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HomeMy WebLinkAboutStaff Report 01 PCDC 03/05/2001 . 'CITY OF PETALUMA, CALIFORNIA • PETALUMA COIVIMIJNITY DEVELOPMENT COMMISSION Hib' AGENDA BILL . Agenda Title: Discussion and Action on Proposed Ariiehdilienrto Meeting Date: Owner•Participation Agreement with LOK Petaluma Marina Hotel March 5, 2001 Company, LLC Department: Director , Contact Person: Phone Number: 778=4581 PCDC/City Manager Marangella .Marangella • Cost Of Proposal: 0 - _ Account Number:. NA ' • Name of Fund: NA Amount Budgeted: 0 Attachments to-Agenda Packet Item: I. Correspondence from LOK`Group requesting amendment to:Owner Participation,Agreement 2. Owner Participation Agreement (OPA) by and between the:PCDC and LOK Petaluma Marina ' HotehCompany,.LLC 3. Resolution Authorizing;Amendmentto OPA Summary Statement: On December 11, 2000, the Petaluma Community Development Commission approved an,Owner Participation Agreement ((PA) by and between the PCDC and LOK Petaluma Marina Hotel Company, LLC. Included in the OPA;is Attachment 4, "Schedule'of Performance:" that details the dates by which certain actions to.implement the transaction should occur. •., Subsequent to the approval of-the OPA and prior to execution ,thereof, the LOK Group advised"the City Manager that the delivery of steel used to construct the•building, is delayed by eight weeks. Additionally,-it was pointed oufthat'the building permit was issued three months later than originally" anticipated. Therefore, the LOK Group;is•requesting the approvalof,the PCDC to amend Attachment No 4, item 7, "Completion. of Construction.of Participant's Improvements," under the "Date" 1 heading, extensi on "Within 24 Section o702' f the'Agreement providesrfor by uch an extension.Y. ' This is an It is recommended that the,PCDC'adopethe attached resolutfon.authorizing the amendment. Council Priority: THIS AGENDA ITEM IS'CONSIDERED To BE'P 1U OF, OR NECESSARY To,,ONE;OR, MORE OF THE' 1999-2000 PRIORITIES ESTABLISHED,:BY THE :CITY COUNCIL ON JANUARY 30, 1999 , AND MARCH'18,2000. Priorities: 1. Complete.Redevelopment Agency,Review: Maximize Income 2. Establish,Revenue Recapture,& Regeneration-Program Revenue Generation— Recommended City Council Action/Suggested:Motion: Adopt the attached resolution, amending,the Owner Participation Agreement,(OPA) by and between the PCDC and LOK Petaluma Marina Hotel ;Company, LL'C, establishing the completion date of construction of improvements to be 24.months:after commencement. • eviewed by inance.Director: Reviewed by City:Attoruevi Approved by City Manager: D t.: bate: 7 Date: 1 - odav's d ate: Revision.# and Date Revised: File Cone: . • 3. ALTERNATIVES. • • The Lok Petaluma Marina Hotel Company, LLC, is acting in accordance with Section 702 of the Agreement. .An altelnativeiwould'be netltorapprove, and.the result would ultimately be that the;hotel grotipCould not meet the,construction schedule. 4. FINANCIAL IMPACTS: None 5. CONCLUSION: The Lok,Petaluma Manna Hotel Company has requested an extension,of time with respect to Attachment NO. 4, Item`7-="Completion.ofCOiistruction of Participant's Improvements" in`accordance with+Section 702,-of the Agreement. The PCDC has the authority to`provide,the requested extension as provided by the terms of the Agreement: 6. OUTCOMES.ORPERFORMANCE MEASUREMENTS THAT WILL IDENTIFY SUCCESSOR COMPLETION: - --The Lok Petaluma Marina Hotel is to be opened byMay'2002. • 7. RECOMMENDATION: It;is recommended that the.Petaluma Community Development Commission adopt,the • resolution in Attachment III,;authorizing.a six Month extension for the completion of construction of the Lok Petaluma Marina Hotel. • • • • • CITY'OF PETALUMA, CALIFORNIA • Petaluma Community Development Commission • MARCH 5,2001 • AGENDA REPORT FOR PROPOSED.AMENDMENT TO OWNER PARTICIPATION AGREEMENT WITH LOK PETALUMA-1VIARINA HOTELCOMPANY, LLC • I. ExECUTivE;SUMMARY:. On December 11, 2000, the Petaluma Community Development Commission approved an Owner Participation Agreement (OPA) by and between thet-PCDC and LOK Petaluma Marina Hotel Company; LLC. The parties have not yet executed,the OPA. Included in the OPA is Attachment 4, •"Schedule tof of Performance," that details the dates by which certain actions to implement the transaction'should'occur. Subsequent to the approval of the OPA and prior to execution thereof, the LOK Group advised, the City Manager that the delivery of steel used to construct the building is delayed by eight weeks. Additionally, it was ointed,oit that the building!permit was issued three months later than onginallyi?anticipated. Therefore, the LOK.Group is requesting the approval of the PCDC to amend Attachment No 4, item 7, "Completion of Construction of Participant's. Improvements," under the "Date" heading, to read "Within 24 months after commencement thereof by the Participant." This is an extension of six months'. Section 702 of the Agreement provides for such an extension.. • A-PCDCresolution approving the,requested amendment-is provided in Attachment III.. 2. BACKGROUND: The LOK .Petaluma Marina Hotel :Company, LLC, has' offered to enter into an "Owner Participation Agreement in good faith and did,not anticipate a delay in the delivery of building materials or the issuance of a building permit. In order to maintain the lintegrity of the agreement, the company immediately advised the City Manager of the delay,and requested,an amendment to Attachment-4, Schedule of Performance. The company has maintained the other elements of the;agreemenfand intends to have the hotel open by Mayof 2002. .Section 702 of the-Agreement, "Enforced E elay;tExtensien of Times of Performance", states: "In additionto specific'provision"s•of this,Agreement, performance;by either party •~ hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement:shall'be extended, where delays or Defaults are due to inability to secure necessary labor, materials or tools; delays of any contractor,,subcontractor or supplier..::or any other causes'beyond the control or without the fault of the party claiming an extension of time to perform... Notwithstanding anything to ther contrary'in this Agreement, an extension of time • for any such cause ,shall be for the period of the enforced ,delay and shall commence to run from the time of the commencement of the cause ... Times of the performance under this Agreement may also be extended in writing by the mutual agreement of Comnrissionand Participant:" • Attachment I • Cotrespondente from LOK Petaluma Marina Hotel Cpmpany, LLC Requesting Amendment to Owner Participation Agreement • JAN-032001 DIED 02,16• PM LOK GROUP OF COMPANIES: FAX No. 707 585 1017 , P. 01 Fax To: Fred Stouder, City Manager Of: City of?etalitma Fax: (707)'77,13=4419 • Phone: (707)/778-4345 Pages: 1,.inciudingjthis cover sheet. Date: Januaty. 3,2001 Fred: • Don asked me to'touch base•with you onttvonianers. First,I•wanted to keep voffinform"ed on the status of our construction financing.. We arc anticipating putting.an SI S million construction loan'in place sometime in Aprils 2001." In the meantime,we have obtained:gap financing from the group who had helped us with the pre-development financing, Cascitdc Acceptance Corporation. They arc providingtus with a$3,million"bridge"loan to help purchase"the steel being:fabricated overthenext few months. They will be repaid when the construction loan funds. Also, Don mentioned there was something in the agreement regarding "completing construction within 18 months of Juiy 1,-,20007.•That,was:a date which would have worked if We could have obtain our building permit back m"March,2000 and had the project fully:bid. As,you know,the building permit"was not issued',until late'July 2000;,and our steel delivery will take atleast S-weeks longer;than originally projected. IL was suggested that the 18-months could be,changed to 24-months:or, as an alternative,just make it.18-months fotlowing.execution of theOPA. Either to Lion o WoUld Work. s steel is early May r If Zand erection begins May 1,2001,tbetproject should be able Givc.me:ril.call and we::can cOntirm how you want;to'handle it. Thanks in advance:for the help. All the best-for:ad3appy New Year! -�� From the leak - Cent FA Moot>onne:1 • Vaa Croup M Co& anies Lok Coop of Companies 5050 Petaiuma.HW%Road cc: Kirkman°L.Lok• Santa Rasa,CA 05404, Phone:.707-5&4-8284: Donald J.Black,Esq.. Fax::707-385-1017 Attachment II Owner Participation Agreement (OPA) • by and between the PCDC and LOIC Petaluma Marina Hotel Company, LLC Y ,� McDoxouGH, HOLLAND &MLE:, JAN i p 1 ga •• A PROFESSIONAL CORPORATION JAN 0 5 2O I ATTORNEYS 1999 HARRISON STREET. SUITE 1300- CITY MANAGER . OAKLAND, CALIFORNIA 99512 AH2VVu ovncc EaR cn MAL_. ry r ' • ;(510) 273-6780 • Sn CRAMEry raL Cw LlroRr.�H95filOn• (9l6) 444-3900 GERALD J.RAM IZA TELECOPIER (SI0) 939-9100 7 ttecR PIER:(SIS) 444-6334 • 422.CENTURY CITY OF-ICE OR:NE SUITE A PC BOX 776 TUBA CI a A'.98992-077.6 TY(530) 674-9761 7 EC[COPiER:(5301 271-0990 January 4,2001 Donald j Black; Esq. • Law Offices of'Donald J. Black 2213 MendocinoAvenue • Santa Rosa, CA 95403 Re: Proposed Ovine*Participation Agreement__--LOK Marina Hotel Co.,LLC. • Dear Don: I:enclose for your review the final:version of:theabovereferenced agreement _. together with redlined pages'showing'the latest revisions,. I'have also enclosed,a copy of the deed of trust tosbe recorded,against the property., I I understand.that Dennis.MacDonneil has submitted to the Commission a I , written;request to extend the outside date for completion of the.hotel improvements as a result of delays m obtainingstructural steel for the project. As-we discussed,.I-will • hold off sendinb the execution documents-lb you,for your'client's signature until the Commission.Bdard has had an opportunity to consider:the,extension request. i If you.have'any questions; please give-me'a,call. Very truly- -ours, • . . . Gerald J..Ramiza - 'GJR:lh Enclosure ••• • cc/enc: Frederick C..Stouder, City.Manager' RicharcfRudnansky, City Attorney • L:r/.Black/01-04-01 1 • • • OWNER PARTICIPATION AGREEMENT By arid between the • COMMUNITY'DEVELOPMENT.COM1VIISSION OP THE CITY.OF PETALUMA and LOKPETALIWA MARINA HOTEL CONIPANY, LLC, a California limited•liability Conipany • PeCaliima,Con-ununitirDevelopment Redevel op fnerit Froject •• TABLE OF CONTENTS • • Pace 100. •DEFIN1110NIS 2 200. REPRESENTATIONS AND WARRANTIES • 8 • 201. Commisscon Representdtions 8 (a) . Authority 8 • (b) 'No Conflict 8 (c) NO Con-irr. iission Bankruptcy 8 202.. Participantistepresentations 9 (a) Authority 9 (b) NOCOnflict • 9• (c) No Participant-Bankruptcy 9 (d) LeaSes and'OtheThInterests 9 (e) Title 9 (f) , Litigation 9 (g) Governmenta1C6inpliance 9 (h) Parking LotrImprOVenients - - -9 203. Prohibition.Againet Change.in Ownership, Managernefit and Control of Participant 10• 204. Alnendinefits to LLC Operating Agreement 12 205. Guarantee _ 13 . . 300. DEVELOPMENT OF.THEBITE - • 13 301. :Seope of Development• 13 302. Peirnits and Approvals 13 303.„ Schedule of Perfoimance 13 304. Cost of Project and Improyernents 13 305. , InsuranceRegiurements 306. -Rights ofAccess 14 307. •CompliancE\With Laws;Indernnity;Waiver 14 '308. Taxes and Assessments - - 15 '309. Co ndi6oh of the Site - . 15 • • Liens Notices 16 • . . 311. Certificate of Completion 312. Submission of,Evidence of Financing Commitments and Loan Closing• 17 313. Mortgage,Deed of Trust:Sale and Lease-Back Financing' '18 313.1 No Encumbrances,ExcepeMertgages;Deeds,of Trustpor Sale:andIease- • Back far Development 18 313.2 Holder Not Obligated to Construct Iniprovements - .. 13 313.3 NotiCe of Default to'Mortaaaee or Deed of Trust Holders;Right toCüfe 18 314. • Work Force Commitments 19 314.1 Local Contractor and Union Contractor Requirements 19 314 2 Card Check Neutrality • 314.3 LiYing Wage Requirements 70 400. COVENANTS,RESTRICTIONS AND AGREEMENTS 20 401. Agreement to be Recorded Affecting Real;Property 20 500. FINANCIAL PROVISIONS 501. Provision of Commission Assistance 71 501.1 Eligible Project Costs 21 502, - Eligible Construction CostLoan . 502 1 Conditions of Eligible ConstruCtiomCcistiLoan DiSbursement. 22 (a) Promissory Note—Eligible ConstructionCost Loan (b) Construction Loan Escrow Instructions (c) No Default (d) Agreement tdbeaecorded Affecting Real-Property - 22 (e) Approval of.EViderice-ofFinancirig .. 22 502:2 Repayrnent of Eligible ConstruOtibn Cost Loan • • - 23 503.. 'Tax Increment Loan 503.1 Disbursement of Tax IncrementiLoan 74. • 503 2 Conditions of Tax Increment Loan Disbursement 25 (a)' Completiorfof Improvements 25 (b) Promissory Njote and Deed of.Trust--Tax Increment Loan 25 (c) NoiDefault „ . . (d) Sheraton Flag(at Op,ening _ 25 (e) Operation of Project • 26 (f). Payment of Property Taxes. . 26 (g) - • Saletf.the Projects, _ , • • • 26 (h) Minimum Project Value 26 (i) Financing Cortm-titments 26 d). Agreernent tolbe Recorded.Affecting,RealfP,roperty '26 (k) Guarantee _ 26 503.3 Repayment-of Tax Increment Loan 26 504. Deferred Participation Payments I 27 • 505. Annual Financial'S btemente • 28 506. Funding of Nen-Profit Cbi-plofation - • 28 600. DEFAULTS AND REMEDIES t 601. DefaulfRemedies _ 29 602. Institution of Legal Actions 29 603. Termination by the:Participant 604. _Termination by.the'Comth.&'Ion ' 29 605. Acceptance of Seryiee of Process 30 606. Rights and Remedies AreCumulative 30 607. Inaction Not a Waiver of Default 30 608. Applicalbie Lacy 700. GENERAL PROVISIONS 30 • r 701. Notices,Demands and CRuninunications Eetweenthe Parties 30 , 702. Enforced-Delay;6:tension of tines of Performan.ce 31 703. Successors and Assigns •- 32 704. Meinoraftchini of Agreement - , 32 705. Relationship Between Conunission andParticipant 32 706. Commission Approyals.and Adions 32 707. Counterparts- 33 708. Integration _ 33 • 709. • Intentionally Omitted . ' 710. -Tiles and Captions 1 33 711.. Interpretation - 33 712. No Waiver. , . 713. NIOdifications 714. Severability - 33 715. Computation of Time • - 34 716. Legal Advice • , .34 717. Tima'of ESSence 718. Cooperation 719. Conflicts of Interest - - 347 720. Time for AOceptance oE Agreerhent by Commission . • '34 721. PaitiOrparit's Indemnity- 722. Date of Ag-reernent • , 35 S 723. Nonliability of Officials'andDmployees of the Con:mission and the Participant 35 • 724. Assignment'by Codurtission 35 • • • v • • e • ATTACHMENTS Attachment No 1 Site Map AttachmentNo:2 SiteLegal Description Attachment No 3A• Promissory Note-Eligible Construction Cost Loan Attachment No.3B ;Promissory Note-TakIncrement Loan Attachment No:4 'SChedUle;of Performance Attachment No.5 • •Scope of Development Attachment No. 6 Certificate of Completion Attachment No 7 Memorandum of Owner'Participation Agreement Attachment No S Agreement to'be Recorded Affecting:Real Property Attachment No,9 Eligible Project Costs Budget Attachment No. 10 Guaranty • • • • • � .. .. OWNER`PARTICIPATION AGREEMENT' • • THIS OWNER,PARTICIPATION AGREEMENT•(this!:"Agreement")dated fors reference,purposes • , 2001, is entered into by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF PETALUMA, a public,body corporate and politic?(the "Commission°), and LOK'PETALU•MA MARINA.HOTEL COMPANY, LLC, a California limited liability company (the "Participant"). RECITALS The following jecitals area substantive part of this Agreement}capitalized terms used'herein and not otherwise defined are d'efined'.in Section 1:00 of this Agreement: • A. The Commission 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.). B. In furtherance Of the:objectives of the Conurnmity Redevelopment Law, the Commission desires to encourage and promote.the;redevelopment of a certain approximately two (2) acre portion of the Petaluma .Community Development Redevelopment Project generally located at the junction of the Petaluma River and U:,S. Highway 101 in the City of Petaluma and, more particularly depicted in Attachment No 1 attached hereto (the "Site"). Participant is the fee owner of theSite: C. ' Participant qualifies as an "owner participant" as that term is • defined in the Redevelopment Plan,and the Community Redevelopment Law.. Participant desires to participate iri the redevelopment-Of-the Site in accordance With the'Comrnunity Redevelopment Law'and thesterms of this Agreement. D. The Commission is autltcrized and empowered under the • Community Redevelopment' Law,, to enter into agreements`for the acquisition, disposition and development of real property and otherwise to assist in the redevelopment of real property ;within a'.redevelopment project area'in conformity with n;redevelopment-plan adopted;for such area, to acquire-real and personal property in.redevelopment project areas to receive consideration for the provision by the Commission of redevelopment assistance; to make and 111, execute contracts and.other instruments necessary or convenient to the exercise of its powers; and to incur'.indebtedness to finance or refinance redevel_oprnent projects. • • • • • E. Commission,and Participantdesire to enter into'thissAgreeinent in • • order to implement the,provisions of'the Redevelopment Plan by providing for (i), the Commission Assistance to the Participant and (ii) the Participant's improvement:of the Site with a three star/four diamond, four (4) story, one hundred eighty-three (183).room Sheraton Hotel, Participant's .expansion and improvement of'the parking lot located directly adjacent to the Site,and depicted on Attachment No. 1 attached hereto (the "Parking Lot") to include'anradditional one,hundred eighty-four (184) parking,spaces, and Participant's construction of . appurtenant .improvements, all as described-in the Scope of Development attached hereto:as Attachment No. 5: F. The Commission firther desires to enter into this Agreement:to ensure the redevelopment of. the, Site because, pursuant to the Community Redevelopment Law and the Redevelopment Plari, such actions will help to eliminate blight within the Project Area, increase employment opportunities within the Redevelopment Project, generate additional taxes with which the community can;increase;'and improve the supply of low- and moderate-income housing and assist in providing an environment for the social, psychological.and economic.growth and well-being of'the citizens of the City. •G. The fulfillment of this Agreement's the vital and bestinterests of • the City'and the,health,safety and of itsfresidents and in accordance with • the provisions`of applicable federal, state and local law. NOW, THEREFORE, the Commission'and the Participant hereby agree as follows: • • 100. DEF3NITIONS • "Agreement means this_Oivner Participation Agreement between the Commission and:the Participant. "Agreement to be Recorded' Affecting' Real Property" means the agreement totbe recorded affecting real property attached hereto as Attachment No. 8. "Capital:Event" means any transaction prior to the Sale of:the Project; including, without limitation, a refinancing of the Project,,the conveyance.of.a partial+interest In the Project or theSite, a condemnation of.the Projecti(or similar eminent domain taking'or disposition in lieu thereof) or'destruction by'casualty, pursuant to which the Managing Member of Participant receives .any capital distribution in excess'of the Managing Member's Equity Repayment. • • "Certificate of Completion" .means the .document which evidences the Participant's satisfactory completion of.the construction and mstallation.df the • L OK:Hotel OP:!-anal' 2 • • • • Improvements,asset forth incSection 311 hereof; in the form.of AttachrnentNo. 6 hereto which is incorporated,herein. • • "City''means the City of Petaluma, a California municipal corporation. "Commission" means the"Commi ity'Development Commission,of-the City of Petaluma, a public body, corporate and politic, exercising governmental functions and powers and organized and existing 'under Chapter 2 of the Community Redevelopment Law of the State of.California; and•any assignee of or successor''to its?rights,powers and;resporisibilities. "Commission Assistance" means both the Eligible Construction Cost Loan and the Tax=IncrernentiLoan. - - "Commission Equity Share"'"i's;defined"in•Section 504 hereof. "Conditions Precedent to Eligible Construction Cost Loan Disbursement" is defined in Section 502.1 hereof: "Conditions Precedent to Tax Inerement Loan,Disburserrlent" is defined in Section:503.2 hereof. • "Date of Agreement" means the date upon which this Agreement shall have been signed by the Commission. • "Default" means 'the failure of:a party to perform•any action;ior covenant, required by this Agreement within the time.periods provided herein following notice and.:opportunity to cure, as setforth'in Section 601 hereof: "Deferred Participation Payments" is defined in.Section 504 hereof.. "Eligible Construction Cost Loan"is-defined in Section 502 hereof: •_ "Eligible Prolect,Costs" is defined'in-Section 501.1 hereof: "Eligible Project Costs Budget" means the Eligible'Project Costs Budget attached--hereto as.Attaehrrlent No. 9. • "Governmental Requirements" means all laws, ordinances; statutes, • codes, rules, regulations, orders and decrees, Of the United States, the State of California, the County of Sonoma, 'the City., or any other political subdivision in • which the Site is located, and of,ans other political; subdivision, commission or instrumentality exercising jurisdiction over the Commission, the Participant or the Site. • • "Gross.Project•Revenues" Means'the entire 'gross' feceipts or-every kind and nature (excluding Transient 'Occupancy Tax Revenues and sales tax revenues Collected by the Participant) actually received by Participant from LOK'Hotel OFA final 3 • e operation of the Project, including;.without limitation, Project Room.Revenues, • food and;beyerage,banquet and restaurant!sales and parking receipts. "Hazardous Materials" means any substance,:material, or:waste which,:is or becomes regulated by any local governmental authority,..the State of California, or.the United:States Governitent, including, but not limited to, any material or substance which is (i) defined;as a "hazardous waste,," "extremely hazardous waste,"for "restrictedEhazardous waste'' under Section 25115, 25117 or . . 25122.7, or listed pursuant to Section 25140 of the:California Health and Safety, Code, Division 20, Chapter 6.5 (Hazardous Waste;Control Law), (ii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20''Cha ter'6.8 Car enter Presle Tanrier'Hazardous Substance Account Act), (iii)�'defined as a "hazardous; mate ial," "hazardous;substance;" or "hazardous waste" under Section 25501 of the California Health and Safety Code,:Division 20, Chapter 6.95 (Hazardous Materials,Release Response Plans • and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California,Health and Safety Code, Division:20,'Chapter; 6 7 (Underground Storage of Hazardous Substances),. (v.) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls, (viii) listed under Article 9 or defined as "hazardous" or^"extremely hazardous" :pursuant to Article 11 of Title,22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous substances" pursuant to Section 311 of the Clean. Water Act (33 U.S:C..§1317);.(x) defined as a "hazardous waste"pursuant to Section 1004 of the Resource.Conservation and Recovery Act, 42 U.S.C. §6901 et seq.-(42 U'S.C. §6903) or (xi) defined as "hazardous substances"-pursuant to Section 101 of the Comprehensive?Environmental Response, Compensation, and.Liability Act, 42 U.S.0 §9601 et-seq., as the foregoing statutes and regulations now exist or may hereafter be amended. "Hotel Rating; means either •a"AAA" hotel,rating of cat least four (4) diamonds, or a"Mobile;Travel.Guide" hotel rating:of atleast three (3) stars. • "Improvements" means the:;four (4)„story, one_hundred eighty-three (183) room, Sheraton hotel,which meets lthe.Hotel Ratinglrequirements, together with the expanded parking facilities (including the additional one.hundred eighty- four (184) parking spaces) and appurtenanton-site and off-site improvements to be constructed and installed by Participant as set forth herein and in the Scope of Development. 6” "Indebtedness" means any and all ,indebtedness of the Commission outstanding as o'f the Date of Agreement; together with any "Tax.Allocation Bonds `Indebtedness shall also include all, such.Indebtedness refinanced;from time to time by Commission after the Date of Agreement. "LILC Operating Agreement" means the LOK Petaluma Marina Hotel. • Company, LLC Operating Agreement dated April 1.7,,2000, as the same,may be amended from time to time. LOK'Hotel OPA-final 4.. • • - "Managing Member's Net• Incoine from Capital Events;' ;means any amounts t'obe paid•to the`Managing,Members of Participant:upon the occurrence • of:a Capital''Event:and/or upon the Sale of the Project;in excess of'the:Managing Member's'Equity,Repayment "Managing-. Member's Net Income from Operations" means those amounts to be paid to the'Managing Member of;Participant=from the net income from operations of the Project. "Managing Member's Equity Repayment" means•the amounts'to be paid to the Managing Member, of Participant upon the occurrence of a Capital Event and/or upon the Sale!of the Project:in order'to-repay the Managing Member for all or a:portion ofdts capital inVestrhent in the Project;up to a:maximum of SIX MILLION DOLLARS;($6,000,000). ' "Managing Member means Lok Petaluma Marina Development Company, LLC a California hfnited:liability company, the sole, managing"Class B" member of Participant`as defined in the'LLCOperating Agreement. ' • "Memorandumiof Agreement" is defined in Section 704 hereof. • "Non-Managing Members'°means the non-managing "Class A"-members of Participant as defined in°.the LLCOperating Agreement. "Notice" shall mean:a notice in the:form prescribed by Section 701 hereof: "Operating-Year" shall mean the one-year penods,commencing upon the • first January 1 or July 1 following, the date that Participant has obtained a certificate..of occupancy for the Project and opened for business to the public and ending on the calendar'day (i e:, December 31 or June-30, as applicable)' immediately prior to the;first anniversary thereof,:each succeeding Operating Year shall commence •on •the day following the last day of the preceding Operating Year;and shall;terininate:on;the calendar'da_y immediately prior to the first anniversary ofsuchsucceeding Operating Year: "Parkmg;Lot" means the existing parking lot located:directly adjacent to the Site and depicted,in the Site Map,•which:is`to be.