Developer owns an adjacent 2.7 acre parcel which is part of the overall project site. The City entered an Exclusive Agreement to Negotiate with the Developer in February, 2006, which was extended to December 31, 2007 in order to allow time for the project to reach the entitlement stage, and for the Disposition and Development Agreement to be finalized. The project completed entitlement approval through the Architectural Advisory Committee and Planning Commission. The Preliminary Planned Development District Application and Tentative Tract Map application were approved by the City Council on July 18, 2007. II� ITEM NO. ?'lam° CRA/City Council Staff Report December 19, 2007 -- Page 2 Re: Loft Partners Palm Springs, LLC Disposition and Development Agreement RECOMMENDATION: 1. Adopt Resolution No. A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT WITH THE RE: LOFT PARTNERS PALM SPRINGS, LLC, FOR A 7.8+ ACRE AGENCY OWNED PARCEL AT THE NORTHEAST CORNER OF CALLS ALVARADO AND AMADO ROAD, MERGED REDEVELOPMENT PROJECT AREA #2, FOR THE DEVELOPMENT OF A MONDRIAN HOTEL WITH 200 ROOMS AND 50 CONDO-HOTEL UNITS, AND 150 CONDOMINIUMS, 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 RE: LOFT PARTNERS PALM SPRINGS, LLC, FOR A 7.8+ ACRE AGENCY-OWNED PARCEL AT THE NORTHEAST CORNER OF CALLS ALVARADO AND AMADO ROAD, MERGED REDEVELOPMENT PROJECT AREA #2, FOR THE DEVELOPMENT OF A MONDRIAN HOTEL WITH 200 ROOMS AND 50 CONDO-HOTEL UNITS, AND 150 CONDOMINIUMS" BACKGROUND This action would approve a Disposition and Development Agreement with Re: Loft Partners Palm Springs, LLC (the "Developer') for a 7.8+ acre parcel across Amado Road from the Palm Springs Convention Center for the development of a 200-room Mondrian Hotel, 50 condo-hotel units, and up to 150 condominiums. The Developer owns an adjacent 2.7 acre parcel which is part of the overall project site. The City entered an Exclusive Agreement to Negotiate with the Developer in February, 2006, which was extended to December 31, 2007 in order to allow time for the project to reach the entitlement stage, and for the Disposition and Development Agreement ("DDA") to be finalized. The project completed entitlement approval through the Architectural Advisory Committee and Planning Commission. The Preliminary Planned Development District Application and Tentative Tract Map application were approved by the City Council on July 18, 2007. Staff has worked with the Developer since January, 2005 on the development of a First Class Hotel near the Convention Center: first, on a site at Tahquitz and Hermosa; second, at the Prairie Schooner site near the Convention Center; and, finally on the current Convention Center North Parking Lot. The City and Agency have a significant interest in the development of First Class Hotels near the Convention Center to support the City's recent $38 million investment in the Center's expansion. Placing the project . . 000002 CRA/City Council Staff Report December 19, 2007 -- Page 3 Re: Loft Partners Palm Springs, LLC Disposition and Development Agreement at this site allowed the City and Agency to secure a second First Class Hotel, the Hard Rock Hotel at the Prairie Schooner site. The Developer originally considered Westin, W aloft, or a W Hotel for the Site. However, the Developer ultimately chose to work with the Morgans Hotel Group and bring a luxury Mondrian Hotel to Palm Springs. Morgans Hotel Group is an elite group of distinctive handpicked hotels, most of them independently branded, from the company's first hotel, the Morgans Hotel in Manhattan, to The Shore Club in Miami Beach, to The Sanderson in London's West End, to the Mondrian Hotels in Los Angeles and Scottsdale. The Sanderson in London has been called "the hippest hotel in the world" by British GQ magazine. Morgans also acquired the Hard Rock Hotel and Casino in Las Vegas last year, The Mondrian Hotel is expected to generate significantly higher per-room revenue than a Westin or a W Hotel, at a much higher level of luxury and exclusiveness. The approved project features 200 hotel rooms and 50 condo-hotel units, with up to 150 condominiums. The Developer has received Preliminary Planned Development District approval, as well as approval of a Tentative Tract Map. The project will still come back to the City through the final Planned Development District approval process, as well as Final Map approval. FISCAL IMPACT The terms of the DDA will be that the Developer will pay fair market value for the Agency's parcel, which was appraised at $4,675,000. One parcel, called the Condo Parcel, of approximately 1.5 acres, will be conveyed to the Developer but will be paid for at the end of construction of the Hotel project. That amount is approximately $932,000. The project's value is estimated at more than $100 million, which will provide considerable tax increment to Merged Project Area #2 of the Agency. In addition, the project will 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. ohn S Ray d, Director of Thomas J. Wils , Ass tant City o unity conomic Development Manager, Dev pment Services David H. Ready, Executi ctor CRA/City Council Staff Report December 19, 2007 -- Page 4 Re: Loft Partners Palm Springs, LLC Disposition and Development Agreement Attachments: Agency Resolution City Resolution Disposition and Development Agreement Summary Report RESOLUTION NO. A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT WITH THE RE: LOFT PARTNERS PALM SPRINGS, LLC, FOR A 7.8+ ACRE AGENCY-OWNED PARCEL AT THE NORTHEAST CORNER OF CALLE ALVARADO AND AMADO ROAD, MERGED REDEVELOPMENT PROJECT AREA #2, FOR THE DEVELOPMENT OF A MONDRIAN HOTEL WITH 200 ROOMS AND 50 CONDO- HOTEL UNITS, AND 150 CONDOMINIUMS, 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. seq.) to carry out the purpose as the redevelopment in the City of Palm Springs ("the City"); and WHEREAS, the Re: Loft Partners Palm Springs, LLC ("Developer') has received Planned Development District approval from the City of Palm Springs to develop a First Class Hotel on a 7.8+ acre Agency-owned 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 December 19, 2007. 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 CFQA 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 Mondrian Hotel consisting of at least 200 hotel rooms and at least 50 condo-hotel units, and no more than 150 condominiums 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 Four Million Six Hundred Seventy Five Thousand Dollars ($4,675,000). 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 Developer is required to make 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 Amado Road and Calle Alvarado; 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 the Convention Center North Parking Lot. 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. 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 DECEMBER, 2007. STEVE POUGNET, CHAIRMAN ATTEST: James Thompson, City Clerk 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 , 2007, by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California 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 RE: LOFT PARTNERS PALM SPRINGS, LLC, FOR A 7.8± ACRE AGENCY-OWNED PARCEL AT THE NORTHEAST CORNER OF CALLS ALVARADO AND AMADO ROAD, MERGED REDEVELOPMENT PROJECT AREA #2, FOR THE DEVELOPMENT OF A MONDRIAN HOTEL WITH 200 ROOMS AND 50 CONDO-HOTEL UNITS, AND 150 CONDOMINIUMS 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 Re: Loft Partners Palm Springs, LLC for a 7.8+ Acre Parcel at the Northeast Corner of Calle Alvarado and Amado Road, Merged Redevelopment Project Area #2, for the Development of a Mondrian Hotel with 200 Rooms and 50 Condo-Hotel Units, and 150 Condominiums. PASSED, APPROVED, AND ADOPTED THIS DAY OF DECEMBER, 2007, STEVE POUGNET, CHAIRMAN ATTEST: James Thompson, City Clerk 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 , 2007, by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California SUMMARY REPORT: DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS ("AGENCY') AND RE: LOFT PARTNERS PALM SPRINGS, LLC, A DELAWARE LIMITED LIABILITY CORPORATION ("DEVELOPER") DECEMBER 2007 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 Site consists of three (3) parcels of land of approximately 7.8 acres. The Site is located at northeast corner of Calle Alvarado and Amado Road in the City of Palm Springs, and is commonly known as the former Convention Center North Parking Lot, and the Agency has acquired said property by a Grant Deed from the City of Palm Springs. The Developer owns an adjacent parcel not conveyed by the Agency of approximately 2.7 acres. Collectively, the Agency parcels and the Developer Parcel are referred to as the Project Site. Proposed Development The Developer proposes to construct a First Class Mondrian Hotel and meeting "space with parking and related uses, including at least two hundred (200) hotel rooms, 50 condominium-hotel units, ten thousand (10,000) square feet of "under-roof' meeting space, and no more than one hundred fifty (150) condominium units. These activities will result in the renovation of a portion of the City of Palm Springs and will help expand and diversify the City's economic base. CONFORMANCE WITH THE AB 1290 IMPLEMENTATION PLAN The sale of the Agency Property to the Developer is in conformance with the Agency's Five Year Implementation Plan, as amended. COST OF AGREEMENT TO THE AGENCY Financing The Developer shall pay to Agency the appraised value for the Agency's parcels, the sum of Four Million Six Hundred Seventy Five Thousand Dollars ($4,675,000). The Agency is not providing financial assistance to the Project. Agency Responsibilities Besides receiving the purchase price, the Agency will incur other administrative, appraisal, report and legal casts, in carrying out the Agreement. Most of these costs have been reimbursed by the Developer through a deposit required as part of the Exclusive Agreement to Negotiate. Developer Responsibilities This Agreement excludes any and all attorneys' fees and costs incurred by Developers in connection with the drafting, negotiation and implementation of this Agreement. Agency's other standard terms and conditions, including non-discrimination and maintenance covenants, and other terms and conditions remain in Disposition and Development Agreement for Developer. ELIMINATION OF BLIGHT The Site is in the Merged Redevelopment Project Area #2. The properly is currently developed as the Convention Center North Parking Lot. 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. The City has made a considerable financial investment in the construction and expansion of the Convention Center, but recent studies have shown that the Convention Center's ability to reach its full room-night-generating potential is limited by the quantity of First Class rooms within a well-lit, walkable radius of the Facility. Increased transient occupancy taxes can be used for community promotion, thereby increasing the City's hotel occupancy rates and convention center bookings. This increase in Convention Center activity will benefit the project areas by drawing additional hotel and service related development in and around the Facility. It will assist in eliminating blighting conditions caused by inadequate parking in and around the Facility and the increased convention and tourism activity will provide additional opportunities to redevelop underperforming commercial development in the central areas of the City. DISPOSITION AND DEVELOPMENT AGREEMENT By and Between COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS and RE: LOFTPARTNERS PALM SPRINGS, LLC, A DELAWARE LIMITED LIABILITY COMPANY PALM SPRINGS MERGED REDEVELOPMENT PROJECT AREA NO. 2 9456230 35983/0003 TABLE OF CONTENTS [NOTE: TOC TO BE UPDATE ONCE AGREEMENT IS FINAL] 1. [§100] SUBJECT OF AGREL-'MENT.......................... .... ............................I A- [§101] Purpose of This Agreement.............................. ......................... ........1 B. [§102] The Redevelopment Plan...... . .......... C. [§103] The Project Area. ................................. 