Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
Res OB-024 (2)
OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: AUTHORIZE THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TO CONVEY A PORTION OF PROPERTY KNOWN AS A.P.N. 694-160-003 / PARCEL B (11.5 ACRES) TO THE REGENTS OF THE UNIVERSITY OF CALIFORNIA (UCR) AS PUBLIC USE LAND PURSUANT TO EXISTING OPTION AGREEMENT SUBMITTED BY: Martin Alvarez, Director of Economic Development DATE: December 3, 2012 CONTENTS: UCR Project Description / Concept Plan for Parcel B Site Map UCR DDA / First Amendment to DDA / Option Agreement Correspondence Dated June 5, 2012 Parcel B Legal Description Recommendation 1) That the Oversight Board waive further reading and adopt Resolution No. oB-024authorizing the conveyance of a portion of real property known as A.P.N 694-160-003 / Parcel B (11.5 acres) from the Successor Agency to the Palm Desert Redevelopment Agency to the Regents of the University of California (UCR) as public use land, pursuant to existing Option Agreement. Background On March 22, 2001, the former Palm Desert Redevelopment Agency entered into a Disposition and Development Agreement (DDA) with the Regents of the University of California, on behalf of its Riverside campus, and Richard J. Heckman Foundation to facilitate the creation of the University of California Riverside — Palm Desert Campus and its existing facilities (see attached DDA). The DDA facilitated the construction of infrastructure and facilities for the International Center of Entrepreneurial Management (ICEM) and the A. Gary Anderson Graduate School of Management. The DDA was subsequently amended on December 12, 2002 allowing the conveyance of 8.5 acres for $1.00 to the Regents of the University of California, Riverside, after the completion of the facility improvements (see attached First Amendment to DDA). Upon the completion of the UCR-Palm Desert improvements (Phase 1), and pursuant to the DDA, UCR was granted a 25-year option to acquire title an 11.5 acre site located adjacent to the UCR-Palm Desert Campus know as Parcel B (see attached site map). Parcel B is Oversight Board Staff Report Authorize Transfer of Parcel B per UCR's Option Agreement December 3, 2012 Page2of3 intended to accommodate the expansion of the UCR Palm Desert Campus and future uses consistent with UCR's mission (see attached Option Agreement). Pursuant to the Option Agreement, the purchase price of the Parcel B is $1.00, subject to the terms, conditions, and covenants of the DDA. The exercising of the Option Agreement shall be enforceable if the following conditions are met: a) Buyer is not in default under conditions of the DDA b) Buyer owns fee simple title to Parcel A and has completed construction of Phase I Center Improvements or Phase II per the DDA c) Buyer provides proof satisfactory to Seller (Successor Agency) that Buyer has necessary funding to construct and maintain future improvements d) Buyer agrees that the Expansion Facilities shall be constructed upon all or a substantial portion of the Property and used and maintained pursuant to the DDA. On June 5, 2012, the City received official notification from the Regents for the University of California requesting the opportunity to exercise their option on Parcel B (11.5 acres) pursuant to the existing DDA (see attached correspondence). UCR's interest in the parcel is in the context of their ongoing development of program opportunities for UCR's School of Medicine at the Palm Desert Campus. On November 19, 2012, UCR submitted information on the proposed development concept, illustrating UCR School of Medicine's intent and commitment to develop a complex of ambulatory clinical facilities on the Parcel B (see attached correspondence). The future complex would contain facilities for the development of clinical education foundation for both undergraduate and graduate medical education (residency) program in primary care and primary care specialties. UCR's attached correspondence provides a description of the program elements, timing, project delivery, and financing strategies. Phase I of the programmatic elements include the development of: 1. Clinical Building 2. Core Ancillary Building 3. Surgery Center Phase II of the programmatic elements include the development of: 1. Geriatric Activity Center a. Rehabilitation Services b. Indoor Rehabilitation Pool The total building coverage is anticipated between 110,000 - 280,000 square feet on 4 buildings, with a maximum of three levels. As part of the development of a Parcel B and UCR's School of Medicine, the current UCR-Palm Desert Campus facilities would be re - purposed to work in connection with the new clinical facilities proposed on Parcel B. The existing buildings would be reprogrammed to accommodate uses such as: \\srv-fi12k3\groups\rda\Martin Alvarez\2012\SR\OBSR\UCR Option Parcel Transfer 12-3-120B.doc Oversight Board Staff Report Authorize Transfer of Parcel B per UCR's Option Agreement December 3, 2012 Page3of3 • Population Based Health Outcomes Research Unit • Center for Healthy Learning, Living and Aging • Continuing Medical Education, lifelong learning opportunities; and • Co -location of non-UCR non -profits in the Coachella Valley The project is anticipated to be funded using both state university funds for the infrastructure of Parcel B and the utilization of a public/private partnership to construct the facilities. UCR has met the conditions of the Option Agreement dated January 31, 2003 and staff recommends that the Oversight Board authorize the transfer of Parcel B (11.5 acres) to the UCR, pursuant to the existing DDA, First Amendment to DDA and the Option Agreement. Fiscal Analysis There is no fiscal impact associated with this action. Submitted By: in Alvarez, Director of Economic Development Paul S. Gibson, Director of Finance M. Wohlmuth, Executive Director Moore, Director of Housing (G. -O , La warn AP s rr) BY OVERSIGHT BOARD ON 1- - VERIFIED BY '; ' �� Original on file with City Clerk's Office \\srv-fi12k3\groups\rda\Martin Alvarez\2012\SR\OBSR\UCR Option Parcel Transfer 12-3-120B.doc 4 UNIVE�`ITY UT CAIItURNtA School of IVERSIDE Medicine November 19, 2012 Mr. John Wohlmuth, City Manager City of Palm Desert 73-510 Fred Waring Drive Patin Desert, California 92260 Re: Transfer of Parcel B, UCR Patin Desert Campus Dear John: Attached is information for the development concept illustrating the UCR School of Medicine's intent and commitment to develop a complex of ambulatory clinical facilities should transfer of Parcel B, UCR Palm Desert Center be made to the UC Regents, and the UCR campus. The concept is just a schema, and much more effort to detail and flesh out the financials of the business plan needs to be completed over the next several months, but we hope that our attachment demonstrates the resources and effort in advance of the proposed land transfer. This conceptual plan outlines our potential delivery models, with details to be gained only after formal RFP and/or RFI processes and associated due diligence are undertaken. The generous opportunity provided by the successor agency of the City of Palm Desert Redevelopment Agency of the 11 acre parcel for UCR Health will enable development of Parcel B as the hub of UCR Health in Coachella Valley. This development, along with the reassignment of the existing buildings at UCR Palm Desert, will enable the UCR School of Medicine and UCR Health to bring clinical care, education, research, community service and economic stimulus to the entire region. We extend our deepest appreciation again for the time and effort which have brought us to this point, and appreciate the advice and counsel provided by staff of the City of Palm Desert throughout the process. We hope that our submittal reflects adequately the key components needed for review and approval of our request to exercise the option for Parcel B. We look forward to working very closely in partnership and collaboration for building the educational and clinical foundation of the UCR School of Medicine and UCR Health, and making tangible improvements on access and quality to improve the health and wellness of the Coachella Valley populations we serve. Sincerely, G. Richard Olds, MD Vice Chancellor, Health Affairs Dean, School of Medicine Page 1 of 7 RRuNiv,f4s,iy of LALifoft^,in School of IVERSIDE Medicine 41 UCR SCHOOL OF MEDICINE/UCR HEALTH PARCEL B OVERALL PROGRAM ELEMENTS, TIMING, PROJECT DELIVERY AND FINANCING STRATEGY: KEY PROGRAMMATIC ELEMENTS: PHASE I A: Clinical building 1 • Internal Medicine • Internal Medicine Geriatrics • Internal Medicine Sub -specialties • Shell for Clinical Expansion B: Core Ancillary building • Clinical lab • Radiology services • Pharmacy D: Surgery Center and Medical Office building • Surgery Center • Medical Office building • Shell for Clinical Expansion PHASE I OR PHASE II C: Geriatric Activity Center • Rehabilitation Services • Indoor Pool Phase I buildout are critical facilities for the development of the clinical education foundation for both undergraduate medical and graduate medical education (residency) programs in primary care and primary care specialities. PHASE II Phase II programming is the reserve of net Parcel B buildable space for clinical and operational expansion. Responding to the need to expand other clinical services beyond primary care, Phase II will program shell space reserved in Phase I for future growth and expansion induding general surgery and well as other surgical specialties. Surgery Center planning will incorporate Phase I as well as Phase II future expansion. Page 2 of 7 RIVERl.INIVEHSIIY Of CALIFOH''IIA School of SIDE Medicine ESTIMATED SCHEDULE: Preliminary estimate of project delivery estimated at 30 — 36 months from September 2013, estimated delivery March to September 2016. Calendar Year 2012 11/20 UCR submits MOU components to City of Palm Desert 12/3 Oversight Board of the Palm Desert Successor Agency to the Palm Desert Redevelopment Agency approves the transfer of Parcel B to UCR 12/6 Palm Desert forwards transfer documents to Department of Finance for 60 day review. 12/13 Successor Agency to the Palm Desert Successor Agency to the Palm Desert Redevelopment Agency approves the transfer of Parcel B to UCR 12/13 UCR team begins drafting RFQ as step 1 of selecting a private partner. YEAR 2013 2/6 Department of Finance completes review of transfer (please note the DOF may approve or object at this point. The DOF may request additional information within the 60 day review period. If DOF objects to the transfer, the City of Palm Desert can request a Meet and Confer meeting. 