`improved and expanded by Participartt:as provided in`the Scope of Developmenf._ "Partrcip'ant" means Lok Petaluma M ar-ina Hotel .Company, LLC, a California limited liability company. . . "Pass Through Agreements" means: (i) the Agreement By and Among the City of'Petaluma; California, the Co"n munity Development Commission of • the City of Petaluma,'the Sonoma ;County Library and the'County of Sonoma, dated September;,1988;,.and (ii) payments;or allocations pursuant to Resolution No 8i 88. 72 of th&Cinabar School District, Resolution No. 106 of the Old Adobe Union School District, Resolution No. 8889-1 of the Board:of E'ducation of the LOK Hotel.OPA-final 5 • .Petaluma City (Elementary) School.District,.Resoltition No. 8889-2•of the'Bbard •: of Education of the Petaluma Joint Union"High. School District, "Resolution • No 88-6 of the Waugh School District,Resolution;No , 7-11=88 of•the Sonoma County Junior College District and the Resolution of the: Sonoma County • Superintendent of Schools dated.December,29, 1993. "Planned Development Plan"'means the planned development plan for the Site approved:by the City Council of the City of Petaluma on November-1'6,, 1988, and;by the Sitetlan and Architectural Review Committeeon:May 27; 1999'. • "Project Room Revenues means:.the entire gross receipts received'by Participant, allocable to the;renting of hotel rooms within the.Project. "Project" means the Site and Improvements constructed on the Site but; excluding any Improvements constructed off the Site, as set forth herein.. • "Promissory ;Note — Eligible Construction Cost Loan" means the promissory note securing Participant's obligation to repay the Eligible Construction Cost Loan to Commission in the• form attached. hereto: as Attachment NO. 3A. "Promissory Note.—.Tax Increment Loan"'means the.promissory note • securing,Participant's obligation to repay.the Tax.Increment Loan ter Commission in the form attached hereto asAttachment.No. 3B. • • "Promissory Notes" means both the Promissory Note — Eligible Construction Cost Loan and the.Promitsor-y Note—Tax'Increment Loan. "'Property Tax Increment Revenues" •shall mean the property tax increment revenues allocated to and received,by the Commission,pursuant ;to Section 33670(b).of the Community Redevelopment Law,,as said:statute maybe amended from time to time, by application of the one percent (1%) tax levied against real property as'perrnitted By Article XIIIA of!the California Constitution, in an amount attributable;by the Sonoma County Assessor-to the Redevelopment Project, but specifically excluding therefrom the following: (a) charges.for County administrative charges, fees, or costs; (b) the portion of tax increment revenues'from the Redevelopment Project attributable to any special taxes or assessments or voter-approved indebtedness; (c) the portion of the tax increment • revenues from the Redevelopment Project (currently twenty percent (20%) or such greater amount as may be amended from ,time-to-time,by the State • Legislature) equal to the percentage of such revenUeel that the Commission,is required' by law to set-aside in the Redevelopment Project as a whole; for affordable.housing purposes, pursuant to the Community Redevelopment Law; (d) the portion of the tax:.increment revenues!froth the Redevelopment Project which the Commission is required to pay or pays to any and all governmental' entities;as required.by the Community Redevelopment Law or pursuant to the' .. Pass Through ,agreements, and any other agreements entered:-into by the Commission and:such affected taxing entitiesirnplerrienting the'Pass Through LOK.Horel CPAttfinal 6 • Agreements; (e),the'portion of tax increment revenues from the.Redevelopment - Project equal to the percentage of•such revenues in the Redevelopment'Project as, a whole which payments the State may mandate that the Commission pay from time to time in the future, including, for example, and without limiting the generality of the foregoing, any payments which the Commission may be required to pay to the Education Revenue Augmentation Fund pursuant to • Section 33681, et seq., of the Community Redevelopment Law;, and (f) that portion o tax increment revenues•pledged to repayment of''Indebtedness f . "Redevelopment Plan" means the Redevelopment Plan' 'for the Redevelopment Project, adopted by Ordinance No 1725 tof the City Council of the City on August-17,1988, as•amended, and incorporated herein by reference. "Redevelopment Project" means the Petaluma Community Development Project, adopted by the City pursuant to;the Redevelopment Plan. "Sale"of the Project" means the first conveyance by Participant:ofrall of its , interest in the Project at .arms length, to a third party not affiliated with the Participant or any of itsMembers or any person or.entity which comprises its Members, after. the completion of the Improvements as evidenced by the Commission's recordation of the Certificate of Completion in accordance with Section'311 hereof. "Schedule of Performance" means that- certain Schedule of Performance attached hereto as Attachment NO. 4 and incorporated herein by reference, setting out the dates and/or time-periods by which certain obligations set forth in this Agreement must be accomplished. The;Schedule of Performance is subject to minor revision from time to time as mutually agreed upon.in writing between the .Partici P ant and the` Commission's Executive Director, and the Commission's:Executive•Directoris authorized to approve such min or revisions as he or she deems reasonably necessary. "Scope of Development" means that certain Scope of Development attached hereto as Attachment'No. 5 and incorporated by reference,`which describes the scope;,amount and quality of the work of Improvements to be constructed and installed by the Participant., The Scope of .Development is subject to revision only as provided herein. • • "Site Legal Description" means the description of the Site which is . attached hereto as.Attaclment No 2 and incorporated herein. "Site Map" means the map of the Site, together with the Parking Lot and certain other adjacent areas, which is attached hereto as Attachment No 1 and • incorporated herein. "Site" means that, certain real property comprising a portion of the ' Redevelopment Pfoject, generally located at the junction of the Petaluma River and U.S. Highway 10i in the City of Petaluma and consisting of approximately • LOIC Hotel OPA-finai,. 7 • two (2).acres,;as delineated on the Site Map and more particularly:described,in •' the Sife,Legal,Description.. "Tax:Allocation Bonds"'shall mean any bond, certificate of°participation or similar -indebtedness or obligation of the Commission now existing or hereafter incurred payable in whole or in part from the proceeds of taxes allocated and paid to,the Commission from-within the..Redevelopment Project . • pursuant to Health and Safety Code Section.33670(8) (as,said'statute may be amended from time to time and include any legislative substitutions: or subventions,for property tax increment revenues) that has been sold pursuant to a public debt'offering or that represents the°private placement of debt mduding, but not limited to, any obligation of the Commission to a joint powers authority. that offers bonds to'the'public or through a private placement: "Tax Increment Loan Cap".is defined in Sectoin 503 hereof. "Tax Increment Loan" is,defined`'in;Section.503 hereof: "Transient Occupancy Tax-;Revenues" means those transient-;occupancy tax revenues received by the City pursuant:to Ordinance No. 1001'NCS adopted by the City Council ofthe City, on October 5, 1970, in accordance with,California Revenue and Taxation Code Section 7280.5, which result froth the ,'levy of the transient occupancy tax on accom.modations'located.on the Site. • • • 200. REPRESENTATIONS AND WARRANTIES: • . 201. Commission Representations. Commission represents and • warrants;to Participant as follows: '(a) Authority. Commission is a public body, corporate and . politic, existing pursuant to the California Community Redevelopment Law (California Health and Safety, Code Section 33000), which•has„been authorized to • transact business ,pursuant to action.of the City. Commission has full'r:ght power and lawful authority to perform its .obligations :hereunder and the. execution, performance anddelivery of°this-Agreement by Commission has been, . fully authorized by all.requisite actions on.the'part,of Commission: (b) No Conflict To the;.best, of Commission's .knowledge;, Commission's execution, delivery and.performance of its obligations,under this • Agreement will not constitute a .default or a breach under any contract, agreement or order to which Commission;is a party or by which it is bound. • (c) No Commission iBankithotcv. "Commission is not:the subject of a bankruptcy proceeding. • .• LOKHote!OPA- ina1 • 8 • Until the completion of the work Of Improvements, Commission shall, • upon learning of anylact or condition which would cause any of`the.warranties and representations in this Section 201anot to be true, immediately,give!-written notice of such'fact or condition:to 'Patticipar tt 202. Participant's Representations. PartiCipantrepresents and warrants to Commission as follows: .. (a) Authority. Participant is a duly organized limited liability company organized within and in good standing under'the.laws of the State of • California. The copies.'of the documents evidencing the organization of the Participant which have been delivered to the Commission, including, without - limitation, the LLCOperating Agreement, me true and complete copies of the originals, as amended to-the date of'this Agreement. Participant has full right, • power and:lawful authority to undertake all obligations.-as provided herein and the execution, performance 'and delivery of this Agreement by Participant has been fully authorized by all requisite actions on thepart,of the Participant., (b) No Conflict: To the best. of Participants knowledge, Participant's execution, delivery.and performances of its obligations' under this • Agreement will not constitute ,a default or a breach under any contract, agreementor order to,whieh'the Participant is a party or by which it. bound. • (c) ' No Participant Bankruptcy. Participanf is not he subject of a bankruptcy proceeding. . (d) Leases and. Other Interests To the best of Participant's knowledge, there are no unrecorded leases affecting the'Site or any portion thereof, and no other,person or entity has any-unrecorded interests in or the right to possess the Site or anyport on of it. . ( ) 1e.. . Participant, at the 'time!.'of the execution of this e Tit Agreement, owns'fee.sunple title tcrthe.Site. • - • •(f) Litigation. eta the best,of Participant's!:knowledge, there are, no affecting tithe Site or material oclai s,legal proceedings, or any 'other proceedings _yp n hereof, at law or in equity before any court;or governmental Commission, domestic or-foreign. •r . (g), Governrnentai Compliance. Participant has,not reteived'any notice from any governmental Commission:or authority?alleging that the Site is currently in violation of any law, ,ordinance, rule, regulation or requirement, applicable t`o its use.and operation If any such notice or noticeslare received by , . Participant following the date :this Agreement is signed by the Commission, . Participant'shall,n'otify Commissionjwithin ten (1.0) days'ofreceipt of such notice. 0 (h' ) Parking Lot Imurovements. 'Participant has all legal rights necessar y to construct tfie.add ional a pp roximatel one' hindied eight y- our •LOK Hote1.OPA<:''L-,a1. 9 . e • (184) parking spaces on the Parkinglof as provided herein and in the Scope of • Development. Until the expiration or earlier termination iof this Agreement, Participant shall, upon learning of any 'fact or condition which would cause any of the warranties.,and'representations in this Section 202 not to be true, immediately give written notice of Stich fact Or condition to Coinnussion. 203. Prohibition Against Change. in Ownership, Management and Control of Participant. The qualifications and<identity of the Participaritand;its Managing'.Membei are of particular. concern tb the,Cormnission. Ittis.because of those unique qualifications and'identity that the Commission has entered jrito this.Agteethent with the Participant: No'vokintary or involuntary'successdr;in interest'of theaParticipant shall acquire any interest in the Site or`the Project nor any rights or powers under this Agreement, except as'expressly set;forth herein; Prior'to the Sale of the Project,by the Participant, the.Participant shall not assign or transfer this Agreement, the Project or the Site ..or any portion(s) thereof, or;interest(s) therein, or:any rights) hereunder, nor shall there be any • change"it the identity of the Managing Member'pr the managingm"ember of the Managing Member (LMDC, -mc., a California icorp oration); without the prior written approv„al 'of the Commissions-Board of Directors. Notwithstanding The, foregoing, Participant shall not be required to obtain Commission's Boards+of • Directors approval prior to submitting a lot line adjust iient•'applicati'on which is reasonably necessary to facilitate development and operation:of the Project or granting.tho5e easements over, under and across the Site,as.shown on the Site Plan for'the Project dated May 1,,2000. Assignments for financing purposes shall be subject to review ,and approval by the Commission's Board',of Directors :in accordance with this Section 203 and with the requirements of Section 313.1; below. Nothing in this Agreement shall be deemed to release'Participant from its obligations4t'o,the Commission set forth in the Promissory,Notes at''the time:of any refinancing;,additional financing or other transaction constituting a Capital "'`Event,.prior to the SaleEof: the,Project. The Commission Board shall have the ' refinancing which would diminish or o herw ise,any the ability of t or ri ht, to be exercised reasonably,-to disapprove an transfer, assignment the Commission to .receive payment of the Deferred, Participation Payments as provided in Section 504, below: Participant shall notify Commission of any proposed transfer, assignment or refinancing'promptly,upon commencement of riegotiations,in.connection with such event. The Commission's Board of Directors,shall approve or disapprove • any requested transfer, assignment or refinancing within thirty (30)' days:after receipt"of,a written request for•approval.ffom Participant, together with such • documentation.:as may be reasonably requested by the Commission (which request must be made;within.fifteen'(15) days of receipt of the initial written request,for• appro\al from Participant) to determine whethet the proposed • transfer, assignment or refinancing ,constitutes a Capital Event triggering the Commissions right tortheDeferred Partic'ipa don Payments. The documentation • LOK 10 . . . . \ . . . . . . . . . • - . . _. • . : . to be provided by Partfeiparit to the Commission may inelilcie, Without . limitation, allioan.docurftenta incOnnectionzwitharisnpropdged tefinancillg and . all dOcUmentationwhich the Commission:deteraiiness'reasohably necessary to evaluate the proposed transaction arid. the,proposed assignee's/transferee's ,..- _- ri experience and qualificatiOnS. The Commission's Board of Directors shall not unreasonably withhold or delay its approval of a transfer or assignment to .a proposed 'transferee/assignee who in the reasonable opinion of the Commission's Board of Directors is'financially capable and has the development qualifications and experience to perform the duties and obligations of the Participant hereunder, provided, however, that if the Cothrnissions.Board of Directors deterinines:that,such transfer/assi;gnirient constitutes a Capital Event, the Commission's Board i of Directors approval shall be conditioned upon the Commission's receipt of the entire amount of the:Deferred Participation _,. „. Payments payable to Commission as provided in Section 504, below. Prior to any proposed assignment being considered for approval by the Conunissionfs. Board of DireOtorsy the;Participaritishalf deliver to the Commission the,form of a proposed writtenassignment and aSSUitptiOn„agreement in which the assignee woUld/expre-s0,agfee to assume all rights .and,obligations of the Participant under this Agreement which arise after the effective date of the assignment, and in which,the assignee Would, agree to assume, or Participant •. would epfelyfeniiirt responsible for, all.perferanance of the Participant which arose prior to the elfiectiVe, date of the assignment, The assignment and assumption agreement. shall be in a form reasonably acceptable to the Commission's legal rcounsel, No later than the date the assignment becomes effective, Participant 'Shall . deliVel. to the Commission a .fully executed counterpart of theiassignmentand assumption agreement; No tWithstanding.any-Other provision of this Agreement to the contrary, Cornmissibn':s.Board ,of bireabrs approval of a transfer or assignment.of this Agreement, the Project, or the Site or any interest therein shall not be required in connection with any of the .following, provided, however, if such transfer or assignment listed below constitutes a Capital EVent,, the Participant shall be required to pay to the Commission the entire amount of the Deferred Participation Payments payable to CornrnisSilm as ,provided in Section 504, beloW: (a). Subject tb the Participant :submitting the assignmeriand • assumption,agieeinent referred to 'abo've and the approval of such asSigniiient and assumption -agreement by the Commission, any transfer, to an entity or entities in which Participant retains a minimum .df fifty percent (50%)- of the • ownership or beneficial interest, and retains management.and control of the transferee entity or entities and so long as the Participant is the managing r membeof'a limited lcabilityccOmpanrot is themanaging-gerieral partner of any general or limited partnership to which an interest in the Agreement, the Site or the-inaproveMentsis trartieFied pUtSuant to thisiSection".203(a); • .. , . . . . • . . . LOK Hotel OPA-final . • (b) Transfers'resulting from the death or mental or physical incapacity • of an individual having an interest in theManagingMember; (c) LThe granting`of temporary- or permanent easements or permits:to facilitate development ofthe'Project; (d) Any requested assignment for financing purposes (subject to such financing being considered. and approved by the Commission. pursuant;to Section.313.1 below), including the grant of a deed of trust:to,secure the funds necessary for construction and permanentfinancing of the Improvements; (e) Any transfer of the interest of ;Non-Managing Members of Participant; provided,such transfer.does-not-materially diminish the powers of the Managing Member or otherwise,cause; a material change:in the rights to manage and control Participant; and . (f) Any-transfer or assignment'in trust-of the interest of an individual. having an interest in the Managing,Member for the,benefit of such individual's spouse;.chiidren,rgrandchildren orother family members. , In the'event of,an:assignment,or=transfer by the Managing,Member under any of the above subsections,203(a) through, 203(d), inclusive, or 203(f),.not requiring:the Commission's prior approval,Participant nevertheless agrees that • _ it shall give of least fifteen ( 5) days rior Written t ten Notice to=Commission of,such ,assignment:or transfer. In addition, Commission shall be entitledtto review:such, documentation as may be reasonably ;required by the Commission for the purpose of determining whether such change constitutes` a Capital. Event. triggering the Commission's rights to payment of the Deferred Participation, Payments.. The restrictions of this Section 203 shall terminate upon the earlier. of (i) the Sale of the Project, or (ii)payment, in full, of the 'entire Outstanding principal balance of the Promissory'Notes. • 204. Amendments to LLC Operating Agreement. Before entering into any amendment to the LLC Operating Agreement;,Participantshall first submit the proposed amendment to the Commission's Executive Director who shall have the right to reasonably'disapprove any such amendment,which would materially diminish or otherwise impair the.ability of the Commission to receive (relative;to any.payment,_withdrawal, or distribution to the Managing Member) payment of the Deferred Participation Payments. Within ten (10) business days, following>receipt•of the proposed amendment, the Executive Director;shall either approve or disapprove the requested:amendment. Participant shall not enter into any amendment to the LLC Operating Agreement which is •reaser:ably disapproved by the Executive Director pursuant to this Section 204. The • restrictions of this Section204 shall terminate Upon the first to occur of (i) the Sale of the Project, or (ii) payment, in,full, of the entire'outstanding principal balance of the;Promissory Notes. LOK -iotel-OPP.-final 1'2 • • 205. . Guarantee: Simultaneously with the.execution Of this,Agreement, .Participant shall cause the Guaranty(in the form attached.as,Attachment No..10) to be executed by Lok ,Petaluma Marina Development Company,,•LLC•, a California limited liability company; the Managing,Member"of-Participant. 