2 D [§1041 The Site ........................ ....... .. . .......... .. ........... ..........2 E. [§105] Patties to This Agreement....................................................................2 F. §108] Deposit. ......... ............. ................ • -- - 3 II. [§200] DISPOSITION OF THE SITE............................ .......................... ........... ................4 A. [§201] Sale and Purchase; Lease.................. ...................... B. [§202] Fscrow .................................................. ................ 5 C. [g203] Conveyance of Title and Delivery of Possession..................................8 D. [§204] Conditions Precedent ............................................................8 E [§209] Form of Deed;Ground Lease..............................................................11 F. [§210] Condition of Title ............... .. ......I............ -............... 11 G. [§211] Time for and Place of Delivery of Deed..............................................11 H. [§212] Payment of the Purchase Price and Recordation of Deed and Memorandum of Lease........................................................................12 1. [§213] Title Insurance......................... ............................12 ................................ J. [§214] Taxes and Assessments.............. . .. .................................12 K. [§215] Conveyance Free of Possession,.,,,..,...I...I..................I----------------------1113 L. [§216] Inspections; Conditions of the Agency Parcel.....................................13 M. [§217] Zoning of the Site.....................................•-------.....--..........................15 N. [§218] Condition of the Agency Parcel and Parking Parcel ------15 O [§219] Preliminary Work by the Developer ...................................................16 P. [§220] Submission of Evidence of Equity Capital and Mortgage Financing..16 0 a 0 S 9456230 35993/0003 III. [§300] DEVELOPMENT OF THC SITF....................... ..................................... ........... .....16 A. [§301] Development of the Site by the Developer................ 16 B. [§313] Responsibilities of the Agency 20 C. [§314] Taxes,Assessments,Encumbrances and Liens...................................20 D. [§315] Prohibition Against Transfer of Agency Parcel,the Buildings or Structures Thereon and Assignment of Agreement..................... ......20 E. [§316] Security Financing; Rights of Holders................................... .. . .......21 F. [§322] Right of the Agcncy to Satisfy Other Liens on the Site After Title Passes.................... ..... .. ........................................... . 23 G. [§323] Certificate of Completion....................................................................23 H. [§324] Prevailing Wages........... ..... ................................................... .......24 IV. [§400] USE OT'THL-' SITE............................ ............ .. . ... ............................... . ..........25 A- [§401] Uses.... ............... . ........... .................................................................25 B. [§402] Hotel Operator................. ........................ .......................25 C. [§403] Obligation to Refrain From Discrimination ........................................26 D. [§404] Form of Nondiscrimination and Nonscgregation Clauses...................26 E- [§405] Effect and Duration of Covenants.......................................................27 V. [§500] DEFAULTS,REMEDIES AND TERMINATION................................. 28 A. [§501] Defaults-General..... 28 B. [§502] Legal Actions......... .. .............................................. 28 C. [§506] Rights and Remedies are Cumulative..................................................29 D. [§507] Option to Repurchase,Reenter and Repossess....................................29 E. [§508J Power of Termination..... ..... ......................... • . ..................... ....31 Vl. [§600] GENERALPROV1S1ON5 ....................................... .... ................................................34 A. [§601] Notices,Demands and Communications Between the Parties------------34 B. [§602] Conflicts of Interest...................- - .. ............................. .. ......34 C. [§603] Nonliability of Agency Officials and Employees................................34 D. [§604] Enforced Delay: Extension of Times of Performance........................34 000017 945623v3 35983/0003 E. [§605] Inspection of Books and Records................................. 35 F. [§606] Plans and Data. .. ................................ .................................. .35 G. [§607] Attorneys'Fees............... ....... ...... .................... -- ......... .........35 VII. [§700] SPECIAL PROVISIONS...................... ........ ..............35 A. [§701] Amendment of Redevelopment Plan...................................................35 13. [§702] Submission of Documents to the Agency for Approval......................36 C. [§703] Amendments to this Agreement.. ..................... . ...36 VIII. [§800] ENTIRE AGREEMENT,WAIVERS AND AMENDMENTS ....................36 IX. TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY...................................................37 Attachments Attachment No, 1 Map of the Site Attachment No.2 Legal Description of the Site Attachment No.3 Schedule of Performance Attachment No.4 Scope of Development Attachment No. 5 Form of Grant Deed Attachment No. 6 Prormssory Note Attachment No. 7 Deed of Trust 9456230 35983/0003 DISPOSITION AND DEVELOPMENT AGREEMENT THIS AGREEMENT is entered into as of the day of 2007, by and between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS (the "Agency"), and RE: LOFT PARTNERS PALM SPRINGS, LLC, a Delaware limited liability company (the "Developer"). The Agency and the Developer agree as follows: I. [§1001 SUBJECT OF AGREEMENT A. (§101] Purpose of This Agreement The purpose of this Agreement is to effectuate the Amended and Restated Redevelopment Plan (the "Redevelopment Plan") for the Palm Springs Merged Redevelopment Project Area No. 2 (the "Project") and adopted plans and policies 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 cotmnercial 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 of the Project (the "Project Area") with a hotel and condominium project (the "Development"). The Developer shall construct or cause to be constructed on the site a "four star"Mondrian hotel, including at least two hundred (200) hotel rooms, at least fifty (50) condominium-hotel rooms, ten thousand (10,000) square feet of"under-roof' group meeting space, no more than one hundred fifty (150) condominium units, and on-site parking which meets the requirements of the City. The development of the Site 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 Amended and Restated Redevelopment Plan that was approved and adopted on February 19, 2003, by the City Council of the City of Pahn Springs by Ordinance No. 1624, as amended. 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. 9456230 35983/0003 12/13/2007 C. [§103] The Project Area The Project Area is located in the City of Palm Springs, Califomia, and the exact boundaries thereof are specifically described in the Redevelopment Plan. D. [§104] 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 7.8 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 tenns and provisions of this Agreement. The Developer owns an approximately 2.7 acre portion of the Site adjacent to the north of the Agency Parcel ("Developer Parcel'). The Developer Parcel and the Agency Parcel shall be collectively referred to herein as the "Condo/Hotel Parcel." The Developer intends to develop a hotel, meeting space, and condominiums on the Condo/hotel Parcel, all as discussed in Section 101 above. That portion of the Condo/Hotel Parcel on which Developer intends to develop the hotel and meeting space condo hotel units is referred to herein as the "Hotel Parcel' and that portion of the Condo/Hotel Parcel on which Developer intends to develop the condominium is referred to herein as the "Condominium Parcel-` The Agency Parcel, Developer Parcel, Hotel Parcel and Condominium Parcel are each shown on the Map of the Site (Attachment No. 1). E. [§105] Parties to This Agreement 1. [§106] TheAecncy 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 et seq.). The office of the Agency is located at 3200 East 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] TheDeveloner The Developer is RE: LOFT PARTNERS PALM SPRINGS, LLC, a Delaware limited liability company. The principal office of the Developer is located at 100 South Sunrise Way, No. 498, Palm Springs, CA 92262. Wherever the tern "Developer" is used herein, such tern shall include any permitted nominee, 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 000020 9456230 35983/0003 2 12/13/?007 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 issuance of a Certificate of Completion of the development of the Hotel Parcel. 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"). 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 thus 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 Agency, shall be deemed to relieve the Developer or any other party from any obligations under this Agreement. F. [§108) Deposit Developer shall deliver to the Agency a deposit of cash or certified check satisfactory to the Agency in the amount of TWO HUNDRED D AND FIFTY THOUSAND DOLLARS ($250,000) (the "Deposit") as security for the performance of the obligations of the Developer to be performed prior to the return of the Deposit to the Developer or its retention by the Agency as liquidated damages. The Deposit shall be delivered in accordance with the schedule attached hereto as Attachment No. 3. In lieu of cash or certified check, the Deposit, at the option of the Developer,may be in the form of: 1. Negotiable certificates of deposit issued by a federal or state bank; or 2. An unconditional and irrevocable letter of credit, in favor of the Agency, from a bank authorized to do business in 000021 9456230 35983/0003 3 12/13/2007 California, in form and substance satisfactory to the Agency. The Agency shall be under no obligation to pay or earn interest on the Deposit, but if interest is paid thereon, such interest shall become part of the Deposit. Upon termination of this Agreement by the Agency as provided in Section 204 hereof, the Deposit (including all interest accrued thereon, if any) shall be retained by the Agency as liquidated damages as provided therein. Upon termination of this Agreement by either party as provided in Section 204 hereof, the Deposit (including all interest accrued thereon, if any) shall be returned to the Developer by the Agency as provided therein. If the Developer is in default with respect to any provision of this Agreement, the Agency may, but shall have no obligation to, use the Deposit or any portion of the Deposit to cure such default or to compensate the Agency for any expense or damage sustained by the Agency and resulting from such default. if this Agreement has not been terminated as a result of such default, the Developer, on demand from the Agency, shall promptly restore such Deposit to the full amount required by this Section. If this Agreement shall not have been theretofore cancelled oT terminated, or the Deposit shall not have been returned to the Developer, the Agency shall return the Deposit to the Developer upon completion of the improvements and development of the Site for which a final Certificate of Completion has been issued pursuant to Section 323 hereof. 