2/7 Assuming approval by the DOF, Palm Desert staff can record Quit Claim Deed with the County of Riverside to implement the transfer of land By 3/1 UC President Yudof accepts transfer; Parcel B becomes Regents property. (Assumes CEQA work necessary for transfer can be successfully completed by this date) 3/1 UCR releases and advertises RFQ 4/1 RFQ responses due to UCR 5/1 UCR develops, releases and advertises RFP, based on RFQ responses and other inputs 6/1 RFP responses due to UCR 7/1 Based on RFP responses, UCR team creates a short list of 3 to 4 firms and invites them to campus to make presentations in early to mid -July. RFP should include mandatory presentation dates at the Palm Desert site. 8/15 UCR selects first choice and negotiates development agreement Page 3 of 7 RIVERSIDEOt CAUFOk"lA School of Medicine • 9/15 Development agreement is executed by UCR and private partner and the project moves to implementation. Notes: The CEQA work needed to construct the project should be scoped and integrated into the above schedule and made part of the RFP, if not the RFQ, even though the work would be done by UC. PROGRAMMATIC RE -PURPOSING ELEMENTS OF PHASE I: The preliminary ideas and plans to repurpose the existing facilities at the Palm Desert campus Parcel A (Heckmann I and II) are integrated with the plans for programming of Parcel B. New clinical facilities of Parcel B have connections and linkages to programmatic elements of the repurposed facilities, including: • Population Based Health Outcomes Research unit • Center for Healthy Learning, Living and Aging • Continuing Medical Education, lifelong learning opportunities • Co -location of non-UCR affiliated non -profits in the Coachella Valley (HARC, Pathways for Success, Clinton Foundation (Alliance for Healthier Generations and Health Matters) to reside together on the campus. The common element of these groups is their shared passion and goals toward improving the health of the community and residents of the Valley, and by bringing them together at Palm Desert, we may be able to provide a neighborhood where collaboration, partnership and synergy might ignite and flourish, and duplicative efforts might be minimized. DEVELOPMENT AND FINANCING STRATEGY: The clinical programs comprising Phase 2 of the UCR School of Medicine Palm Desert campus would be delivered through a public/private partnership. UCR would provide the land, so-called parcel B, for construction of the clinical and support facilities under a long-term ground lease to a developer. UCR would provide to the developer the financing for the project's infrastructure. UCR physicians and other UCR health care professionals would provide high - quality healthcare in the facilities. UCR would receive ground lease revenues and clinical revenues from the project, as well as other ancillary revenues. The private partner would design, construct, finance, and operate the facilities under the terms of a development agreement, an operating agreement, and a ground lease. The partner would receive rent from UCR for its facility and operating costs and, depending on the final structure of the agreement with the partner, could share in clinical and ancillary revenues. Page 4 of 7 RIVERSIDESchool of Medicine The university would serve as the lead agency under CEQA and would hold design approval to itself. It would work closely with the city during the design process, adhering to its commitments under the DDAs between the city and the university to do so. The project would revert to university ownership at some point in time, the terms of which would be negotiated with the partner prior to the execution of the needed agreements, as cited above. Page 5 of 7 RESOLUTION NO. OB - 024 A RESOLUTION OF THE OVERSIGHT BOARD OF DIRECTORS FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY AUTHORIZING THE CONVEYANCE OF A PORTION OF PROPERTY KNOWN AS A.P.N. 694-160-003 / PARCEL B (11.5 ACRES) TO THE REGENTS OF THE UNIVERSITY OF CALIFORNIA (UCR) AS PUBLIC USE LAND PURSUANT TO EXISTING OPTION AGREEMENT RECITALS: A. Pursuant to Health and Safety Code Section 34179(3), all actions taken by the Oversight Board for Successor Agency to the Palm Desert Redevelopment Agency (Oversight Board) shall be adopted by resolution. There has been presented to this Oversight Board for approval of a conveyance of a portion of real property (11.5 acres) to the Regents of the University of California - Riverside as public use land for the expansion of educational programs at the UCR- Palm Desert Campus and pursuant to the existing Option Agreement entered in to on January 31, 2003. NOW, THEREFORE, THE OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Oversight Board hereby adopts Resolution No. OB - 024 approving the transfer of 11.5 acres to the Regents of California -Riverside as public use land pursuant to the existing Disposition and Development Agreement (DDA), First Amendment to DDA and Option Agreement, which are made a part hereof and attached hereto as "Exhibit `A;". Section 3. The staff of the Successor Agency is hereby directed to provide the State Department of Finance ("DOF") written notice and information regarding the action taken by the Oversight Board in Section 2 of this Resolution. Such notice and information shall be provided by electronic means and in a manner of DOF's choosing. Section 4. The officers of the Oversight Board and staff of the Successor Agency are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Resolution. 1 RES. NO. OB - 024 PASSED, APPROVED AND ADOPTED this day of , 2012. AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, CHAIR ATTEST: RACHELL D. KLASSEN, SECRETARY OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY 2 RESOLUTION NO. OB - 024 EXHIBIT A OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY • DISPOSITION AND DEVELOPMENT AGREEMENT DATED MARCH 21, 2001 • FIRST AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT DATED DECEMBER 12, 2002 • OPTION AGREEMENT DATED JANUARY 31, 2003 • PARCEL B LEGAL DESCRIPTION DISPOSITION AND DEVELOPMENT AGREEMENT THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement"), dated as of March 22 , 2001 is entered into by and among the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, on behalf of its Riverside campus ("UCR"), and, the RICHARD J. HECKMANN FOUNDATION, a California mutual benefit corporation ("Heckmann") and is executed with reference to the following circumstances as described herein. RECITALS A. The purpose of this Agreement is to effectuate the Redevelopment Plan for Project Area 2 of the Agency (the "Redevelopment Plan"), in the City of Palm Desert, California, by facilitating improvements to real property within the Project Area (as defined below). B. The Redevelopment Plan has been approved and adopted by Ordinance No. 509 of the City of Palm Desert adopted July 15, 1987. C. The Agency is a public body, corporate and politic, exercising governmental functions and powers, and organized and existing under the Community Redevelopment Law of the State of California. D. UCR is a constitutionally created corporation and arm of the State of California, and is governed by its Board of Regents. E. Construction of the Project will assist in the elimination of blight in the Project Area, provide additional jobs, and substantially improve the economic and physical condition in the Project Area in accordance' with the purposes and goals of the Redevelopment Plan. F. The land uses specified in this Agreement and the provisions relating to construction of the Project (as defined below) are consistent with the provisions of the Redevelopment Plan and each of its applicable elements. G. Heckmann and UCR are in the process of planning an International Center of Entrepreneurial Management ("ICEM") to be located within the A. Gary Anderson Graduate School of Management ("AGSM"), University of California, Riverside. The ICEM will require an initial facility composed of land, improvements and buildings and access to sufficient acreage to allow for expected expansion in the future. UCR desires that the ICEM be located on approximately eight and one half (8.5) acres more or less of that certain real property, as depicted and legally described on Exhibit A attached hereto and incorporated by reference herein ("Parcel A"), which 8.5 acres are adjacent to the approximately fifty-five (55) acres of that certain real property owned by the California State University ("CSU"), located at the northeast corner of Frank Sinatra Drive and Cook Street within the City of Palm Desert, California, within one mile of Interstate 10 and four miles from State Route 111 (the "CSU Property"). The ICEM improvements will be constructed by Heckmann and will include facilities that will be available for joint use by UCR and CSU, as are more particularly described on Exhibit B attached hereto and made a part hereof (the "Center Improvements"). RWGIMAN1 614980 11 H. UCR also desires an option to acquire fee title to an additional parcel of land of approximately eleven and one half (11.5) acres of that certain real property, as depicted and legally described on Exhibit A attached hereto and incorporated by reference herein ("Parcel B"), which is adjacent to Parcel A, in order to accommodate possible expansion of the ICEM in the future or other uses consistent with the Redevelopment Plan and UCR's mission. Parcels A and B (collectively, the "Site") are close to the center of the Coachella Valley. Cook Street and the interchange on Interstate 10 will provide excellent access to the Site for students residing in the region. The City of Palm Desert (the "City"), the Agency, and UCR intend to encourage, support and provide for other means of transportation to the Site, including bus, car-pooling and bicycle. I. CSU acquired the CSU Property pursuant to a Disposition and Development Agreement entered into by and between the Agency and CSU, dated as of November 16, 1999 (the "CSU DDA"). Under the terms of the CSU DDA, the Agency has agreed to reserve for a period of 10 years approximately one hundred forty-five (145) additional acres of land owned by the Agency and adjacent to the CSU Property, which includes the real property upon which UCR desires to locate the ICEM and related facilities. In other words, the total of approximately twenty (20) acres of land needed by UCR and Heckmann, consisting of Parcels A and B, is part of the afore- mentioned 145 acres of land owned by the Agency and reserved to CSU. J. Pursuant to a Memorandum of Understanding between UCR and CSU, executed on March 21, 2000 (the "MOU"), CSU has agreed to recommend necessary changes to the CSU DDA to the City and the CSU Trustees so that Parcel A can be committed immediately to the Center Improvements with an option to acquire Parcel B when the first phase of facilities for the ICEM has been completed on Parcel A and has been accepted by UCR. The parties to the MOU understand that such changes to the CSU DDA must be agreed to by all the parties to the CSU DDA before such changes can become effective. K. The Agency, UCR and Heckmann desire the development of the ICEM, the Center Improvements, related facilities, and the related infrastructure to proceed in a coordinated, cooperative, and timely manner. L. The Agency, UCR and Heckmann have negotiated this Agreement, by which the parties hereto agree that: (i) the Agency shall enter into a Lease with respect to Parcel A of the Site to Heckmann for construction, furnishing and equipping of the Center Improvements; (ii) Agency shall loan up to $2 million in funds for on- and off -site improvements to be completed by Heckmann; (iii) upon completion of development and construction of the Center Improvements, Heckmann shall convey title to the Center Improvements and all related facilities and improvements that it constructs on Parcel A of the Site to UCR; (iv) Agency shall convey to UCR fee simple title to Parcel A of the Site upon Heckmann's completion of construction of the Center Improvements thereon as defined by UCR's written acceptance of the Center Improvements and issuance of a certificate of occupancy for the Center Improvements; and (v) the Agency shall grant a twenty-five year option to UCR to acquire fee simple title to Parcel B of the Site upon completion and acceptance of the Center Improvements for further expansion and development of the ICEM or UCR's other mission related teaching, research and public service uses thereon. Heckmann has provided to the Agency proof satisfactory of its commitment to construct the Center Improvements on the Site and UCR has provided to Agency proof that it will accept the completed Center Improvements and underlying land. Such educational facility will yield significant educational, cultural, and economic benefits to the Coachella Valley region. RWGIMAN1 614980 11 2 M. The Agency, UCR, and Heckmann desire to enter into this Agreement in order to establish commitments for the proposed development and provision of public services, public uses, and public infrastructure related to the development of the Site. The Agency recognizes the benefit to the region and its citizens of having UCR acquire and operate an educational facility on the Site. UCR recognizes that it is in the best interests of the state and its citizens to develop the Site for purposes of its higher education mission. N. A material inducement to the Agency to enter into this Agreement is Heckmann's covenant to construct and UCR's commitment to maintain the ICEM and related facilities on the Site in accordance with the terms of this Agreement. O. The City and the Agency served as co -lead agencies for the Environmental Impact Report ("the EIR") on the proposed uses of the Site. The City and Agency duly considered and certified the EIR as completed on April 22, 1999. P. The Agency completed the report required by California Health and Safety Code Section 33433. Q. The Agency and the City held the public hearings required by California Health and Safety Code Section 33433 on , 2001. AGREEMENT NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants contained in this Agreement the parties hereto agree as follows: ARTICLE 1 DEFINITIONS. Section 1.1 Definitions. The following terms as used in this Agreement shall have the meanings given unless expressly provided to the contrary: 1.1.1 Agency means the Palm Desert Redevelopment Agency, 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. 