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HomeMy WebLinkAboutStaff Report 3.A(PCDC) 12/01/2003CITY OF PETALUMA, CALIFORNIA PETALUMA COMMUNITY DEVELOPMENT COMMISSION Aeenda Title: Meetine Date: Discussion and Action Authorizing the Execution of the First December 1, 2003 Amendment to an Owner Participation Agreement Between LOK Petaluma Marina Hotel Company, LLC and the Petaluma Meetine Time: © 3:00 PM Community Development Commission and the First ❑ 7:00 PM Implementation Agreement to Subordination and Standstill Agreement between WG Investments and the Petaluma Community Development Commission Cateeory (check one): ❑ Consent Calendar ❑ Public Hearing ❑ New Business © Unfinished Business ❑ Presentation Department: Director: I Contact Person: Phone Number: Redevelopment Paul Marangella I Paul Marangella (707) 778-4581 Cost of Proposal: N/A Amount Budeeted: N/A Account Number: N/A Name of Fund: N/A Attachments to Agenda Packet Item: I. First Amendment to Owner Participation Agreement and Related Attachnients IL First Implementation Agreement to Subordination and Standstill Agreement Summary Statement: On April 17, 2001, the Petaluma Community Development Commission (PCDC) entered into an Owner Participation Agreement (OPA) with the LOK Petaluma Marina Hotel Company, LLC (Participant). The OPA provides, among other things, for (1) the Participant to develop a hotel and to expand and improve an adjacent parking lot on certain real properly located within the bomidaries of the Petaluma Community Development Project, (2) the PCDC to loan certain funds to the Participant in order to assist with the development of the project on the site, and (3) the Participant to comply with certain living wage and union card check neutrality requirements in connection with the ownership and operation of the hotel. In accordance with the OPA, the Participant has completed the development of the site and the parking lot adjacent to the site, and the PCDC has disbursed some of the loan funds to the Participant. The Participant and Hotel Employees and Restaurant Employees Union, Local 2850 AFL-CIO have entered into a new Memorandum of Agreement governing labor union organizing activities at the hotel, which replaces that certain Memorandum of Agreement dated August 2000. The PCDC and Participant now desire to amend the original OPA to modify the Participant's obligations with respect to payment of living wages and labor union organizing activities and to clarify certain other provisions of the original OPA. 1 Summary Statement continued. In connection with the amendment of the OPA, PCDC desires that Participant's lender, WG Investments, confirm that the amendment to the OPA will not affect the relative priorities of any lien or agreement recorded or entered into prior to the 1st Amendment to OPA, including the WG Investments lst deed of trust (as amended), the PCDC second deed of trust, the memorandum of OPA, the Agreement Affecting Real Property, and the Subordination and Standstill Agreement among PCDC, WG Investments and Participant (as amended). The First Implementation Agreement to Subordination and Standstill Agreement confirms that the amendment to the OPA has no affect on the existing priorities. Therefore, the purpose of this agenda item is to obtain approval for the first amendment to PCDC/LOK OPA and the First Implementation Agreement to Subordination and Standstill Agreement. Recommended PCDC Action/Sueeested Motion: It is recommended that the PCDC approve the First Amendment to the PCDC/LOK Petaluma Marina Hotel Company, LLC Owner Participation Agreement and the First Implementation Agreement to Subordination and Standstill Agreement and authorize the Executive Director to execute the same as well as the attached Memorandum of First Amendment to OPA. Rexiewed by Finance Director: ,1/ Date: -,UL - � Todav's Dade: November 21, 2003 Reviewed by City Attornev: Date: Revision # and Date Revised: ro AvvroveA by City Manaeer: r Date: File Code:: CITY OF PETALUMA, CALIFORNIA PETALUMA COMNIUNITYDEVELOPMENT COMMISSION DECEMBER 1, 2003 AGENDA REPORT FOR DISCUSSION AND ACTION AUTHORIZING THE EXECUTION OF THE FIRST AMENDMENT TO AN OWNER PARTICIPATION AGREEMENT BETWEEN LOK PETALUMA MARINA HOTEL COMPANY, LLC AND THE PETALUMA COMMUNITY DEVELOPMENT COMMISSION 1. EXECUTIVE SUMMARY: On April 17, 2001, the Petaluma Community Development Commission (PCDC) entered into an Owner Participation Agreement (OPA) with the LOK Petaluma Marina Hotel Company, LLC (Participant). The OPA provides, among other things, for: (1) the Participant to develop a hotel and to expand and improve an adjacent parking lot on certain real property located within the boundaries of the Petaluma Community Development Project, (2) the PCDC to loan certain funds to the Participant in order to assist with