300. DEVELOPMENT OF THE SITE' 301: Scope of Development. The.Participanfshall construct and install the Improvements in one phase in accordance'with the Scope of Development and the plans, drawings'and documents -submitted by the Participant in • connection with the Planned Development Plan. All such work shall be performed by a-licensed.contractor 302'. Permits,and Approvals. Before commencement-of construction of the Improvements or other works,of improvement upon the',Site the Participant shall/at ifs & ense, secure or cause to be secured any and all land,use and other entitlements,'permits and approvals which may be required by the City or any other governmental commission,affected by such construction or work: The Commission staff will work cooperatively with the 'Participant to assist in coordinating the expeditious processing and .consideration of all necessary permits, entitlements and;:approvals. However, the execution of this,Agreement does..not constitute the granting of,;or a commit rient to obtain, any required land use permits, entitlements or approvals required by'the Commission or the City. 303. Schedule of Performance:" The Participant shall 'commence=and complete construction.of the Improvementsiand satisfy all other obligations and conditions of this Agreement=within the times :established therefor in the Schedule of Performance. • 304. Cost of Project,and Improvemments. Except-as otherwise expressly provided, in Section 500 below, Participant shall bear the entire cost of. developing the Project cand designing and constructing the work. of "Improvernents: 305. ...Insurance Requirements. The Participant shall take out and maintain or shall 'cause+its contractor to',take out and maintain throughout the term of this Agreement, a commercial general liability policy in the amount of TWO MILLION DOLLARS-(52,000,000), combined single limit, or such other policy limit as the Commission may approve at its discretion, including contractual liability, as shall protect the Participant, City and Commission from claims for such damages. Such policy or policies "shall be written on an • occurrence form. The Participant'shall also obtain and maintain throughout the term of this Agreement .a comprehensive automobile liability policy in the • amount of ONE MILLION DOLLARS ($1,000,000), combined single limit, and builder's all-riskinsurancein,an amount not less than the ?uninsurable value of • LOK Hot-el'OPA-final _ 13 • I •O . •the Improvements on a replacement cb t basis and shall furnish,or cause to be furnished to the Commission:evidence satisfactory to the Commission that Participantand any contractor.with whom it has contracted for the performance of work on the Site or otherwise;pursuant to this Agreement carries workers' compensation insurance, as required by 'law. The Participant shall furnishea notarized certificate of insurance countersigned by an authorized° agent of the insurance carrier on a form approved by the Commission setting..forth the . general provisions of the insurance::coverage. Thisrcountersigned certificate'shall : name the City and the Commission and 'their respective,officers,. agents, and • employees as additionally insured parties under the policy; and the certificate shall be accompanied by a duly executed endorsement evidencing, such additional insured status. The certificate and endorsement by the insurance carrier shall contain a statement of obligation on the part of°thercarrier to notify City and the•Commission of any materialechange, cancellation or'termination.of the coverage at least"thirty (30) days,in-,,advance of the effectiveAd'ate of.anysuch material change; cancellation or termination and shall bein,a form:reasonably ' acceptable to the City Coverage;provided,hereunder by the:Participant shall be primary insurance and not be contributingwith any<insurance or self-imsiifance, Maintained'by the Commission or City,..and'the policy shall contain such an endorsement. The insurance policy or the endorsement:shall contain-a waiver of subroga'ion 'for: the benefit of the City and the Commission. The:required certificate and.endorsement shall be furnished by the Participant to Commission and approved by the City prior to the commencement of the work of Alb Improvements: 306. Rights of. Access. Prior to the issuance of a 'Certificate of Completion (as specified in Section 311 of this Agreement), for purposes of assuring,compliance with this Agreement, representatives of the Commission shall have the right of access to the Site, without charges or fees, at normal construction hours.during the period of construction for the purposes,of this Agreement, including but,not limited to,the inspection of,the Project4and the work of.3mpro,yementsso:long as the Commission_representatives comply with. all safety rules The Commission (or its representatives) shall, except in emergencyssituations, notify the,'Partieipant prior to exercising its rights pursuant to this Sectiont306. Nothing herein shall be deemed to limit:the.ability of the City to conduct code enforcement and other administrative inspections of the Site iri'accordance with applicable law. • " 307. Compliance With;Laws;.Indemnity,;;Waiver. The participant:shall carry out the work of I nproyernents in conformity with all applicable' laws, • including without,limitationall"applicable;state..labor standards; the City and,development standards; building, plumbing, mechanical and electrical codes, 'all other provisions of the. City of Petaluma Municipal Code, and all applicable disabled and handicapped access requirements; including without limitation ithe Americans'With Disabilities:Act, 42 U S.C."Section 12101, et.seq Government Code Section 4450, et seq., Government Code Section 11135, etseq, and theUnrtih CiVil Righfs Act, Civil"Code Section_51, et•seq.. • LOK Hotel OPA-final 14, • • • Patticipant shall defend;,indemnify and hold harmless the Commission and the City and its and their officers, employees, agents! and representatives from,and'against any and all present and future liabilities, obligations, orders, claims, damages, fines,,penalties•and expenses (including" attorneys' fees and costs) (collectively, "Claims'.), arising,out of or in any -way. connected with, Participant's obligation to comply with all laws with respect to the work of Improvements'including, without limitation; all applicable:'state labor laws and • standards. • The Participant hereby waives, releases and .discharges forever the, Commission, and the City, and its and their employees; 'officers, :agents and representatives, from any'and all`.present and future Claims arising,out of or in any way connected with.;Participant's obligation to comply with all laws with• respect to the work of Improvements including, without limitation, all applicable state labor laws and standard's.. • The Participant is Faware of and•familiar with the provisions of Section 1542 of'theiCalifornia Civit Code which provides'as°follows: to claims which the creditor doesnnot know or suspect to exist,'in;his favor at the time of executing the release, which if known by him must,havematerially affected his settlement with the debtor" As such relates to this Section:307,. the Participant. hereby waives' and relinquishes all rights and benefits which it may have under Section 1542 of the Califorria Civil Code. Participant Initials: . Commission-Initials 308. Taxes and Assessments. 'The Participant shall pay prior to. delinquency all ad valorem_real;estate taxes and assessments on.the Site, subject to the Participant's rightvto contest in good faith any°such,taxes. The Participant shall remove or.have removed any"levy or attachment•made on the Site or any part thereof, Or assure the satisfaction thereof within thirty (30),days following the date of,attachment-or levy. . 309. Condition iof the Site The Participant shall`t`ake all necessary precautions to prevent the release .into the environment•of any Hazardous. Materials which are located in, on or under the Site.. Such precautions shall include compliance with all `Governmental Requirements with respect to Hazardous Materials. In addition the Participant shall" install and•utilize such • equipment and implement and`adhere to such procedures as are consistent with the standards prevailing in the industry, to the extent such standards exceed applicable Governmental Requirements, as=respects+.the:.,disclosure, storage, use, removal and disposal di Hazardous Materials. Participant shall cause each LOK Hotel OPA-final 15' " • release: of Hazardous -Materials in, ion or under the Site to :be remediated 'in • accordance with all.Governmental;Requirernents. Participant-agrees to indemnify, defend and hold the Commission and. City harmless from and against any claim, action, shit, proceeding; loss,,cost, damage, liability, deficiency, fine, penalty, punitive damage„ or expense (including, without,limitation,attorneys' fees), resulting from, arising out of ,or based 'upon (i) the. presence, release, use, generation, discharge, storage',or disposal of any Hazardous Materials on, under, in for.:about, or the`transportation of any such Hazardous Materials to'or.from, the Site, or (ii) the violation, or alleged violation,, of any'statute,, ordinance; order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under,in or about, to or from, the Site, caused by Participant or any of Participant's predecessors.in interest.,'This'indernnity shall include, without limitation, any damage, liability, fine, penalty,parallel indemnity, cost or expense arising from or out;of any claim, action, suit or proceeding for personal injury `(including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income,;profits or other economic"or consequential loss;•damage>to the natural resource or the,environment,,nuisance, contamination,,leak, spill,,release or other adverse;effects on the environment. 310 Liens and Stop Notices. The Participant shall not allow to be • placed on the Site or any part thereof any;lien or stop notice. If a claim of a lien • or stop notice is :given or recorded affecting the Project, the Participant shall within thirty (30) days of suchrecording or service: (a) Pay and discharge the same; or (b) Affect the release_ thereof by recording and delive_ring, to the Commission a surety bond:in sufficient form and amount; or (c) = Provide the Commission .with. other assurance which the Commission deems,-in its sole discretion,•:to be satisfactory for the payment of such lien or bonded stop notice and for the full,and continuous protection of Commission from:the effect of such lien or bonded stop notice. 311. Certificate of Comp?e°tion. Promptly after completion of • construction of the Improvements in conformity with this Agreement, the Commission shall furnish the Participant with a."Certificate of Completion" substantially in the,forrn of Attachment,' lo. 6 attached hereto. The Commission , shall notUnreasonably withhold;such Certificate of.Completion, The Certificate of Completion shall be conclusive determination,of satisfactory completion of the work of:Improvements and the ,Cern y ficate of Completion shall so state. Any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest in ,the, Site shall not (because of. such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement except for LOK Hotel.OP.A-final 16 ... . 0 those continuing covenants as set forth in the Agreement to be Recorded . Affecting Real Property set forth.in,Section 401,hereof. . If the Commission refu"ses'or;fails to furnish:the,Certificate of Completion, the Commission;shall, within thirty (30) days after:Participant's written request . therefor, provide the Participant with a written statement of the reasons the Commission refused or -failed to-furnish :the Certificate of Completion. The• statement shall also contain the Commission's opinion of the actions the Participant--must take`;to ',obtain the Certificate of Completion. Provided Participant indicates in its request'for issuance of the Certificate of Completion that Commission;sfailure to'provide,such.a written statement within thirty (30) days shall he deemed;approval of the ;request, then Participant's request for • issuance?shall be.deemed approved if Commission fails,to`soaresporid within said thirty (30) day period. The Certificate of Completion shall, not :constitute evidence of compliance with.or'satisfaction of any obligation of theParticipantto any holder of:any, mortgage,or,[any Insurer of a°mortgage securing money loaned to finance the work of Improvements, or any-part thereof. The,,Certificate of Completion;is not a notice"bf ceiripletion as referred to,in Section 3093 of the California Civil Code. . 312. .Submission of Evidence Of Financing Commitments and Loan Closing. Within the time established therefor in the Scheduleof Performance, the Participant shall obtain and submit to the Commission evidence that the Participant has obtained firm, and binding comrrutments for ,debt and equity financing necessary to undertake:the development<of'theProject and the design and:construction of thetmprovements inaccordance with this Agreement. The debt.component+of such;financing,exclusive of"furniture, fixtures and equipment debt,Shalt in no event exceed`TWENTY'ONE MILLION DOLLARS ($21,000,000). The Commissions Executive Director;shall approve or:disapprove such evidence of financing commitments within. the time established, in the-Schedule of Performance. Approval, shall not be unreasonably withheld. . If the Commission's Executive;Director shall-reasonably disapprove!any such evidence of financing; the Executive Director. shall "do so by written notice to the Participant stating the reasons -for, such disapproval and, thereafter, the Participant shall:exercise. n reasoable:diligence in;an effort'to promptly,;obtain„and submit to the Commission. new 'evidence of financing. The •Con=linission's , . Executive:Director shall approve Or disapprove.such new evidence of financing;, in the same manner and .within the same times .established in the},Schedule .of - 2 Performance attached 'hereto as Attachment No 4 for the approval or disapproval of the evidence of financing as initially submitted to the Commission... • . Such evidence of financing Shall include.a copy of the firm.and binding . commitment' obtained by the Participant for the mortgage loan or loans, to finance: construction 'thi'oiigh completion of the: Project: The term of such 0 construction financing shall be.tor not less than one (1) year. . The commitment for financing shall be in a form sufficient, in the reasonable opinion of the Commission's EXecTitive Director', to evidence a legally binding; firm. and • LOK Hotel OPA-final • enforceable loan commitment subject to the construction lender's reasonable, • customary and normal conditions and terms.' • 313.; Mortgage, Deed of Trust, Sale,and Lease-Back`Financing. 313.1 'No Encumbrances Ezcept :1Vlortgages, Deeds of Trust,.or Sale and,Lease-Back for Development. Mortgages, deeds:of'trust and,sales and . lease-back are permitted before:; completion . of the construction:, of the Improvements; but only for the purpose,of securing loans of funds to be,used for financing.the costs of constructing the Improvements and/or refinancing the construction loan: TheParticipant shall not:enter into any such conveyance for • financing prior'to the.Sale of the,Project by the Participant .without-the ,prior, written:approval of the.Commission. Theregiirements ofthis Section'313.1 shall terminate effective upon:the first:to•occur of (i) the Sale of the Project by the Participant, (ii)'the Participant's repayment, in full,.of the,entire outstanding principal balance of the Promissory Notes, or (iii) Participants payment,=in full, of all of'the'Deferred'Participatio'n Payments: The.Participant shall notify the Commission in advance- of any mortgage or deed of trust, if the Participant proposes to enter into the same before completion of construction.of all of the Improvements:on the'Site. The words "mortgage" and "deea o&trust" as ifsed hereinafter shall;include.sale and leaseback financing. The"provisi'ons, of this Section,313.1 shall survive the issuance of a Certificate•ofCompletion:, - 313.2 Holder Not Obligated to Construct .Improve"ments. The holder of:an Y mortgage;or deed of trust;authorized-by this Agreement=shall,not' •be obligated by the provisions of-this Agreement to construct or complete the Improvements or to guarantee.such,construction or completion. Nothing.in this Agreement-shall be deemed to.or'be construed;to: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. 313;3 Notice.of Default to Mortgagee,or Deed of Trust Holders; Right to Cure., . With respect to any mortgage or deed of trust granted by Participant as`provided'herein, whenever the Commission shall •deliver any notice'or demand to Participant with respect to any breach or default by the • Participant hereunder, the Commission shall,.at the same time, deliver-to,each holder of record',of ariymortgage or deed of trust authorized by this Agreement,. • a copy--.of;such notice or demand. No notice of default shall.'be effective as to the holder unless such notice is given: Each,such holder shall (insofar as the rights of- the Commission are concerned)'have the•right, at :its option, within sixty (60) 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 mortgage debt and the-lientof its mortgage.'In the event possession of the Site (or portion thereof) is requiredto•effectuate such cure or remedy, the holder shall be deemed to have timely cured or remedied if it commences the proceedings necessary to obtain possession thereOf within sixty (60) days,diligently pursues such,proceedings;to completion, and;after obtaining possession, diligently' completes such cure,or LOK'HoteiGPA-fina'. 18 I. • . e e' remedy. Any such holder properly cornpletingP Improvements shall be entitled, upon compliance with the requirements, of, 'Section 311 of this Agreement, to a Certificate Of,Completion. • . 314. ' Work Force Commitments. . • '314:1 Local and Union `,Contractor' Requirements. Participant •- , shall utilize good faith, diligent efforts to ensure that more than fifty percent;:, . (50%) of the construction work to be performed-`in connection with the construction and developmentof the Improvements is performed bycontractors and subcontractors based within a 70-mile radius of the Site ("Local Contractors"). In addition, Participant covenants ,agrees on behalf of itself; its contractors and,subcontractors and its and their successors'.and assigns to Utilize, good faith, diligent efforts to ensure thatmo less than,sixty percent (60%) of the labor and materials component.of Project construction„costs (excluding_furniture, fixtures and equipment and insurance, Project financing and other soft costs) is manufactured, installed,-constructed, provided or performed; as.applicable, by union contractors,.subcontractors,manufacturers or suppliers. As of the Date.of Agreement'the.parties estimate.that the labor and materials component of Project construction costs will 'total, approximately •Eighteen Million Four Hundred • Seventy Thousand. Dollars ($18,470,000). Accurate and ,.complete:books, and records evidencing compliance with the foregoing'requirements shall be compiled and maintained by Participant,and shall be made available to Agency and its designees for<inspection.during.regular business hours at Participants address set/fol.-frt.'in,Section 701, or',at another location with°the City of Petaluma. In addition Participant shall prepare and submit t'o t_he:Executive Director Of the Commission written certifications in a form reasonably acceptable to the Executive Director, certifying whether Participant and its contractors and subcontractors have Met thekpercentage targets set;forth in this,Section 314.1. A written certification shall be submitted by Participant to the Executive Director. on the`first day of<the first:calendar;quarter following the Date:of:Agreement and on the first day of each calendar quarter thereafter during the^construction of the Project. Participant shall submit:a final written certification to the Executive Director on the date of issuance of the Certificate Completion., As set forth:in Sections.502.1 acid 5032 below,,,the Commission's.obligation to make the Eligible Construction,Cost Loan and Tax Increment Loan, disbursements to Participant shall`be conditioned upon (i) I Participant and its,contractors and subcontractors' meeting or exceeding the percentage hiring targets set forth above and (ii) Participant's compliance with the foregoing written certification requirements. The inability or failure, of Participant and,its.contractors-and subcontractors to meet or exceed the percentage hiring targets.(set for--'thabove;shall not constitute a • default 'under the 'terms •of this Agreementt The covenants set forth in this Section 314.1 shall remain in effect until issuance of the Certi'ficate.of`Completion. 3142 Card Check Neutrality: Participant covenants and agrees that it shall comply with all of the terms and conditions of that certain Memorandum of Ag H reement between Participant arid the Hotel Employees and LOK HoterOPA7finel 19 • • • Restaurant Employees Union dated August; 2000; as amended, regarding card. • check neutrality: ' • 314.3 Living Wage'Requireirients. Participant covenants and. agrees on behalf of`itself,.its contractors, subcontractors and concessionaires"and its and their successors and assigns, that-all workers employed at the Project . . followingthe issuance of the Certificate of Completion, shall be paid an hourly wage.of not.less'than (i) $10 00'per.hour (including wages, tips and bonuses) with benefits or (ii) $11.00 per hoiir (including wages, tips.and bonuses) without benefits, which wage rate the Comiru sionthereby determines to,be the minimum "living wage" within the City of'Petaluma. The'requirements•of this Section shall apply to all:workers (hereinafter sometime •:referred to as '"employees") performing •work;.for the Participant, the-.general contractor or any other contractor, subcontractor or concessionaire engaged in the construction; • operation or maintenance of the Project, including, without limitation, the operator(s) of all restaurants and concessions located within the Project, and all successofs.`and assigns of-the foregoing. Accurate and complete payroll records shall be compiled and, maintained" and, with appropriate protections for employee privacy; shall be made, available for inspection by the Executive. Director'of the Commission or his or her designee at all reasonable hours at a local office of the .employer. Participant shall, prepare and submit to the Executive Director of the Commission an annual written certification in a:form reasonably acceptable to the Executive Director, certifying that Participant.andits contractors and -subcontractors have complied "with-all of:-the provisions"of this Section 314.3. The,annual written,certification shall be submitted beginning on • the first anniversary of the issuance of the Certificate of Completion and continuing each year thereafteruntil expirationof the Redevelopment Plan. In•addition the Participant shall cause"the.living;wage rate requirements of this; Section:to be;incorporated.into each agreement,'contract and,subcontract subject thereto. Nothing herein shall be ;deemed to impose, any liability on the Commission to ,any. employee for unpaid wages, overtime vages or benefits required to be=paidby this:Section. 'The covenants set forth in this Section 314.3 • shall remain"in•effeet untiliexpiration of`the Redevelopment Plan:. • 400. COVENANTS, RESTRICTIONS AND AGREEMENTS 401. Agreement to be Recorded Affecting' Real Property, In consideration,of the "Commission.Assistance to be provided•by Commission`to. Participant, Participant'shall; within fifteen (15) days after the execution of this Agreement by the Commission; causeto be recorded in the Official Records' of Sonoma County, California, an ".agreement to be Recorded Affecting Real- Property" in the fotm of Attachinent No.,8 attached hereto. • 40 • LOK Hote1;OPA-f,na1 20 • ! .. • • •' 500. FINANCIAL PROVISIONS 501. Provision of°:Commission Assistance. In consideration of the Participant's obligations hereunder, mdudmg without,.limitation, Participant's obligation to construct,.the'Improvements, to operate and maintain the Project and to make the Deferred-Participation Payments toithe Commission, and subject to the terms and conditions set.f&rth herein, the Commission shall.,provide-the Participant with the Commission.Assistance consisting of both the Eligible Construction Cost;Loan as set forth:in Section 502 below,and'the Tax Increment Loan as set forth in Section 503 below, 501:1 Eligible Project Costs. The proceeds, of the Eligible Construction Cost Loan ;shall be used by Participant exclusively to pay or reimburse Participant for the costs of site improvements and boardwalk improvements (line items' 1. and 3.)- as shown on the Eligible, Project Costs Budget attached;hereto as Attachment:No.'9. The proceeds of the Tax Increment Loan shall be used by Participant exclusively to pay or'reimburse Participant for the costs of concrete piles.and foundation and pre-development costs (line-=items 2. and 4:) as shown on the-Eligible Project Costuw_Budget. The costs described in Attachment No.9 (line items 1 : b through 4. inclusive),are referred to'collectively herein,as the "EligiblesProject Costs • 502. Eligible Construction Cost Loan. Subject to the terms and conditions of this Agreement, including; without limitation, Participant's fulfillment of the Conditions Precedent to Eligible Construction "Cost Loan Disbursement set forth in'Section,'502.1 below, the,Commission hereby agrees to loan to.Participant an amountoequal to SEVEN HUNDRED"FIFTY THOUSAND DOLLARS ($750,000) (the 'Eligible Construction Cost Loan"). The Eligible • Construction Cost Loan shall be evidenced by ia promissory note (the "Promissory Note -,Eligible•Construction Cost Loan,,") in the form attached hereto as Attachment No 3A: For the first five, (5) years of the Eligible Construction Cost',Loan term 'interest shall accrue on the Eligible Construction Cost Loan from the date of disbursement at the rate oaf three percent '(3%)!per annum, compoundedvannually, Beginning in the sixth (6`") year of the Elig-ible, • Construction Cost Loan'term and eonhnuing until the Eligible,Construction Cost • Loan has=been;repaid in full, interest shall accrue'on'the,Eligible Construction Cost Loan,at,the rate of five and eighty-seven one hundreths percent(5.87%) per annum and shall be payable in arrears as provided in Section502,2, below. The Promissory Note - Eligible Construction;Cost Loan shall be secured. • by a deed of trust, assignment of rents, security agreement and fixture filing• . • ("Deed of Trust. - Eligible Construction Cost Loan"), to be recorded upon • disbursement of the Eligible Construction Cost Loan. The Deed of Trust = • Eligible Construction Cost.Loan shall encumber the Site, shall be.subordinate to all financing approved by the Commission pursuant to Section 312 of this Agreement, and shall be reconveyed,upon the repayment in full, or foregiveness, of the Eligible.Construction'Cost Loan as provided in Section 5012 hereof. The LOKHote!OPAL-final. 