1.1.2 Agency Board means the board of directors of the Palm Desert Redevelopment Agency. 1.1.3 Agreement means this Disposition and Development Agreement. 1.1.4 Center means the ICEM to be developed on the Site. 1.1.5 Center Improvements means any and all buildings, facilities, landscaping, infrastructure, utilities, and other improvements for the Center to be built on the Site or related off -site improvements, as described on Exhibit B. 1.1.6 City means the City of Palm Desert, a municipal corporation. RWGIMANI 614980 11 3 1.1.7 City Council means the City Council of the City of Palm Desert, a municipal corporation. 1.1.8 Parcel A Close of Escrow is defined in Section 2.6. 1.1.9 UCR means the Regents of the University of California, an arm of the State of California, and receiving its authority from the California Constitution. 1.1.10 Escrow Holder means a licensed title insurance company and escrow holder mutually selected by the Agency and UCR. 1.1.11 Hazardous Materials means any chemical, material or substance now or hereafter defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous waste," "restricted hazardous waste," "toxic substances," "pollutant or contaminant," "imminently hazardous chemical substance or mixture," "hazardous air pollutant," "toxic pollutant," or words of similar import under any local, state or federal law or under the regulations adopted or publications promulgated pursuant thereto applicable to the Site, including, without limitation: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq. ("CERCLA"); the Hazardous Materials Transportation Act, as amended, 49 U.S.C. § 1801, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251, et seq.; and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq. The term "Hazardous Materials" shall also include any of the following: any and all toxic or hazardous substances, materials or wastes listed in the United States Department of Transportation Table (49 CFR 172.101) or by the Environmental Protection Agency as hazardous substances (40 CFR Part 302) and in any and all .amendments thereto in effect as of' the date of the close of any escrow; oil, petroleum, petroleum products (including, without limitation, crude oil or any fraction thereof), natural gas, natural gas liquids, liquefied natural gas or synthetic gas usable for fuel, not otherwise designated as a hazardous substance under CERCLA; any substance which is toxic, explosive, corrosive, reactive, flammable, infectious or radioactive (including any source, special nuclear or by-product material as defined at 42 U.S.C. § 2011, et seq.), carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any governmental authority; asbestos in any form; urea formaldehyde foam insulation; transformers or other equipment which contain dielectric fluid containing levels of polychlorinated biphenyl's; radon gas; or any other chemical, material or substance (i) which poses a hazard to the Site, to adjacent properties, or to persons on or about the Site, (ii) which causes the Site to be in violation of any of the aforementioned laws or regulations, or (iii) the presence of which on or in the Site requires investigation, reporting or remediation under any such laws or regulations. 1.1.12 Lease means the lease to be granted to Heckmann by Agency regarding Parcel A of the Site in the form attached as Exhibit C. 1.1.13 Opening of Escrow means the date upon which Escrow Holder receives a fully executed copy of this Agreement, pursuant to Section 2.6. 1.1.14 Option Agreement means the option to purchase to be granted to UCR by Agency regarding Parcel B of the Site in the form attached as Exhibit E. RWGIMAN 1 614980 11 4 1.1.15 Planning Committee means the University Planning Committee, as defined in Section 4.2. 1.1.16 Proiect means Heckmann's development of the Site with the Center Improvements and upon acceptance by UCR, its operation thereof as described in this Agreement, including and covering both Parcels A and B. 1.1.17 Site means that certain real property depicted and legally described in Exhibit A, attached hereto and incorporated herein by reference, which shall be or is contemplated to be developed by Heckmann and upon acceptance, operated by UCR. For purposes of this Agreement, the Site is composed of approximately twenty (20) acres, consisting of eight and one half (8.5) acres in Parcel A and eleven and one half (11.5) acres in Parcel B. ARTICLE 2 PURCHASE . SALE AND OPTION OF THE SITE. Section 2.1 Transfer of the Site. Subject to and in accordance with the terms and conditions hereinafter set forth, the parties hereto agree that: (a) the Agency shall lease to Heckmann Parcel A of the Site for construction of the Center, the form of Lease is attached hereto as Exhibit C (the "Lease"); (b) upon completion of the Center Improvements and acceptance of the Center Improvements by UCR, Heckmann shall convey all its right, title and interest in and to the Center and any related facilities and improvements constructed in connection therewith on Parcel A of the Site to UCR and the Lease shall terminate; (c) after completion of construction of the Center Improvements by Heckmann and acceptance of the same by UCR, the Agency shall transfer to UCR, and UCR agrees to accept from the Agency, fee simple title to Parcel A of the Site, including all water, mineral, oil, gas, and geothermal rights to said parcel, and including the right to extract the same from said parcel, to the extent such mineral rights are owned by the Agency. The form of Grant Deed is attached hereto as Exhibit D: and (d) the Agency shall grant to UCR, and UCR agrees to accept from Agency, an option to acquire fee simple title to Parcel B of the Site, which option shall be exercisable by UCR pursuant to the terms set forth in an Option Agreement to be executed by and between the Agency and UCR and dated of even date herewith, the form of which is attached hereto as Exhibit E. Section 2.2 Purchase Price. The purchase price for Parcel A and Parcel B of the Site to be paid by UCR (the "Purchase Price") shall be the sum of $1.00, being the fair reuse value pursuant to the terms and conditions of this Agreement. Section 2.3 Condition of the Site. 2.3.1 UCR and Heckmann are granted permission to enter onto the Site for the purpose of inspecting the Site, including hazardous material and /or geotechnical testing of the soil. UCR and Heckmann, each jointly and severally, shall indemnify, hold harmless, and defend the Agency against and hold the Agency and the Site harmless from, all losses, costs, damages, liabilities, liens, and expenses, including, without limitation, reasonable attorneys' RWGIMANI 614980 11 5 fees, arising out of such entry and activities by UCR and/or Heckmann and each of their respective agents, employees, representatives, contractors or subcontractors, prior to the Close of Escrow, except to the extent any such losses, costs, damages, liabilities, and expenses arise out of the gross negligence or willful acts of the Agency and/or the City. At any time during its inspection of the Site, but prior to commencement of construction as evidenced by the start of grading on the Site by Heckmann or any other entity, UCR and Heckmann shall approve or disapprove of the condition of the Site. If UCR or Heckmann disapproves of the condition the Site, this Agreement and the Escrow shall terminate. UCR and Heckmann shall provide to the Agency its approval or disapproval in writing. UCR and Heckmann have been afforded access to the Site as described in Section 2.3.1 and opportunity to inspect the Site and shall rely solely upon their own inspection(s) of the Site and determination as to whether the physical condition of the Site shall be suitable for the intended purposes of the ICEM. UCR AND HECKMANN SPECIFICALLY ACKNOWLEDGE AND AGREE THAT AGENCY IS SELLING AND LEASING THE SITE ON AN "AS IS," "WHERE IS" AND "WITH ALL FAULTS" BASIS AND THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, UCR AND HECKMANN ARE NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM AGENCY, CITY, THEIR AGENTS, OFFICERS, EMPLOYEES, REPRESENTATIVES, OR BROKERS, AS TO ANY MATTERS CONCERNING THE SITE, INCLUDING WITHOUT LIMITATION: (i) the quality, nature, adequacy and physical condition of the Site, (ii) the quality, nature, adequacy, and physical condition of soils, geology and any ground water, (iii) the existence, quality, nature, adequacy and physical condition of utilities serving the Site, (iv) the development potential of the Site, and the Site's use, habitability, merchantability, or fitness, suitability, value or adequacy of the Site for any particular purpose, (v) the zoning or other legal status of the Site or any other public or private restrictions on use of the Site, (vi) the compliance of the Site or its operation with any applicable codes, laws, regulations, statutes, ordinances, covenants, conditions and restrictions of any governmental or quasi- governmental entity or of any other person or entity, (vii) the presence of Hazardous Materials on, under or about the Site or the adjoining or neighboring property, (viii) the condition of title to the Site, (ix) any agreements affecting the Site and (x) the economics of the Site. 2.3.2 Release. Without limiting the above, UCR and Heckmann, on behalf of themselves and their successors and assigns waive their rights to recover from, and forever release and discharge, Agency and City, their council members, affiliates, partners, trustees, shareholders, directors, officers, employees and agents of each of them, and their respective heirs, successors, personal representatives and assigns (collectively, the "Agency Related Parties"), from any and all demands, claims, legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens, judgments, costs or expenses whatsoever (including, without limitation, attomey's fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of or in any way be connected with the physical condition of the Site or any law or regulation applicable thereto, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.A. Sections 6901 et seq.), the Resources Conservation and Recovery Act of 1976 (42 U.S.A. Section 6901 et seq.), the Clean Water Act (33 U.S.A. Section 1251, et seq.), the Safe Drinking Water Act (14 U.S.A. Section 1401 et seq.), the Hazardous Materials Transportation Act (49 U.S.A. Section 1801, et seq.), the Toxic Substance Control Act (15 RWGIMANI 614980 11 6 U.S.A. Section 2601, et seq.), the California Hazardous Waste Control Law (Califprnia Health and Safety Code Section 25100, et seq.), the Porter -Cologne Water Quality Control Act (California Water Code Section 13000 et seq.), and the Safe Drinking Water and Toxic Enforcement Act of 1986 (California Health and Safety Code Section 25249.5, et.. seq.). However, in no event shall the foregoing be construed as a release of any third parties other than Agency and City and the Agency Related Parties, and the foregoing shall not release the Agency or the Agency Related Parties from any liability arising out of Agency's or the Agency Related Parties' willful misconduct or negligent actions occurring after the date hereof. UCR and Heckmann acknowledge and agree that: 2.3.2.1 The Agency has made no representation or warranty with respect to the Site except for those representations and warranties contained in this Agreement, and that the Agency will make no representations and warranties with respect to the Site, other than those contained in this Agreement. 2.3.2.2 Heckmann is leasing the Site with the ultimate objective of constructing the Center Improvements thereon for purposes of the ICEM and benefit of UCR. 2.3.2.3 UCR's decision to acquire the Site shall be based on the results of UCR's analysis of the reports it shall obtain prior to commencement of construction on the Site by Heckmann. 2.3.2.4 The Agency has made no representation or warranty as to the accuracy or completeness of any reports or other materials prepared by any persons, and UCR and Heckmann are not relying on the accuracy or completeness of any reports or other materials prepared by persons other than UCR, Heckmann, their respective agents, or contractors. 