the development of the project on the site, and (3) the Participant to comply with certain living wage and union card check neutrality requirements in connection with the ownership and operation of the hotel. In accordance with the OPA, the Participant has completed the development of the site and the parking lot adjacent to the site, and the PCDC has disbursed some of the loan funds to the Participant. The Participant and Hotel Employees and Restaurant Employees Union, Local 2850 AFL-CIO have entered into a new Memorandum of Agreement governing labor union organizing activities at the hotel, which replaces that certain Memorandum of Agreement dated August 2000. The PCDC and Participant now desire to amend the original OPA to modify the Participant's obligations with respect to payment of living wages and labor union organizing activities and to clarify certain other provisions of the original OPA. In connection with the amendment of the OPA, PCDC desires that Participant's lender, WG Investments, confirm that the amendment to the OPA will not affect the relative priorities of any lien or agreement recorded or entered into prior to the 1st Amendment to OPA, including the WG Investments 1st deed of trust (as amended), the PCDC second deed of trust, the memorandum of OPA, the Agreement Affecting Real Property and the Subordination and Standstill Agreement among PCDC, WG Investments and Participant (as amended). The First Implementation Agreement to Subordination and Standstill Agreement confirms that the amendment to the OPA has no affect on the existing priorities. 3 Therefore, the purpose of this agenda item is to obtain approval for the first amendment to PCDC/LOK OPA and the First Implementation Agreement to Subordination and Standstill Agreement. 2. BACKGROUND: The proposed amendment to the OPA includes the following: A. ADDroval of Chanee in Manaeement and Control. The PCDC approves Luna Investments as the managing member of the Managing Member. B. New Promissory Note and Deed of Trust in the Event of Disbursement After Foreclosure: If WG Investments or any other senior lender to the Project forecloses on the Project or takes title to the Project pursuant to a deed in lieu of foreclosure, then the lender or purchaser of the Project through foreclosure, if it desires to receive any further disbursement of the Tax Increment Loan, shall be required to assume all surviving obligations of the Participant under the OPA (which shall not include any obligation to repay any disbursements of the Tax Increment Loan and Eligible Construction Cost Loan made prior to the date of the foreclosure) pursuant to a written assignment and assumption agreement in form reasonably acceptable to Commission counsel and to execute and deliver to Commission a new promissory note and deed of trust in forms reasonably satisfactory to Conmlission counsel evidencing and securing such lender or purchaser's obligation to repay Commission all such further disbursements of the Tax Increment Loan. C. Labor Union Oreanizine: Participant covenants and agrees that it shall comply with all of the terms and conditions of that certain Memorandum of Agreement among RIM Corporation, Participant and Hotel Employees and Restaurant Employees Union, Local 2850, AFL-CIO, dated October 29, 2003, governing labor union organizing activities at the hotel. D. Union Representation Terminates Livine Waee Provision: The following sentence is hereby added to the end of Section 314.3 as follows: " Notwithstanding the foregoing, this section 314.3 shall be of no force or effect if a majority of the employees employed at the Project select Hotel Employees and Restaurant Employees Union, Local 2850, AFL-CIO or any other union as their exclusive representative for purposes of collective bargaining. Furthermore, this section 314.3 shall be of no force or effect as to any employees who are represented by a union for purposes of collective bargaining in connection with their employment at the Project." 3. ALTERNATIVES: The PCDC could direct staff to pursue other alternatives relative to union organizing and living wage issues. 