1 • form of the Deed of Trust- Eligible Construction Cost Loan:shall be reasonably • approved by-the Commission and the Participant prior to recordation. • The proceeds of-the:Eligible:Construction Cost;Loan shall he disbursed by Commission through a.construction`loan escrow established,by�the Commission and Participant for such purpose.. Commissionyshall' authorize the construction loan escrow holder to make disbursements of the Eligible Construction Cost Loan proceeds to Participant in,accordance."with escrow instructions:.apprbved • by the'Commission and Participant: Said escrow instructions shall ihclude, among other things, a,requirement that Participant'submit invoices and other evidence reasonably satisfactory to said construction loan.escrow holder that Participant has incurred costs for site improvements and boardwalk improvements (line items 1. and 3. as •Shown on the Eligible Project Costs Budget) in amount,equal to the amount.ofthe Participant's;draw request:, • • 502.1 Conditions of Eligible Construction '.Cost Loan, Disbursement. The Commission:shall disburse the Eligible Construction Cost • Loan to the construction escrow holder within ten (10) days following the • Participant's fulfillment'(or express wyaiv,er in writing by the Commission) of each and .,all of the conditions precedent (a) through (f) inclusive,; described below '("Conditions Precedent. to -Eligible Construction. Cost Loan Disbursement".) which Conditions Precedent to:Eligible Construction::Cost Loan Disbursement are solely for the,benefit of the Commission and which shall be •, fulfilled or waived-with the time periods provided,for herein: (a) Promissory Note and Deed of Trust - Eligible Construction Cost Loan. Participant,shall have 'executed and delivered the Prorrussory'Note - Eligible Construction,Cost Loan to the Commission and shall have executed, acknowledged and delivered the Deed of Trust - Eligible • Construction`Cost Loan to the Commission. (b) Construction Loan Escrow Instructions. Commission •and Participant shall have approved and executed construction loan escrow instructions': (c) No Default. Participant is not in default of any of its obligations under Agreement, and all representations, and obligations der the 'terms of A seem warranties of Participant contained herein shall be true and correct. • • (d) Agreement to be Recorded Affecting Real Property. . Participant shall have executed, acknowledged and delivered the Agreement to be Recorded Affecting,Real'Property to the:Comnussion. • •(e) Anoroval of Evidence of Financing. The Commission shall have. approved Participant's evidence of financing in accordance with Section31.2 of this Agreement. LOK Hotel OPA-final 22 • • • • • (f) . • Local and Union. Contractor _Ceftification. With respect to the,-work. completed of the time of, the,request for disbursement, Participant and its>.contractors'andsubcontractors shall have met or exceeded:all of the percentage hiring targets regarding use of local and union contractors'set • forth in Section 314.1 and Participant_shall havestibmitted written certification of such compliance to theExeditiveDirecter.°` 502:2 Repayment of;Eligible Construction.Cost Loan. Participant. shall repay to Commission the outstanding principal balance of the Eligible Construction Cost.Loan, together with all accrued interest,.in forty (40) equal m quarterly payments-comencing;on the:first day of:tl e second calendar quarter of the sixth(6t).Operating Year and.continuing4on.the'first°day of each calendar quarter thereafter ;until;the entire outstanding principal amount of the Eligible Construction Cost Loan, together with all accrued interest, has been-repaid full. The aMountof each'such quarterly payment shall be calculated on the basis ' • of an equal-payment ten 0.0) year•amortizatiori of principal 'and interest. If, following the first day of the sixth (6"') Operatingg Year, Participant makes a Deferred:Participation Payment toa'the Commission as provided in Section 504 below, then the remaining, outstanding principal balance of the Eligible Construction Cost Loan shall be reamortized on the date Participa_ nt makes the Deferred, Participation Payment, for the period of time,equal to (a) ten(10) years • minus (b) the period of time commencing on the "first°day of the "sixth (6') Operating Year and..ending on the date Participant makes the Deferred Participation Payment: F.s set forth in the Promissory Note, - Eligible Construction Cost Loan, the entire;outstanding principal balance.of the Eligible Construction Cost':.Loan, together^with all accrued interest, shall be:iimiiediately. due and payable by Participanbto Commission upon any`Default'by Participant • under, the terms of this Agreement and/or the Promissory Note - Eligible Construction Cost Loan.. 503. Tax. Increment Loan Subject to the terms and,conditions of this Agreement, including; without limitation; •Participant's. fulfillment of the Conditions:Precedent to Tax.Increment Loan Disbursement set forth.in Section. 503.2 below, the Commission shall loan to Participant an amount equal to the • total of alh Property Tax Increment,Revenues b to e,disbtrrsed by'Commission to Participant as providedin Section 503.1, below (the ''Tax Increment Loari'), but in no event, more than TWO MILLION DOLLARS ($2,000,000) (the "Tax Increment Loan- Cap")L, The Tax -Increment-<Loan. shall be evidenced by a ' promissory note (the "Promissory Note!-Tax Increment Loan") in the form attached.hereto as Attachment No.,• B:, For the first ten (10) 'years of the Tax Increment;Loan term, interest shall accrue on the Tax Increment Loan from the date of disbursement it the;rate of.three percent(3%) per annum, compounded annually., Beginning in the:eleventh•.-(lit) year of the,Tax Increment Loan term b Loan has been repaid in frill, interest and continuing until the Tax Increment Loa shall accrue on the Tax Increment Loan;at the rate of five and eighty-seven one hundreths; percent (5.87%) per annum and shall be payable iii arrears as provided:in Section 503.3,below. LOK:xst=1PF -fit.a 23 • • • • • • The Promissory Note Tax Increment Loan"shall be secured by a deed of` • trust,,assignrrient of:rents,.security agreement and fixture filing ("Deed of Trust - Tax increment Loan") to be recorded upon the first disbursement of the Tax Increment Loan. The Deed of Trust= Tax Increment Loan-shall encumber the Site, shall•be subordinate:to ali•rfinancmg approved by the Commission pursuant to Section 312' m of this Agreeent,'and shall be reconveyed upon the repayment in full, or foregiveness, of the Tax Increment Loan as provided 'in,Section 503:3' hereof. The-form of the'Deed of,Trust- Tax Increment Loan shall be reasonably approved by the'Commission and-the•Participant,prior to recordation. , 503;1, Disbursement of Tax Increment Loan. Subject°;to the terms and 'conditions of, this ,Agreement, including, without limitation, the 'TAX Increment Loan, Cap and the Project Room Revenues Benchmark and Gross Project Revenues :Benchmark discussed below, the Commission:shall disburse • the Tax'Iticrement Loan-proceeds_to Participant,as'follows; For each of the first (1st) through. fifth (5th) •Operating.Years,; the Commission shall disbursepto • Participant an amount of Property Tax Increment Revenues equal to sixty-six. and six-tenths percent: ,(66.6%d), of the 'Transient Occupancy Tax Revenues received, by the City, ,attributable to the Project. Promptly following the expiration of the fifth (5th) Operating Year, the Commission shall reassess 'the, Project's need for continued Tax Increment,Loan,.assistance. Provided'theTax. Increment Loan Cap has not been reached, and further provided the Project •Room Revenues and Gross Project Revenues Benchmarks set forth below have not been reached, then for each of the sixth (6th) and seventh (7t1,0,!Operating Years, the Commission shall disburse.to Participant an:amount of Property Tax Transient Occupancy Tax Revenues•;received by the City, aattributable o the! Increment Revenues equal to thirty=three and three-tenths percent,,(33.3.°43) • y City, ble" to the Project. Commission shall.make each Tax,Increment Loan disbursement within thirty (30) days after City s receipt ofIthe Transient Occupancy Tax Reyemies. Notwithstanding anything to the contrary, herein•,,, each Tax Increment Loan installment'shall be payable'exclusively from available°Property Tax Increment.Revenues actually allocated to and received by the,Commission and attributable 'to the immediately preceding Operating Year and Commission shall have no obligation to use any other source of ,monies to fund the Tax Increment.Loan. Participant acknowledges and agrees that Commission has incurred.or will incur Indebtedness, that the repayment of the Indebtedness is secured by' Property Tax Increment. Revenues to be generated from the Redevelopment Project, and that Commissions obligation to make each`Tax Increment Loan disbursement to Participant shall be expressly subordinate to Commission's obligation to repay all such Indebtedness. In addition, • Commission's obligation,to loan the Tax Increment Loan proceeds'to:Participant shall immediately'cease:upon the first'to,occur of thecfollowirig:, (0,disbursement by •Commission'to Participant of a cumulative total of Tax Increment Loan proceeds equal to the Tax Increment Loan Cap, (ii) Project Room Revenues have exceeded SEVEN MILLION FOUR HUNDRED, THOUSAND DOLLARS ($7,400,000), for two (2) consecutive Operating Years'-(the "Project• Room Revenues Benchmark"); or (iii) Gross Project Revenues have exceeded TWELVE L'oi.1ote1.0PA-final' ' • • • MILLION,DOLLARS ($12,000,000) for two (2) consecutive:'Operating Years (the "Gross Project Revenues Benchmark"). • Notwithstanding;any'other provision set,"forth-in this Agreement to " the contrary, Commission's pledge;of`Property Tax Increment.Revenues shall be subordinate to its obligations to make debt' service•payments on any .Tax • Allocation Bonds. Participant:acknowledges that the. Commission'intends to - issue Tax Allocation Bonds in :the estimated principal amount• of EIGHTEEN • MILLION DOLLARS ($18,000,000) on or-before June:30, 2000. After the issuance of such bonds, the Commission shall not issue any Tax.Allocation Bonds, for . • • which Property Tax Increment-Revenues!are to be pledged or utilized in whole or in for payment unless.it has delivered to Participant at least twenty (20) days prior to •the date it issues such Tax Allocation Borids, a written certificate prepared by a reputable financial advisor or redevelopment consultant that demonstrates that the aggregate. amount of Property Tax Increment Revenues that is estimated to be received by the ,Commission from the Redevelopment Project in the next and each succeeding.fiscal year based upon the most recent . assessed" valuation of taxable property in the Redevelopment .Project as determined by'the County Assessor of the County,Of Sonoma based upon the most recently established tax rates will be sufficient to pay one hundred ten percent-(110%) off'the annual debt!service:in the next,and each succeeding fiscal • year, respectively,on.all then existing Indebtedness, and=the Tax"Alllocati"on Bond ,11110 proposed to be issued, plus the Commission's obligations under this Agreement: • • - 503t2 Conditions,of Tax Increment Loan Disbursement " °The Commission's obligation to make each installment of thertax Increment Loan is conditioned upon the satisfaction or waiver by the,Commissionof each and,all of the conditions precedent (a) through (m), inclusive, described below (the "Conditions Precedent to Tax Increment.Loan Disbursement"), which are "solely for the benefit of the Commission, and which shall be;fulfilled or waived by the time;periods provided fbr;herein . • (a)_ Combletion of Improvements. Participant shall have satisfactorily completed the construction of the.Improvements, and a Certificate of Completion shall have:been issued' ,by. the Commission as provided in .Section=311,hereof, • (b) Promissory Note..and:Deed of Trust Tax Increment Loan. Participantlshall'have executed and:delivered the•Promissory Note - Tax m Increent Loan totheCommission and shall have executed; acknowledged and delivered`the'Deed,of Trust-Tax'Increment"Loan to the Commission. (c) No Default: Participant isnot in default of any of its ! obligations under the terms of this Agreement, ?and all representations and warranties,of•Partieipant.eontained'herein shall be true•and correct. • (d), Sheraton,:Flag at Opening. Participant shall have initially:opened th&Project under a Sheraton:hotel.tlag.; ' - LOK Hotel.°P?-final • 25 • • (e) ,Operation of .Project:. Participant _shall ,have • continuously operated the Project as .a hotel, which.meets the Hotel Rating' requirements:. (f) Payment-of Property,Taxes. No.,ad valorem property taxes or assessments„assessed-with respect to.the';Project shall=be delinquent:, . (g) Sale of th@Project: The Sale of the Project has not yet occurred. • (h) Minimum Project _Value. Participant shall have, provided,proof'reasonably satisfactory to•Commission of its compliance with the minimum project value covenants set forth in the Agreement to be Recorded, Affecting,Real Property. ' (i) Financing Commitments. Participant: shall have obtained, and Commission shall have approved, Participant's debt and equity- commitments for the Project as provided.in,Section.312, above: (j); Agreement to be Recorded Affecting Real Property. Participant shall have executed,acknowledged and delivered the Agreement to: • be Recorded Affecting.Real Property to the Commission. • (k) Guarantee. The guaranty provided for in Section 205 shall have been executed and delivered to'the;Comniission as provided herein, • (1) Local,and+Union Contractor Certification, Participant and its:contractors and subcontractors shall.have met; or exceeded all of the percentage hiring targets;regarding use of local and tulion contractors set forthrin Section:314.1 and Participant.shall'have submitted written,certification of such compliance to the Executive Director'. • (m) Living Wage: Certification Participant :,Ball have complied with all of;the living wage requirements set forth-in Section 314.3.and shall,have submitted written certification of such,compliance to the Executive Director. '50313 Repayment of Tax Increment Loan. Par-ticipanVshall.repay to Commission the outstanding principal,balance of the Tax.Increment Loan, together with all accrued' interest, in sixty (60), equal quarterly payments commencing on the first day of the:second calendar quarter of the.eleienth (11``c) Operating Year and continuing on the first day” of each calendar quarter thereafter: until the entire outstanding principal amount of the TaxIncrement Loan, together with,all accrued interest, has been repaid in Lull The amount of each such, quarterly payment shall be calculated on the basis of an equal- payment fifteen (15),-year amortization of:principal and interest It, following the •' first day- of the eleventh (11`°) Operating, Year, :Participant makes a Deferred • 6OK Hotel CPA-final 26 • Participation Payment to-the Comrnission;asprovided in Sectiorn504 below;=then the remainin outstandin rind al..balance of the Tax Increment•Loan shallbe g. ' g,P p ,..p reamortized on the date Participant makes the Deferred:Participation Payment, • for the period of time equal to (a) fifteen ('15)years minus (b) the perioddof'time commencing onthe first dayof'the eleventh•(11th)•Operating Year and ending on, the date Participant makes the Deferred Participation Payment As set:forth in:,. the Promissory Note — Tax Increment Loan, the entire outstanding principal. balance of the'Tax Increment Loan, together 'i;V.ith all accrued interest, shall be immediately due and payable by Participant to Commission upon a,default by Participant under the terms of this Agreement and/on:PromissoryNote Tax Increment Loan. 504. Deferred Participation 'Payments,., In consideration of the provision of the Commission Assistance to Participant;,Participant,shall pay to Commission deferred participation payments .(•"Deferred, Participation, Payments") as provided.in this Section 504.: The amount and timing of the Deferred Participation Payments shall'be as follows; (a) Upon the,Sale;of the Project by Participant and/or upon the occurrence of any Capital:'Event.prior to the:Sale of?the Project, Participant pay to Commission in cash, .an'amount. equal .to the lesser' of (i);fifty percent (50%) of the Managing Members' Net Income from Capital Events, or (ii) the • entire outstanding principal balance of the Promissory,Notes, together with all accrued interest if such interest isi required;to be paid pursuant to the terms of Sections 502 and 503 above''(the:"Commission'Equity Share"). It is"understood that there may be more than one Capital Event prior to the Sale of the;Project and that the provisions of this Section`504 (a) are intended to apply to each such Capital Event until the'entire outstanding principal balance of the Promissory Notes, together with all accrued interest if such,interrest is required:`toi be paid pursuant`to the terms of`Sections',502 and 503 above •;has been paid in full: Upon the occurrence of a Capital Event, the Commission Equity Share shall be disbursed directly to Commission prior to ior simultaneously with the disbursement of the Managing;Members' Net Income from' Capital Events. Upon the 'Sale of•the 'Project,the Commission Equity Share'shall be paid`to Commission.directly from the escrow established,for•the Sale of the Project: (b), Participant may prepay-all'or any part of the outstanding thirty nc 30 balance of theiPromissory Notes at-any`time, without pe~`lialty., Within. • P p_ �. ( ) days following,such prepayment, in fiill,;Commission shall.return the Promissory Notes'to.Participant°marked ",cancelled",and, thereafter, Participant shall have no obligation to make any Deferred;Participation Payments to the Commission. • (c) The Deferred Participation Payments Shall be applied in the following order; (i) First, to payment of outstanding interest under the•Promissory Note - Eligible Construction'Cost Loan; LeK Hbtei OPA-final, 27 • (i ) Seconclitot.payment of outstanding` rinci al,amounts, • • under the .Promissory' Note — Eligible Construction Cost Loan; (iii) Third, to payment.of outstanding interest under the Promissory Note—Tax,Incremenf Loan; and . (iy) . Fourth, to payment of outstanding•principal amounts •-under the-Prorrussory Note—Tax IncrementLoai 505. Annual;Financial Statements. Prior to the 'Sale oldie Project, the Participant shall to the:Commission€.Executive Director, with copies to the City'Finance'Director, written' annual statements; sufficient to allow the Commission's Executive Director to verify the amount of the Managing; Members' Net Income from Capital'Events, Managing Members' Net Income from Operations, Managing MeinbeIs'Equity Repayment, Deferred,Participation Payments and Commission Equity Share: In addition, for as long as the Participants right;to receive installments of:the Tax Increment Loan pursuant to Section 503:of this Agreement remains in effect, the Participant shall provide,to the•Commission's•,Ekecutive Director, With copies to the•City Finance Director,, such written statement(s) as are reasonably necessary in 'order to tallow the Commissions Executive Director, or his/her designee, to determine the date. AAt, . upon which the 'Commission's •obligation to disburse to Participant the Tax Increment Loan,proceeds ceases'as provided in Section 503.1 above.Prior., to the — •Sale•of the Project; Participant shall,,prov^de to Commission a true and correct copy of any financial statements provided by the Participant to z lender Pitt e s prepared g .accepted a roved by the Commission pursuant to Section 313.1, hereof. Such annual' written statements shall be re aced rn accordance with :generally acce ted' •accounting=principles. 506. Funding'of,Non-Profit Corporation. Participant and Commission 'shall cooperate-to form a non-profit corporation, or other similar•entity, which shall have the,authority to oversee and administer the river front enhancement ;improvements to'be constructedcby Participant. The Board. of Directors.of the Commission shall haveithe right to approve the initial board of directors of said non-profitcorporation. In consideration.of•'the Commission's provision of the Commission Assistance to the Participant, Participant shall pay to the nonprofit corporation, foveach of the firs`' (11 through fifth (5') Operating Years, the sum of Twenty Five Thousand Dollars '($25,000)'per Operating;Year. Said:funds'shall • be paidby the Participant no later than thirty.(30) days following the start of each 'of thetfir t (1 through fifth (5s') Operating Years. • LOX HoLel-OPA-f 95, i 600. DEFAULTS-AND'REMEDIES' • 601. Default Remedies. Subject to the.permitted eitensions of time set forth in Section 702 of this Agreement, failure by either party to perform any action or covenant required by this Agreement within the.time periods provided herein following notice and expiration"fof any applicable cure period, shall - constitutes a "Default" under this;Agreement. A party claiming a Default shall give written notice of Default to the 'other party specifying the Default complainedofl, Except;as'otherwise.expressly providedin this Agreement, the claimant shall not instituteany proceeding agamst',any other,party,yand the other party shall not be in Default if such-.party within thirty (30) days from receipt of such notice, immediately, with due diligence, commences to cure, correct or remedy such yfailureor'delay and shall,complete such cure, correction or remedy with diligence. 602. :Institution;of Legal;,Actions. Upon the occurrence of,a Default, the non-defaulting party shall have the right, in addition to any other rights or remedies, to,institute any action at law or in equity to cure, correct, prevent or remedy any Default, or`''to' 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 Sonoma, State.of • California, in an;appropriate municipal court in that County or in the Federal District Court for the Northern District of the State of California. Notwithstanding anything herein to the contrary, the Participant's right to recover damages in the eVent of a Default by the Commission shall be limited to recovery of actual damages and-Shall eZdiide consequential damages. 603. Termination;by theParticipant. In,the°eyenf of any Default of the Commission, which is not cured within the time set forth in Section 601 hereof after written"demand by the Participant,.,then this Agreement:may, at the;.option of the Participant, be'terminated by Notice thereof to the Commission. In addition, in the,event any person or•entity contends'that the Project is a "public work" within'the meaning of Labor Code Section 1720 et. seq., or that Participant is subject to the "prevailing wage" statutes ,.and regulations of the State of California, Participant shall have the right, exercisable in its sole discretion, to terminate this Agreement by Notice thereof to the Commission; •provided, • However,.at the time of delivery of such Notice, Participant shall pay to Agency the entree outstanding principal balance of the•Promis•sory Notes, together with all accrued interest. From the date of the Notice of termination of (this Agreement by the Participant to the Commission and thereafter This Agreement shall be deemed terminated and there shall'be no further rights or obligations between the patties • 604. T,erminati'bn.by the'Commission. In the event that the'Participant is in Default of this Agreement and fails to cure such default within the time set forth in Section 601 hereof, then this Agreement and any rights of the Participant or anv.assignee or transferee with respect to or arising,out of the Agreement or the Site, shall, at the option 'of the Commission, be terminated by the LOK Hotel OP,A final' 29 • • • Commission by written notice thereof to the,Participant From the,date of.the • Notice of termination of this Agreement by the Commission to the Participant',, and thereafter the Commission,shall have no obligation to make any further disbursements.of the Commission.. Assistance, and the ;entire outstanding principal'balance-of the Promissory Notes, together With all accrued interest, shall beammediately due•and payable to Commission. 605. .Acceptance of Service of.Process. In the event that anylegal.action is commenced bytthe,Participant°against the Commission, service of process on the Commission.shall be made,by personal.service upon the Executiye;Director of the:Commission-or in such other mariner as may be provided by law.. Inthe event that any legal action is :commenced, by the Cornmis• ion against the • Participant, service of process on the Participant shall be made by ,personal. service upon Dennis A. MacDonneil or in such other-manner'as maybe provided by 606. 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 either party of one or more of such rights or. remedies-shall,;not preclude the exercise by it, at the same or different times,,of any other rights or remedies for the same default or any other'default by the other party. -607. Inaction Nota Waiver of Default: Any failures or delays by either • • party in •asserting any of its rights and remedies as to any Default shale not operateas a waiver of any Default or of any such rights or remedies, or d'epri:ve either such party of its right,to institute and maintain.any actions or proceedings which it may deem.necessary to protect, assert or enforce any such rights or remedies: . • 6,08: Applicable Law. The laws of the State of`California„shall govern the interpretation and enforcement bf this Agreement. '700. GENERAL PROVISIONS • 701. Notices, Demands and Communications Bettiveen.'the Parties..