11. 1§2001 DISPOSITION OF THE SITE A. [§201] Sale and Purchase In accordaance with and subject to all the tenns, covenants and conditions of this Agreement, the Agency agrees to sell, and the Developer agrees to purchase for development, the entire Agency Parcel for the sum of Four Million Six Hundred Thousand Seventy Five Thousand Dollars ($4,675,000) (the "Purchase Price"), $3,742,750 of which shall be paid at the close of escrow and the remaining balance of which, in the amount of Nine Hundred Thirty Two Thousand Two Hundred and Fifty Dollars ($932,250.00), shall be paid in accordance with the terms and provisions of the Promissory Note attached hereto as Attachment 6 ("Note"), which Promissory Note shall be secured by the Deed of Trust attached hereto as Attachment ("Deed of Trust"), which shall only encumber Parcel 3 of Tentative Map No. 000022 9456230 35953/0003 4 12/13/2007 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. 13. (§202] Escrow The Agency agrees to open an escrow with First Arnetican 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 initial outstanding principal amount of the Note in accordance with the provisions of Section 208 of this Agreement. The Developer shall timely and properly execute, acicnowlcdge (as necessary) and deliver the Note and the Deed of Trust. 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 ten (10) days prior to the scheduled date for the close of escrow: 1. 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, acluxowledge 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 certifying that the Developer has completed all acts (except deposit of the Purchase Price less the initial outstanding principal amount of the Note) 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 000023 9456230 35"3/0003 5 12/13/2007 of such fees, charges and costs, but not earlier than ten (10) days 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 and memorandum of lease; 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.1..T.A. survey; 7. Ad valorem taxes, 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. immediately thereafter, Escrow Agent shall record the Deed of Trust. The Escrow Agent shall buy, affix and cancel any transfer stamps required by law and pay any transfer tax required by law. Any insurance policies governing the Agency Parcel are not to be transferred. 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; 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; and 945623v3 35983/0003 6 1J13/2007 3. Record any instruments delivered through this escrow, if necessary or proper, to vest title in the Developer in accordance with the terns and provisions of this Agreement. All funds received in this escrow shall be deposited by the Escrow Agent with other escrow funds of the Escrow Agent in a general escrow account or accounts with any state or national bank doing business in the State of California. Such funds may be transferred to any other such general escrow account or accounts. All disbursements shall be made by check of the Escrow 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 time for conveyance established in Section 203 of this Agreement, either party who then shall have fully performed the acts to be performed before the conveyance of title 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. If neither the Agency nor the Developer shall have fully performed the acts to be performed before the time for conveyance established in Section 203, no termination or demand for return shall be recognized until ten (10) days after the Escrow Agent shall have trailed 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 failure 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 Escrow 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 under Section 202 of this Agreement. Neither the Agency nor the Developer shall be liable for any real estate commissions or brokerage fees that may arise herelrom. The Agency and the Developer each represent that neither has engaged any broker, agent or finder in convection with this transaction. 000025 9456230 35983/0003 7 12/l3/2007 C. [§203] 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 Agency and the Developer agree to perform all acts necessary to 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 1. 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 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 mortgage financing necessary to finance a portion of the development of the Agency Parcel that is being closed upon pursuant to this Agreement, 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. There shall be no litigation pending with respect to the Agreement or any City approvals related to the Development, the outcome of which could materially interfere with the development of that portion of the Agency Parcel that is being closed upon. C. Developer has obtained or will obtain all discretionary permits and land use approvals required for the 090026 9456230 35983/0003 8 12/13/2007 development of that portion of the Agency Parcel that is being closed upon pursuant to this Agreement, excepting a final planned development permit and a final map which are anticipated to be issued or approved subsequent to the approval of this Agreement but prior to the close of escrow, 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 prior to close of escrow: a. Developer's approval of the condition of title pursuant to Section 206. b. The Developer has obtained binding commitments for the equity capital and mortgage financing necessary to finance a portion of the development of the Site pursuant to this Agreement- C. Developer has obtained or will obtain all discretionary permits and land use approvals required for the development of the Site pursuant to this Agreement, 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 warranties of the Agency contained herein shall be true and correct in all material respects. 3. Termination for Failure of Condition In the event that, prior to the time established in the Schedule of Performance (Attachment No. 3) for close of escrow, there is a failure of one or more conditions described in Section 204 that is not waived by the benefited party, the party for whose benefit the condition is established tnay terminate this Agreement by written notice to the other party. In the event of such a termination, the Agency shall return the Deposit to the Developer and no party shall have any further rights or liabilities to the other under this Agreement. 945623v3 35983/0003 9 12/13/2007 4. Liquidated Damages IF THIS AGREEMENT 1S TERMINATED 13Y THE AGENCY FOR A DEFAULT OF THE DEVELOPER PRIOR TO CLOSE OF ESCROW, THE DEPOSIT MAY BE RETAINED BY THE AGENCY AS LIQUIDATED DAMAGES AND AS ITS PROPERTY WITHOUT ANY DEDUCTION, OFFSET OR RECOUPMENT WHATSOEVER. IF THE DEVELOPER SHOULD DEFAULT UPON ITS OBLIGATIONS, MAILING 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 SUCH SITE 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 REVE'•NUES 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 TIIE 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 HELD BY THE AGENCY AT THE TIME OF THE DEFAULT OF THE DEVELOPER, AND THE AMOUNT OF SUCH DEPOSIT SHALL BE PAID TO THE^` AGENCY UPON ANY SUCH OCCURRENCE AS THE TOTAL OF ALL LIQUIDATED DAMAGES FOR ANY AND ALL SUCH DEFAULTS AND NOT AS A PENALTY. IN THE EVENT THAT THIS PARAGRAPH SHOULD BE HELD TO BE VOID FOR ANY REASON, THE AGENCY SHALL BE ENTITLED TO THE FULL EXTENT OF DAMAGES OTHERWISE PROVIDED BY LAW. THE DEVELOPER AND THE AGENCY SPECIFICALLY ACKNOWLEDGE THIS LIQUIDATED DAMAGES PROVISION BY THEIR SIGNATURES HERE: By: By 945623v335983/0003 10 12/13/2007 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 Brant deed in substantially the form set forth in Attachment No. 5. F. [§206] Condition of Title Within the times set forth in the Schedule of Performance (Attaclunent 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 approve or disapprove any exceptions to title within fifteen (15) business days fi-om the time of receipt. Failure by the Developer to either approve or disapprove the exceptions to title within such time shall be deemed an approval. If the condition of title is not acceptable to Developer, the Agency shall have thirty (30) days to eliminate exceptions to title. If Agency is unable to eliminate exceptions to title, Developer may terminate this Agreement pursuant to Section 204. Notwithstanding the foregoing, the City shall retnove all monetary encumbrances other than a lien for taxes not yet due and payable. 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). 945623v3 359.93/0003 11 12/13/2007 14. [§208] Payment of the Purchase Price and Recordation of Deed The Developer shall deposit the required portion of the Purchase Price the (less the initial outstanding principal amount of the Note) that corresponds to the Agency Parcel 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, have been delivered to the Escrow Agent and that title is in condition to be conveyed in confonnity 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. 1. [§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 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 portion of the Purchase Price paid for the Agency Parcel. 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. J. [§210] Taxes and Assessments Ad valorem taxes and 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 ad valorem taxes and assessments levied or imposed for any period commencing after closing of the escrow shall be paid by the Developer. 