4 4. FINANCIAL IMPACTS: The proposed amendment to the OPA and the First Implementation Agreement to Subordination and Standstill Agreement contain no additional financial impacts beyond those already contained in the original OPA. 5. CONCLUSION: The Participant and the PCDC are desirous of updating the OPA to reflect current conditions. The proposed amendments meet this need. 6. OUTCOMES OR PERFORMANCE MEASUREMENTS THAT WILL IDENTIFY SUCCESS OR COMPLETION: The amendment to the OPA will provide for a more hannonious method of determining whether the affected hotel employees choose to be represented by a union or not. RECOMMENDATION: It is recommended that the PCDC approve the First Amendment to the PCDC/LOK Petaluma Marina Hotel Company, LLC Owner Participation Agreement and the First Implementation Agreement to Subordination and Standstill Agreement and authorize the Executive Director to execute the same, together with the attached Memorandum of First Amendment to OPA. ATTACHMENT I FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT This First Amendment to Owner Participation Agreement (the "First Amendment") dated for reference purposes , 2003, is entered into by and between LOK PETALUMA MARINA HOTEL COMPANY, LLC, a California limited liability company ("Participant"), and the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF PETALUMA, a public body, corporate and politic, of the State of California, having offices at I I English Street, Petaluma, California 94953 ("Commission"). RECITALS: Capitalized terms not otherwise defined herein shall have the meaning ascribed to such ternis in the Original OPA (defined below). A. Commission and Participant entered into that certain Owner Participation Agreement dated April 17, 2001 (the "Orieinal OPA"). B. hi accordance with the Original OPA, Participant has completed the development of the Site and the parking lot adjacent to the Site, and Commission has disbursed some of the loan funds to Participant. C. Participant and Hotel Employees and Restaurant Employees Union, Local 2850, AFL-CIO have entered into a new Memorandum of Agreement governing labor union organizing activities at the hotel, which replaces that certain Memorandum of Agreement dated August 2000. D. Commission and Participant now desire to amend the Original OPA to modify Participant's obligations with respect to payment of living wages and labor union organizing activities and to clarify certain other provisions of the Original OPA all as set forth herein. E. Concurrently herewith Commission and Participant's lender, WG Investments, LLC, have entered into a First Implementation Agreement to Subordination and Standstill Agreement, confirming that this First Amendment and the Memorandum of First Amendment to Owner Participation Agreement to be recorded, against the Project as set forth below, shall not affect in any way the relative priority of any lien or agreement recorded or entered into prior to this First Amendment among the parties hereto or by and between Commission and WG Investments, LLC. 6 AGREEMENTS: NOW THEREFORE, in consideration of the foregoing recitals, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Participant and Commission hereby agree as follows: 1. Amendments to Definitions Under Section 100. The following definition under Section 100 of the Original OPA is hereby revised to read as follows: "Agreement" means the Owner Participation Agreement between Commission and Participant, dated April 17, 2001, as amended by the First Amendment to Owner Participation Agreement, dated 2003. The following definitions are hereby added to Section 100 of the Original OPA: "WG Investments" means WG Investments, LLC, Participant's current primary lender, which provided the financing for development of the hotel and parking lot improvements. "Luna Investments" means Luna hrvestments LLC, a Delaware limited liability company, the manager of the Managing Member, as defined in the Managing Member's LLC Operating Agreement. "Original OPA" means the Owner Participation Agreement between the Commission and Participant, dated April 17, 2001. 2. Approval of Chanee in Manaeement and Control. Commission hereby approves Luna Investments as the manager of the Managing Member. 3. Amendment of Section 503.2. The following new subsection (n) is hereby added to Section 503.2 of the Original OPA: (n) Execution and Delivery of New Promissory Note and Deed of Trust in the Event of Disbursement After Foreclosure. If WG Investments or any other lender to the Project forecloses on the Project or takes title to the Project, or any portion thereof, pursuant to a deed in lieu of foreclosure or other means, then the lender or purchaser of the Project through foreclosure, if it desires to receive any further disbursement of the Tax Increment Loan, shall be required to assume all surviving obligations of the Participant under the OPA (which shall not include any obligation to repay any disbursements of the Tax Increment Loan and Eligible Construction Cost Loan made prior to the date of the foreclosure) pursuant to a written assigmnent and assumption agreement in form reasonably acceptable to Commission counsel and to execute and deliver to Commission a new promissory note and deed of trust in forms reasonably VA satisfactory to Commission counsel evidencing and securing such lender or purchaser's obligation to repay Commission all such further disbursements of the Tax Increment Loan. Upon the written request of the foreclosing lender or purchaser