°” • Any approval; disapproval, demand,!document-or.other notice ("Notice") which either party may desire to o ye to the other party under this Agreement,must`tie in writing and may be given by any commercially acceptable means'to the party to whom_:the Notice is directed-at the address of the party as set'forth b&ow, or at any other address•as that partymaylater,designate by Notice. • • • LOK Piece!0:PA-final 30' •. . • • As To'Comrnission: CornThunity Development:Commission of the City of Petaluma ' • 11 English Street. • Petaluma, Califeffnia 94953 • Attention: Executive Director . • • With copies to: City of' 4Petaluma• • 11 English Street • • Petaluma, California 94933 Attention: - Finance Director • and McDonough,HollandA Allen 555 Capitol Mall, Suite950 'SacramentoCA 95814 Atlention: Brent(Hawkins To Participant: • LokMarina Hotel • 5050 Petaluma Hill Road • Santaltosa, CA 93404 • :- Attention: Dennis A. MacDormeil • With a copy to: Donald J..Black • • • Law Offices of Donald J. Black 2213 Mendocino Avenue • Santa Rosa,Caiiiornia.95403 Any writterynotice, demand or communication shall be deemed received immediately if delivered by hand and skall.be deemed received omthe third day from:the'd.aelt istosimarkedif'deliveredby first-class mail; postage.prepaid. • 701 Enforced Delay; Extension of:Tines of I5erformance. In addition to speCifie-proviSions.of this Agreement, performance by either party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to: war;instirrectiott; strikeS; loCkoutS; riots tiodds; earth'Ruakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantinerestrictions; freight . embargoes; lack of transportation; governmental 'restrictions or priority; 1110 litigation; umisuallysevere.weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier, acts or omissions of the other party; acts or failures to act of the City or any .other public or LOK Hotel OPA-final '31 . ° governmental commission or entity (other than the acts:or failures'to actor' the • Commission which shall not:.excuse°performance by the Commission); or any other causes beyond the control or without the fault of the party claiming'an . extension of time:to perform, Notwithstanding anything'to the contrary'in°this Agreement, an:extension of time for anysuch cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement , ._ of the cause, if Notice•by the party claiming such extension is sent to the other party ° y (30) days m of the commencement of the cause. Times of performance under this Agreement gmayalso be, extended in writing by the mutual, agreement of 'Commission ,and Participant. - Notwithstanding any provision,of this _Agreement to the contrary, the Participant's inability to obtain financing or other lack of funding to complete;the work of Improvements shall . not constitute grounds:of enforced:delay pursuant to this Section 702. 703. Successors and Assigns. Subject to the prohibitions against 'changes in the ownership, management'and control of Participant set forth in S.estion 203 above, all of'the terms, covenants and conditions of this Agreement shall be'binding upon the Participant and its permitted successors and•assigns. Whenever the term "Participant" is Used in this Agreement, such-term shall includeIIany other permitted successors and assigns as herein provided.. 704. Memorandum of Agreement. Within fifteen (15) calendar days after receipt of a:fully executed original'of'this Agreement, Participant shall cause to be. recorded in the Official Records of Sonoma County,' .California, a "Memorandum of Agreement" in the form of Attachment No. 7 hereof. 705; Relationship Between Commission and Participant. It'is hereby acknowledged that the'relationship between the Commission and,thetParticipant is not that of a partnership or joint venture and that the Commission and.the . Participant shall not,be deemed or'construed for-any purpose•to be the agent of the other. Accordingly, except as expressly, provided herein.._or in the Attachments hereto, the .Commission shall have no rights', powers, duties or obligations with respect to the development, operation, maintenance or manageir•:eiit of the Site or'the Project. The'Participant agrees to indemnify,hold harmless. and defend the Commission from any, claim•, made against the: Commission arising from,a claimed relationship of.partnership or joint venture; between the Commission.and the 'Participant With respect to the development, operation, Maintenance or:management:Of'the Site or the Project: 706. Commission Approvals and Actions.. Whenever a„,reference is. made•here n to an action or approval to be undertaken by the Commission,.the Executive.Director of the Commission.or-his or her designee is authorized to act on behalf of the :Commission unless, specifically provided otherwise or the' - context should' require otherwise. Notwithstanding; the .foregoing, any modification of the terms and conditions of. this Agreement, which would materially ann adversely affect the:rights, and obligations of the Commission, iii shall require the approval of five sevenths,(5/7) of the Board of Directors of the Commission.. LOK Hotei':CPA-final 32 . - • r • ake 707. Counterparts. This Agreement inay be signed in multiple counterparts 'which, when signed by all parties, shall constitute•'a binding agreement: This Agreement is executed.in four (4) originals, each of which is deemed to bean original. ' 708. Integration. This Agreement contains the entire 'understanding' ' between the parties relating to the transaction contemplated by this Agreement: All prior or contemporaneous agreements, understandings,.representations and statements, oral or written, are merged in this Agreement and shall be of no- further force or effect. Each party is entering this Agreement based solely upon. the representations set forth herein and upon each party's own•independent_ • investigation of any and all facts'such party deems material. This Agreement includes thirty-two (34),pages and Attachment Nos. .1 through 10, which constitute the entire understanding and, agreement of the parties, notwithstar.ding_anyprevious negotiations or agreementsebetween the parties or their predecessors in interest•with respect to all"or,any part of the subject matter hereof. • 709. Intentionally Omitted. 710. Titles and Captions. Titles and captions are for convenience of • reference onlyand do not define,_describe or.limit the scope or the intent of this Agreement or of any of its terms, Reference to sectio"n:numbers are to sections in . this Agreement, unless ezpresslystated otherwise. 711.. Interpretation. As used in this Agreement, masculine, feminine or neuter gender,and the singular or plural number'.shalt each'be deemed to include the others where and when the context so dictates, The'word "including" shall be construed as if followed_by the;words"without'hmitation;=' This Agreement shall be interpreted'as'though prepared jointly by both parties. 712. :No Waiver. A waiver b"y either party of a breach of any of the covenants,conditions, or agreements,under this Agreement-to be performed by the other party shall not beconstruedas a waiver of,any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement 713. .Modifications. Any alteration; change;or modification of"or to'this Agreement, in order to become effective, shall•be made in'writing.and in each instance signed onbehalf of each party. 714. 'Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall b e-held, to any a extent, invalid or unenforceable,, the remainder of this Agreement, or the application o'f the term, provision, condition or covenant to persons or circumstances other, than those as to whom or which it 'is held invalid or • LOK Hotel'OPA;iinal 33 • • unenforceable,;shall not be affected; and,shall be valid and enforceable to the fullest extent permitted bylaw. • 715. Computation of Time The time in which any act his to be.done under this Agreement is computed by excluding the first day (such ascthe•,day escrow opens), and including the last day, unless the last day is a holiday or Saturday_or Sunday, and then that day is.also excluded. The term"holiday" shall mean all holidays as specified in Section 67Q0 and 6701 of the California Government Code. If any act is to be done-by a particular.time during;a day,that . time shall bePacific Time Zone time. 716. Legal Advice. Each party,represents and warrants1to the;other the following: they have carefully read this;-Agreement, and in signing. this Agreement, they do;so with full knowledge of any right which they may have, they have:received independ'entlegal advice from their respective legal counsel as to the matters set forth in this,Agreement, or have knowingly chosen not to consult legal counselas-to the matters set forth in this Agreement; and,they have freely signed this;Agreement without any, reliance:upon any agreement, promise, statement;or representation by or on behalf,:of the other party, or their respective agents, employees, or actor-Heys, except' as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 717. Time of Essence. Time is expressly made of the essence with respect to the performance by the Commission and the Participant of each and • every obligation and condition of this Agreement. 718. Cooperation. Each party agrees.to cooperate with the other.inqhis transaction and, in:that regard, shall execute any and all documents'which.may be reasonably necessary, helpful, or.appropriate fo carry out the purposes and intent of this Agreement including, but not limited to, releases or: additional agreements.. • , 719. Conflicts of Interest. No member, official or employee of the Commission shall have any personal interest;, direct or indirect, in this. • Agreement,"nor shall any-such,member, official or employee participate,in any decision relating'to'the Agreement which affects his personal interests or the interests of any corporation, partnership or,association;in which he is directly or • indirectly interested. '" • .720. Time for Acceptance of Agreement by Commission. This Agreement, .when executed by the Participant and delivered,to the Commission, must be authorized, executed and delivered by the Commission on or before forty-five (45) days after signing and delivery of this Agreement by the Participant or this;,Agreement .shall •be void, except to the extent that. the Participant shall, consent in writing to a--further extension of time for the authorization, execution and delivery of thi"s[Agreemenf. • • LOK'Hb gel CPA-final • 34 • • • • 721. Participant's'Indemnity. The Participant shall defend, inderrndy, assume all responsibility forfiancli hold the Cornnussion and the City, and its and their officers, employees and .agents, harmless from, all .claims, 'demands damages, defense costs or liability of any kind,or nature.relating to the subject matter of this Agreement;or the implementation hereof and:for any damages to property or injuries to persons;.including accidental death (including attorneys' fees and costs),,which maybe caused by-anyof`the Participant's activities under this Agreement, whether,such activities or performance thereof be by the Participant or by anyone directly or indirectly employed or,contracted with by the Participant and Whether such damage shall accr"iueorbe discovered before or after termination of this Agreement. The Participant shall not be liable for, and shall not be required toJndemmfytheCommission or ,City!for, propertydarnage or bodily injury occasioned'by, the sole negligence of the Commission.or the•City, • or its or their designated agents of employees. • 722. Date of Agreement. The date of this Agreement ("Date of Agreement") shall be: the date when it shall have been signed by the Commission. • 723. Nonliability of Officials and Einployeesof,the-Commission and the Participant. No member, official.or employee of°the Commission or the City ID shall be personally liable to the Participant, or any successor in interest, in the event of any Default or 'breath by the Commission (or the City) or for any amount .which may become due to the Participant.or its successors, or on any • obligations under the terms of this Agreement. Participant hereby;waives and _- releasesany claim it may haveagainst the members, officials or employees of the Commission and the City with respect toi Defaulta.or breach by the Commission (or the City) dr 'for any amount'which may become due to the Participant or its successors, or on any obligations' under the terms of. this Agreement. 724. Assignment b:y•Commission. The Comnt ssion:may assign or transfer any of'its rights or obligations, under this Agreement,with;the approval • of the Participant,which approval shall not be.unreasonably withheld, provided, however,• that the Commission may assign or 'transfer any of its interests hereunder to the,City or anypublic or private entity controlled:by'the City at any time without the consent Of Participant: • • • [Re"mainder of Page IntentionallyLeftBlankli • • • • • • • LOKr dtel,011 final 35 -. . IN WITNESS WHEREOF, the Commission and the Participant have . executedahis Agreement'on the respective'dates'setfbrth below. . . • , 2001 ' COMMUNITY DEVELOPMENT COMMISSION.. OF THE CITY OF PETALUMA, a public body, corporate and politic By Chairman. . ATTEST: • • • Secretary • • "COM\!IISSION" • APPROVED AS TO FORM; By: Commission Counsel • • 2001 LOK PETALUMA MARINA,HOTEL . COMPANY,,LLC., a California limited liability company • By Kirkman L. Lok President By: Dennis A. MacDonneil, Secretary • °"PARTICIPANT" • APPROVED AS TO FORM: • • • By: Participant Counsel • • • LOK Hotel OPA-flna1 36 • . • . . . . • . . , • \. • ATTACHMENT 0,.. I . - . • . LOCATION MAP . . , . ... . • , .. . • . . . . ,. . , . . [ . i - ..• ,, ,. , .. . ••••_._1 . .. .. . „ ._ . I , 'VI' 1 i, ,c, '''' ' . h . • . . . . . cfr . , . . , • . ...„ Elptel Site ",,, . \ . . • .. - , zk. .-- 2:::-;:ii I I ., ----- ' - "rar----- ' . 1 . -... -- -, -. ' • , ".., •. , . . • ..'---- % ' liNs. :-.:- - -<•..,... 6:7-t-4•,, . , - .. '•• • e474-" - 5,, :1 , . ••- . .4• ------ _ ' , . , . . , . , , •, . , ' . .' ,'. • 4•'---•- 03'‘Al' ,' ' a /I i . . . ,-- . . . ,. . , ,' • ,,, . I , 1 ‘ . i ,f. ,i6 . \ . . • 811E1tATONOTEL AT THE PET,.A.LUIVI_k IVIARIN..A. 745 BAyVVOOD DRIVE. M3 9922,98 • APN 005-060-056. . . . - . . . , • . , • • ATTACHMENT NO. 2 SITE LEGAL DESCRIPTION All that real property situated in the City of:Petaluma, County of Sonoma,State of California, and being;a;portion of the lands�of`Kirk"man,Les Lok, etal., as described by Deed;recorded as Document Number 97-041197;,Official.Records of Sonoma County; described as follows: PARCEL ONE: Beginning:at a;point on theisouthwesterly line of Lot 4.as shown on that map entitled 'Petaluma Marina Parcel.Map No 247" filed in Book 454 of . Maps at pages 9 and 10, Sonoma County Records, from which the,most westerlycornerof said Lot 4°b:ears:North 41"04'00" West 5,00,feet, thence leaving said line, parallel to and 5:00,;feetidistant from'the,Easterly line of Lo n t-3 as show on said Parcel Map No, 247, North 48°56'00 East • 132.11 feet,thence North 03°56'00" East 148,68 feet to a point on the: Southwesterly line of a 30 foot non-exclusive common driveway'easemene as shown,on said Parcel Map No 247;thence along said'Southwesterly line, also being the Northeasterly line;of said Lot-4, South:86°04'00" East 32.24 feet; thence continuing.South 86°04'00 11'East, 2.23 feet; thence Southeasterly along a tangent curve concave to the right; with a radius of 35.00 feet;:through a central angle of 38°35'40",.for an arc length of 23:58 feet, thence South 47928'20" East 76?21 feet; thence Southeasterly along a tangent;curve concave to the right, with a radius of 55:00.feet, through a central.angle of 06°24'20',for'an are length of 6:15 feet; thence. South 41°04'00 East;;3.38 feet;:thence:North 48°56'00" East, 7,72 feet; thence South 41°04'00' East,`-72,00 feet;thence South 48 956'00 West, 7:72 feet;.thence South 41 904'00 East,:11:47 teet, thence Southerly along a tangent curve,concave to'the:right, with a radius of 52,00 feet,'through a central angle of28°24'14', for an arc length of25:78 feet,thence:South.: 12°39'46" East, 14,07 feet, thence Southerly along'a tangent curve,concave to the right;with a radius of 35t0 feet,:through a central angle•of 16 035'46", for an arc length of 10,14 feet; thence South 03°56'00" West, 2:07 feet:to a point on the Northeasterly line of'said Lot 4 (454 M 9);,thence; continuing South 03°56'00"`West 32':94 feet; thence South 41° 04'00' East , 163:27 feetsthence South 10°..09'03Yf West 63.45.feet, thenice,Souths03°56'00" • West 103.91 feet to the Southerly line_of said Lot 4; thence along said line North 86°04;00' West 76,70"feet; thence North 03°56'00" East 72.93 feet; . thence North,41°04'00 ' West 146.00.fee,t, thence,North 86 9041100" West- 28.50 feet, thence South.48°56'00" West 91.00;feet, thence North 41°04'00 West 183'30 feet to the pointof Beginning. • • • Attachiner t No..'2 - • • PARCEL TWO:. A REVISED ALIGNMENT'30-foot Non-Exclusive"CommonDriveway as described in the:second modification,of Declaration of Easements, Covenants:andRestrictions"and Reciprocal Easements recorded July 21, 2000, as Document Number 2000-072696,,more:particularly described,as • follows: • • AN EASEMENT over a,portion of Lot 5, Petaluma Marina, said Lot,being delineateci.on the Parcel Map recorded;m Book,454 of Maps at Pages 9 and 10/Sonoma County•Records, said portionbeing more particularly described as follows: • A!STRIP•OF LAND 30 feet in—Width, the center line of which-is described as follows: • BEGINNING ata"point on.the'Northerly line of Lot 6;said.poinpbeing' South.7,6°59'1Z' East, 7.45 feet from a point designated_as"Point "C ,being the centerline of an_;existing 30' Non-ExclusivetComrnon Driveway Easement, all as delineated omsaid map (4.54.M;9)'; and,running thence along said centerline,,South 05°10'14" East, 53:62"feet; thence continuing on said centerline,Southeasterly, along:a tangent curve:concave to the left , S • with a radius of 100'.00 feet, through.a centrahangle of 35°53'46,,for an`arc length of 62.65 feet; thence continuing on saidi:centerline, Easterly,:along a • tangentcurve concave'toithe left with a radiu$of30.00 feet, through.a central angle of 45°00'00', for an:arc length of:39.27feet, thence:continuing on said centerline, South 86°04'00"'.East,2:23 feet;, thence Southeasterly, along a tangent curve concave to the,right,with;a"radius;of 50.00.feet,-; through a.central angle of 38°35'40", for an arc,length of 38..68,feet; thence South 47°28'20" East,76.21 feet; thence.Southeasterly, alonga tangent curve to the right+with a radius 70:00 feet, through a'central angle of 06°24'20",for an-arc.length of!7`83'feet, thence:South41 " °04'00 East, 86:84 feet; thence Southerly, along a tangent curveconeave to the right - with a radius of 67"00'feet,,through a central angle of.28°24'14',for an arc length.ofT33.21. feet; thence South 12°39'46"East, 14 08'feet;thence Southerly.,along,a°tangent;curve concave to thedright With:a radius;of 50.00 fee, through a central angle of 16°35'46' for an arclength,of 14:48 feet,thence°Soofh 03°56'00" West, 2.06 feet to the;true point of ending,of the centerline of this description, said point beinga point on'the centerline iof'tlie previously mentioned existing'30' Non-Exclusive Common Driveway`.Easement+(454 M,9),,said'point bearing North 03°56'00" East, 26:12 feet from themonument:at the Southerly,end of course"L12-, as delineated on.said map (454-M^9).' EXCEPTING THEREJ-ROM that portion lying within,Parcel One, above. Attachment•No. 2 • PARCEL THREE;. • AN EASEMENT fdr'Street or highway purposes,more particularly describedas follows: A STRIP.OF LAND;.80 feet wide,•situated in the City of Petaluma, County of Sonoma,State of California; lying equally40 feet on each side of the • ' followingdescribed,line: • COMMENCING at the'Southeasterly corner of that certain parcel of land descrrbethin;Deed dated May 16, 1984 from-Public Storage Properties X, • Ltd. to City ofaPetaluma , recorded July 3, 1984, under Document No.:,84- 045209,Sonoma County Records,•said•corner'being the Northerly line,of land, 60 feet wide; of North ,western Pacific Railroad Company; thence • North 77°01'51" West, along;said Northerlyline, being parallel with and distant'30 feet Northerly, measured at right angles from the original- located,centerline,of Northwestern Pa`cific:Railroad Company's maintraet (forr nerly Donahue..Branch,retired),26.33'feet to the true point of beginning of the line hereinto be,described;thence South 05 018'25 ' East, 63.19 feet to the.;Southerly.line of said Company's land. • The side lines of the herein above described 80-foot wide strip of land terminate'insaid Northerly and Southerly lines. • PARCEL FOUR. AN EASEMENT for street or highway purposes, moreparticiilarly • described ascfollows: BEING A PORTIONof the lands of;Northwestern Pacific Railroad Company, as described by Deed recorded in Book 345 of Deeds,Page,266,. Sonoma County Records;.and•being more`particularly described as f_ollows:. BEGINNING:at Point "C" as shown on that Record of Survey,filed:in Book 185,of Maps,„Page-15, in.the Office of the Sonoma-County-Recorder; thence along the Southeasterly line of the said lands of;Northwestern Pacific Railroad Company, along-a:curve to the left from a tangent;which bears North 76 059'12” West through a central angle.of 03°02'36", having..a radius.of 352 204eetand length of 18.71-feet, thence leaving.said • Southeasterly line, North 05°10'14' West, 0.52 feet; thence 76°59'12' East, • 18:$6 feet tothe point of beginning.. PARCEL FIVE: AN EXIT EASEMENT overnatortion'of Lot 3 and Lot 4, Petaluma Marina; said'Lots being delineated on:the Parcel,Map recorded in Book 454 of Maps at°Pages 9 and 10, Sonoma CountyRecords,conveyed by document • Attachment No. 2. • • 11, recorded June 19, 2000,-as,Document Number'2000;060401, Sonoma County Records; said.portion'b:eing'more particularly described as folloWsi BEGINNING at the Northwesterly corner of said Lot 4 (454 M 9) and 1 proceeding:along the Northerlyline of Lot 4 (454 M 9), South 86'04'00" East, 5:00 feet, thence South 03°56'00""West, 148:67 feet, thence South 48°56'00"'West, 77.27`feet„thence North 41°04'00” West, 10.00 feet; thence North 48°56'00" East, 73.12 feet; thence North.;03°56'00"East, 147.74 feet; thence South 41204;00" East, 4.53 feet; thence South 86°04'00" East, 1.80 feet to the point-of beginning. • PARCEL SIX: A PRIVA J h UTILITY EASEMENT over ali'`that real property situated in the City of Petaluma, County,`of Sonoma,:Stateof'California, and being a portion of Lot 5, as shown and designated upon that certain map-entitled Petaluma Marina Parcel Map No 247, filed in the Office of the County Recorder on February 27, 1990, in book 454 Of Maps; Pages 9 and 10, Sonoma County Records,as conveyed by document recorded July 21, 2000, as`Document Number 2000-072695, Sonoma.County:Records, • described as follows: • • • BEGINNING at the most Northeasterly corner of Lot4 as shown on that • . map entitled Petaluma Marina Parcel Map No. 247' filed inBook 454 of - Maps at'Pages 9 and 10, Sonoma County Records; thence along the, Northeasterly line;of Lot 4,(45,4•M 9), North•41°04'00" West, 154.79 feet to . the true point of beginning;;thence leaving said Northeasterly line,,South 86°04'13" East,-69.05 feet; thence South 41,904'09"Ea'st,a_40.96 feet; thence North 48°53'31"East, 6.67'feet; thence:North 10°17'21"East,41.60`feet; thence North 41°04'00' West,24.68 feet,thence(South:48'25'28" West, 34.43 feet;thence North'86°04'13" West, 71 74 feet taa pointon•the Northeasterly line of Lot 4(454 M 9);,thence along said Easterly line, South 056 00" e4.01 feet;:thence South 41°04'00" Ea st, 8 =7"fe et to the-true point West, A. P. Nos, 005,060-083 and 005-060-069 (portion) • • • • • •Y. Attachment:No..2 1 {. • • • ATTACHMENT NO. 3A, • PROMISSORY NOTE —ELIGIBLE:CONSTRUCTION COST LOAN $750,000 , 2001 Petaluma;;California • • FOR VALUE RECEIVED, LOK. PETALUMA MARINA HOTEL. COMPANY, LLC, a California limited liability, company (the"Maker") ,promises to pay to the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF the laws of the State of California (the "Ho der"), or rder, at 11 English Street,PETALUMA, a public body, corporate and olitic, organized;and'•existing.und et, Petaluma, California or at such other place as Holder may direct-.from time:to time in writing, the principal sum of SEVEN HUNDRED-FIFTY'THOUSAND DOLLARS ($750,000) or so much thereof, which has been disbursed by the Holder to the Maker pursuant to Section 502 of the Owner Participation ' Agreement,.as hereinafter described ,(the "Eligible Construction Cast Loan"),. together with interest and other charges as set forth hereinbelow: All sums payable hereunder shall be payable in lawful money of the United States of America. 1. Owner Participation_ Agreement, — This. .promissory' note ("Promissory Note") is made and delivered pursuant to and in implementation of that certain Owner Participation Agreement dated , 2001, byand' between the Holder and the Maker (the "Agreement"): • The terms: and conditions of'such Agreement, which, among other things, allow for acceleration of this Promissory`Note upon the occurrence of certain events of default, are hereby incorporated:by'reference. Capitalized terms not defined herein are as defined in Section 100 of the Agreement. In the event there is any conflict between the terms,of this Promissory Note andothe terms of the Agreement, the terms of the Agreement shall govern 2. Interest Rate, Payments —For the firstfive (5) years of`the Eligible Construction Cost Loan term, this Promissory Note shall bear:interest from the . date of disbursement at the rate of three percent (3%) per annum, compounded annually. Beginning in the sixth (6U') year of the Eligible Construction Cost Loan term and continuing until the Eligible Construction Cost Loan,has been repaid in full, this Promissory Note shall bear interest at'the rate of five and`eighty-seven one hundreths percent (5,87%) per annum, which shall be payable in arrears as provided`below. Maker shall repay to Holder the,outstanding principal balance of the Eligible Construction Cost,Loan, togetherwith all accrued interest,,in forty (401. equal quarterly payments commencing on the first day of' the second • Attachment',.?b. ,=.A • • calendar quarter ofithe;sixth(6th) Operating Year and'continuing on the first day • of each calendar quarter thereafter until the entire outstanding principal amount of the Eligible Coristruetion, Cost`Loan, together with all accrued interest, has been repaid in. full. The amount of each such quarterly payment shall be . calculated on the basis of an equal-payment ten (10)' year amortization of principal and interest. If, following the"first dayofthe,sixth(6d') Operating Year, Maker makes a Deferred Participation Payment to the Holder as provided in Section'3 below,then the-remaining,outstanding principal,balance of the.Eligible • Construction Cost Loan shall ,be 'reamortized on the date Maker makes the Deferred'Participation.Payment, for the period of time equal to (a) ten (10) years minus (b) the period of time commencing on the first day of the sixth (6"') . Operating Year and ending:on:the date Maker makes the Deferred Participation Payment, Notwithstanding,'"anyother provision hereof to the contrary, the entire . outstanding principal balance of the Eligible Construction Cost Loan, together with all;accrued interest,,shall be immediately due and,payable by Maker to Holder a defaultby Maker under the terms-of-this Promissory Note and/or the Agreement. 