9456230 35983/0003 12 12/13/2007 K. [§211] Conveyance Free of Possession Except as otherwise provided in the Scope of Development (Attachment No. 4), the Agency Parcel shall be conveyed free of any possession or right o f possession by any person except that of the Developer and the easements of record. L. [§212] Inspections; Conditions of the Agencv Parcel ]. Inspections Developer has conducted a Phase I Environmental Study and Soils Analysis of the Agency Parcel and is satisfied with their condition. No further 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 Agency Parcel "as is," in its current physical condition, with no warranties, express or implied, as to the physical condition thereof, 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. I Developer Indemnity Developer agrees, from and after close of escrow, to defend, indeuuiify, protect and hold harmless the Agency and its officers, beneficiaries, employees, agents, attorneys, representatives, legal successors and assigns ("lndemnitees") from, regarding and against any and all liabilities, obligations, orders, decrees, judgments, liens, demands, actions, Environmental Response Actions (as defined herein), claims, losses, damages, fines, penalties, expenses, Environmental Response Costs (as defined herein) or costs of any kind or nature whatsoever, together with fees (including, without limitation, reasonable attorneys' fees and experts' and consultants' fees), whenever arising, unless caused in whole or in part by any of the lndemnitees, resulting from or in connection with the actual or claimed generation, storage, handling, transportation, use, presence, placement, migration and/or release of Hazardous Materials (as defined herein), at, on, in, beneath or from the Agency Parcel (collectively referred to as "Contamination"). Developer's defense, indemnification, protection and hold harmless obligations herein shall include, without limitation, the duty to respond to any governmental inquiry, investigation, claim or demand regarding the Contamination, at Developer's sole cost. 0000331 945623v3 35983/0003 13 12/13/2007 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 Indemnitees 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 ITom [lie Agency Parcel is caused in whole or in part by any of the lndernnitees. In furtherance of the intentions set 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 tight 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 a. As used in this Agreement, the term "Environmental Response Actions" means any and all activities, data compilations, preparation of studies or reports, interaction with environmental regulatory agencies, obligations and undertakings associated with environmental investigations, removal activities, remediation activities or responses to inquiries and notice letters, as may be sought, initiated or required in connection with any local, state or federal governmental or private patty claims, including any claims by Developer or Agency. b. As used in this Agreement, the term "Environmental Response Costs" means any and all costs associated with Environmental Response Actions including, without limitation, any and all fines, penalties and damages. 000032 9456230 35983/0003 14 1211 312007 c. 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 terns 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 defense, indemnification, protection and hold harmless obligations of 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, indermniGcations, 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 thus Agreement. M_ [§213] Zoning of the Site The Agency and the Developer agree that on the date of execution of this Agreement the Site is zoned so as to permit the development and construction of ir7provcments in accordance with the provisions of this Agreement and the use, operation and maintenance of such improvements- 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. The Agency shall not be responsible for any items of site work except those that are listed in the Scope of Development as the Agency's responsibilities. ft 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 9456230 35983/0003 15 12/13/2007 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. 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 any activity pursuant to this section. 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 iTorn such preliminary work, access or use thereof Copies of data, surveys and tests obtained or made by the Developer shall be filed with the Agency. Any preliminary work by the Developer shall be undertaken only after securing any necessary pennits from the appropriate goverumental agencies. P. [§2161 Submission of Evidence of Equity Capital and Mortgage Pinancina No later than the time specified in the Schedule of Performance (Attachment No. 3), the Developer shall submit to the Agency Counsel evidence satisfactory to the Agency that the Developer has obtained the equity capital and commitments for mortgage financing. 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 schernatic drawings and an entitlement application (collectively a "Preliminary Planned Development"). The Site shall be developed as generally established in the Preliminary Planned Development and related documents except as 00093 �, 9456230 35993/0003 16 12M/2007 changes may be mutually agreed upon between the Developer and the Agency. Any such changes shall be within the limitations of the Scope of Development (Attachment No. 4). 3. [§304] Construction Plans. Drawings and Related Documents The Developer shall prepare and submit construction plans, drawings and related documents to the City/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. The Developer shall also prepare and submit to the City/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 mutually agreed to by the parties hereto. During the preparation of all final drawings and plans, City/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 City/Agency. The City/Agency and the Developer shall communicate and consult informally as frequently as is necessary to insure that the formal submittal of any documents to the City/Agency can receive prompt and speedy consideration. If any revisions or corrections of plans approved by the City/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 City/Agency shall cooperate in efforts to obtain a waiver of such requirements or to develop a mutually acceptable alternative. 1. [§305] City/Agency Approval of Plans. Drawings and Related, Documents Subject to the terms of this Agreement, the City/Agency shall have the right of architectural and site planning review of all plans and drawings, including any changes therein. The City/Agency shall approve or disapprove the plans, drawings and related documents in a timely fashion 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 City/Agency, a later rendering of such aspect, or a more detailed iteration of such aspect, shall be approved by the City/Agency absent a material change thereto. Any disapproval shall state in writing with reasonable specificity the reasons for disapproval and the 000015 945623v3 35983/0003 17 11/13/2007 changes that the City/Agency requests be trade. 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 City/Agency. The Developer, upon receipt of a disapproval based upon powers reserved by the City/Agency hereunder, shall revise such plans, drawings and related documents and resubmit them to the City/Agency as soon as possible after receipt of the notice of disapproval, provided that in no case shall the City/Agency be entitled to require changes inconsistent with the Scope of Development and any previously approved items. if the Developer desires to make any substantial change in the construction plans after their approval by the City/Agency, the Developer shall submit the proposed change to the City/Agency for its approval. If the consh-oction plans, as modified by the proposed change, conform to the requirements of Section 304 of this Agreement, the approvals previously granted by the City/Agency under this Section and the Scope of Development (Attachment No. 4), the City/Agency shall approve the proposed change and notify the Developer in writing within thirty (30) days after submission to the City/Agency. If any such change in the construction plans is rejected by the City/Agency, in whole or in part, such rejection shall be by written notice thereof by the City/Agency to the Developer setting forth in detail the reasons therefor, and such rejection shall be made within said thirty (30) day period. 5. [§306] Cost of Construction The cost of developing the Site and constructing all 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. The Agency and the Developer shall each pay the costs necessary to administer and carry out 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 improvements and the development of the Site. The Developer shall begin and complete all construction and development within the times specified in the Schedule of Performance (Attaclunent 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 tirne 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. 9456230 35933/0003 Is 12/13/2007 7. [§308] Bodily Injury. Property Damaee 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 ($5,000,000) for any occurrence and FIVE, HUNDRED THOUSAND DOLLARS (5500,000) 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 carves 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 covering the Hotel Parcel as hereinafter provided in Section 323. 8. [§309J City and Other Governmental Agency Pen-nits 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] Rights of Access 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 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. 10. [§311] Local, State and Federal Laws The Developer shall carry out the construction of the improvements in conformity with all applicable laws, including all applicable federal and state labor standards. 9456230 35983/0003 19 12/13/2007 11. [§312] Antidiscrimination During Construction The Developer, for itself'and its successors and assigns, agrees that in the construction of the 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 of the Agency The Agency, without expense to the Developer or assessment or claim against the Site, shall perform 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). 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 or delivery to Developer. Prior to the issuance of a Certificate of Completion for the Hotel Parcel, the Developer shall not place or allow to be placed on the Site any mortgage, trust deed, 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 arnounts of any tax, assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. The Developer understands that under certain conditions, its control of the Site or portion thereof under this Agreement may give rise to the imposition of a possessory interest tax on said property, and in such event, the Developer agrees to pay when due any such possessory interest tax. D. [§315] Prohibition Against Transfer of Agency Parcel, the Buildings or Structures Thereon and Assiglunent of Agreement 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 improvements pursuant to Section 323, with the exception of the sale of individual condominium-hotel and condominium units, 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 improvements thereon without the prior written approval o f the Agency. This prohibition shall not apply subsequent to the issuance of the Certificate of Completion for the improvements on the Motel Parcel. This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Agency Parcel or to prohibit or restrict the leasing of any part or parts of a building or structure when said improvements are completed. 