2.3.2.5 Except as specifically provided in this Agreement, the Agency has made no representation or warranty with respect to the use, fitness for a particular purpose, zoning, value, improvements, infrastructure, square footages or any other condition of the Site. UCR and Heckmann agree that the Agency has no obligation to remedy any faults, defects, or other adverse conditions described in any report or other material obtained by UCR or Heckmann, or delivered by the Agency to UCR or Heckmann, including the remediation of any Hazardous Material on the Site or any liability with respect thereto. Further UCR and Heckmann, on behalf of themselves and their successors, affiliates, partners, and assigns, hereby fully and entirely release and discharge the City (as a third party beneficiary hereof) and the Agency (including, but not limited to, the City's and the Agency's servants, employees, agents, representatives, successors, administrators, assigns, and attorneys), and of each of them alone, of and from any and all claims, causes of action, or demands, liabilities, damages, and losses, of whatever nature, anticipated or unanticipated, known or unknown, on account of the presence of any Hazardous Materials in, on, under, or about the Site or in connection with, or in any way related to the Site, if caused in any way by the Project, or for the physical condition of the Site or any portion thereof. UCR and Heckmann declare and represent that they are effecting and executing this release of the City and the Agency after having read all of this release and with full understanding of its meaning and effect and after having received full legal advice as to its rights from an attorney. THIS RELEASE CONSTITUTES AN EXPLICIT WAIVER BY UCR RWGIMAN1 614980 11 7 AND HECKMANN OF EACH AND ALL OF THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH STATES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." BY INITIALLING BELOW, UCR AND HECKMANN HEREBY WAIVE THE PROVISIONS OF SECTION 1542 IN CONNECTION WITH THE MATTERS WHCAH ARE THE SUBJECT OF TIE OREGOING WAIVERS AND RELEASES. Heckmann Section 2.4 Condition of Title: Title Insurance. 2.4.1 Promptly following the execution of this Agreement by all parties hereto, UCR shall order from Chicago Title Company (the "Title Company"), or another title company - mutually acceptable to the Agency and UCR, for delivery to UCR and to the Agency, a preliminary title report for an ALTA Owner's Standard Coverage Policy of Title Insurance covering the Site, setting forth all liens, encumbrances, easements, restrictions, conditions, pending litigation, judgments, administrative proceedings, and other matters affecting the Agency's title to the Site, together with copies of all documents relating to title exceptions referred to in the preliminary title report (collectively, the "Preliminary Title Report"). UCR shall approve or disapprove each exception shown on the Preliminary Title Report within fifty- five (55) calendar days following the receipt of same. Notwithstanding the foregoing, the Agency shall be under no obligation to remove any encumbrance on title, but the Agency agrees to cooperate in good faith with UCR in UCR's efforts to eliminate any encumbrance on title, provided the Agency is not obligated to pay any sums to the holder of such encumbrance to obtain the release thereof. 2.4.2 As of the date of this Agreement, the Agency is in possession of an ALTA survey with respect to the aggregate of approximately two hundred (200) acres of real property, including the 55 acres comprising the CSU Property and the adjacent 145 acres reserved by the Agency, as described in Recital I hereof, and the Agency shall make such relevant portions of said survey available to UCR promptly following the full execution of this Agreement. Upon written request of UCR, the Agency shall provide a re -certification by the surveyor, at the sole cost and expense of UCR, of such ALTA survey, with respect to the Site, to UCR (the "Survey") within forty-five (45) days after full execution of this Agreement. Subject to the terms of Section 2.4.1 above, UCR shall approve or disapprove each encroachment, overlap, boundary line dispute, or any other matter that materially and adversely affects title to the Site or that violates any law, rule, or regulation reflected on the Survey (each an "Exception") within thirty (30) days after receiving said Survey. Any such Exception that UCR disapproves is termed a "Disapproved Exception." If UCR is unable to obtain a discharge, satisfaction, release, or termination of a Disapproved Exception, or if the Agency does not elect to do so, then UCR shall have the right, RWGIMAN1 614980 11 8 AND HECKMANN OF EACH AND ALL OF THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH STATES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." BY INITIALLING BELOW, UCR AND HECKMANN HEREBY WAIVE THE PROVISIONS OF SECTION 1542 IN CONNECTION WITH THE MATTERS WHCAH ARE THE SUBJECT OF THE FOREGOING WAIVERS AND RELEASES. UCR _//1( Heckmann axe Section 2.4 Condition of Title; Title Insurance. 2.4.1 Promptly following the execution of this Agreement by all parties hereto, UCR shall order from Chicago Title Company (the "Title Company"), or another title company mutually acceptable to the Agency and UCR, for delivery to UCR and to the Agency, a preliminary title report for an ALTA Owner's Standard Coverage Policy of Title Insurance covering the Site, setting forth all liens, encumbrances, easements, restrictions, conditions, pending litigation, judgments, administrative proceedings, and other matters affecting the Agency's title to the Site, together with copies of all documents relating to title exceptions referred to in the preliminary title report (collectively, the "Preliminary Title Report"). UCR shall approve or disapprove each exception shown on the Preliminary Title Report within fifty- five (55) calendar days following the receipt of same. Notwithstanding the foregoing, the Agency shall be under no obligation to remove any encumbrance on title, but the Agency agrees to cooperate in good faith with UCR in UCR's efforts to eliminate any encumbrance on title, provided the Agency is not obligated to pay any sums to the holder of such encumbrance to obtain the release thereof. 2.4.2 As of the date of this Agreement, the Agency is in possession of an ALTA survey with respect to the aggregate of approximately two hundred (200) acres of real property, including the 55 acres comprising the CSU Property and the adjacent 145 acres reserved by the Agency, as described in Recital I hereof, and the Agency shall make such relevant portions of said survey available to UCR promptly following the full execution of this Agreement. Upon written request of UCR, the Agency shall provide a re -certification by the surveyor, at the sole cost and expense of UCR, of such ALTA survey, with respect to the Site, to UCR (the "Survey") within forty-five (45) days after full execution of this Agreement. Subject to the terms of Section 2.4.1 above, UCR shall approve or disapprove each encroachment, overlap, boundary line dispute, or any other matter that materially and adversely affects title to the Site or that violates any law, rule, or regulation reflected on the Survey (each an "Exception") within thirty (30) days after receiving said Survey. Any such Exception that UCR disapproves is termed a "Disapproved Exception." If UCR is unable to obtain a discharge, satisfaction, release, or termination of a Disapproved Exception, or if the Agency does not elect to do so, then UCR shall have the right, RWGIMAN1 614980 11 8 within sixty (60) days of receipt of the Survey, to: 2.4.2.1 waive the Disapproved Exception and proceed with Heckmann's construction of the ICEM on Parcel A and the Close of Escrow for same, accepting title to the Site subject to the Disapproved Exception, or 2.4.2.2 terminate this Agreement, in which event UCR, Heckmann and the Agency shall be relieved of all further obligation and liability to each other party under this Agreement; or 2.4.2.3 ask Agency for an extension of time to do further investigation prior to making a decision, which request shall not be unreasonably withheld by Agency. Section 2.5 Construction of the Center on Parcel A of the Site. Within ten (10) days after UCR's approval of the condition of title of the Site: (a) Agency and Heckmann shall execute a Lease substantially in the form attached hereto as Exhibit C with respect to Parcel A of the Site and Heckmann shall commence construction of the ICEM on Parcel A of the Site, and (b) Heckmann shall agree, upon completion of the Center Improvements and acceptance by UCR, to convey all its right, title and interest in and to the Center and any related facilities and improvements constructed in connection therewith on Parcel A of the Site to UCR and shall terminate the Lease and release any construction rights it may have. Section 2.6 Ooening and Closing of Escrow — Parcel A. Within the (10) days after the UCR's approval and acceptance of the completion of the construction of the ICEM by Heckmann, the Agency and UCR shall cause an escrow (the "Parcel A Escrow") to be opened with Escrow Holder for the transfer of Parcel A of the Site by the Agency to UCR. The Agency and UCR shall deposit with Escrow Holder a fully executed duplicate original of this Agreement, which shall serve as the escrow instructions. The Agency and UCR shall provide such additional escrow instructions as shall be necessary and consistent with this Agreement. Escrow Holder is authorized to act under this Agreement and to carry out its duties as Escrow Holder hereunder. Escrow shall close within thirty (30) days after the opening of the Escrow (the "Parcel A Close of Escrow"), unless an extension of time is mutually agreed to in writing by the Agency and UCR. Section 2.7 Conveyance of Parcel A. Upon satisfaction of the conditions to convey title to Parcel A of the Site, the Agency shall convey fee simple title to Parcel A of the Site to UCR by Grant Deed. Title to Parcel A of the Site shall be conveyed subject to (i) all exceptions affecting Parcel A of the Site shown on the Preliminary Title Report approved by UCR, (ii) the covenants, conditions and restrictions benefiting and burdening Parcel A of the Site as described in this Agreement, and (iii) any other matters which arise out of the actions of UCR or its agents and representatives (the "Permitted Exceptions"), but including all water, mineral, oil, gas, and geothermal rights to said parcel, including the right to extract the same from said parcel held by the Agency, if any. The Agency shall use reasonable efforts to cause any Disapproved Exceptions to be removed by the Parcel A Close of Escrow (so long as such exception may be removed without the Agency being obligated to pay any sums to the holder thereof), but if the Agency is unable to remove any disapproved non -monetary title exceptions, then the Agency shall not be in breach hereof but UCR shall have the right to terminate this Agreement. At the Parcel A Close of Escrow, UCR may, at UCR's sole cost and expense, purchase a CLTA or an RWGIMANI 614980 11 9 ALTA Owner's Standard Coverage Policy of Title Insurance, issued by the Title Company, in favor of UCR, insuring that title is vested in UCR free and clear of all liens, easements, covenants, conditions, restrictions, and other encumbrances of record, other than the Permitted Exceptions for Parcel A of the Site. Any and all policies of title insurance or special endorsements shall be obtained by UCR at its own cost and expense. Section 2.8 Escrow Charles. UCR shall be responsible for paying any and all charges related to the escrow and transfer of Parcel A, including without limitation, all Escrow charges, and all recording fees, documentary and local transfer taxes that are legally applicable to a transaction with respect to the Site wherein UCR is the transferee. Section 2.9 Conditions to Close of Escrow — Parcel A. The obligations of the Agency and UCR under this Agreement to close the escrow for the conveyance of Parcel A of the Site shall be subject to the satisfaction or waiver of each of the following conditions: 2.9.1 Heckmann shall have completed its construction, furnishing and equipping of the ICEM on Parcel A of the Site and delivered to Escrow for delivery to UCR, an appropriate executed bill of sale or other document transferring the Center Improvements to UCR ("Heckmann Transfer Document"). 