through foreclosure, Commission shall subordinate any such new Commission deed of trust to the deed of trust securing any permanent financing or refinancing of the Project, provided all of the following conditions are satisfied: (i) The foreclosing lender or purchaser demonstrates to the reasonable satisfaction of Commission that the permanent financing or refinancing is an anus -length loan transaction involving a lender that is not an Affiliate of (defined below) Participant or WG Investments or any related successor or assign of Participant or WG Investments or any other person or entity having any interest in the Project. For purposes of this subsection, the terns "Affiliate" means, when used with respect to a person or entity, an entity that controls, is controlled by, or under common control with such person or entity. (ii) The foreclosing lender or purchaser demonstrates to the reasonable satisfaction of Commission that the loan to value ratio of the Project does not exceed 65%. In calculating the loan to value ratio, all loans secured by all or any portion of the Project (other than loans that are junior to the Tax hrcrement Loan and Eligible Construction Cost Loan) shall be taken into account, including the proposed financing or refinancing. The value of the Project shall be evidenced by an appraisal prepared by an MAI certified appraiser having at least 10 years of experience appraising hotel properties in the San Francisco Bay Area and/or Sonoma County. All costs of the appraisal shall be borne by the lender or purchaser requesting the subordination. (iii) The subordination of any such new Commission Deed of Trust to the deed of trust securing the permanent financing or refinancing shall be evidenced by a subordination agreement in a form reasonably acceptable to Commission counsel and counsel for the lender providing such pennanent financing or refinancing. 4. Amendment of Section 314.2. Section 314.2 of the Original OPA is hereby deleted in its entirety and restated as follows: "314.2 Labor Union Organizing. Participant covenants and agrees that it shall comply with all of the terms and conditions of that certain Memorandum of Agreement among RIM Corporation, Participant and Hotel Employees and Restaurant Employees Union, Local 2850, AFL-CIO, dated October 29, 2003, governing labor union organizing activities at the hotel." 5. Amendment of Section 314.3. The following sentence is hereby added to the end of Section 314.3 as follows: "Notwithstanding the foregoing, this section 314.3 shall be of no force or effect if a majority of the employees employed at the Project select Hotel Employees and Restaurant Employees Union, Local 2850, AFL-CIO or any other union as their exclusive representative for purposes of collective bargaining. Furthermore, this section 314.3 shall be of no force or effect as to any employees who are represented by a union for purposes of collective bargaining in connection with their employment at the Project." 6. Amendment of Section 701. Participant's address for Notices in Section 701 of the Agreement is hereby amended to read as follows: LOK Petaluma Manna Hotel Company, LLC Luna Investments, LLC, Manager of Managing Member c/o Friedemann, O'Brien, Goldberg & Zarian LLP 420 Aviation Boulevard, Suite 201 Santa Rosa, CA 95403 Telephone: (707) 543-4900 Facsimile: (707)543-4910 Attention: Steven M. Goldberg, Esq. The parties may designate by Notice any other address or any other person to whom any future Notices are to be sent. 7. Memorandum of First Amendment. Prior to Commission's execution of this First Amendment, Participant shall execute, acknowledge and deliver to Commission for recordation in the Official Records of Sonoma County, California, a "Memorandum of First Amendment to Owner Participation Agreement" in the form attached hereto as Attachment No. 1. 8. Conditions Precedent to Effectiveness of First Amendment. This First Amendment shall become effective only upon the satisfaction of each of the following conditions: (a) Participant shall have executed, acknowledged and delivered to Commission the Memorandum of First Amendment to Owner Participation Agreement. (b) The First Implementation Agreement to Subordination and Standstill Agreement described in Recital E, above, shall have been fully executed and acknowledged by Commission and WG hivestments and shall be ready to be recorded immediately following full execution of this First Amendment. 