9456230 35983/0003 20 12/13/2007 In the absence of specific written agreement by the Agency, no such transfer, assignment or approval by the Agency shall be deemed to relieve the Developer or any other party :from any obligations under this Agreement until completion of development of the Hotel Parcel as evidenced by the issuance of a Certificate of Completion therefor- E. [§316] Security Financing: Rights of Holders I. [§317] No Encumbrances Except Mortgages, Deeds of Trust, Sales and Lease-Backs or Other Financing for Development Notwithstanding Sections 314 and 315 of this Agreement, mortgages, deeds of trust, sales and lease-backs or any other form of conveyance required for any reasonable method of financing are permitted before issuance of a Certificate of Completion for the Hotel Parcel, but only for the purpose of securing loans of funds to be used for financing the acquisition or development of the Agency Parcel, the construction of improvements on the Hotel Parcel, 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, sale and lease-back 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 Hotel Parcel. The Developer shall not enter into any such conveyance for financing without the prior written approval of the Agency (unless such lender shall be one of the ten (10) largest banking institutions doing business in the State of California, or one of the ten (10) largest insurance lending institutions in the United States qualified to do business in the State of California), 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, sale and lease-back or other financing conveyance, encumbrance or lien that has been created or attached thereto prior to completion of the construction of the 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 Improvements 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 improvements or to guarantee such construction or completion, nor shall any covenant or any other provision in the grant deed for the Hotel 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. 9456230 35983/0003 21 12/13/2007 3. [§319] Notice of Default to Mortgage. Deed of Trust or Other Security Interest Holders- Right to Cure Whenever the Agency 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 improvements, the Agency 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 and to add the cost thereof to the security interest debt and the lien on its security interest. 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 this Section. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the improvements (beyond the extent necessary to conserve or protect the 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 improvements to which the lien or title of such holder relates and submit evidence satisfactory to the Agency that it has the qualifications and financial responsibility necessary to perform such obligations. 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 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 under 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 bolder of an amount equal to the stun of the following: a. The unpaid mortgage, deed of trust or other security interest debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings)-, 9456230 35983/0003 22 12/13/2007 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. Ali amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such 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 Agency. 5. [§321] Right of Aggency to Cure Mortgage, 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 development, and the holder has not exercised its option to complete the development, 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 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 finds to purchase and develop the Hotel Parcel as authorized herein- F. [§322] Right of the Agency to Satisfy Other Liens on the Site After Title Passes After the close of escrow and prior to the issuance of a Certificate of Completion for construction and development on the Hotel Parcel, and after the Developer has had a reasonable time to challenge, cure or satisfy any liens or encumbrances on the Site, 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 City of all construction and development to be completed by the Developer upon the Hotel Parcel, the Agency shall furnish the Developer with a Certificate of Completion upon written a 0 R 0 6 11 945623v3 35993/0003 23 12/13/2007 request therefor by the Developer. 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 detennination of satisfactory completion of the construction required by this Agreement upon the Hotel Parcel 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 Hotel Parcel covered by said Certificate of Completion 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 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 Hotel Parcel, neither the Agency nor any other person shall have any rights, remedies or controls with respect to the Hotel Parcel 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 (lie respective rights and obligations of the parties shall be as set forth in the grant deed of the Hotel Parcel. The Agency shall not unreasonably withhold a Certificate of Completion. If the Agency refuses or tails to furnish a Certificate of Completion for the Hotel Parcel 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 relitsed 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 Ior 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 tailed 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 (n) comply with the other applicable provisions of Labor Code Sections 1720 et seq. Neither Agency nor 000E2 9456230 35933/0003 24 12/13/2007 Developer believe that the project to be developed on the Site is a public work for purposes of State law. Developer shall indemnify, hold harmless and defend (with counsel reasonably acceptable to the Agency) the Agency against any claim for 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 improvements or any other work undertaken or in connection with the Site_ TV. [§4001 USE OF THE SITE A. [§401] 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 four star Mondrian hotel and meeting space with parking and related uses, including no less than two hundred (200) hotel rooms, 50 condominium-hotel units, ten thousand (10,000) square feet of "under-roof' meeting space, no more than one hundred fifty (150) condominium units. The hotel will provide no less than a one hundred fifty (150) room block commitment to the Convention Center under the Convention Center's Committable Rooms Program as further set forth in the Motel Operating Agreement described in Section 402 below. The Developer shall use the Site and the improvements thereon for no purpose other than hotel and condominium related uses without the prior written consent of the Agency. The foregoing covenant shall run with the land. For purposes of this Section, a "four star hotel" means a full service hotel comparable to other Mondrian hotels in operation as of the date of this Agreement. B. [§402] Hotel Operator The Developer shall cause the hotel to be constructed on the Hotel Parcel to be operated pursuant to an operating and/or management agreement ("Hotel Operating Agreement") with a qualified operator ("Operator"). The Hotel Operating Agreement shall provide for no less than a one hundred fifty (150) room block commmitment to the Convention Center under the Convention Center's Committable Rooms Program. The Operator shall be satisfactory to the Agency, in its reasonable discretion and shall have a reputation, experience and qualifications for managing a four star hotel, as defined in Section 401. Prior to conveyance of the Agency Parcel to the Developer, the Developer shall provide to the Agency written confirmation that it has entered into the Hotel Operating Agreement with the Operator together with an abstract of Hotel Operating Agreement which identifies the material terms and provisions contained therein. QU90�12 945MQ 35983/0003 25 12/13/2007 If the Operator is not a publicly traded company or entity, then any change in the identity of the Operator prior to issuance of a Certificate of Completion shall require the prior written approval of the Agency, which approval shall not be unreasonably withheld or delayed if the new Operator meets the qualifications set forth in this Agreement. As used herein "change in the identity of Operator" shall mean any change in fifty percent (50%) or more of the ownership or control of the Operator or in a general partner, managing partner or other entity having a controlling interest in Operator. C. [§403] Obligation to Refrain From Discrirnination 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 arc defined in Section 12926, 12926.1, subdivision (in) 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 pennit 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 Nonsearegation 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 (in) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 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, location, number, use or occupancy of tenants, lessees, subtenants, QQQQ�� 9456230 35983/0003 26 12M/2007 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 to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein leased." I 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 o£ 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. [§405] Effect and Duration of Covenants Except as otherwise provided, the covenants contained in this Agreement and the grant deed shall remain in effect until (the termination date of the Redevelopment Plan). 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 1'avor of the Agency, its successors and assigns, the Agency and any successor in interest to the Site or any part thereof. 00a04� 5 9456230 35983/0003 27 12/13/2007 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. This 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. The 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. [§5001 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 perfonnn any term or provision of this Agreement constitutes 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 and during any period of curing shall not be in default. The injured party shall give written notice of default to the party in default specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings against the party in default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of 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 default shall not operate as a waiver of any 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- B. [§502] Legal Actions 1. [§503] Institution of Legal Actions In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, or recover 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 of the County of Riverside, State of California. 945623v3 35983/0003 28 12/13/2007 2. [§504] Applicable Law; Interprclalion The laws of the State of California shall govern the interpretation and enforcement of this 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. 3. [§505 1 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 patty. D. [§507] Option to Repurchase, Reenter and Repossess The Agency shall have the right at its option to repurchase the Agency Parcel together with all improvements thereon, if after conveyance of title to the Agency Parcel and prior to the issuance of the Certificate of Completion for the Hotel Parcel, the Developer shall: I. Fail to commence construction of approved improvements on the the Agency Parcel within the time established therefor in the Schedule of Performance (Attachment No. 3), 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 00004� 7 945623v3 35983/0003 29 12/13/2007 specifications for all improvements provided in this Agreement, completed rough grading on the Agency Parcel, and conunenced installation and construction of improvements provided herein pursuant to permits issued by the City for the construction of such improvements; or 2. 