2.9.2 The Agency and UCR shall have accepted and approved of Heckmann's construction of the ICEM. 2.9.3 UCR shall have committed, in writing, to operate and maintain the ICEM on Parcel A of the Site, and that it has obtained funding sufficient to do so. 2.9.4 The representations and warranties of the Agency and UCR contained in this Agreement shall be true and correct as of the Parcel A Close of Escrow. 2.9.5 The Agency shall have delivered all documents required to be delivered by the Agency pursuant to this Agreement. 2.9.6 The Title Company shall have issued a commitment to issue a Policy of Title Insurance, as required herein, upon the Parcel A Close of Escrow, subject only to the Permitted Exceptions on Parcel A of the Site and the Option Agreement on Parcel B of the Site, with liability equal to such sum as requested by UCR, showing fee title to Parcel A of the Site vested in UCR and that the Option to Parcel B of the Site, when exercised will provide fee title to Parcel B of the Site vested in UCR. If the foregoing conditions are not satisfied, and the Escrow has not closed, by September 30, 2004, then either the Agency or UCR shall have the right to terminate this Agreement, at which time the site and any improvements revert to the Agency. Section 2.10 Deposits into Escrow. The Agency, UCR, and Heckmann agree to deliver to Escrow Holder, prior to the Parcel A Close of Escrow, the following instruments and documents, the delivery of each of which shall be a condition precedent to the Close of Escrow for Parcel A: 2.10.1 The Grant Deed, duly executed and acknowledged by the Agency, conveying a fee simple interest in Parcel A of the Site to UCR; RWGIMANI 614980 11 10 2.10.2 The Option Agreement to acquire Parcel B of the Site, duly executed and acknowledged by Agency and UCR; 2.10.3 The Agency's affidavit as contemplated by California Revenue and Taxation Code §18662 (the "Withholding Affidavit"); 2.10.4 The Heckmann Transfer Document executed and acknowledged by Heckmann and UCR; 2.10.5 A Certification of Non -Foreign Status signed by Agency in accordance with Internal Revenue Code Section 1445 (the "FIRPTA Certificate"); and 2.10.6 Such proof of the Agency's, UCR's and Heckmann's authority and authorization to enter into this transaction as the Title Company may reasonably require in order to issue UCR's policy of title insurance. Section 2.11 Escrow's Closing Actions. Upon the Parcel A Close of Escrow, Escrow Holder shall close Escrow as follows: 2.11.1 Record the Grant Deed (marked for return to UCR) with the Riverside.. County Recorder; 2.11.2 Record the Option Agreement (marked for return to the Agency) with the Riverside County Recorder; 2.11.3 Obtain conformed copies of all instruments so recorded, bearing the County Recorder's file marks, and deliver a copy of same to the attorneys for both the Agency and UCR; 2.11.4 Issue the Title Policy, or cause the Title Company to issue the Title Policy, to UCR, with UCR as the insured; 2.11.5 If applicable, prorate any taxes, assessments, rents, and other charges, if any, as of the Close of Escrow, if and to the extent UCR shall be liable for payment thereof after the Close of Escrow; 2.11.6 Charge UCR for those costs and expenses to be paid by UCR under the terms of the Escrow and disburse any net funds remaining after the preceding disbursements to UCR; 2.11.7 Prepare and deliver to both UCR and the Agency one signed copy of Escrow Holder's closing statement showing all receipts and disbursements of Escrow; and 2.11.8 Deliver to UCR the FIRPTA Certificate and the Withholding Affidavit. 2.11.9 Deliver to UCR the Heckmann Transfer Document. Section 2.12 Additional Provisions. The Agency and UCR may execute additional appropriate escrow instructions if necessary as prepared by the Escrow Holder, which are consistent herewith. If there is any inconsistency between the terms hereof and the terms of the RWGIMAN 1 614980 11 11 additional escrow instructions, the terms hereof shall control unless an intent to amend the terms hereof is expressly stated in such instructions. Any amendment of these escrow instructions shall be in writing and signed by both the Agency and UCR. At the time of any amendment, Escrow Holder shall agree to carry out its duties as escrow holder under such amendment. Escrow Holder is instructed to send copies of notices, demands and communications between the Agency and UCR to or from the Agency or to or from UCR, to both parties to the addresses and in the manner established in Section 7.1 of this Agreement. ARTICLE 3 CONSTRUCTION, USE, MAINTENANCE, AND NON-DISCRIMINATION OBLIGATIONS. Section 3.1 Construction of Property. Heckmann agrees that it shall complete the construction of the Center Improvements on Parcel A of the Site as described on Exhibit B within three (3) years from the date of this Agreement, as such timing is more particularly set forth in the Schedule of Performance attached hereto as Exhibit F and incorporated herein by this reference. The cost of constructing the Project, including the costs for developing and constructing the Center Improvements thereon, and the cost of all infrastructures on the Site, shall be at the cost, expense, and responsibility of Heckmann and the Agency as follows: 3.1.1 Heckmann shall be responsible for costs directly associated with the construction of the Center Improvements, consisting of an approximately 20,000 square foot building for educational purposes pursuant to conceptual plans previously approved by the City's Planning Commission and consistent with the Center Improvements described on Exhibit B, and including, without limitation, furniture, equipment, overhead, insurance, contingency, architectural and other professional fees, and all other ancillary costs directly associated with the construction of the Center Improvements; 3.1.2 Up to an amount not to exceed $2,000,000.00, Agency shall advance funds for: (a) costs for off -site improvements associated with the construction of the Center Improvements and improving the Site (the "Off -Site Costs"), including but not limited to street improvements, bringing utilities to the Site, and traffic control; and, (b) funds necessary for on - site improvements other than costs directly associated with the construction of the buildings and facilities of the Center Improvements (the "On -Site Costs"), including but not limited to grading, parking, interior roadways, bringing utilities to the building, and landscaping, all of which are more particularly described on Exhibit G attached hereto and made a part hereof. Terms of the advances will be determined by Agency in its sole discretion. The advances for the Off -Site and On -Site Costs shall be reimbursed to the Agency by UCR on or before the date that is three (3) years after the Parcel A Close of Escrow. To the extent permitted by law, the reimbursement shall be made from State of California funds designated for use on the Site. To the extent there are not sufficient state funds, the reimbursement shall come from private funds, provided that any remaining funds necessary to fully reimburse the Agency shall be paid by UCR. Advances, if any, shall not bear interest. Any costs for construction of the Center Improvements beyond those provided for herein shall be the responsibility of UCR. Prior to commencement of construction of the Center Improvements, UCR may require the preparation of cost estimates and/or firm construction bids for Center Improvements ("Costs Analysis") for its review and approval. Within forty-five (45) days of receipt of satisfactory Costs Analysis, UCR may disapprove the Costs Analysis and terminate this Agreement Section 3.2 Use of Property. UCR shall make a good faith effort to use the Site only RWGIMAN 1 614980 11 12 for operation of the Center as part of the AGSM. Should demand or support for such operation fail to find adequate student interest or financial support, UCR may use'the property to support its activities which are educational, research or public service in nature as part of the mission of University of California, including university or college related service and administrative facilities and for no other purposes whatsoever, except as provided herein, in perpetuity. Notwithstanding the foregoing, UCR may lease or license the operation of retail, commercial, restaurant and service uses as defined by UCR's mission and permitted under any applicable legal or regulatory requirements that are incidental to and directly supportive of the operation of the Center or the AGSM, as applicable, and to the extent that same are customarily associated with similar universities. Such permitted uses include, but are not limited to, a student union, athletic and recreational facilities, student housing, bookstore, and food concessionaires and/or restaurants. Section 3.3 Maintenance of the Site. UCR shall maintain the Site, in a manner at least equal to the level of maintenance provided to other equivalent University of California facilities, in perpetuity. Section 3.4 Reversionary Rights due to Change in Use. If during the twenty-five (25) years after conveyance of Parcel A of the Site to UCR ("Reversionary Period"), except for periods of construction of new facilities or repair of existing facilities, UCR ceases to use or maintain the Site for operation of the Center or other educational purposes in accordance with the provisions of Section 3.2, then the Site and any improvements thereon shall revert to the Agency following one hundred eighty (180) days' notice to UCR and if UCR does not cure such default prior to the end of such 180 day period. Such reversion of the Site shall be free and clear of any and all liens and encumbrances that may have been created by or with the approval of UCR, other than utility easements and reasonable access easements. Section 3.5 Restriction on UCR's Transfer of the Site and Rights and Obligations Under this Agreement. During the Reversionary Period, except as provided in Section 3.2, UCR shall not convey, sell, encumber, hypothecate, lease or otherwise transfer (collectively, "Transfer") the Site or any portion thereof, or this Agreement, or any interest therein, without the prior written consent of the Agency, which consent may or may not be given in the sole and absolute discretion of the Agency, except as provided in Section 3.2. If at any time after the Reversionary Period, UCR decides to cease activities on the Site and dispose of the Site, it must first offer the Site, at fair market value, to CSU, and if CSU refuses to purchase the Site, then to the Agency. Fair market value shall be determined by agreement of UCR and CSU, or the Agency, as appropriate. If the parties are unable to reach agreement, then fair market value shall be determined by an appraisal performed by a MAI certified appraiser who is selected by the acquiring party and whose costs shall be paid by the acquiring party. Section 3.6 Obligation to Refrain from Discrimination. UCR covenants and agrees for itself and its successors and assigns, and for every successor in interest to the Site, or any part thereof, and to its rights under this Agreement, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, age, handicap, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, and UCR shall not 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, subleases, or vendors of the Site or any portion thereof. RWGIMANI 614980 11 13 Section 3.7 Form of Nondiscrimination and Non-Seereeation Clauses. UCR shall refrain from restricting the rental, sale or lease of the Site or any portion thereof, on the basis of sex, age, handicap, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or non -segregation clauses: 3.7.1 In deeds: "The grantee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of sex, marital status, race, age, handicaps color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or any person claiming under or through him, 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, subleases or vendors in the land herein conveyed. The foregoing covenants shall run with the land." 3.7.2 In leases: "The lessee herein covenants by and for himself, his heirs, executors, administrators and assigns, and all persons claiming under or through him, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, age, handicap, color, religion, creed, national origin or ancestry, in the leasing, subleasing, transferring, use, or enjoyment of the land herein leased, nor shall the lessee himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." 