9 9. Authoritv of Participant. Participant and each person executing this First Amendment on behalf of Participant does hereby covenant and warrant that: (a) Participant is duly organized and validly existing under the laws of the State of California; (b) Participant has full power and authority to enter into this First Amendment and to perform all of its obligations hereunder; and (c) each person (and all of the persons if more than one signs) signing this First Amendment on behalf of Participant is duly and validly authorized to do so. 10. Authoritv of Commission. Commission and each person executing this First Amendment on behalf of Commission does hereby covenant and warrant that: (a) Commission has full power and authority to enter into this First Amendment and to perform all of its obligations hereunder; and (b) each person (and all of the persons if more than one signs) signing this First Amendment on behalf of the Commission is duly and validly authorized to do so. 11. Ratification. Except as amended hereby, the OPA remains unmodified and in full force and effect. [a IN WITNESS WHEREOF, the parties have executed this First Amendment on the respective dates set forth below. ATTEST: -0 2003 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF PETALUMA, a public body corporate and politic Commission Secretary APPROVED AS TO FORM: MCDONOUGH, HOLLAND & ALLEN PC 1.2 Commission Counsel By: Chair Attest: Commission Secretary "COMMISSION" 11 2003 LOK PETALUMA MARINA HOTEL COMPANY, LLC, a California limited liability company By: LOK PETALUMA MARINA DEVELOPMENT COMPANY, LLC, a California limited liability company Its: Managing Member By: LUNA INVESTMENTS, LLC, a Delaware limited liability company Its: Manager Lo Thomas H. Birdsall, Manager "PARTICIPANT" 12 ATTACHMENT NO. 1 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: McDonough Holland & Allen PC 1999 Harrison Street, Suite 1300 Oakland, California 94612 Attention: Gerald Ramiza Space above this line for Recorder's Use This document is exempt from the payment of recording fee pursuant to Government Code § 27383. MEMORANDUM OF FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT THIS MEMORANDUM OF FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT ("Memorandum"), dated for identification purposes as of 2003, is entered into by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF PETALUMA, a public body, corporate and politic ("Commission"), and LOK PETALUMA MARINA HOTEL COMPANY, LLC, a California limited liability company ("Participant"). 1. First Amendment to Owner Participation Agreement. Commission and Participant have entered into a First Amendment to Owner Participation Agreement dated for identification purposes as of , 2003 ("First Amendment to OPA"), which amends that certain Owner Participation Agreement by and between Commission and Participant dated April 17, 2001, which is evidenced by a Memorandum of Owner Participation Agreement dated April 17, 2001, recorded in the Official Records of Sonoma County on May 16, 2001, as Instrument No. 2001-062799 (the "Original OPA"). The First Amendment to OPA, among other things, modifies Participant's obligations with respect to payment of living wages and union organizing activities and clarifies certain other provisions of the Original OPA. The First Amendment to OPA and the Original OPA are available for public inspection and copying at the office of the City Clerk, City of Petaluma City Hall, 11 English Street, Petaluma, California 94952. All of the terns, conditions, provisions and covenants of the First Amendment to OPA are incorporated in this Memorandum by reference as though written out at length herein, and the First Amendment to OPA and this Memorandum shall be deemed to constitute a single instrument or document. 2. Purpose of Memorandum. This Memorandum is prepared for recordation purposes only, and in no way modifies the terms, conditions, provisions and covenants of the First Amendment to OPA. In the event of any inconsistency between the terms, conditions, provisions and covenants of this Memorandum and the First Amendment to OPA, the terms, conditions, provisions and covenants of the First Amendment to OPA shall prevail. Attachment No. 1 1�) Page l The parties have executed this Memorandum on the dates specified immediately adjacent to their respective signatures. 2003 LOK PETALUMA MARINA HOTEL COMPANY, LLC, a California limited liability company By: LOK PETALUMA MARINA DEVELOPMENT COMPANY, LLC, a California limited liability company Its: Managing Member By: LUNA INVESTMENTS, LLC, a Delaware limited liability company Its: Manager By: Thomas H. Birdsall Its: Manager "PARTICIPANT" 2003 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF PETALUMA, a public body, corporate and politic ATTEST: Commission Secretary APPROVED AS TO FORM: MCDONOUGH HOLLAND & ALLEN PC 0 Commission Counsel By: Executive Director Attachment No. 1 1 L- "COMMISSION" Page 2 LEGAL DESCRIPTION OF SITE [To Be hiserted] Exhibit A to Attachment No. I 15 EXHIBIT A Page I [NOTARY A CKNO 6T I ED Gd LENTS] To be inserted RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: McDonough Holland & Allen PC 1999 Harrison