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 Schedule of Performance (Attachment No_ 3), where such failure has not been cured within three (3) months after written notice thereof from the Agency; or 3_ 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 Agency; or 4. Without the prior written consent of Agency, 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 Agency Parcel, except for (i) a Permitted Transfer, (n) equipment or "soft goods" financing, (iii) mezzanine or similar debt, or (iv) any sale or transfer that is expressly permitted by the terms of this Agreement. For the purpose of this paragraph, the terms "sell" and "transfer" shall include, in addition to the common and ordinary meaning of those terns 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 Agency Parcel may be exempt from such transaction during the period when owned by Agency. This option 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 affecting the Agency Parcel as permitted by this Agreement; or B. Any rights or interests provided in this Agreement for the protection of the holder of such mortgages, deeds Of trust or other security instruments. UG90 8 9456230 35983/0003 30 12M/2007 To exercise its right to repurchase, reenter and take possession with respect to the Agency Parcel, the Agency shall pay to the Developer in cash an amount equal to: I. The cash Purchase Price for the Agency Parcel paid by the Developer; plus 11. The costs actually incurred by the Developer for "hard" and "soft" costs related to the Agency Parcel 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 Agency Parcel at the time of the repurchase, reentry and repossession, exclusive of amounts financed; less III. Any gains or income withdrawn or made by the Developer horn the Project Area or the improvements thereon; and less IV. The amount of any unpaid assessments and any liens against the Agency Parcel. E. [§508] Power of Termination The Agency shall have the additional right, at its option, to terminate the estate conveyed to the Developer, to reenter and take possession of the Agency Parcel with all improvements thereon and to rcvcst in the Agency the estate theretofore conveyed to the Agency, if after conveyance of title to the Agency Parcel and prior to issuance of the Certificate of Completion for the Hotel Parcel, the Developer shall: 1. Fail to comnmence construction of approved improvements on the portion of the Agency Parcel within the time established therefor in the Schedule of Perfonnance (Attachment No. 3), for any reason whatsoever. For purposes of this provision, the Developer shall be deemed to "commence construction" when and only when the Developer has commenced rough grading (if required) pursuant to a permit issued by the City for the construction of the improvements provided for herein, the final plans and specifications for which had been approved by the City; or 2. 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 Schedule of Perfonnance (Attachment No. 3), where such failure has not been cured within three (3) months after written notice thereof from the Agency; or �a0a4� 31 9456230 359D/0003 31 1?/13/2007 �. 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 Agency; or 4. Without the prior written consent of Agency, 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 (i) a Permitted Transfer, (ii) equipment or `-soft goods" financing, (iii) mezzanine or similar debt, or (iv) any sale or transfer that is expressly permitted by the terms of this Agreement. For the purpose of this paragraph, the terns "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 lact that the Site may be exempt from such transaction during the period when owned by Agcncy. The interest created pursuant to this Section 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 Agency Parcel under the same or similar conditions specified in Section 507 above. The Agency 's power of tenmination shall be subordinate and subject to and be limited by and shall not defeat, render invalid or limit: I. Any mortgage, deed of trust or other security instrument permitted by this Agreement; or 2. Any rights or interest provided in this Agreemment for the protection of the holder of such mortgages, deeds of trust or other security instruments. Upon revesting title to the Agency Parcel or any part thereof in the Agency as provided in this Section, the Agency shall use its best efforts to resell the Agency Parcel or part thereof as soon and in such manner as the Agency shall find feasible to a qualified and responsible party or parties (as determined by the Agency) who will assume the obligation of making or completing the improvements, or such other improvements in their stead, as shall be satisfactory to the Agency and in accordance with the uses specified for the Agency Parcel or part thereof in the Redevelopment Plan. Upon resale of the Agency Parcel, the proceeds thereof shall be applied: 1. First, to reimburse the Agency for all costs and expenses incurred by the Agency, including, but not limited to, salaries to persormel in comuection with the recapture, management and resale of the 0090.5 0 9456230 359B/0003 32 12/13/2007 Agency Parcel or part thereof(but less any income derived by the Agency from the Agency Parcel or part thereof in connection with such management); all taxes, assessments and water and sewer charges with respect to the Agency Parcel or part thereof (or, in the event the Agency Parcel is exempt fi-om 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 Agency Parcel 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 Developer; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Agency Parcel or part thereof; and any amounts otherwise owing the Agency by the Developer; and 2. Second, to reimburse the Developer the sum of the following: (a) the cash portion of that portion of the Purchase Price for the Agency Parcel paid by the Developer; plus (b) any cash payments previously made by the Developer for the development of the Agency Parcel and for the improvements existing on the Agency Parcel at the time of the reentry and repossession, exclusive of amounts financed but inclusive of all "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 such reimbursement, exclusive of amounts financed; less (c) any gains or income withdrawn or made by the Developer from the Agency Parcel or the improvements thereon; and less (d) the amount of any unpaid assessments against the Agency Parcel. Any balance remaining after such reimbursements shall be retained by the Agency as its property. As set forth above, this section is intended to create and reserve in the Agency 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 fact that the Agency will convey the Agency Parcel to the Developer for development pursuant to the Redevelopment Plan, and not for speculation in undeveloped land. a®6®51 945623v3 35983/0003 33 12/13/2007 VI. [§600] GENERAL PROVISIONS A. [§601] Notices, Demands and Communications Between the Parties Formal notices, demands and communications between the Agcncy 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 105 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 of Agency Officials and Employees No official or employee of the Agency shall be personally liable to the Developer in the event of any default or breach by the Agency or for any amount that may become due to the Developer or on any obligations under the terms of this Agreement, 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 default where delays or defaults 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 lime of the commencement of the cause. If, however, notice by the party claiming such extension is sent to the other parties more than thirty (30) days after the commencement of the cause, the period shall commence to 000052 9456230 35983/0003 34 12/13/2007 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 tight, 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 for any reason, the Developer shall deliver to the Agency any and all plans and data concerning the the Agency Parcel, 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 or liability therefor to the Developer or any other person. 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 comiection 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 VIL [§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 permitted on the Site or changes the restrictions or controls that apply to the Site or otherwise directly affect the use of the Site shall be made or become effective without the prior written consent of the Developer. Amendments to the Redevelopment Plan applying to other property in the Project Area shall not require the consent of the Developer. 000053 9456230 35983/0003 35 1)/13/2007 B_ [§702] Submission of Documents to the Agency Aggicy 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 A Bement 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 the Agency, provided such requests are consistent with this Agreement and would not substantially alter the basic business terns included herein. D. [§704] Conflicts In the event of a conflict between the terns and provisions of this Agreement and the terns and provisions of the Attachments, the terms 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 comprises pages 1 through _, inclusive, and Attachment Nos. I through 5, attached hereto and incorporated herein by reference, all of which constitute the entire understanding and agreement of the parties. This Agreement integrates all of the terns 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 City approves a disposition and development agreement for any condominium 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 Project and which disposition and development agreement contains terns or provisions that are materially 99Ga514 9456230 35M/0003 36 12/13/2007 more favorable than the terms and provisions contained herein, then the corresponding terms and provisions of this Agreement shall be deemed to be amended to match (as near as possible) such favorable terms and provisions. Any such amendment shall be automatic and shall require no further action on the part of the Agency or the Developer_ IX. TIME 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 forty-five (45) 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. , 2007 COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and Politic By: Title: By: "title: "AGENCY" Approved as to form: Agency Counsel 2007 RE: LOFT PARTNERS PALM SPRINGS, LLC, a Delaware limited liability company By: Title: "DEVELOPER" QGG,01u5. 9456230 35983/0003 37 l2/13/2007 a3G,Q16 945623v3 35983/0003 38 12/13/2007 ATTACHMENT NO. 1 MAP OF THE SITE Qa9aE7 9456230 35983/0003 Attachment No 1 12/13/2007 IL- .��.- .� � iL t f.