3.7.3 In contracts relating to the sale or transfer 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 sex, marital status, race, age, handicap, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, subtenants, sublessees or vendees of the land." Section 3.8 Restrictive Covenants. To the extent permitted by law, UCR agrees that the covenants and agreements set forth in the above Section 3.1 through Section 3.7 shall burden the Site and shall run with the land for the benefit of the Agency and its successors and assigns, and that the same shall remain in effect in perpetuity unless stated otherwise within the specific terms set out above. The Agency and its successors -in -interest may obtain by appropriate legal action specific performance of these covenants and restrictions and injunctive relief prohibiting the breach of such covenants and restrictions. The Grant Deed(s) regarding the Site shall set forth the restrictive covenants on the Site as required by Section 3.7, above, restricting and burdening the Site, as set forth in this Article. Such restrictive covenants shall be in a form and in substance that shall be subject to the approval of UCR and the Agency; shall provide that the restrictive covenants shall remain in effect in perpetuity (unless stated otherwise within the specific terms set out above); and shall provide that the restrictive covenants shall be enforceable RWGIMAN1 614980 11 14 by the Agency and its successors -in -interest by appropriate legal action for specific performance of their covenants and restrictions and for injunctive relief prohibiting the breach of their covenants and restrictions. ARTICLE 4 DEVELOPMENT OF THE PROJECT. Section 4.1 Development of Parcel A. Prior to transfer of Parcel A to UCR, Heckmann shall construct and develop, or cause to be developed, the Center on the Site, in accordance with any and all federal, state and local laws, rules and regulations in connection with such construction, and all terms, conditions and requirements of this Agreement. Section 4.2 Development of Parcel B. After transfer of Parcel A to UCR, the further development of Parcel A and development of Parcel B of the Site shall be governed by this Section. The University Planning Committee (the "Planning Committee") shall be the same as that which was established by CSU and whose charge will be to review all interim and permanent development proposed for the Site, advising and recommending action to the Chancellor of the University of California, Riverside, and the President of California State University, San Bernardino, regarding land owned by the State. The Planning Committee will review proposed developments prior to submission for action. The Planning Committee will be composed of thirteen (13) members. Five (5) will be identified by the Mayor of Palm Desert, five (5) will be identified by the President of CSU, and two (2) will be identified by the Chancellor of the University of California, Riverside. The Mayor, the President of CSU and the Chancellor of UCR will jointly identify the 13th member, who will be the Chair. The President of CSU and the Chancellor of UCR shall formally appoint the Planning Committee. Section 4.3 Air Emissions. Heckmann during construction and UCR during operation thereafter will work with the South Coast Air Quality Management District (SCAQMD) to minimize its impact upon the air quality of the Coachella Valley region. UCR is committed to mitigation measures related to regional and project impacts upon air quality. Section 4.4 Compliance by Contractors. UCR and Heckmann shall require contractors to take appropriate measures necessary to reduce construction related impacts upon local traffic, air quality and noise. Section 4.5 Erosion Control. UCR and Heckmann shall implement erosion control measures to protect against the impacts of construction and project generated urban runoff. Section 4.6 Safety. UCR and Heckmann shall coordinate campus development with local law enforcement and fire protection agencies, and establish a campus office of public safety as the ICEM develops. Once established, the office would enter into mutual aid agreements with appropriate local agencies, as required by law. Section 4.7 Community. UCR and Heckmann shall work with the City and the Agency, and other local agencies, to develop programs for reducing impacts of campus development with respect to housing, air quality, traffic, public services and noise. UCR and Heckmann shall coordinate initial Parcel A and ICEM development with local school districts, community colleges, and other public independent colleges and universities in the region. UCR RWGIMANI 614980 11 15 and Heckmann shall coordinate toxic materials disposal plans and procedures with any necessary agencies. UCR and Heckmann shall coordinate campus efforts with the community concerning alternative powered vehicle use and ride sharing programs. Section 4.8 Local. State and Federal Laws. UCR and Heckmann shall carry out the construction of the Center Improvements on the Site in conformity with all laws applicable to Agency, UCR and Heckmann, including all applicable federal and state occupation, safety and health standards, including, without limitation, prevailing wage laws and public bidding requirements. Section 4.9 Anti -discrimination Durine Construction. UCR and Heckmann, for each of itself and its respective successors and assigns, agrees that it shall not discriminate against any employee or applicant for employment because of age, sex, marital status, race, handicap, color, religion, creed, ancestry, or national origin in the construction of the Center Improvements, as required by law. Section 4.10 Taxes. Assessments. Encumbrances and Liens. UCR and/or Heckmann shall pay when due, to the extent UCR and/or Heckmann is legally obligated to do so, all real property taxes and assessments, if any, assessed or levied on the Site. Section 4.11 No Agency Created. In performing this Agreement, neither UCR nor Heckmann is the agent of the Agency or the City. The Agency and the City are not agents of UCR or Heckmann. Neither the Agency nor the City shall have any responsibility whatsoever for payment to any contractor or supplier of Heckmann. UCR and Heckmann shall not have any responsibility whatsoever for payment to any contractor or supplier of the Agency or the City. ARTICLE 5 EVENTS OF DEFAULT. REMEDIES AND TERMINATION., Section 5.1 Defaults — Definition. Occurrence of any or all of the following breaches shall constitute a default ("Event of Default") under this Agreement: 5.1.1 Heckmann's failure to comply with the development of the Center in accordance with the Schedule of Performance. 5.1.2 UCR's failure to comply with the use restrictions, the maintenance requirements, and/or the non-discrimination or other restrictive covenants covering the Site in accordance with Article 3 hereunder. 5.1.3 A breach of any material term of this Agreement by any party hereto not involving the payment of money, and failure of such party to cure such breach within the time period stated, or if no cure period is stated, then within thirty (30) days after the non -defaulting party has given notice to the defaulting party; provided, however, if such breach is not reasonably curable within such thirty (30) day period, then such party shall be deemed in Default only if such party does not commence to cure such breach within such thirty (30) day period and thereafter fails to diligently pursue a cure of such breach to completion unless the provision breached provides otherwise; RWGIMAN1 614980 11 16 5.1.4 The Agency's failure or refusal to provide any requested approvals without good faith or a legitimate reason which could cause UCR to be deemed in breach of this Agreement or default or threat thereof; 5.1.5 Any breach of this Agreement by any party hereto involving the payment of money, and the continuance of such breach for a period of thirty (30) days after the non - defaulting party has given written notice to the defaulting party, as specified in Section 7.1. It is specifically acknowledged that any breach by the City, the Agency, Heckmann or UCR, of any other agreement between UCR and/or Heckmann and the Agency or the City, shall be a breach hereof and of each other agreement between UCR and/or Heckmann and the Agency or the City, and any breach hereof shall be a breach by UCR, Heckmann, the Agency or the City, as applicable, of each other agreement between UCR and/or Heckmann and the Agency or the City. Section 5.2 Remedies in the Event of Default. In the Event of Default by any party hereto, the non -defaulting party shall have the right to terminate this Agreement by delivering written notice thereof to the defaulting party and to Escrow Holder, subject to the rights of the defaulting party to cure such Event of Default as provided above. Such party may also seek" against the defaulting party any available remedies at law or equity, including but not limited to, the right to receive damages or to pursue an action for specific performance. Section 5.3 No Personal Liability. No representative, agent, attorney, consultant, or employee of the Agency shall personally be liable to UCR or Heckmann or any successor in interest of UCR or Heckmann, in the event of any Event of Default or breach by the Agency, or for any amount which may become due to UCR or Heckmann or their respective successor(s) in interest, on any obligation under the terms of this Agreement. No representative, agent, attorney, consultant, or employee of UCR or Heckmann shall personally be liable to the Agency or any successor in interest of the Agency, in the event of any Event of Default by UCR or Heckmann, or for any amount which may become due to the Agency or any successor in interest, on any obligation under the terms of this Agreement. Section 5.4 Rights and Remedies are Cumulative. The rights and remedies of the parties hereto are cumulative, and the exercise by any party of one or more of such rights or remedies shall not preclude the exercise by it, at the same time or different times, of any other rights or remedies for the same default or any other default by the non -defaulting party. Section 5.5 Inaction Not a Waiver of Default,. Any failures or delays by any party hereto in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive any such party of its rights to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. The acceptance by a party hereto of less than the full performance from any other party shall not constitute a waiver of such party's right to demand and receive the full amount due, unless such party executes a specific accord and satisfaction. ARTICLE 6 INDEMNITY. Section 6.1 UCR's Indemnity. From and after the date of recordation of a grant deed to UCR with respect to Parcel A and/or B of the Site, UCR shall indemnify, defend, protect, and hold harmless the Agency and the City, and their agents, employees, attorneys, and RWGIMAN1 614980 11 17 representatives, from and against all losses, liabilities, claims, damages, costs and expenses (including all reasonable out-of-pocket litigation costs and reasonable attorney's fees) and demands of any nature whatsoever, related directly or indirectly to, or arising out of or in connection with: (i) the development of the Center Improvements on such Parcel(s) of the Site or the use, ownership, management, occupancy, or possession of such Parcel(s) of the Site, (ii) any of UCR's activities on such Parcel(s) of the Site (or the activities of UCR's agents, employees, lessees, representatives, licensees, guests, invitees, contractors, subcontractors, or independent contractors on such Parcel(s) of the Site), except to the extent such losses or liabilities are caused by the negligence or conduct of the Agency or the City or its agents or contractors. UCR shall defend, at UCR's expense, including attorneys' fees and costs, the Agency and the City, and the Agency's and the City's respective council members, board members, officers, employees, representatives, agents, attorneys, and consultants, in any legal action or threatened legal action (including arbitrations and mediations) based upon such alleged acts or omissions. The Agency and the City may in their discretion participate in the defense of any such legal action. Section 6.2 Heckmann's Indemnity. From and after the date of execution of a lease in favor of Heckmann with respect to Parcel A of the Site, Heckmann shall indemnify, defend, protect, and