3. Deferred Participation Payments.-In consideration of the Holder's provision of the:Commission Assistance to the Maker, Maker shall pay to.Holder deferred participation; payments ("Deferred Participation Payments") as provided in this Section 1 The amount and timingiof.the Deferred Participation • Payments shall be as "follows: Upon the Sale of the Project by Maker and/or shallpay to Holder in cash, an amount prior to the Sale of the Project, Maker upon the occurrence of any Capital Event p y equal to the'leaser of M.fifty percent (50%) of the Managing Member's Net Income from Capital Events, or (ii) the entire outstanding principal balance. of the Promissory Notes, including this Promissory Note and the:Promissory Note -- Tax Increment Loan, together with all accrued interest if-such interest is required to be paid.pursuant to the of Sections 502 and.503 of the Agreement (the "Commission Equity'Share"). If is understood that there; maybe more than one Capital Event prior to the-Sale of the Project and that the provisionsr,of this Section 3•are intended to apply to each • such 'Capital Event-.until the entire outstanding principal balance of this' • Promissory Note,together,withall accrued interest if such interest is;required to • be--paid pursuant to the terms•of Sections 50Z and 503.of.the Agreement, has been paid in'full. Upon the occurrence Of a Capital'Event,.the Commission Equity Share shall be disbursed, directly"to,Helder prior to or simultaneously with the disbursement of the `Managing' Member's-Net Income from .Capital Events. - Upon the 'Sale of the Project, the Commission Equity Share shall be paid to Holder directly from the.escrow"established for the Sale oftheProject 4. Prepayment - Maker may .prepay all or any part of the .outstanding principal balance of this. Promissory Note at any time, without penalty. Within thirty (30).days'following such prepayment, in full,Holder shall return this Promissory Note to Maker marked "cancelled:"" • Attachment No. 3A:. • • 2 e _ 5. Deed of Trust- This Promissory Note is secured'by a deed,of trust dated concurrently herewith, encumbering the Site Maker shall record the deed of trust-concurrently with the execution"of this Promissory Note.. .6. Default --Maker will,be in default under this Promissory Note upon the occurrence of any or',more of the following:events (each, an"Event of Default"): (i) Maker fails to;make any payment of principal,under this Promissory Note within'three (3) days after the date,when, due;or • (ii) "Maker fails to-(comply with any provision contained in this Promissory Note or the Agreement, and does not cure that failure within thirty (30) days after written notice from Holder;.or (iii) Maker becomes insolvent or the subject of-any:bankruptcy'or • other voluntary or ,involuntary proceeding, in or out of court,for the adjustment„of debtor-creditor relationships;.or• • • (iv.) Maker dissolves or liquidates; or (v) Any representation or warranty or given`by Maker in the Agreement proves to be false or misleading in any material respect;;or • (vi) An event of default under the Agreement occurs.. • If an Event of Default occurs, theiHolder may exercise any right or remedy which it has'under. this Promissory,',Note ,or•the Agreement, 'or which is otherwise available at law or in equity orby statute, and all•of Holder's rights m and remedies shall be cumulative Upon the occurrence of,any Event.of Default, Holder's obligation to lend under:the.Agreement shall automatically terminate. , Upon the occurrence of any"Event,of'Default, all of Maker's;obligations under this Promissory Note and the Agreement,may become Immediately due and payable without notice of default, presentment or”demand.for•payment. protest or.notice of nonpayment,or dishonor, or other notices,or demands of arty kind or character, all at Holder's option; exercisable in its sole discretion, .Holder,'s failure to exercise:such option"shall,not constitute :a„waiver of such option"with respect to any subsequent event:. Holder's failure ih the exercise`of any other • right or-remedy hereunder or under,any agreement or other instrument;which secures the indebtedness or is"related thereto shall not affect any right or remedy and no single or:partial exercise of any such right or remedy shall'preclude any further exercise thereof: 7. Waivers - Maker expressly waives; (a) •anti• defense based upon • any legal disability "at•other defense of Maker; or:other person,•it by reason of Attachment-No. 3A 3 • th&cessation o? imitation ofthe liability o'fMaker-'from'anycause other than full payment and performance•of those obligations of Maker which,are provided for hereunder; (b) any defense based upon any lack of'authority'of the members, officers, directors, partners or agents acting or purporting to act on behalf'of Maker or any-'member of Maker or any defect in the!formation of Maker or any member of Maker, (c) any defense based upon the application by Maker of the proceeds of this .Promissory Note for purposes other' than the purposes represented by Maker to Holder or,intended•o"r understood,byHolder or Maker; (d) any defense.based upon Hold'er's election, in any proceeding instituted under the Federal Bankruptcy Code, of the application of Section 1111(b)(2) of 'the Federal Bankruptcy Code,or any successor statute; (e)' any defense based upon any borrowing or-any grantrof a security interest under Section 364 of the Federal Bankruptcy Code; (f) any"right of subrogation, any right to enforce any remedy which Holder may have against Maker and any rightdto participate in, or benefit from, any security for this Promissory Note or the other documents now or :hereafter held by,Holder, and (g) presentment, demand, protest and all notices other than any noticeexpressly provided for in this,Promissory Note and/or the Agreement. 8. Costs - U,pon .the occurrence of an Event. of Default, Maker promises to pay all-costs,expenses-and attorneys' fees incurred by the Holder in • connection with the collection or 'enforcement of this Promissory Note or any part of it, whether or not suit.-is filed,,including'blit not limited to, all costs, expenses and attorneys" fees incurred by the Holder in connection with any insolvency, bankruptcy; reorganization, arrangement or similar proceedings involving Maker. As used herein, the term "attorneys' fees" means the full costs of legal services performed.,in<connection with 'the=matters involved, calculated on the basis of usual charged an'attorney performing those services, and not limited to "reasonable attorneys' fees" as defined by any statute or rule of any court in which an action hereunder,may be brought: - 9. Amendments and Modifications -'This'Promissory Note may not be changed orally, and May only by an agreement in writing, signed by the party'against whom;enforcement'of any waiver,.change, modification-or dispute is sought. 10. Governing-Law - This Promissory Note shall be construed and enforced in accordance•with-the laws'of the State ofCaleornia. 11. Successors!-The terms"'Maker" and,"Holder shall be construed • to include the parties'-respective successors and assigns: • 12. Severability - If any provision of this Note shall be invalid, illegal. or unenforceable; the validity, legality and enforceability of the remaining provisions hereof shall'not in any way be affected or'impaired'thereby. . • "ttachrnent'No. 3A 4 • • IN WITNESS WHEREOF,the undersigned has executed this Promissory Note as Of the date first set-forth above.. , 2001 LOK PETALUMA MARINA HOTEL COMPANY, LLC., a'California limited liability company By, Kirkman'.L..Lok President • By. -Dennis A. M_acD_ onneil,. Secretary "MAKER" • • • • • . • • • • AttachmentNo. 3A i Promissory;Not'e— Eligible Construction Gost+Loan • Disbursemerit Record' Amount_ Disbursement-Date 1) 2) 3) - 4) 5) 6) • 7) 8) 9) • 10) • • • • • • • • • Attachment-No',3A _ 6 • • ATTACHMENT NO. 3B • • •PROMISSORY NOTE - TAX INCREVIENTLOAN . NOT TO EXCEED $2;000,000 . • .,:2001 Petaluma; California •POR VALUE RECEIVED, LOK PETALUMA MARINA HOTEL COMPANY, LLC, a:California limited liability company (the,"Maker"),promises to pay to the COMMUNITY DEVELOPMENT COMMISSION OF"THE'CITY OF PETALUMA, a public'body, corporate and politic, organized and existing under the laws of the State of California (the "Holder"), or order at 11 English Street, Petaluma, California or such other.'place as Holder may direct from time to • time inwriting, the principal sum of TWO'MILLION DOLLARS ($2,000,000) or so much which has been disbursed by the Holder to the Maker pursuant to Section 503 of the Owner Participation Agreement, as hereinafter described hereinbelow All:sums)payable:hereunder shall be payable in l ful money of Tax Increment Loan to ether with,interest and other charges as set-f y'of O the United States.of America. • 1, Owner Participation Agreement — This promissory note • ("Promissory Note") is made and delivered pursuant to and in implementation of that:certain Owner Participation Agreement dated_ -,-2001,by and • between.the :Holder and the Maker (the ":Agreement"). The terms and conditions,of"such Agreement, which, among other things, allow for acceleration, of this Promissory Note upon,the occurrence of certain. events of default, are hereby incorporated by reference. Capitalized terms not defined herein are as defined in Section 100 of the .Agreement. In the event there is• any conflict • between the terms.of this`Promissory Note and the terms of the Agreement,-the terms ofthe Agreementshall govern. 2. Interest• Rate; Payments — For the 'first ten (10) years,of the Tax • Increment Loan term, this Promissory Note shall bear interest-from the, date;o disbursement at the "rate of three percent (3%) per annum,; compounded annually: Beginning in the eleventh (11`h) year of the Tax Tncrement'Loan term, and continuing until the Tax Increment -Loan has been repaid in full,:. this `Promissory Note shall bear interest at the rate of five and eighty-seven one hundreths percent (5:87%o) per annum, which shall be payable in arrears as provided below., Maker shall repay to Holder the,outstanding principal balance of the Tax,Increment Loan, together with all accrued interest, insixty (60) equal • quarterly payments commencing on the first day of the,second calendar quarter of the eleventh (11t) "Operating Year and continuing on the first .day of each calendar quarter thereafter until the entire 'outstanding.principal amount of the Attachment No. 3ff 0 Tax Incremer ttLoan, together with;alkaccrued,interest,. has ;been.repaid in full. The amount,of each such'quarterly payment:shall be calculatedbon,the basis:of an equal-payment fifteen (15) year:amortiza_tion of principal` and interest. If, following the first day of the eleventh (11`h)' Operating Year, Maker makes a Deferred Participation,Payment to the Holder as provided in.Section 3 below, then.the remaining outstanding principal,balance of the Tax Increment Loan shall be reamortized on the date Maker makes the Deferred Participation Payment, for the period of time,equal to (a) fifteen (15) years minus (b) the-period of time commencing on the first.day of the eleventh (11th) Operating Year and ending on the date Maker makes the Deferred Participation Payment. . Notwithstanding. any other provision hereof to the contrary, the entire .outstanding principal balance of the Tax Increment Loan, together with all accrued interest,shall be immediately due,and payableby Maker to Holder upon a default by Maker under the terms of this Promissory. Note and/or the Agreement. 3 Deferred Participation Payments —In:consideration;of the Holder's provision of the Colmnisslon.AssiStance to the Maker, Maker shall pay to Holder • deferred participation payments .("Deferred Participation .Payments") as provided in this Section 3, The amount:and timing;.ofithe Deferred Participation Payments shall be as follows: Upon the Sale of the Project by Maker and/or upon the occurrence of any Capital=Event prior to the first-Sale of the Project, Maker shall pay to Holder in cash, an amount equal to the lesser of (i) fifty percent (50%) of the Managing.Member's Net Incomeifrom Capital Events, or (u) • the entire outstanding principal;balance of the Promissory Notes, including this' Promissory Note and the Promissory Note Eligible Construction Cost Loan, together With all accrued'interest if'such interest isrequired to be paid pursuant to the terms of Sections 502 and,503 of the Agreement'(the."Commission Equity, . Share"). It is.understood that there may be more than one Capital Event prior to the Sale of the Project and that the provisions of this Section 3 are intended to apply to each such:Capital Eventtintil the entire outstanding principal balance of this Promissory Note, together with all accrued interest if such interest is required to be paid pursuant to the terms of,Sections` 502 and 503 of the Agreement, has'been paid-in full. Upon the occurrence of a Capital Event; the Commission Equity Share shall' be 'disbursed directly to Bolder 'prior to or simultaneously with the disbursement of the Managing•Member's•Net Income . from Capital Events. Upon the-Sale-of the Project, theComnussion Equity Share shall be paid to Holder directly from the escrow established for'the Sale'of the Project. 4 • Prevaiiment—Maker may prepay all or any part of the outstanding • principal,balance of this Promissory Note at any time, without penalty. Within thirty (30) days 'following such prepayment, in full, Holder shall return this PromiSsoryNbte to Maker`marked,"Ca"ncelled." • 5.. Deeds of Trust:— This Promissory Note is secured by'a deed of trust dated conciurrently'here;with, encumbering the Site Maker shall record'the deed of trust:concurrently wititthe execution of this Promissory Note. • • Attachment No. a • 2 . 0 6: Default -.Maker will be.in •defaulr•tuider this Promissory'Note upon the occurrence of:any one or more of the follo*rng events (each, an("Event of Default"): . • •(i) Maker fails 'to make any payrrient of principal under this Promissory. Note within three (3) days:after'the date,when clue; or . (ii) Maker fails, td comply with arty°provision contained in this Promissory Note or the Agreement, and does not cure that failure within thirty (30) days after written notice from Holder;.or iii • Maker becomes cmsolvent or the subject of any or other voluntary or :involuntary proceeding, in or out of court; for the sadjiistment.of`debtor crediforrelationships, or (iv) Maker dissolves dr liquid'ates; or • • (v): Any representation or warranty made or given by Maker in the Agreement proves to be false or misleading 'in any material respect';',or (vi) An.event of.default under the Agreement occurs. If an Event of.Default.occurs, the'Holdermay exercise any right or remedy which it has, under this Promissory Note or the.Agreement• or which is otherwise available at law or in.eqUity or by statute; and all of Holder's rights and remedies shall be cumulative. Upon the occurrence of any Event of Default, Holder's obligation to lend-under the Agreement shall automatically terminate. 'Upon the • occurrence of any Event of Default, all of Maker's obligations under this Promissory Note and the Agreement may,becorne immediately due aiid payable without-notice of default presentment or demand:for"payment, protest or notice of nonpayment or.dishonor, or other notices or demands of any kind or character all at Holder's option, exercisable in its sole..discretion. Holder's failure to exercise such option,shall not constitute a waiver of such option with respect to any SAsequelit event. Holder's failure in the,exercise of any other Might or remedy hereunder or under, any agreement or other instrument"which' secures the indebtedness:or'is`rel'ated thereto shall not affect any right or remedy and•no,single or partial exercise of:any such fight-or remedy shall preclude any further exercise thereof:. 7. Wai•'vers - Maker expressly waives: (a) any defense;based upen any legal disability or other defense of Maker; or other person, or by reason Of the cessation or limitation of the liability'of Maker,from any cause other than full ,payment''and,performance of those obligations of Maker which are provided for. hereunder; (b) any defense based upon any lack of-authority of the members, • Attachment No. 3B_ 3 _ . • • e• 'officers, directors, partners, or 'agents.`acting or.purporting to act"on behalf of • Maker or any member of Maker or'any'defect in the•formation of-Maker of any •. member of Maker; (c) any defense based upon the application by Maker the proceeds of this Promissory Note ••for purposes. other than .the purposes represented by Maker.to Holder,oriintended or understood;by Holder or Maker; (d) any defense based upon Holder's election•of any remedy against Maker; • (e) any defense'based upon Holder's election, in any proceeding instituted under the Federal BarkruptcyCode, of the application of. Section, 1111(b)(2) of the • • Federal Bankruptcy. Code,or any successor statute; (f) any defense based upon any borrowing or any grant of a security interest under Section 364 of the,Federal Bankruptcy Code; (g) any right of subrogation, any right to enforce any remedy which Holder.may have against Maker and any right to participate in, or benefit from, any •security for this Promissory Note or the other documents now or hereafter heldby Holder, and (h) presentment, demand, protest and all notices other'than any notice expressly Provided for in this Promissory Note and/or the Agreement.• E. Costs - `Upon the occurrence of an Event of Default, Maker promises to pay all costs, expenses"and attorneys' fees incurred by the;Holder in connection with the collection or enforcement of ;this Promissory Note or any part of it, whether or not'suit is filed, including but not limited to, all costs, expenses and attorneys' fees incurred by the Holder in connection with any 'insolvency, bankruptcy, reorganization, arrangement or similar proceedings • involving Maker. As used herein,the term"attorneys' fees"°means the full costs of legal services performed_in connection with thelinatters'involved, calculated - on the.basis of usual fees charged`by an attorney performing'those:services,and not limited to "reasonable, attorneys' fees" as defined;by any statute or rule of any court in which an action hereunder may be brought. 9. Amendments and Modifications -This Promis"soryNote may not be changed orally, and:may be amended;only by an agreement in writing, signed • by the party against'whom enforcement of any waiver, change, modification or dispute-is sought., • 10. Governing Law - This Promissory Note shall be construed and • enforced'.in accordance with the laws of the.'State of,Califor""pia • 11. Successors:- The terms "Maker" and "Holder" shall be construed to include the parties''respective successors'and assigns • • 12. Severability -If any provision of this Note shall,be invalid, illegal • or unenforceable, the validity, legality and enforceability of the remaining provisions.hereofshall not in any way be affected or impaired thereby. • • • • Attachment No. 313 • 4 • • • IN WITNESS WHEREOF-the-undersib edhas executed this Promissory • Note as of the datefirst.set forth above. - ,2001 .;LOK,PETALUMA MARINA:HOTEL COMPANY, LLC., a California limited liability company By. Kirkman L. Lok President • By . -Dennis A. MacDonneil, Secretary • `MAKER • • • • • • S Attachment-No. 3B 5. • • •. Promissory Note -Tax.Increment Loan Disbursement Record Amount Disbursement Date 1) 2) 3) 4) • 5) 6) 7) • 8) 9) 10) • • • Attachment No.38 6 ATTACHMENT-NO.4 : SCHEDULE OF PERFORMANCE Action Date 1. Submission -- Evidence of ,Equity At least,10 days prior, to disbursement of Capital and Mortgage Financing: The Eligible Construction Cost Loan. Participant shall• submit to the Commission for review and approval, evidence of equity;capitahand,a,'Mortgage • . financing commitment necessary for development of the Site (Section 312) ' 2. Approval '=,Evidence of'^Equity Capital Within.10;!days of submission. and Mortgage, ' '-Financing. The Commission;shall approve or•disapprove * the;Participant's evidence,of:equity capital 1 and a mortgage .financing commitment. (Section 312) • 3. Submission - Certificates,of Insurance. Prior to the'.'commencement of-construction The Participant shall furnish to the of the P_articipant's 'improvements on the •" Commission duplicate 'originals or Site appropriate certificates of°bodily injury' and property damage insurance policies. (Section 305) • 4. ConstructionLoan Escrow`Instructions. Prior to the first disbursement of the Participant and the Commission: shall Eligible Construction Cost Loan have approved and-:executed constructioni loan escrow instructions. (Section 502) 5. Governmental Permits. The Participant Prior to the commencement of construction shall obtain any and all-permits required of the Participant's improvements on the by the City or any other governmental Site. agency: (Section 302) . 6. Commencement of ':Construction of Not later than October 31,2000: Participant.'s Improvements. The Participant+shall commence construction. . . of the improvements',totbe constructed on ' the Site. (Section 303) 7. Completion of Construction o Within 18 months after commencement Participant's Improvements. The thereof;by the Participant. . Participant shall complete;construction of - the improvements to be constructed on the Site. (Section 303) • • Attachrnent No. 4 Action. Date 8. Contractor Written Certifications. The. On the.first day of each!calendar quarter Participant shall submit to the during construction of the Project and on Commission written certifications: the,„date of issuance of a Certificate of regarding local •and union contractor, Completion. • hiring targets; (Section 314.1) 9. Issuance - Certificate. of Completion: Promptly after completion of all The Commission shall furnish the construction required to`be completed by Participant with a '.Certificate of the Participant on the Site and upon Completion. (Section311) written request thereforbytheiParticipant. 10. Living Wage 'Certifications. The Oneach;anniversary ofthe date'of issuance. Participant, shall . submit to the of the Certificate of'Completion, Commission written certifications - regarding payment of living _wages. (Section 31 4'l3) • 11. Funding of Nonprofit Corporation: No later than thirty (30);days following the . Participant!shall make,payments to the start of each of the :,lst through 5th riverfront improvements nonprofit Operating Years. corporation: (Section 506) 12. Annual Financial Statements. No later than srxty'i(60).days following the Participant shall pros ide the end of each Operating:Year. Coriimission's ,Executive Director with. written ahndal financial statements. • (Section 505) • . • • • • • • • • - Attachment;No. 4, 2 ATTACHMENT NO.5 • SCOPE OF DEVELOPMENT • A. GENERAL • •The Participant 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 City, pursuant toDesign Permit No . The Participant, its•super-vising.architect,:engineer and contractor, shall work to • ensure the/overall design, architecture and color of the;improvements on the Site comply with the requirements'ofthe•City set;forth•Jin•the Design Permit. B. PARTICIPANT'S IMPROVEMENTS The Participant shall' construct, or cause to be constructed, on the Site,a Mobile three.(3) star and/or AAA four (4) diamond Sheraton Hotel containing ' • one hundred eighty three,()'83) guest'rooms, over nine.thousand nine hundred (9,900) square feet of banquet/meeting space, eighty plus.(80+) seat signature restaurant, and a fifty (50).seat cocktail lounge, health club for guests, pool and • spa area for guests, and special "Club Level" for'frequent guests, all contained within a four (4) story building of approximately one hundred thirty-four thousand seven hundred (134•700) square feet. Also, the Participant will construct and deliver to th"e<Petaluma Marina Project not less than one hundred . • eighty-four(184) parking spaces;for the hotel and thediroject<on the Parking Lot, . C. ARCHITECTURE AND DESIGN • The Participant's inprovements shall be othigh architectural.quality, shall be well landscaped, and shall he effectively and aesthetically designed. The shape,'scale of volume,"exterior design and exterior finish of the building'must be consonant with the Design Permit, D. LANDSCAPING • Landscaping;,shal mbellis L, hall open spaces upon the.Site to integrate the Participant's improvements with adjacent sites with the Project Area Landscaping includes such materials as paving, trees, shrubs and other plan materials, landscape containers, plaza furniture,, fop soil;preparation, automatic irrigating, landscape and pedestrian lighting. Landscaping shall carry out the objectives and principals of the Commission's design to accomplish a high quality aesthetic environment. - - Attachment No. 5 • E. SIGNS • All signs on the exterior of the buildings are of special concern to the Commission andmusf be in conformance with the City's,sign ordinance. F. SCREENING • 'Trash areas shall be,screened on at least three (3) sides and have-movable: doors and other devices to obscure:such areas fromview. All fire standpipes and such other fire related mechanical devices shall be screened with plant materials.; Rooftop:,equipment shall be reasonably hidden so as to mitigate views from principal elevations surrounding the development. G. •APPLICABLE CODES - • The Participant's improvements shall be construed in accordancerwith the Uniform.BuildingCode (with City Modifications) and the Municipal Code: • • • • • • • • • • • • .'Attachment'No.