- : 1. _ E_ ■ r . ��3i � g "�. (k 3i�i171.9"yY �6�'}d•,per ��r Hotel Parcel ;�KCWa7:C,n[ama ➢�{raR 6.T.kkkc.VWalUa PAO&t -�:I Imo- Mondrian Hotel Parcel 300R ° cityGIS Agency Parcel = Hotel IN C'Q!lFORH�� Parcel plus Condo Parcel Copynglrt c32006 P9 Rights Reserved. The irdarmadbn cantamed herein is the proprufery property of the �y contrlbdor supplied under I ceme and may nd he ap�oroeed except as licermed fry Digital Map Products. r'Sll C� ATTACHMENT NO. 2 LEGAL DESCRIPTION OF THE SITE A ency Parcel: All that certain real property located in the City of Palm Springs, County of Riverside, State of California, more particularly described as follows: BLOCKS 103, 105 AND 106 IN SECTION 14, TOWNSHIP 4 SOUTH, RANGE 4 EAST, SAN BERNARDINO MERIDIAN, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNTA, ACCORDING TO THE OFFICAL PLAT THEREOF. Developer Parcel: 13LOCK 102 IN SECTION 14, TOWNSHIP 4 SOUTH, RANGE 4 EAST, SAN BERNARDINO MERIDIAN, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALI7ORNIA, ACCORDING TO THE OFFICAL PLAT THEREOF_ 9456230 35983/0003 Attachment No.2 12/13/2007 000059 ATTACHMENT NO. 3 SCHEDULE OF PERFORMANCE Item To Be Performed Time for Agreement Estimated Performance Reference Date 1. Developer executes and delivers DDA to On or before December Agency 19, 2007 2. Agency holds public hearing on DDA December 19, 2007 3. Agency approves or disapproves DDA and, if On or before December December approves,executes DDA 31,2007 31, 2007 4. Submission—Certificates of Insurance. The Within 30 days after January 31, Developer shall furnish to the Agency execution of this 2008, duplicate originals or appropriate certificates Agreement by the of bodily injury and property damage Agency. insurance policies. 5. Deposit: The Developer delivers the Deposit Within 90 day after Section 108 March 31, to the Agency. execution of this 2008 Agreement by the Agency and the Developer. 6. Submission-Final Planned Development Within 120 days after Section 304 April 30, District Application. The Developer shall execution of this 2008 prepare and submit to the City Planning and Agreement by the Engineering Departments for review and Agency, approval the Final PDD and related documents containing the overall plan for development of the Site. The City process includes the Architectural Advisory Committee,Planning Commission, and City Council approval. Such Final PDD application shall include final Site Plan, Architectural Elevations, Landscaping and Grading Plans, Lighting Plans, and other plans necessary to approve the Planned Development District. 7. Submission—Evidence of Equity kinancine, Within 120days after Section 216 April 30, IIotel Management Agreement, and execution of this 2008 Condominium Licensing and marketing Agreement by the Agreement. The Developer shall submit to Agency and the the Agency Counsel for review and approval Developer. evidence of equity capital financing,the Hotel Management Agreement, and the Condominium Licensing and Management Agreement. 8. Acceptance--Evidence of Equity Financing Within 30 days after Section 216, May 30, Hotel Management Agreement, and submission to the Section 402 2008 Condominium Licensing and marketing Agency Counsel. Agreement by Agency Counsel. 9. Opening of Escrow: The Agency shall open Section 202 June 30, an escrow for conveyance of the Conveyance 2008 Parcel to the Developer. 10. Title Report. Agency delivers to Developer Within 30 days after Section 206 July 30, Preliminary Title Report. opening Escrow. 2008 11. Approval or Disa roval of Title Exceptions. Within 15 days after Section 206 August 15, Developer approves or disapproves title delivery of Preliminary 2008 exceptions. Title Report to Developer. 12. Agency delivers Clean Title to Developer. Section 206 October 30, 2008 13, Initial Submission—Hotel Construction Plans Within 270 days after Section 304 March 30, The Developer shall submit to the City for approval by the City of 2009 review and approval Hotel Building Plans for the Final Planned the site. Development District. 14. Escrow Fees and Charges. Escrow Agent One (1)week prior to Section 202 gives notice of fees, charges, and costs to Closing. close Escrow. 15. Submission of Evidence of Mortgage:or On or before 1:00 p.m. Section 208 Constriction Financing. Tho Developer shall on the last business day deposit the Evidence of Mortgage or preceding the Closing Construction Financing into escrow. Date 16. Deposit of Purchase Price and Developer's On or before 1:00 p.m. Section 208 Share of Escrow Costs. The Developer shall on the last business day deposit the Purchase Price of Hotel Parcel and preceding the Closing Developer's share of escrow costs into Date escrow. 17. Deposit of Grant Deed and Agency's share of On or before 1:00 p.m. Section 208 Escrow Costs.The Agency shall deposit the on the last business day executed grand deed for the Conveyance preceding the Closing Parcel and Agency's share of escrow costs Date into escrow. 18. Deposit of Promissory Note and Deed of On or before 1:00 p.m. Section 201 Trust for Condo Parcel.The Developer shall on the last business day deposit an executed Promissory Note and preceding the Closing Deed of Trust for the Condo Parcel into Date escrow. 19. Estoppel Certificate, Certificates evidencing On or before 1:00 p.m. Section 202 insurance. The Developer shall deposit an on the last business day Estoppel Certificate and Certificate preceding the Closing Evidencing Insurance into escrow. Date 20. Estounel Certificate,Taxpayer 117 Certificate, On or before 1:00 p.m, Section 202 FIRPTA Certificate. The Agency shall on the last business day deposit an Estoppel Certificate,Taxpayer ID preceding the Closing Certificate, FTRPTA Certificate. Date 21. Close of Escrow,recordation and delivery of As soon as possible Section 203 November documents. The Agency shall convey fee title upon Receipt of All 30, 2009 to the Conveyance Parcel to the Developer, documents required to and the Developer shall accept such close. convenyance. The Escrow Agent shall cause the Grant Deed and Deed of Trust to be recorded with the Riverside County Recorder. 22. Commencement of Construction of On a schedule that will Section 307 December Developer's Improvements. The Developer coordinate with the 1, 2009 Within 30 days after receipt thereof by the Developer's Developer shall commence construction of the construction schedule. improvements to be constructed on the Site. 23, Completion of Construction of Developer's Within 18 months after Section 307 June 1, Improyements The Developer shall complete commencement of 2011 construction of the Hotel and Condo-Hotel construction. Units improvements on the Site. 24. Request—Certificate of Completion. The Promptly after Section 323 June 1, Developer shall request from the Agency a completion of all 2011 Certificate of Completion on the Hotel Parcel construction required to Development. be completed by the Developer on the site. 25, Payment for Condo Parcel. The Developer Prior to issuance of a June 11, shall make payment to the Agency of the Certificate of 2011 balance due under the Condo Parcel Completion by the Promissory Note and the Agency shall cause Agency. to be recorded a Substitution and Reconveyance retiring the Promissory Note and Deed of Trust. 26. Issuance—Certificate of Completion. The Within 10 days after Section 323 June 11, Agency shall famish the Developer with a receipt of written 2011 Certificate of Completion on completed request thereof by the phases of work 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,the 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 Developer and Agency. A failure by either party to enforce a 00eH2 breach of any particular time provision shall not be construed as a waiver of any other time provision. The Executive Director of Agency shall have the authority to approve extensions of time without Agency Board action not to exceed a cumulative total of 180 days as provided in Section 903. ATTACHMENT NO. 4 SCOPE OF DEVELOPMENT I. PRIVATE DEVELOPMENT A. General The Developer agrees that the Site shall be developed and improved in accordance with the provisions of this Agreement and the plans, drawings and related documents approved by the Agency pursuant hereto. The Developer and its supervising architect, engineer and contractor shall work with Agency staff to coordinate the overall design, architecture and color of the improvements on the Site. B. Developer's Improvements, The Developer shall construct, or cause to be constructed, on the Site a "four star" Mondrian Hotel of at least two hundred (200) rooms, at least fifty (50) condominium-hotel rooms, plus not more than one hundred fifty (150) condominium units, and on-site parking which meets the requirements of the City. A "four star" hotel means a full service hotel comparable to other Mondrian Hotels in operation as of the date of this Agreement. The hotel will contain at least ten thousand (10,000) square feet of"under roof' group meeting space and on-site parking which meets the requirements of the City_ The hotel shall provide the Convention Center with no less than one hundred fifty (150) room block commitment under the Convention Center's Cormnittable Rooms Program. C. Architecture and Desian The Developer's improvements shall be of high architectural quality, shall be well landscaped and shall be effectively and aesthetically designed. The shape, scale of volume, exterior design and exterior finish of the building must be consonant with, visually related to, physically related to and an enhancement of adjacent buildings within the Project Area. The Developer's plans submitted to the Agency shall describe in detail the architectural character intended for the Developer's improvements. D. Landscaping Landscaping shall embellish all open spaces upon the Site to integrate the Developer's improvements with adjacent sites within the Project Area. Landscaping includes such materials as paving, trees, shrubs and other plant materials, landscape containers, plaza furniture, top soil preparation, automatic irrigation and landscape and a a a 0 : 9456230 35983/0003 Attachment No.4,Page 1 12/13/2007 pedestrian lighting. Landscaping shall carry out the objectives and principles of the Agency's desire to accomplish a high quality aesthetic environment. E. Si gas All signs on the exterior of the buildings are of special concern to the Agency and must be approved by the Agency (which approval shall not be unreasonably withheld)- F. Screening Trash areas shall be screened on at least three (3) sides and have movable doors or other devices to obscure such areas from view. All fire standpipes and such other fire related mechanical devices shall be screened. Rooftop equipment shall be reasonably hidden so as to mitigate views from principal elevations surrounding the development. G. AI)plicable Codes The Developer's improvements shall be constructed in accordance with the Uniform Building Code(with City modifications) and the Municipal Code. II. SITE CLEARANCE AND PREPARATION The Developer shall perform, or cause to be performed, at its sole cost and expense, the following work: A. On-Site Demolition and Clearance 1. On the Site, demolish or salvage, clear, grub and remove (as may be needed and called for in the approved plans) all on-site buildings, pavements, walks, curbs, gutters and other improvements; and 2. Remove, plug and/or crush in place utilities, such as storm sewers, sanitary sewers, water systems, electrical overhead and underground systems and telephone and gas systems located on the Site, as may be required following any necessary relocation of the utilities. B. Compaction, Finish Grading and Site Work The Developer shall compact, finish grade and do such site preparation as is necessary for the construction of the Developer's Improvements on the Site. 9456230 35983/0003 Attachment No,4,Page 2 12/13/2007 Q'010065 III. PUBLIC IMPROVEMENTS The ,Agency shall perform, or cause to be performed, the following work in connection with the development of the Site by the Developer: NONE 9456230 35953/0003 Attachment No.4,Page 3 12/13/2007 Mass ATTACHMENT NO. 5 FORM OF GRANT DEED RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO GRANT DEED For valuable consideration, the receipt of which is hereby acknowledged, THE REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic, exercising govenunental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.) (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 RE: LOFT PARTNERS PALM SPRINGS, LLC, 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 and dated 2007- 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 four star Mondrian hotel, and related retail uses as further described in Section 401 of 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_ 9456230 35983/0003 Attachment No.5,Page 1 12/13/2007 Goa H7 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 curbline(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; fertilization; mowing; edging; trimming of grass; tree and shrub pruning, trimming and shaping of trees and shrubs to maintain a healthy, natural appearance, safe road conditions 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. (e) All maintenance work shall conform to all applicable federal and state Occupation Safety and Health Act standards and regulations for the performance of maintenance. 