hold harmless the Agency and the City, and their agents, employees, attorneys, and representatives, from and against all losses, liabilities, claims, damages, costs and expenses (including all reasonable out-of-pocket litigation costs and reasonable attorney's fees) and demands of any nature whatsoever, related directly or indirectly to, or arising out of or in connection with: (i) the construction, furnishing, equipping and development of the Center Improvements on Parcel A of the Site or the use, ownership, management, occupancy, or possession of Parcel A of the Site, (ii) any of Heckmann's activities on Parcel A of the Site (or the activities of Heckmann's agents, employees, lessees, representatives, licensees, guests, invitees, contractors, subcontractors, or independent contractors on Parcel A of the Site), except to the extent such losses or liabilities are caused by the negligence or conduct of the Agency or the City or its agents or contractors. Heckmann shall defend, at Heckmann's expense, including attorneys' fees and costs, the Agency and the City, and the Agency's and the City's respective council members, board members, officers, employees, representatives, agents, attorneys, and consultants, in any legal action or threatened legal action (including arbitrations and mediations) based upon such alleged acts or omissions. The Agency and the City may in their discretion participate in the defense of any such legal action. ARTICLE 7 GENERAL PROVISIONS. Section 7.1 Notices. All notices and demands required or allowed to be given hereunder shall be given in writing by U.S. certified mail, postage prepaid, and return receipt requested, or by personal delivery. Notices shall be considered given upon the earlier of (a) RWGIMANI 614980 11 18 personal delivery or (b) two (2) business days after deposit or delivery shown on the return receipt in the United States mail, postage prepaid, certified or registered, return receipt requested. A copy of all notices shall be sent to Escrow Holder. Notices shall be addressed as provided below for the respective party; provided that if any party gives notice in writing of a change of name or address, notices to such party shall thereafter be given as demanded in that notice: The Agency: With a copy to: Mr. Carlos L. Ortega City Manager/Executive Director Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Telephone: (760) 346-0611 Facsimile: (760) 341-6372 Richards, Watson & Gershon A Professional Corporation 333 South Hope Street, 38th Floor Los Angeles, California 90071 Attention: William L. Strausz, Esq. Telephone: (213) 626-8484 Facsimile: (213) 626-0078 UCR: Chancellor, University of California Riverside, California With a copy to: Dean, A. Gary Anderson Graduate School of Management University of California Riverside, California Heckmann: Richard J. Heckmann Foundation [to be provided] With a copy to: Section 7.2 Construction. The parties hereto agree that each party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement or any amendments or exhibits thereto. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the parties hereto. Section 7.3 Force Maieure. Notwithstanding anything to the contrary in this Agreement, Heckmann's unexcused material failure to complete the Center Improvements required to be completed according to this Agreement within three (3) years from the date of this Agreement shall be a breach hereof; provided, however, nonperformance shall be excused when performance is prevented or delayed by reason of any of the following forces reasonably beyond the control of such party: (i) war, insurrection, riot, flood, severe weather, earthquake, fire, casualty, acts of public enemy, governmental restriction, litigation, acts or failures to act of any RWGIMANI 614980 11 19 governmental agency or entity, including the Agency, or (ii) inability to secure necessary labor, materials or tools, strikes, lockouts, delays of any contractor, subcontractor or supplier. In the event of an occurrence described in clauses (i) and (ii) above, such nonperformance shall be excused and the time of performance shall be extended by the number of days the matters described in clauses (i) and (ii) above prevent or delay performance. Section 7.4 Interpretation. In this Agreement the neuter gender includes the feminine and masculine, and singular number includes the plural, and the words "person" and "party" include corporation, partnership, firm, trust, or association wherever the context so requires. Section 7.5 Time of the Essence. Time is of the essence of this Agreement. Section 7.6 Warranty Against Payment of Consideration for Agreement. UCR, Heckmann, the Agency and the City, warrant that they have not paid or given, and will not pay or give, to any third person, any money or other consideration for obtaining this Agreement, other than normal costs of conducting business and costs of professional services such as architects, engineers and attorneys. Section 7.7 Entire Agreement. Waivers and Amendments. This Agreement may be executed in duplicate originals. Escrow Holder may accept escrow instructions in counterparts. " This Agreement, together with all attachments and exhibits hereto, and all agreements executed pursuant hereto, constitutes the entire understanding and agreement of the parties hereto with respect to the subject matter hereof. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties hereto with respect to the subject matter hereof. Any amendments to this Agreement shall be effective only when duly executed by the parties hereto in writing and deposited with Escrow Holder, if made prior to Close of Escrow. No subsequent agreement, representation or promise made by any party hereto, or by or to any employee, officer, agent or representative of any such party, shall be of any effect unless it is in writing and executed by the party to be bound thereby. No person is authorized to make, and by execution hereof UCR, Heckmann and the Agency acknowledge that no person has made, any representation, warranty, guaranty or promise except as set forth herein, and no agreement, statement, representation or promise made by any such person which is not contained herein shall be valid or binding upon UCR, Heckmann or the Agency. Section 7.8 Severability. Each and every provision of this Agreement is, and shall be construed to be, a separate and independent covenant and agreement. If any term or provision of this Agreement or the application thereof shall to any extent be held to be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to circumstances other than those to which it is invalid or unenforceable, shall not be affected hereby, and each term and provision of this Agreement shall be valid and shall be enforced to the extent permitted by law. Section 7.9 Headings. All section headings and subheadings are inserted for convenience only and shall have no effect on the construction or interpretation of this Agreement. The references in this agreement to "Section" shall refer to the sections of this Agreement unless it is clear from the context that another meaning is intended. RWGIMANI 614980 11 20 Section 7.10 Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For purposes of this Agreement, facsimile signatures shall be deemed to be original signatures, and shall be followed by the immediate overnight delivery of original signature pages. Section 7.11 No Third Party Beneficiaries other than the City. The City shall be a named third party beneficiary of this Agreement. This Agreement is made and entered into for the sole protection and benefit of the Agency, UCR, Heckmann, the City and each of their respective successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. Section 7.12 Governing Law; Jurisdiction; Service of Process. This Agreement and the rights of the parties hereto shall be governed by the law of the State of California. The parties hereto consent to the exclusive jurisdiction of the California Superior Court for the County of Riverside. If any legal action is commenced by UCR and/or Heckmann against the Agency, or by Agency against UCR and/or Heckmann, service of process on the Agency shall be made by personal service upon the executive director or secretary of the Agency, or in such other manner as may be provided by law. If any legal action is commenced by Agency against UCR, service of process upon UCR shall be made by personal service upon the President of the Board of Trustees of UCR, or in such other manner as may be provided by law. UCR agrees, for the benefit of the Agency, that it shall designate an agent for service of process in the State of California in the manner prescribed by law, and if it fails to do so, the State Attorney General of the State of California is designated as agent for UCR, with full authority to receive such service of process on its behalf, which designation and authorization shall survive the Parcel A Close of Escrow and shall be irrevocable. Section 7.13 Survival. The provisions hereof shall not terminate but rather shall survive any conveyance hereunder and the delivery of all consideration. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the day and year first above written. "UCR": "The Agency": THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus / .� By: By: �' "j/✓-r Carlos L. Ortega, Executive Director osgX� P. Mullinix, Senior Vice President ATTEST: /a4444 T. 0(4117 PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic By: Secretary RWGIMANI 614980 11 21 RICHARD J. HECKMANN FOUNDATION, a California mutual benefit corporation By: APPROVED AS TO FORM: Richards, Watson & Gershon, a professional corporation By: Agency Attorney RWGIMANI 614980 11 22 Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G LIST OF EXHIBITS — Legal Description and Site Plan — Center Improvements — Form of Lease — Form of Grant Deed — Form of Option Agreement — Schedule of Performance — On and Off -Site Improvements RWGIMANI 614980 11 I. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the day and year first above written. "UCR": THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, RIVERSIDE By: Raymond L. Orbach, Chancellor By: RICHARD J. HECKMANN FOUNDATION, a By Title: APPROVED AS TO FORM: Richards, Watson & Gershon, a professional corporation Agency Attorney "The Agency": PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic By: Carlos L. Orteg !Executive Director ATTEST: P6402\0464\614980.11 22 GERALD FORD DRIVE P.O.B. 67' 67' 1 R.S. 103/68-69 / SCALE 1 "=300' 1189°49'59"E 783.33' 33134 FRANK LEGEND — -- PROPERTY TO BE DEEDED. \� N •,' 10 ' fa n RING ROAD R = 912.50' 11.46ACRES �— L9 T.P.O. B. N89 50'32"E 2652.59' SINATRA DRIVE PREPARED BY: !!