Street, Suite 1300 Oakland, California 94612 Attention: Gerald J. Ramiza Space above this line for Recorder's Use Attachment II ) ) ) This document is exempt from the payment of a recording fee pursuant to Government Code § 27383. THIS FIRST IMPLEMENTATION AGREEMENT TO SUBORDINATION AND STANDSTILL AGREEMENT ("Agreement") is made as of , 2003, by and between WG INVESTMENTS, LLC, a California limited liability company ("WG Investments"), LOK PETALUMA MARINA HOTEL COMPANY, LLC, a California limited liability company (`Borrower") and the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF PETALUMA, a public body, corporate and politic ("Commission"). RECITALS A. Borrower, Commission and WG Investments have entered into a number of agreements in connection with the real property, and the hotel thereon, located at 745 Baywood Drive, Petaluma, California, more particularly described in the legal description attached as Exhibit A. These agreements include, but are not limited to, an Owner Participation Agreement, dated April 17, 2001 ("Original OPA"); a memorandurn thereof recorded in the Official Records of Sonoma County, California, on May 16, 2001, as instrument no. 2001-062799 ("Memorandum of OPA"); an Agreement to be Recorded Affecting Real Property recorded as instrument no. 2001-062800 ("Agreement Affecting Real Property"); a Deed of Trust by Borrower, as Trustor, naming Commission as beneficiary, dated April 17, 2001, recorded in the Official Records of Sonoma County, California, on May 16, 2001, as hnstrument No. 2001- 062798 ("OPA Deed of Trust"); a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated September 17, 2001, recorded in the Official Records of Sonoma County, California, as Instrument No. 2001-133595 ("WG Deed of Trust"); an Addendum to the WG Deed of Trust, recorded in the Official Records of Sonoma County, California, as Instrument No. 2002-081256; a Subordination and Standstill Agreement dated September 17, 2001, recorded in the Official Records of Sonoma County, California, as Instrument No. 2001-133596 11 ("Subordination and Standstill Agreement") and an Addendum to the Subordination and Standstill Agreement, recorded in the Official Records of Sonoma County, California as Instrument No. 2002-112333. B. Concurrently herewith, Borrower and Commission are entering into a First Amendment to Owner Participation Agreement which modifies Participant's obligations with respect to payment of living wages and labor union organizing activities and clarifies certain other provisions of the Original OPA ("First Amendment"). A memorandum of the First Amendment of even date herewith is being recorded in the Official Records of Sonoma County ("Memorandum of First Amendment"). C. Commission, Borrower and WG Investments wish to agree that the First Amendment and the Memorandum of First Amendment shall not effect in any way the relative priority of (i) the Original OPA, (ii) the OPA Deed of Trust, (iii) the Agreement Affecting Real Property, (iv) the WG Deed of Trust, as amended or (v) the Subordination and Standstill Agreement, as amended. AGREEMENT NOW THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration are hereby acluiowledged, it is hereby declared, understood and agreed as set forth below. 1. No Effect on Existing Priorities. Commission, WG Investments and Borrower hereby acknowledge and agree that the First Amendment and the Memorandum of First Amendment shall not effect in any way the relative priority of (i) the Original OPA, (ii) the OPA Deed of Trust, (iii) the Agreement Affecting Real Property, (iv) the WG Deed of Trust, as amended, or (v) the Subordination and Standstill Agreement, as amended. Commission, WG Investments and Borrower further agree that any determination regarding such priorities shall be made entirely through reference to the situation as it existed prior to September 1, 2003, with the sole exception being this Section 1 confirming that such priorities shall be determined without any reference to events occurring after September 1, 2003, including without limitation the First Amendment. 2. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California. 3. Modifications. This Agreement may not be changed, terminated or modified except by an agreement in writing, signed by each of the parties hereto. 4. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the WG Investments, the Commission, the Borrower and their respective successors and assigns. 