•5 7 . • • • ATTACHMENT NO. 6 • FORM"OF'CERTIFICATE OF COMPLETION • • RECORDLVG.REQUESTED BY AND WHEN RECORDED MAIL.TO Community Development Commission of the City of Petaluma 11 English Street Petaluma,California.94953 . Attention: Executive Director This document is exempt from the payment of a.recording fee .' puis4ant to Government Code§'6103. CERTIFICATE OF COMPLETION THIS CERTIFICATE OF"COMPLETION (the "Certificate");is madeby the. COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF PETALUMA, a public body corporate and politic• (the "Comrission"), in favor of LOK PETALUMA MARINA 'HOTEL COMPANY, LLC, a.:California limited liability company.(the "Participant"), as of the.'date set'forth below. RECITALS A. The Commission and the Participant have entered into that'certain Owner Participation Agreement (the "OPA") dated 2001 concerning•the redevelopment of certain real property situated in the City of • Petaluma,,Califor"nia,,as m ore fully d'escribed'in Exhibit "A" attachedheretotand made apart°hereof. B. As,•referen'ced in Section '311 of the OPA, the Commission is required to furnish the Participant .or its successors with a,,Certificate of Completion upon completion of:construction"of the"Improvements (as defined in Section 100 of the OPA); which"Certificate,is required to be in such form as to permit it to be recorded in the _Recorder's Office of Sonoma County. This Certificate is conclusive determination of satisfactory' completion of the I • construction and development required by'the'OPA. C. The Commission has conclusively determined that such construction and development has been satisfactorily completed. • Attachment-No..6 • NOW,THEREFORE, the Commission hereby certifies aS follows: • 1. The work of Improvements to;be constructed by the Participant has been fully and 'satisfactorily completed, in conformance with the CPA Any operating requirements and all use ,maintenance'or.;nondiscrirmnation covenants contained in the OPA shall remain in effect,and enforceable according to-their terms. 2: Nothing contained in this instrument shall modify,inany"other way • any other provisions of'the OPA. IN WITNESS WHEREOF, the Commission has executed this Certificate this:_day of, COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF PETALUMA, a public body, , corporate and,pelitic. By: Chairman Al EST: • • • Secretary • • "COMMISSION" APPROVED.ASTO FORM: • B : y Commission Counsel • • • • • • • Attachment No- 6 • . . • SITE DESCRIPTION [To Be Inserted]. . . • Exkibit A to Attachr.nent No. 6 110 ACKNOWLEDGMENTS • Acknowledgments • ATTACHMENTNO. 7 • FORM;OF'MEMORANDUM OF OWNER PARTICIPATION AGREEMENT RECORDING REQUESTED'BY' • AND WHEN RECORDED MAIL TO: - Community.Development Commission • _ of the'City of Petaluma 11 English Street; Petaluma,California 94953 • Attention: Executive'Director • . _ This document is exempt from,the payment.of a recording fee pursuant to'.Governmeat Code,§6103. MEMORANDUM OF OWNER PARTICIPATION AGREEMENT • THIS MEMOR:ANTDUM' OF OWNER PARTICIPATION`AGREEMENT ("Memorandum"), dated fat identification purposes as of - , 2001, 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.limitedTliability company (°Participant)', 1. Owner Participation Agreement.... Commission and Participant have executed an Owner' Participation Agreement dated for identification purposes.as of ., 2001, which provides, among;other things, for (i) the development by Participant of a four=story, one; hundred eighty-three (183) room, three-(3) star/four (4) diamond Sheraton hotel on that certain real property (the "Site") located -in the City of Petaluma, County of Sonoma, State of California, more fully described in "A" attached hereto and incorporated herein by this reference. (ii) the Commission to make certain loans to the ' Participant, (iii) the.continuing operation of the improvements to be,constructed on the Site as a,three (3) star/four.(4);diamond hotel, (iv) the maintenance of the site and improvements thereon as set. forth in the Owner Participation . Agreement, and•(v).,Participant's payment;of;Deferred Participation Payments to Commission upon the occurrence of certain Capital'Events and upon the Sale.of the Project. The Owner Participation Agreement is available for public inspection ana.copyingat the office of the.City Clerk,City of Petaluma City Hall, 11• English Street, Petaluma, California 94953. All of the terms, conditions, provisions and covenants of the Owner Participation Agreement are incorporated to this Memorandum by reference as though written out at length • herein, and the Owner Participation Agreement and this Memorandum shall be deemed to constituteia,singl'e'instrument or document: • • • Attachment No..7 • S • 2. Purpose of Memorandum., This Memorandum is prepared for recordation purposes only, and in no way modifies the terms, conditions, provisions.an&covenants of the Owner Participation Agreement. In;the event of any inconsistency between,the,terms, conditions, provisions and covenants .of this Memorandum and the Owner Participation Agreement, . the terms, conditions, provisions and covenants of the Owner Participation Agreement shall prevail. The parties have executed this Memorandum on the dates specified • immediately adjacent to their respective signatures. , 2001 LOK PETALUMA MARINA HOTEL • • COMPANY,LLC.,.a Californiatlimited liability • company • By: • - Kirkman L. Lok President By: • Dennis;A. MacDonneil,. • Secretary "PARTICIPANT"' •. • ,2001 COMM-UNITY DEVELOPMENT COMMISSION ' OF THE CITY OF PETALUMA,.a public body, corporate.and politic. By: Chairman • 1'=LLEST: • • Secretary , "COMiUIISSIO " APPROVED AS TO FORM: • By: • • Commission Counsel. Attachment:No. 7 2 • •• EXHIBIT A LEGAL DESCRIPTION OF SITE • [To Be Inserted] • ' • • EXhibit A co.Attachrnent No. 7 • ACKNOWLEDGMEI<TTS ;-. . , Acknowledgments • • ATTACHMENT'NO. 8 • . FORM OF-AGTZEEMENT.TO=BE.`RECORDED AFFECTINGREAL PROPERTY • RECORDING`REQUESTED BY • AND WTEN RECORDED MAR,.TO: Community DevelopmentC_ommissibn of the.City.of Petaluma 11 English Street , Petaluma,California 94953 Attention: Executive'Director. 'This document isiexempt from the payment of a recording fee • ;piusuant to Government Code 5.6103. AGREEMENT TO BE.`RECORDED AFFECTING REAL PROPERTY • THIS AGREEMENT,TO BE,R ECORDED,AFFECTING REAL PROPERTY dated' for references purposes 2001 ',(this "Agreement"), is entered into by and between the COMMUNITY DEVELOPMENT . l politic ("Commission"),:and. LOK',P,ETALUMA MARINA INA body, corporate and COMMISSION OF THE CITY OF PETALUMA, a ARINA HOTEL COMPANY, LLC, a California limited liability company ("Participant), with reference to the following facts: • RECITALS • A. Commission.andPartieipanthave executed an Owner Participation Agreement dated ,for reference purposes as of - 2001 ,("OPA"), which provides, among,other things, for, (i) the development b;y Participant of a four (4) story, one hundred eighty-three (1'83) room, three (3) star/four (4)diamond Sheraton hotel_on that,certain real property (the "Site")_located in the City of Petaluma, County of?Sonoma State of California, mote fully described in Exhibit, "A" attached,hereto and,incorporated herein by this reference, .(ii)the • Commission to make certain. loans to the Participant,, (iii) the continuing operation of the improvements to be constructed on the Site as a three (3) .star/four(4) diamond•hotel, (iv) the maintenance of'the:Site and Improvements thereon, and (v) Participant's payment of Deferrea Participation Payments to Commission upon the occurrence•of certain Capital Events and upon the Sale of the Project. The Owner Participation Agreement is available for public �. inspection and copying at the otfice.of the City Clerk, City of,Petaluma City Hall, 11 English,.Street;,Petaluma, California 94953. .Capitalized.termsiitilized'in this • • Attachment No..8 • Agreement and:not otherwise defined shall have the,same meaning as forth • in Section.100'of the OPA. B. The Site is within the Petaluma Community Development Project and is subject to the provisions of the Redevelopment Plan for the Petaluma Community Development ,Project `which was approved_ and adopted by Ordinance No 1725 of the City Council of the City of Petaluma on.August 17, 1988, as amended, and'incorporated:herein by.reference. • C. Participant has agreed with:Cominission to executeandrrecord"this . Agreementain order to bind itself and future owners of the :Site to certain. obligations regarding'the on-going use, operation..and maintenance of theSite: and certain other covenants, all as more particularly set forth herein. D. Tlze:enforcement of the covenants and`requirements set forth herein will ensure the proper-implementation,of the Redevelopment Plan and will, therefore, benefit the.Participant, the City of`Petaluma, the Commission, and the- properties located-within the Petaluma Community Development;Project. • AGREEMENT • NOW, THEREFORE, in Consideration of the mutual benefits,accruing to . the parties hereto, and for other valuable consideration, the receipt and sufficiency of'Which is hereby acknowledged, the Participant on behalf of itself and its successors, assigns arid each=successor'in:interest to the Site or any part thereof;hereby covenants and agrees as.follows: 1.. s Use Covenants. The Participant covenants'and agrees for:itself,its successors;assigns, and every successor in interest to the:Site;'or any part thereof, that the Participant shall continuously maintain, use'and 'operate'the Site as a hotel,"which meets the mm iruum Hotel Ratirigstandards;set forth in;_Section 100 of-the.OPA, for the period of time specified in Section 5, below, provided, however,rthat the covenant to continuously use and operate the?Site.as set forth in this Section 1 shall not apply to any foreclosing`lender during the period of time such,foreclosing lender owns;the Site or to any successor in interest of the foreclosing lender. Participant further covenants;:to initially open and operate the hotel(under`a "Sheraton" flag. No uses other than those specified above_shall be permitted without the-prior written approval of`'the•Commission,,which may be granted or denied.in Commission's sole discretion. All uses conducted on the Site, including,-without limitation,; all activities undertaken by the Participant pursuant to this Agfeement,, shall conform-to the Redevelopment Plan and all applicable provisions of the Petaluma.Mumcipal'Code. The foregoing covenants :shall run,with the land. 2. Maintenance'-- Covenant. Following,completion of construction of the Improvements, Participant shall maintain in accordance. with the Maintenance Standards, as hereinafter defined, the private improvements'and AttachmentNo.g, 2 • publi c improvements and landscaping to the c itbline(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.a'lliother improvements on the Site and in the public right of-way to the •nearest 'curbline(s) abutting the Site . To accomplish the.maintenance, Participant,_ shall either staff.or contract with and hire licensed and qualified personnel -to perform the maintenance, work, including the provision of laboriequipment,,materials,-support facilities, and any and all other items necessary to comply with the requirements of this Agreement. . The maintenance covenantsland obligations set forth in this Section 2 shall remain in effect'for the period of time specified in Section 5, below. (a) Maintenance Standards. The following standards ("Maintenance Standards",.)E shall be complied with by Participant and its maintenance staff/contractors and subcontractors:: (i) Landscape.rnaintenarice;;shall` include, but not be limited to watering/irrigation; fertilization; mowing; edging; trimming of grass, tree and shrub pruning; trinunirgand shaping'of`:trees'.andtshrubs to maintain ,a healthy; natural appearance,;safe, road conditions and visibility, Land irrigation coverage) replacement, as needed`, of all plant materials;,control or weeds in .all'planters,.shrubs, lawns, ground covers, or other planted areas; and.staking,for support of trees. . (u) 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;clearof 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 clearing 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 ' • •" (iii) All Lmaintenance`work shall conform to all applicable' • federal and state Occupation Safety and Health Act standards and regulations for the performance of maintenance., (iv) Any and all chemicals, unhealthful substances, and 4 pesticides used in and during maintenance shall be • applied, in strict accordance with all Governmental tRequirements. Precautionary measures shall be Attachment No. $ • • 3 • • employed recognizing that all areas :are open to . '•, public aeeess.' (v) The Improvements shall be maintained in • conformance. and in compliance with the Sheraton franchise agreement standards, or.equivalent,,as°the • same may be amended from time to time with the approval of the city and in accordance with the custom and practice generally applicable to comparable hotels located within Sonoma-County,California - . For purposes .of this subsection. (v), comparable hotels shall be those meeting' the minim im Hotel Rating. The °public right-of-way improvementsito the curbline(s) shall be maintained. as required'by this subsection (a). in good condition. and in -accordance with the custom and practice ,generally applicable to public-rights-of-way within. the City of Petaluma. ,. (b) Failure to Maintain:Improvements.• If Participant does not maintain the private and public.improvements,on ithe'Site to the.curbline,(s) in the manner set forth herein and in accordance with the.Maintenance Standards, Commission,and/nor City shall have the right totmaintain such private and/or public improvements,or.to contract for.the-correction of such deficiencies, after written notice to Participant However; prior to taking any such action, Commission •agrees to notify:Participant 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 Participant to cure the. deficiencies. Upon notification,of°any maintenance deficiency, Participant shall • have thirty (30) days within whichto,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 Participant shall haye::forty-eight (48)hours'to•rectify the problem. • In the :event Participant 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,Cityand/or • Commission shall.-have the right to maintain such improvements:;_ :Participant agrees to pay Commission;such charges and:costs upon demand. Until sopaid, the ,Commissiomshall have alien.on the Site for the amount of,such;charges or costs, which lien.shall,be perfected by.the recordation of a "Notice{of Claim of Lien” against the Site: Any lien in favor of the Commission created or claimed hereunder is expressly made subject,and'subordinateto any mortgage Cr deed of trust made in good faith and tor 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 subotuinates his • Attachment:No. S. 4 . • \,• • •' interest- of record;to Such lien. No lien in favor of the Commission created or claimed hereunder shallin 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. Participant acknowledges and agrees that the City • and Commission 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. Nondiscrimination Covenant. There shall_be`no,discrimination against or segregation of'',any person or group of persons on account of race, color, creed, religion,sex, marital status, physical or Mental disability or=rriedical condition;, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,.'tenure or enjoyment of the Site, riot shall Participant itself, or any 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 vend_ees of the Site:, 'The foregoing•covenant-shall run with the • land. • Participant shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, creed, religion, sex, marital status, physical or mental disability or medical condition,-handicap,.national origin:or ancestry of • any person: All.such deeds, leases or contracts, shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:, .• (a) Iitdeeds: "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,ithat there_shall'betrio discrimination-against or segregation of, any person or group:of persons on account of race, color, creed,, religion, sex,.marital status, physical or mental disability.or medical `condition,. handicap, national origm.:or ancestry in the sale, lease, sublease, transfer, use, occupancy.,, tenure ‘or enjoyment: of the land herein conveyed;, nor shall the grantee himself oriherselffor any.person,claiming'imder or through him.or`her, establish or permit anysuch practice or practices of°discriminationor segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or`vendees.in the: land herein conveyed. The foregoing covenants,shall run with the land." herself,;his or her,heirs,executo se administrators and ass by and for 11 himself or (b) igns, and all persons claiming-under orthrough him or her, and this lease:is made.and accepted upon and subject to,the following.conditions: •"There shall be no discrimination against or segregation of any • person or.group of persons on account of race, color, creed, religion, sex,marital status, physical or_me*ntal,disability or medical condition, handicap, ancestry or national:origin in theleasing, subleasing,'transferring/use occupancy, tenure or enjoyment of the'premises herein;leased nor shall the lessee himself or herself; or Attachment Md. S • • J, any person claiming under'or through him.or her, establish or permit any such. • practice or practices jpractices-oft discrimination or segregation with reference to the selection, location,,number, use or occupancy of tenants, ;lessees, sublessees, • subtenants or vendees.in'the prernises'herein leased:"` (c) Iii contracts:. In contracts relating to the sale, transfer or • leasing of"the!Site or any.interest therein "There `shall be no discrimination . against or segregation of„any person, or group of persons on account of race; color, creed, religion,.sex,.marital status, physical or mental disability or medical condition, :handicap, ancestry or national'origin, in the sale, lease, sublease, transfer,, use, occupancy; tenure. or enjoyment of the premises, nor shall the • y person g „ rough him or her, transferee himself:or her-Self or.an erson daimin under or through 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 veridees of the preriseS.: 4. Minimum Proiect Value Covenant. Participant covenants, and agrees that in connection with its construction of the Project, Participant shall expend not less than SEVENTEEN`MILLION DOLLARS (517,000,000) in "hard • construction;costs; "hard".construction costs shall"consist exclusively of on-site labor 'and materials expenditures, "Hard"construction costs shall not include construction•or project management fees, legal, engineering or architectural fees; overhead; costs of furniture, fixtures,and equipment; or any other costs or fees typically characterized by the construction/development ;industry as "soft" costs. In addition, Participant covenants and agrees that it shall expend nottless than THREE:MILLION FIVE HUNDRED THOUSAND DOLLARS'53;500;000) • on furniture, fixtures and:equipment for the Project. Participant shall provide evidence,reasonably:satisfactory to Commission..of all of lts hard construction cost and furniture, fixture and equipment expenditures prior to submitting its requests for.issuance of a Certificate!of Completion as provided in;the OPA, 5. Term. The covenants contained in this A greementJ'shall:remain in effect until the issuance of the Certificate of Completion for the work of Improvements, except ler,the folldWirigi (a) The,covenant's,pertaining to. use and operation of the Site which are set forth in'Section 1 shall remain in effect until' the first to:occur'of (i) the termination date of the Redevelopment Plan, (ii) the Parti'cipant's. p y g p . .ip , Promissory re a went, in frill,of the entire oufstanam , rind al balance of the P Notes,or (iii)Participant's payment, in full, of all of the Deferred Participation Payments. (b) The covenants pertaining to maintenance of•the Site and all improvements thereon, as set forth in Section 2, shall remain in,effect until the termination date, of the.Redevelopment Plan; provided, however, Participant shall be:released from its cobligations,to:maintain the publicimprovements at the • Site upon assumption,of all of Participant's maintenance obligations with respect to saidpublic improvements by the Petaluma.Marina Owners Association,'Inc. AttachmenfNo. 8 • 6, • • (c) The;covenants:rainst•discrim nation,asset forth lin Section 3; shall remain ineffectin perpetuity. 6. Covenants:Run with the Land The Covenants and agreements j established in,this Agfeement shall, without:regard to technical classification or designation, be;binding''on:the Participant, its,successors; and assigns and any successor in interest,`to the;Site,,or°any part:thereof, for the of and in favor of the Commission, its•successors and assigns; and the City, for their respective . terms as set forth-in Section;5, above. 7. Remedies. The Commission,in the event of any breach of any of the covenants contained herein, shall have the rightto,exercise all the rights and remedies and to maintain any actions at law or suits in equity or other proper proceedings to.enforce the,curingof'the'breach. • 8. Severability. If any:;ter=m, provision, condition or covenant of this Agreement or its application to any party or circumstances shall`be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term,m, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected;.and shall be valid and enforceable to the • fullest extent permitted bylaw;: 9: Titles and,Captions'. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement. 10. Modification. The Commission, its'successors and assigns, and the Participant and its successorskand;assigns in and to all or any part of the,fee title to the Site shall have•the=right with the mutual consent of the Commission to consent and agree to changes;in, or to eliminate in whole:or in part, any.of the covenants herein without the consent of any tenant, lessee; easement holder, licensee, mortgagee, trustee, beneficiary under 'a deed of trust or any other person or entity having any interest less than ia fee in the: Site The covenants contained in this Agreement, without regard to technical classification, shall not benefit or be enforceable,by any owner of any other real property within or outside the Redevelopment Project, or any persán or entity having any interest,in any other such realty:: • • • • • Attachment No. 8 7 •' • • -11. Interpretation. In the ement:there IS any conflict between,the.terms of this Agreement and the terms of theOPA;•the'terms of OP.A,shall goverh. IN WITNESS WHEREOF, the parties have executed this Agreernenras of the dates set fofth below. ' • , 2001 LOK PETALUMA MARINA HOTEL COMBANY,'LLC., a California limited liability company . By: 'Kirkman L. Lok -President • • ' 13y: • Dennis A. MacDonneil, • Secretary • "PARTICIPANT" 2001 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF PETALUMA,.a publicbody, corporate'and politic • • By: . • Chairman • •ATTEST: . • . • • Secreiary .. "CONIISSION" APPROVEDAS TO F,ORM: • By: , • Commissibin,•Cbuns el • • • . . Attachment:No. 8 • • • e EXHIBIT A LEGAL DESCRIPTION OF SITE [to Be Inserted] • • Exhibit A to.Attac. meht'No. 8 . • . • ACKNQAVLEDGMENTS • • • . . ' • • Acknowledgments • ATTACHMENT NO. 9 ELIGIBLE PROJECT.COSTS BUDGET ELIGIBLE 'ESTIMATED' • PROJECT COSTS BUDGET AMOUNT 1. Site Improvements (Varking Lot) $551,599 2. Concrete Piles and Foundation $1.,804,605 3. 'Boardwalk Improvernents $258,760 4. Pre-Development Cogts (Including Architectural and,Engineering) $1,387,120 Total Estimated Eligible Project:Costs $4,002,084 • • • . . • 40. • Attachment No. 9 • • • • ATTACHMENT NO',10, • • 'GUARANTY • • • • THIS GUARANTY'("Guaranty ') is made a"s of the day of 2001, by LOK PETALUMA MARINA DEVELOPMENT COMPANY, LLC, a California limited liability company .