945623v3 35983/0003 Attachment No.5,page 2 1 / ENIS (d) Any and all chemicals, unhealthful substances, and pesticides used in and during maintenance shall be applied in strict accordance with all govenunental requirements. Precautionary measures shall be employed recognizing that all areas are open to public access- (e) The improvements shall be maintained in conformance and in compliance with the franchise agreement standards, or equivalent, as the same may be amended from time to time with the approval of the Grantor and in accordance with the custom and practice generally applicable to comparable hotels located within Riverside County, California, (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 to the public health and safety, then Grantee shall have forty-eight (48) hours to rectify the problem_ In the event Grantee fails to correct, remedy, or cure or has not commenced correcting, remedying or curing such maintenance deficiency after notification and after expiration 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 Tien" 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 easement unless such instrument is expressly subordinated to such lien. Grantee acknowledges and agrees that 9456230 35983/0003 Aaachmcnt No.5,Page 3 12/13/2007 HOCH 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 Section 323 of the DDA, the Grantee shall not, except as permitted by the DDA, sell, transfer, convey, assign or lease the whole or any part 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. This prohibition shall not be deemed to prevent the granting of easements 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 Section 323 of 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 "conunence construction" when and only when the Developer 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 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 tenors "sell" and "transfer" shall include, in addition 9456230 35983/0003 Aaachment No.5,Page 4 12/13/2007 0 0 a 0 7 0 to the common and ordinary meaning of those terns 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. This option 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 interests provided in the DDA for the protection of the bolder 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 govermnental 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 of arnounts 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 revest 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 "continence construction" when and only when the 945623v3 35983/0003 Attachment No,5, Paige 5 12/13/2007 9 G G 9 7 1 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 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 temps "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 fx-oan 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 bolder 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 9456230 35983/0003 Attacbment No.5,Page 6 007 2 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 assame the obligation of making or completing the improvements, or such other improvements in their stead, as sball 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 persormel in connection with the recapture, management and resale of the Site or 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 detennined 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 (ii) 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 from 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 fact 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 9456230 35983/0003 Attachmcnc No.5,Pa.-e 7 12/13/2007 000673 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. 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 Govermnent 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 nm 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 Govermnent Code, as those bases are defined in Section 12926, 12926.1, subdivision (in) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Goverment Code in the leasing, subleasing, transBerring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the lessee himself or 9456230 35M/0003 Attachment No.5,Page 8 1 / 3/20 7 Q 074 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." 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 12935 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, 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 cbarge of any mortgage, deed of trust or other financing or security instrument pennitted 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 date 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 Section 323 of 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 rim 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 to 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 945623v3 35983/0003 Attachment No.5,Page 9 12/13/2007 Qaaa75 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 pennitted on the Site or change the restrictions or controls that apply to the 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 WIIEREOF, the Grantor and Grantee have caused this instrLmient to be executed on their behalf by their respective officers thereunto duly authorized this_day of , 2007. COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic By: Title: "GRANTOR" Approved as to form: Agency Counsel 945623v3 35983/0003 Attachmene No.5, Page 10 12/13/2007 Qaa0,76 The provisions of this Grant Deed are hereby approved and accepted. 2007 RE: LOFT PARTNERS PALM SPRINGS, LLC, a Delaware limited liability company By: Title: "GRANTEE" 945623v3 35983/0003 Attachment No.5,Page I l �/ 3 2�0 ACKNOWLEDGMENTS 9456230 35983/0003 Attachmem No.5,Acknowledgments 12/13/2007 000078 EXHIBIT A LEGAL DESCRIPTION Or THE SITE Agency Parcel: All that certain real property located in the City of Palm Springs, County of Riverside, State of California, more particularly described as follows: BLOCKS 103, 105 AND 106 IN SECTION 14, TOWNSHIP 4 SOUTH, RANGE 4 EAST, SAN BERNARDINO MERIDIAN, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ACCORDING TO THE OFFICAL PLAT THEREOF. Developer Parcel: BLOCK 102 IN SECTION 14, TOWNSHIP 4 SOUTH, RANGE 4 EAST, SAN BERNARDINO MERIDIAN, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ACCORDING TO THE OFFICAL PLAT THEREOF. 945623v3 35983/0003 Attachment No.5 12/132007 00007 ATTACHMENT NO. G PROMISSORY NOTE [To Be Produced with Escrow Documents] 945623v335983/0003 AttachmcntNo 7 12/13/2007 GOOD 0 ATTACHMENT NO. 7 DEED OF TRUST [To Be Produced with.Escrow Documents] 411608443 945623v3 35983/0003 Attachment No. 8 �1y2`/�13/2007 • • Ul�l9�p7 PROOF OF PUBLICATION This 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; I am over the age of eighteen .-_............. years,and not a party to or interested in the above-entitled mutter.I am the principal clerk of a No.3632 CITY OF PALM SPRINGS printer of the,DESERT SUN PUBLISHING AND COMPANY a newspaper of general circulation, Gom OF THE Crrr REDEVELOPMENT SPRINGS AGENCY printed and published in the city of Palm Springs, NOTICE of JOINT PUBLIC HEARING County of Riverside,and which newspaper has been DISPOSITION AND DEVELOPMENT AGREEMENT adjudged a newspaper of general circulation by the LOr•r PARTNERS PALM SPRINGS. LLC za Superior CourC of the County of Riverside,State of ADO AND THE NORTH SIDE OF AMADO ROAD California under the date of March 24,198$.Case NOTICE IS HEREBY GIVEN rhar the Community Number 191236;that the notice,of which the Redevelopment A uncy of the city of Palm SpnhgF and the Clty Council will hold a Join) annexed is a printed copy(set in type not smaller Public Hearing at its meeting of December 12, tom.The CIry Council/Communit Radevelo - than non paricl,has been published ill each regular mcnt Agency meetingq begins at 2f p.m. in tic and entire issue of said newspaper Rnd net in an 0..,Chamber at City Hell 32D0 East Tahquitz y Canyon Way, Palm Springs. supplement thereof on the followingdates,to wit: The"Agency"proposesant Agreement to enter Into a) w Ill iLoft antl ors Palm Sp Agreement ('DDA) wllp Loh tli W Partners Palm Springs, LLC.The "Agency" and November 28 ,December 5 ,2007 'City" are required to make eenaln flndings pur- ---_--------` suant m Health and Safety Code Sections ^- 33421.1. 33433 and 33445 and prior to making those flndings,a Public Hearing i3 hold to recelve public input on me manor. ThI nature of the Agreement is that the 'Ag,riCY All in the year 2007 will sell at fait market value the approxlmate 7.93- acre site approved for the duvellepment of the Mondrian Hotel, bounded by Calle Alvarado on I certifyor declare under ens the east and Amato Road on the south. The ( penalty Of perjury that[Ito Agency" will convey the parcel to me Developer Foregoing is true and correct. •md in exchange,the Developer agn,o* to inn. "struct the hotel, condo hotel and condominium project on the site. - f Dated at Palm Springs,California this---Sri',---day Response to this notice-may be made Vcrbally Pt-•— - the Publc Ho'+ring and/or-In writing before the hearing. Wrinen commonto may be made to the of-- December--- _,2007 Agency Membera/Clty Council by letter (tor mall or hand delivery)toe f James Thompson Muigtanl Secretery/CIry Clerk 3200 E.Tohgwlx Canyyon Way :.7 Palm^Gprmos, CA 92362 ------- "----- Any challenge oi the proposed project in court i amre may be Ilmd to raising only those issues raised rjc yid at th me public hearing described in the notice, or qC in written correspondence delivered to the AssiG- tent Secretary/City Clerk at,or prior,to the public 1 hearing. (Government Cade Sechon 65DD9[b][2]) lA!, �[) An restedopportunityerz will be given at said beans r for all Interested persons to pa beam.questions repperd- ' Ins this case may be dunctpd to John S.79ay- Lt.f4. C.] tn� Mond, Dlrector of Community&Economic Devbl- :+.1-- oppment(700)321.8228. runner Information, In- O U eluding a copy of the Amendment and Re^oludon, prepared In accordance with Health and Safaly }- ti E Code Sec[lon 33433,arc;available In the Office of I.- o 1 ~T� the Cry Clerk at the above addre [: N SI neces to ayuda con esta cans,ponavor[lame a la Ciudad de Palm Springs yy pUCtl41e nobler con Nadine Fieger telefono (7b0) 323-82 . Jamee Tnomp on Assistant Secretnry(t;dy Ierk Publiahod: 11/26,12/5/oT