4 \S IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above. BORROWER: ATTEST: Commission Secretary APPROVED AS TO FORM: McDonough Holland & Allen PC Agency Special Counsel LOK PETALUMA MARINA HOTEL COMPANY, LLC, a California limited liability company By: LOK PETALUMA MARINA DEVELOPMENT COMPANY, LLC, a California limited liability company Its: Managing Member By: LUNA INVESTMENTS, LLC, a Delaware limited liability company Its: Manager C Thomas H. Birdsall Its: Manager COMMISSION: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF PETALUMA, a public body, corporate and politic Its: 5 �C� WG INVESTMENTS: WG INVESTMENTS, LLC, a California limited liability company in Its: APPROVED AS TO FORM: Friedemann O'Brien Goldberg & Zarian LLP Steven M. Goldberg, Esq. 6 30 EXIBBIT A LEGAL DESCRIPTION OF THE SITE [to be inserted] Exhibit A 3 � STATE OF CALIFORNIA ) ss. COUNTY OF 1 On .20 before me, the undersigned, personally appeared ( ) personally known to me ( ) proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) (is/are) subscribed to the within instrument and acknowledged to me that (he/she/they) executed the same in (his/her/their) authorized capacity(ies), and that by (his/her/their) signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal: Signature STATE OF CALIFORNIA ) ss. COUNTY OF 1 On . 20_, before me, the undersigned, personally appeared ( ) personally known to me ( ) proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) (is/are) subscribed to the within instrument and acknowledged to me that (he/she/they) executed the same in (iris/her/their) authorized capacity(ies), and that by (his/her/their) signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal: Signature Exhibit A 9D-1 STATE OF CALIFORNIA ) ) ss. COUNTY OF 1 On . 20, before me, the undersigned, personally appeared ( ) personally known to me ( ) proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) (is/are) subscribed to the within instrument and acknowledged to me that (he/she/they) executed the same in (his/her/their) authorized capacity(ies), and that by (his/her/their) signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal: Signature 192356v7 32624/0002 PETALUMA COMMUNITY DEVELOPMENT COMMISSION RESOLUTION NO. RESOLUTION OF THE PETALUMA COMMUNITY DEVELOPMENT COMMISSION APPROVING AND AUTHORIZING THE EXECUTION OF A FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT BETWEEN THE COMMISSION AND LOK PETALUMA MARINA HOTEL COMPANY, LLC WHEREAS, the Petaluma Community Development Commission ("Commission") is carrying out the Community Development Plan ("Plan") for the Petaluma Community Development Project ("Community Development Project"); and WHEREAS, in furtherance of the Community Development Project, Commission and LOK Petaluma Marina Hotel Company, LLC ("Participant") entered into an Owner Participation Agreement dated April 17, 2001 ("OPA"); and WHEREAS, the OPA provides, among other things, for Participant to develop a hotel and to expand and improve an adjacent parking lot on certain real property located within the boundaries of the Petaluma Community Development Project, Commission to loan certain funds to Participant in order to make development of the hotel project economically viable, and Participant to comply with certain living wage and union card check neutrality requirements in connection with the ownership and operation of the hotel; and WHEREAS, in accordance with the OPA, Participant has completed the development of the hotel and adjacent parking lot improvements, and Commission has disbursed some of the loan funds to Participant; and WHEREAS, Participant and Hotel Employees and Restaurant Employees Union, Local 2850 AFL-CIO have entered into a new Memorandum of Agreement governing labor union organizing activities at the hotel, which replaces that certain Memorandum of Agreement dated August 2000; and WHEREAS, Commission and Participant now desire to amend the OPA to modify Participant's obligations with respect to payment of living wages and labor union organizing activities and to clarify certain other provisions of the OPA. NOW, THEREFORE, THE PETALUMA COMMUNITY DEVELOPMENT COMMISSION DOES HEREBY RESOLVE AS FOLLOWS: 1 Section 1. The Commission hereby approves the First Amendment to Owner Participation Agreement ("First Amendment") attached hereto as Exhibit A and incorporated herein by reference. Section 2. The Executive Director and Secretary of the Commission are hereby authorized and directed to execute the First Amendment on behalf of the Commission, subject to any minor technical revisions as may be approved by Commission counsel. The Executive Director and Secretary are hereby further authorized and directed to take such further actions and execute such documents, including the First Implementation Agreement to Subordination and Standstill Agreement, as are necessary to carry out the First Amendment on behalf of the Commission. PASSED AND ADOPTED by the Petaluma Community Development Commission this 1st day of December, 2003, by the following vote: AYES: ABSENT: ABSTAIN: Chair ATTEST: Secretary EXHIBIT A FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT [to be inserted] 403937v1 32624/0002