("Guarantor") .in favor of THE COMMUNITY DEVELOPMENT"COMMISSION"OF THE CITY OF PETALUMA, a public body, corporate and politic ("Commission"). RECITALS • A. Commission and•Lek Petaluma Marina Hotel- Company, LLC; a California limited liability company (the,"Participant") entered into an Owner Participation Agreement dated " , 2001. (the "OPA"), pursuant to which the Participant, agreed.to acquire.and develop certain real property in the • City of Petaluma, Sonoma County, California more particularly described in the OPA (the "Site"). Initial,ca italized terms used in this Guaranty and not defined herein shall have the meaningsgiven to such terms in•:the•OPA. B. As a condition to:entering into the OPA with Participant on the terms set forth in the OPA, including without limitation, certain monetary assistance by the Commission,,Commission.has required'thatGuarantor. execute this guaranty of performance'of the Participant's;obligations under the OPA, and the additional documents 'and instruments to be entered;into pursuant to the OPA (collectively, the'/ Project Documents"). • NOW, THEREFORE,'at the request of Participant,:Guarantor'guarantees, covenants, warrants'and agrees as follows: • 1: Guaranty. Guarantor hereby unconditionallt and irrevocably guarantees the •full, timely and complete 'performance by the Participant, its successors' or assigns, of each and,,all.of'the=obligations of Participant under the Project Documents:in:accordance with and subject to their respective terms•and conditions, including,any amendments thereto (collectively, "Obligations"): 2. Obligations of the Guarantor Unon Default by the Participant. It a default by Participant.under the OPA or any other Project Document:shall occur, Guarantor shall diligently proceed to Lcure such default and procure complete:. • performance of each and all of the`Obligations. However, the obligations of Guarantor to so cure such,default and procure complete performance of each and all of The Obligations shall be subject to.thexsame terms and conditions"set forth Attachment No. 10 • in the, applicable Project Document as would have :applied to similar • performance by Participant. 3. Remedies. Guarantor shall be;in default (a "Default").hereunder:if Guarantor shall fail to perform a monetary:obligation within fifteen (15) days • after written notice from Commission'to=.Guarantor, or, if the Default is not inthe payment,of money and is of such;a nature as cannot.be cured within such fifteen (15) days, unless Guarantor commences to cure such Default within fifteen (15) days. after written notice from Commission to Guarantor and proceeds diligently to cure thereafter. Following,a Default, Commission, at its option and without any obligation so to do/may exercise any and all of the remedies,set, forth in,the OPA'or any other remedy allowed rat law or in equity, including bringing an action.to enforce the terms of this-Guaranty. 4. Consents.of Guarantor. Guarantor hereby consents and agrees that Commission may, in such manner, upon such terms and at such times as Commission deerrisbest and without notice to or<further assentfrom Guarantor: . (a), with the consent. of Participant,' alter;. compromise,. accelerate, extend or change the time, manner or place for the performance of any Obligation hereby guaranteed, or. change any of the terms, covenants, conditions or provisions. • of the'OPA or any other Project:Document; (b) waive performance or compliance with any term/ covenant or agreement on Participant's part to be performed: or observed under the,OPA•or any other Project Document„or consent to failure in or departure from such performance.or, compliance; (c) transfer and assign the Project Documents, or any of them; (d) accept additional security for the Obligations from third • , parties, or exchange, sell, surrender, `'release, reconvey, subordinate,modify, waive, rescind,compromise or extend, . in whole or in part, any security therefor, or permit or consent-to anyauch actiori'or;the;resun of any such action;' (e) request and accept other guarantees of the Obligations'from third parties and, in ,whole or in part,. surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guarantee, or permit or consent to any such,action or the result of any sueh,action;.and (f)', exercise, waive or otherwise refrain from exercising, any • • other right, remedy, power or privilege granted by the-OPA • or any other'Project Document or other security document or agreement, of otherwise available to Commission, with, Attachment No. 10 • respect to (i)the Obligations,: (ii) the other- obligations of • Guarantor'hereunder, (iii)'any security;forCthe;Obligations or (iv)uother security for any or all,ofthe other obligations hereunder,'even,if the exercise of such right, remedy, power • or privilege affects or elumnatesk any right of subrogation or any other.right ofGuarantor against Participant. No exercise:or nonexercise by Commission'of,any right hereby given to Commission; no dealing.,by Commission with Participant or any guarantor, endorser or, any other person, and no change, impairment,rrelease or suspension of any right or remedy of Commission shall in any way affect any of the obligations of Guarantor.hereunder or any security furnished by Guarantor or • • give Guarantor any recourse against`Commission. 5. Rights of Guarantor. Guarantor,in connection with its obligations under this Guaranh ma one do on or both of the following, (a) cause Participant, as agent for•Guarantor,to construct and complete the Project; or (b) cause •p right, interest in and to-the Site..to Partin ant to transfer all of its ri ht, title and int Guarantor, provided that Guarantor assumes all of the„obligations of'Participant under the OPA and the:other.Project•Documents (such,transferee being deemed a permitted assigneerof Participant): 6. Interest and Attorneys' Fees. Any sum required to.be `paid by Guarantor to Commission pursuant'to the terms hereof shall bear interest at a rate equal to six and one-half percent (6-1/2%) Per annum, compounded annually; from the,.datesaid sum shalcbe due until paid. If Commission expends or incurs any sum to 'protect, preserve or 'enforce Commission's rights or Guarantor's obligations under ;this'Guaranty whether or not suit is filed, or if Commission commences aan action against Guarantor to enforce this Guaranty or for any alleged breach or,default of a ty ny term at provision of this Guaranty, the prevailing party shall be ,entitled to have and recover from the party not prevailing reasonable attorneys` fees and all costs and expenses incurred, together with interest thereon for the time and at the.rate provided in this ;Paragraph6,7including,-.without limitation, those incurred in connection with any insolvency, bankiuptcy, reorganization, arrangement or other similar, proceedings involving;Guarantor that m any way affect Commission's exercise , of its rights, powers, remedies and privileges hereunder: 7. No Waiver. NO failure-on.the part of the'Commission to pursue any remedy hereunder or under the'OPA or any'other Project Document shall constitute.a'waiver on the part of"Commission of the right to pursue remedy on the basis of the;sanie or a subsequent Default. Ne,extension, modification, amendment or'renewal'of`the.OPA, any'other"P,roject Document or any security • instrument securing the same, or any of them, or the assignment of the • Participant's ant's interest.under the OPA, shall serve to waive the provisions hereof or discharge Guarantor from any obligation herein contained in whole or in part, except to the extent'expresslyapproved by Commission in writing. Attachrrient No. 10 3, 8. :Covenants, Representations and Warranties of Guarantor. Guarantor represents and warrants to Cominission,as follows: • (a) I Guarantor has 'investigated'fully whether any benefit,will inure to Guarantor by reason of the execution of this Guaranty, and,=has determined that a direct or indirect • benefit will;inure to Guarantor by reason of the execution of this Guaranty; (b) This Guaranty, when executed and delivered to Commission, will constitute the legal, valid', and ,binding . obligation of Guarantor, "enforceable against Guarantor in accordance with its terms, except as the same maybe limited by laws of bankruptcy, insolvency and laws affecting the rights:of creditors;generally. 9. GuarantyIndependent. Guarantor agrees that the obligations! of Guarantor hereunder are independent of,;separate from and in addition to the undertakings of Participant pursuant to the OPA and the other Project Documents„and any deed of`trust or'security agreement given to secure the same, any other guaranties given in connection with the OPA or any other. Project Documen t and any other obligations of Guarantor to Commission.' A separate action or actions may be brought and prosecuted to .enforce the provisionscof this Guaranty whether Participant and/or any other guarantor:is a party in any such action or not Commission"may maintain:separate actions;for other. defaults. Commission's rights.hereunder shall not be exhausted by its exercise of.any of rights or remedies or by any-such action orby,any number of/successive actions until and unless all Obligations hereby guaranteed and all other obligations of Guarantor hereunder have been fully performed. • Corrimis"sion may enforce this Guaranty in'the event of any default under•any of • the Project Documents notwithstanding°the existence of any dispute between ` Commission and.Participant with respect-to the existence of:such default. 10: ,Guarantor's Waivers: The liability of Guarantor under this Guaranty shall not be affected by any circumstance which might constitute a discharge of a surety or guarantor other than the indefeasible,payment and performance,in full of all Obligations-hereby guaranteed and all other obligations of Guarantor hereunder. Without limiting the generality of the foregoing, Guarantor hereby waives,and agrees not'to assert or take advantage.of: (a), any right to require Commission to marshal assets in favor of Participant, Guarantor, any other guarantor or any other person, to proceed against Participant, any other. guarantor,• or any other person;.to proceed against or "exhaust any • security:held by Commission at any time or to pursue,any other right, remedy, power or privilege of Commission before proceeding,against Guarantor; • - •' Attachment No. 10 • (b) any defense that may arise by°reason of,incapacity;lack of • corporate or other • authority, death or disability of Participant, Guarantor or any, other person.or the failure of Comrriission:to file,or 'enforce:a daim againstthe 'estate (in administration, bankruptcy or any:other proceeding) of any otherperson or persons (c)' promptness,i,diligence,'presentment; ,dernand,protest and notice of any,kind including, without limitation, notice,of default, protest,: .dishonor or nonpayment, notice of acceptance Of this Guaranty and, notice of the existence, creation or:incurring'of any new or additional obligation or notice of any action or nonaction on the part of Participant, Commission,, any endorser or creditor of .Participant or Guarantor or+on the part of;any other person whomsoever under this ;or.any other instrument in connection with any obligation or evidence of indebtedness held by Commission • `as collateral,or in connection with:the Obligations or any other obligation herebyguaranteed; (d) any,right to enforce any remedy that Commission now has or-may hereafter have against Participant„and the benefit-of • and.any right.to participate in, any security now°orihereafter held-by•Comrission from Participant; (e) any-d'uty,on[tlie part of Conuni`ssion;to disclose'to'.Guarantor any facts Commission may now or'hereafter know about Participant,it;being understood,and agreed that Guarantor is fully responsible,for being and keeping informed of the • financial condition of Participant'and ofall circumstances bearing on the risk of nonperformance of the Obligations.or any,Other obligationLhereby guaranteed,- (f) all,setoffs and counterclaims;” (g) any.defensearising'out of the,„absence, impairment:or loss of any right or remedy of Guarantor against Participant or against any security resulting frofn,the exercise or election of any remedies by 'Comi fission, and any'defense: arising by reason of any or other defense of Participaritor by reason of the cessation;.from any cause, whether consensual • of by operation Of law,, of the liability Of Partidipanf to Commission other than full discharge and performanceof"all - of, Participant's obligations under, the OPA 'and the other Project,Documents;. - . • . ttachirrent No. fd 5 (h) any defense of whatsoever,nature on,the part of Participant • • which otherwise may have been_ 'asserted by Guarantor as a defense hereunder; and • (i) any defense arising because of..Gommissiori s eledtion,;in;any proceeding;instituted,,under the federal Bankruptcy Code,.,of the :application of Section 1111(b)(2) of the Federal.. Bankruptcy Code:of 1978, as amended; it being agreed by ' the:Guarantor that this Guaranty 1s an absolute guaranty of payment and performance and not of collectibility, that the, failure of.Commission to exercise any rights'or remedies Commission has or may against;Participant shall in no way'impair'the,obligation of Guarantor and that'the liability of Guarantor hereunder is and shall be direct and unconditional. Without ,limiting the generality of the foregoing„or, any other p , Guarantor hereby -expressly waives•any and 'all rights of subrogatione reiim�'bursement,:indemnification and contribution and any other rights benefits and defenses which might c'otherwise be.or become available to Guarantor, under California Civil Code Section.1431, Sections 2787 to-2855, inclusive,; Section,2899 and Sec€ion.3433, or any successor sections: or, any amendments thereto, and all other suretyship defenses Guarantor would otherwise have under the laws,of California:; 11. Sums Received by,Guarantor. If Guarantor receives payment of any amount on, account of any subrogation, or right of indemnification, contribution or reimbursement from Participant or, otherwise in respect of any ,,payment or performance by Guarantor of any obligations of Guarantor hereunder at any time when all the Participant's obligations under the Project Documents shall nothavebeen paid and performed in full,'or when any default shall have occurred and be continuing, Guarantor shall .hold such amount in trust for the the,benefit'off,Commission and Guarantor shall forthwith pay"the same . to Commission to/15e credited and applied.:upon,Participant's obligations under the Project, Documents, whether. matured or unmatured, in such order as Commission„in°itssole discretion,!shall+deterrriine: • 12.; Clims:Against Participant; Assignment Guarantor shall file in any bankruptcy.or other proceeding in which the filingaof.claims is required by law, all claims which Guarantor-may have against'Participant relating to any indebtedness of Participant to Gliarantor.and will assign to Commission all . rights of!Guarantor .thereunder. In all.such cases, whether in administration, bankruptcy or otherwise, the person(s).authorized to pay such claim shall pay to Commission the 'full amount thereof and, to the full extent,necessary for that purpose, Guarantor hereby assigns to Commission all of Guarantor's rights to any such payments or distributions'to which Guarantor would otherwise be entitled.. - - ,11p Attachnent,No. 10 6 • • • 13. Cumulative Rights. The amount of Guarantor's liability and all • lights, powers,remedies and•privileges,of;Commission„hereunder and under any other now -or any time hereafter in force between Commission and Guarantor,including any other guarantee executed:byi.Guarantor'relating to any obligations of Participant Commission, 'shall be cumulative and not exclusive and such rights,powers,remedies and privileges shall'be in addition to all rights, powers,;reinedies'andprivileges available'to Commission. 14. Miscellaneous. (a) This :Guaranty shall be governed by and construed in accord ance with.thte.laws of the State:61 California, exclusive of its laws°regarding the conflict'of laws. (b) Except;asprovided to the contrary herein, Guarantor waives all presentments,:demands for 'performance, notices of nonperformance, protests; notices of protest, notices of dishonor and,notices of acceptance of this. Guaranty and of the existence; creation dr°incurring'of all or any part of the • •Obligat ons,now existingor hereafter arising. (c) Time is of the,essence hereof. • (d) Whenever possible,each-provision of'this Guaranty shall be interpreted in such.manner as to.,be effective and valid under all applicable laws and regulations. 'If, however, any • provision of this Guaranty is determined'.;to be prohibited by or invalid under any such law or regulation, it shall be deemed modified to conform torthe minimum requirements thereof, or, if for any-reason,it is;not de'emed.so Modified, it shall be ineffective:and invalid only to the extent of such . prohibition or.,invalidity without affecting :the remaining provisions of.this Guaranty. (e) Commission, upon 'serving Participant with any notice of - default or any other:notice under the provisions of or with respect to the OPA or any other^Project'Document, shall also • serve a copy of stich notice upon Guarantor at the address*” • provided immediately:Tolloving/the signature of Guarantor on this Guaranty In the eventParticipant is in default under any Project Document, Guarantor' shall have the right to remedy or cure.such default, or cause 'the same to be cured. or remedied Within'-the period provided for Participant to cure such 'default and icrtherwise as provided in the • applicable Project Document, and Commission shall accept such performance'by or at the instance of Guarantor as if the , sat eliad been_timely made by Participant. Attachment'No. 10 • 7 • :(f) .This Guaranty shall inure'to the benefit"iof Commission, its • • successors%,and assigns, including, the assignees of the Obligations or of any other obligations hereby guaranteed, and shall bind the heirs,:executors, administrators personal. representatives, successors and assigns .Ofr Guarantor.. . Commission;may assign this Guaranty with respect to all.or any portion of the Obligations or such other obligations,and; when so assigned Guarantor shall be liable under this Guaranty to the assignee(s).'of the portion(S) of the Obligations or other obligations so assigned without in.any Manner affecting the liability of Guarantor hereunder to Commission with.respect to any portion of the Obligations or other obligations :retained,by Comrnissioh.. Guarantor herebywaives notice of assignment or transfer: Guarantor shall' have no tight JO assign or transfer its rights and • obligations hereunder without the prier=Written approval,of Commission. . (g) No provision of this Guaranty or right of Commission ;hereunder can be waived nor can Guarantor be "released from Guarantor's obligations hereunder except by a,writing' duly executed by Commission. No failure, on the part of Commission •to exercise, and no delay in exercising; any • right, power;remedy or privilege hereurider-shall.:operate'as a waiver thereof, nor:shall,any single or'partial exercise of any,such right, power, remedy or privilege preclude any other or further exercise•.thereof or the exercise of"any other right; power/remedy or privilege. (h) When the Context and'cconstruction so require, all "words used,in the singular herein shall be deemed,to have been used in the ,plural and the masculine shall include the . • feminine and neuter and vice;versa. The word "person" as used herein shall include any individual, company, firm, association, ;partnership; corporation, limited liability company„trust or other legal tentitybf.any kind whatsoever.- In,coristruinP this,Gilaranty, the captions and headings of this Guaranty are for convenience only and shall net be considered arpart o£this',Guaranty 0) So long as any obligation hereby guaranteed retrains unsatisfied, Giiarantonwill execute, acknowledge, deliver,. tile and record at Guarantor's expense all such further. agreements, ;instruments, certificates, documents, and assurances, and perform •such acts, as. Commission may request to effectuate the purposes of this Guaranty.. Attachment NN. 1Q • 8 • 15.. Participant's AbilitvtoTerform. Prior to making this Guaranty; . Guarantor has made an independent investigation of the financial condition,of Participant and the ability of Participant to perform the obligations hereby guaranteed. Guarantor has also received and:rev_iewed copies of the OPA and the other Project Documents., Guarantor hereby waives any defense that Guarantor may have by reason of the .failure of ,Commission to provide Guarantor with any information respectingthefinancial condition of Participant or Participant's ability to pay or perform any of the obligations hereby guaranteed, and 'any duty on.the.part of Commission to obtain or disclose to Guarantor any facts that Commission may now or hereafter know about Participant, regardless, of whether,Commission has reason to believe that any such facts,.materially increase the.risk beyond that.Which.Guarantor intends to assume or has reason to believe:that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor. Guarantor • understands and agrees that Guarantor is fully responsible for being,and keeping informed of the financial condition of Participant and of all circumstances bearing on the risk of nonperformance of any obligations hereby guaranteed. Guarantor is not relying upon or expecting Commission' to furnish any • information,now or hereafter in Comrriissions possession concerning any matter. An assignment of Participant's interest under the OPA shall not .relieve the Guarantor of its obligation :hereunder. 16. Termination oftGuaranty. This Guaranty shall terminate upon the repayment in full of the Proinissory.Note - Eligible„Construction Cost Loan and Promissory Note Tax Increment Loan, and the Commission shall confirm in writing such termination upon request of the Guarantor. IN WITNESS WHEREOF, the undersigned has executed this Guaranty effectiveathe day and year first above written. ,.2001 • LOK PETALUMA MARINA DEVELOPMENT COMPANY, LLC.,a California limited..liability 'company By: LMDC, INC.,;a California corporation • By: Kirkman L. Lok President • • By: Dennis A. MacDonneil, Secretary "GUARANTOR" LOK Hotel'.OPX-final. Attachment No. 10 G • r • 40_ Attachment in • Resolution Approving Amendment To Owner Participation Agreement By and Between The Petaluma Community Development Commission And The-LOK Petaluma Marina Hotel Company, LLC • • • RESOLUTION NO. A RES,OLUTIQN.OF THE,PETALUMA COMMUNITY DEVELOPMENT COMMISSION APPROVAL OE AMENDMENT TO THE.OWNER-PARTICIPATION AGREEMENEBY AND BETWEEN THE PCDC ANDITHE LOK PETALUMA MARINA HOTEL COMPANY, LLC: A: Whereas, the Petaluma Community,Development Commission of the City of Petaluma approved an Owner Participation Agreemeribwith LOK Marina Hotel Company, LLC on • December 11, 2000; and • B. Whereas,.Section 303 of the Agreement provides for.aischedule!ofperfoiuiance for the completion°ofthe construction of:project improvements; and, • C. Whereas, Attachment No 4, Item 7, of the-Agreement identifies both an action and date for the completion of the construction of project improvements; and D. Whereas, Section 702 of the Agreement contains provisions'for the Extension of Times of Performance; and E. Whereas, in accordance with the, provisions offSection 702 ofthe=Agreement, the LOK Petaluma-Marina Hotel Company, LLC, has.requested,a;six month extension.of time, for the completion of the construction bfprojeet improvements. E. Now, Therefore Be If Resolved, that the Petaluma Community Development Commission does hereby, approvelthe request for extension by the LOK`Petahna-Marina Hotel Company, LLC, as provided in the`revised Attachment No. 4, attached-hereto as Exhibit A. • • Thereby certify that'the'foregoing Resolution No. was duly and adopted by the Petaluma Community Development Commission,at,a.regular meeting held on March 5, 2001 by the following vote: • Commissioner Aye No Absent Thompson Cade•-Thompson Healy Maguire Moynihan O'Brien •rliatt E'..Ctark Thompson, Chairman ATTEST: Beverly I Kline, Recording Secretary • • • • • (02/0520.1 'NON 1,2:•13 FAX 6392104 NC DONOEGH-OAKLAND 41002' • ATTACHNENT „ SCIEDULE(OF PERFORMANCE Action Date • 1, Submission Evidence of Equity At least 10 days prior to disbursement of ,Capital and lvtortiage,Finanting. The Eligible Construction Cost Lan. Participant shall submit- to the Commission for review 'end ,ifitfroVal, evidence of equity capital n4 a mortgage financing commihnent, necessary' for development of'the Site.,(Seetitin 312) L Approval r.:-Evidence of'Equity Capital. Withal°days of submission. and /vicirtgage Vinancing 112ie Commission shall,approvmor disapprove , the-Participantinvidence of equity.cap ital and a mortgage ,finzificirig„commihaient. (Section 312) 3. Submission - Certificates of Insurance Priontoithe commencement of construction The Participant shall ',furnish to the of,,tht.karticipant's improvements on the Commission duplicate originals or Site, 0. appropriate certi.ficatea of bodily injury and property damage insurancetpolides. (Section 305) 4. Construction Loan Sarin* Instrnetionsi, Pnor to the first disbursement of the t Participant' and the Commission shall Eligible Consfruction Cost Loan. have.approved:and executeaconstruction loan escroVilne-tnicticini. (Section502) S. Governmental Permits. Ttiotparti4dpant Prior to commencement of construction • shall'abtairi any and alTpennits required of Participant:a improvements on the by the City oranyiother governmental Site. agency. (Seeticiii 302) 6. Commencement. of Construction Of Not Later thottec' tober 31,2000. Partici panv.s Improvements. The Participant shall commence constructioti of the irripleivanienti,-16.be conStrixted on the..8i* (Se.cti9Pt. .d3); • Completion of 'Construction of Within 4424 months after commencement Participant's IMprovethents.., The !thereof byrthd.PartiCipant Participant shallxorriplete:construction of. the',improvements M be constructed on • the'Site. (Sectidri:303) AttichrrientN' O. 4 •