°° E 0.Nc pave . S.' 206 73.710 try 7er40L soy Ks let A,4u[ CA 20022 NIP 0[w,. CA 22260 323 726•2322 760-773.6200 F 0 323.726•2321 f4i• 760 773.6603 53' LINE AND CURVE DATA NO. BRG. / DELTA 0 N89°49'59"E • NO°I0'0l"W 0 N89°49'59"E to S87°03'59"E • N89°50'32"E NOO°09'28"W Q S23°41'17"E • SOO°09'28"E c9 S89°50'32"W 0 44°52'35" Cl 84°58'49" C3 23°31'49" • 41°48'52" 1 RADIUS LENGTH 92.52' 81.00' 234.71' 480.80' 205.00' 660.76' 127.63' 272.86' 857.22' 965.50' 756.22' 34.50' 51.17' 447.00' 183.57' 34.50' 25.18' UCR HECKMANN CENTER DEED PLAT DESCRIPTION POR. SECTION 34 SEC 34 , T. 4 S., R. 6 E, S.B.M. E2 m L 0 SHUT I OP I PILE REP / 0I —704 LEGAL DESCRIPTION All that portion of Section 34, in Township 4 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, which bears S89°49'59"W 783.33 feet from the Southeast corner of Section 33, Township 4 South, Range 6 East, San Bernardino Meridian; Thence N89°49'59"E 92.52 feet along the South line of said Section 33; Thence NO°10'01"W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N89°49'59"E 234.71 feet along said parallel line and the Northerly right of way of Frank Sinatra Drive; Thence S87°03'59"E 480.80 feet; Thence N89°50'32"E 205.00 feet to the True Point of Beginning; Thence NO°09'28"W 660.76 feet to the beginning of a non tangent curve concave Northeasterly and having a radius of 965.50 feet; a radial line of said curve through said point bears S26°12'28"W; Thence Easterly 756.22 feet along said curve through an angle of 44°52'35" to the beginning of a tangent curve concave Southwesterly and having a radius of 34.50 feet; Thence Southeasterly 51.17 feet along said curve through an angle of 84°58'49"; Thence S23°41'17"E 127.63 feet to the beginning of a tangent curve concave Southwesterly and having a radius of 447.00 feet; Thence Southerly 183.57 feet along said curve through an angle of 23°31'49"; Thence SO°09'28"E 272.86 feet to the beginning of a tangent curve concave Northwesterly and having a radius of 34.50 feet; Thence Southwesterly 25.18 feet along said curve through an angle of 41 °48' 52" to a point on the Northerly right of way of said Frank Sinatra Drive; Thence non tangent to said curve S89°50'32"W 857.22 feet along said Northerly right of way to the True Point of Beginning; The parcel described herein contains 11.467 acres, more or less. JMS Engineering, Inc. 73-710 Fred Waring Drive Palm Desert, California 92260 (760) 773-6600 Wed Mar 07 10:38:40 2001 PROJECT: D:\JMS-Jobs\01-704 Heckmann\01-704 Heckmann East Parcel.pro Pt# Bearing Curve Data Distance Northing Easting 0 0 0 0 0 0 0 0 0 NO0°09'28"W 660.76 ft S63°47'31"E 0.00 ft 10057.9109 10718.6684 10718.6684 S86°13'49"E 737.03 ft Radius Point: 0 11584.9116 Radius: 965.50 ft Delta: 44°52'35" Left Arc: 756.21 ft Middle Ordinate: 73.10 ft External: 79.08 ft Deg of Curvature: 5°56'04" Arc Definition Tangent: 398.70 ft 10670.2111 10670.2111 S66°10'42"E 46.61 ft Radius Point: 0 10637.5263 Radius: 34.50 ft Delta: 84°58'49" Right Arc: 51.17 ft Middle Ordinate: 9.06 ft External: 12.29 ft Deg of Curvature: 166°04'31" Tangent: 31.60 ft N71°19'54"E 0.00 ft S23°41'17"E 127.63 ft S11°55'23"E 182.29 ft Radius Point: 0 Radius: 447.00 ft Delta: 23°31'49" Arc: 183.57 ft Middle Ordinate: 9.39 ft External: 9.59 ft Deg of Curvature: 12°49'04" Tangent: 93.10 ft S00°09'28"E 272.86 ft S20°44'58"W 24.62 ft Radius Point: 0 Radius: 34.50 ft Delta: 41°48'52" Arc Definition 10651.3858 10534.5091 10354.9237 Right Arc Definition 10356.1518 10083.2928 10083.1978 Right 11012.1617 11010.3422 11010.3422 11436.7340 11745.7775 11745.7775 11756.8206 11788.4167 11839.6929 11430.3543 11877.3536 11878.1050 11843.6051 Arc: Middle Ordinate: External: Deg of Curvature: Tangent: 0 25.18 ft 2.27 ft 2.43 ft 166°04'29" 13.18 ft S89°50'32"W 857.22 ft 0 Arc Definition 10060.2697 10057.9092 11869.3826 11012.1658 Closing latitude Closing departure Closing bearing Closing distance Total traverse length Total error of closure Error of closure in latitute Error of closure in departure Area Area = -0.00171 = 0.00410 = N67°22'15"W = 0.00444 = 2909.02 (2934.60) = 1/655227 = 1/1702931 = 1/709877 = 499516.72 sq ft. = 11.467 ACRES. JMS Engineering, Inc. 73-710 Fred Waring Drive Palm Desert, California 92260 (760) 773-6600 Wed Mar 07 10:46:32 2001 PROJECT: D:\JMS-Jobs\01-704 Heckmann\01-704 Heckmann Overall Parcel.pro Pt# Bearing Curve Data Distance Northing Easting 0 0 0 0 0 0 0 0 0 N42°11'33"E 998.61 ft S52°15'46"E 0.00 ft S80°27'56"E 912.58 ft Radius Point: 0 Radius: 965.50 ft Delta: 56°24'20" Arc: 950.50 ft Middle Ordinate: 114.62 ft External: 130.07 ft Deg of Curvature: 5°56'04" Tangent: 517.76 ft S71°19'48"W 0.00 ft S66°10'42"E 46.61 ft Radius Point: 0 Radius: 34.50 ft Delta: 84°58'49" Arc: 51.17 ft Middle Ordinate: 9.06 ft External: 12.29 ft Deg of Curvature: 166°04'31" Tangent: 31.60 ft S23°41'17"E 127.63 ft S11°55'23"E 182.29 ft Radius Point: 0 Radius: 447.00 ft Delta: 23°31'49" Arc: 183.57 ft Middle Ordinate: 9.39 ft External: 9.59 ft Deg of Curvature: 12°49'04" Tangent: 93.10 ft S00°09'28"E 272.86 ft S20°44'58"W 24.62 ft Radius Point: 0 Radius: 34.50 ft Delta: 41°48'52" 10081.5106 10821.3733 10821.3733 11584.9116 Left Arc Definition 10670.2131 10670.2131 10637.5282. Right Arc Definition 10651.3877 10534.5110 10354.9257 Right Arc Definition 10356.1537 10083.2948 10083.1998 Right 10175.1193 10845.8093 10845.8093 11436.7340 11745.7831 11745.7831 11756.8262 11788.4223 11839.6985 11430.3599 11877.3592 11878.1106 11843.6108 0 0 0 0 Arc: Middle Ordinate: External: Deg of Curvature: Tangent: S89°50'32"W N87°03'59"W S89°49'59"W 25.18 ft 2.27 ft 2.43 ft 166°04'29" 13.18 ft 1062.22 ft 480.80 ft 151.87 ft Arc Definition 10060.2713 10057.3463 10081.9526 10081.5101 11869.3890 10807.1730 10326.9984 10175.1290 Closing latitude Closing departure Closing bearing Closing distance Total traverse length Total error of closure Error of closure in latitute Error of closure in departure Area Area = -0.00006 = 0.01448 = N89°45'04"W = 0.01448 = 4260.09 (4304.41) = 1/294193 = 1/67703391 = 1/294196 = 871391.86 sq ft. = 20.004 ACRES. JMS Engineering, Inc. 73-710 Fred Waring Drive Palm Desert, California 92260 (760) 773-6600 Wed Mar 07 10:46:32 2001 PROJECT: D:\JMS-Jobs\01-704 Heckmann\01-704 Heckmann POB Parcel.pro Pt# Bearing Distance Northing Easting Curve Data 0 0 0 0 N89°49'59"E N00°10'01"W N89°49'59"E 92.52 ft 81.00 ft 82.84 ft 10000.0000 10000.2696 10081.2692 10081.5102 10000.0000 10092.5196 10092.2836 10175.1215 GERALD FORD DRIVE 67' \ as 67' 1 POB. 43 R.S. 103/68-69 8.54 ACRES TPO.B. A'89°49'59"E 783.33' RING ROAD R = 912.50' ,V89 507I E _2652.59' FRANK SINA TRA DRIVE LINE AND CURVE DATA NO. BRG. / DELTA 0 N89°49'59"E 0 NO° 10'01 "W c3 N89°49'59"E 0 I N42°1l'33"E • SOO°09'28"E • S89°50'32"W • N87°03'59"W S89°49'59"W ci I 1 1 °31'45" RADIUS LENGTH 92.52' 81.00' 82.84' 998.61' 660.76' 205.00' 480.80' 151.87' 965.50' 194.28' PREPARED BY: .N6 SCALE 1 "=300' SA00 E awwe 0.0. SUM 200 73 710 rap moms Srm106 la A°r112i CA 90022 Air Omer, CA 92260 323. 926. 23•5 760 •773.6600 r41 • 323. 726.2321 rAt • 760 •773 6603 LEGEND PROPERTY TO BE DEEDED UCR HECT#MANN CENTER DLrE'D PLAT DESCRIPTION POR. SECTIONS 33 & 34 SEC. 33-34 , T. 4 S., R. 6 E, S.B.M. ENTRANCE SHEET I OP I FILE REP / 01-704 LEGAL DESCRIPTION All those portions of Sections 33 and 34, in Township 4 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, which bears S89°49'59"W 783.33 feet from the Southeast corner of said Section 33; Thence N89°49'59"E 92.52 feet along the South line of said Section 33; Thence NO°10'01 "W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N89°49'59"E 82.84 feet along said parallel line and the Northerly right of way of Frank Sinatra Drive to the True Point of Beginning; Thence N42°11'33"E 998.61 feet to the beginning of a non tangent curve concave Northeasterly and having a radius of 965.50 feet; a radial line of said curve through said point bears S37°44' 14"W; Thence Southeasterly 194.28 feet through an angle of 11°31'45"; Thence non tangent to said curve S00°09'28"E 660.76 feet to a point on the Northerly right of way of said Frank Sinatra Drive; Thence S89°50'32"W 205.00 feet along said Northerly right of way; Thence N87°03'59"W480.80 feet; Thence S89°49'59"W 151.87 feet to the True Point of Beginning; The parcel described herein contains 8.537 acres, more or less. JMS Engineering, Inc. 73-710 Fred Waring Drive Palm Desert, California 92260 (760) 773-6600 Wed Mar 07 10:30:01 2001 PROJECT: D:\JMS-Jobs\01-704 Heckmann\01-704 Heckmann West Parcel.pro Pt$ 0 0 0 0 0 0 0 0 0 Bearing Curve Data Distance Northing Easting N42°11'33"E N90°00'00"W S58°01'38"E Radius Point: Radius: Delta: Arc: Middle Ordinate: External: Deg of Curvature: Tangent: N90°00'00"W S00°09'28"E S89°50'32"W N87°03'59"W S89°49'59"W 998.61 ft 0.00 ft 193.95 ft 0 965.50 ft 11°31'45" 194.28 ft 4.88 ft 4.91 ft 5°56'04" 97.47 ft 0.00 ft 660.76 ft 205.00 ft 480.80 ft 151.87 ft 10081.5106 10821.3733 10821.3733 11584.9116 Left Arc Definition 10718.6736 10718.6736 10057.9161 10057.3516 10081.9583 10081.5158 10175.1193 10845.8093 10845.8093 11436.7340 11010.3371 11010.3371 11012.1566 10807.1574 10326.9875 10175.1181 Closing latitude Closing departure Closing bearing Closing distance Total traverse length Total error of closure Error of closure in latitute Error of closure in departure Area Area = 0.00525 =-0.00114 = S12°13'04"E = 0.00537 = 2690.99 (2691.32) = 1/501427 = 1/513047 = 1/2369391 = 371872.53 sq ft. = 8.537 ACRES. EXHIBIT B CENTER IMPROVEMENTS RWGIMANI 614980 11 PLANNING COMMISSION RESOLUTION NO. 2008 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF PALM DESERT, CALIFORNIA, RECOMMENDING TO CITY COUNCIL APPROVAL OF A REQUEST BY THE RICHARD J. HECKMAN FOUNDATION FOR A PRECISE PLAN/CONDITIONAL USE PERMIT TO PERMIT THE CONSTRUCTION OF THE RICHARD J. HECKMAN INTERNATIONAL CENTER FOR ENTREPRENEURIAL MANAGEMENT ON PROPERTY LOCATED AT THE NORTHEAST CORNER OF COOK STREET AND FRANK SINATRA DRIVE, 75-150 FRANK SINATRA DRIVE. CASE NO, PP/CUP 00-16 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 15th day of August, 2000, hold a duly noticed public hearing to consider the request by RICHARD J. HECKMAN FOUNDATION. for the above project; and WHEREAS, said application has complied with the requirements of the "City -of Palm Desert Procedure for Implementation: of the California Environmental Quality Act, Resolution No. 00-24," in that the project"was reviewed as part of an Environmental Impact Report which was prepared and certified -in 1999; pursuant to City Council Resolution No. 99-34, and no further documentation is necessary; and WHEREAS, at said public hearing, upon hearing' -and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said Planning Commission did find the following facts and reasons more fully delineated in the staff report dated August 15, 2000 to exist to justify recommending to City Council. approval of said precise plan/conditional use permit: 1. That the proposed location of the precise plan/conditional use is in accord with the objectives of this title and the purpose of the district in which the site is located. 2. That the proposed location of the precise plan/conditional use and the conditions under which it will be operated and maintained will not be detrimental to the public health, safety or general welfare, or be materially injurious to properties or improvements in the vicinity. 3. That the proposed precise plan/conditional use will comply with each of the applicable provisions of this title, except building height as discussed at length in the staff report dated August 15, 2000. 4. That the proposed precise plan/conditional use complies with the goals, objectives and policies of the City's adopted general plan. PLANNING COMMISSION RESOLUTION NO. 2008 CONDITIONS OF APPROVAL CASE NO. PP/CUP 00-16 Department of Community Development: 1. The development of the property shall conform substantially with exhibits on file with the Department of Community Development/Planning, as modified by the following conditions. 2. Construction of a portion of said project shall commence within one year from the date of final approval unless an extension of time is granted; otherwise said approval shall become null, void and of no effect whatsoever. 3. The development of the property: described herein- shall. be subject to the restrictions and limitations set forth herein which are. in addition to all municipal ordinances and state and federal statutes now in force, • or which. hereafter may be in force. 4. Prior to issuance of a building permit for construction of any. use contemplated by this approval, the applicant shall first obtain permits and/or clearance from the following agencies: Coachella Valley Water District Palm Desert Architectural Review Commission City Fire Marshal Public Works Department Evidence of said permit or clearance from the above agencies shall be presented to the Department of Building and Safety at the time of issuance of a building permit for the use contemplated herewith. 5. Access to trash/service areas shall be placed so as not to conflict with parking areas. Said placement shall be approved by applicable trash company and Department of Community Development. 6. Should the applicant choose to create an illuminated parking lot or illuminate the building exterior, a detailed parking lot and/or building lighting plan shall be 3 PLANNING COMMISSION RESOLUTION NO. 2008 The project shall be designed to retain storm waters associated with the increase in developed vs. undeveloped condition for a 100-year storm. 3. Signalization fees, in accordance with City of Palm Desert Resolution Nos. 79- 17 and 79-55, shall be paid prior to issuance of any permits associated with this project. 4. A complete preliminary soils investigation, conducted by a registered soils engineer, shall be submitted to, and approved by, the Department of Public Works prior to the issuance of a grading permit. - 5. As required under Palm Desert ::Municipal: Code Section 26.28, and in accordance with Sections 26.40 and- 26.44, complete improvement plans and specifications shall be submitted to the Director of Public Works for checking and approval before construction of any improvements is- commenced. Offsite: - -• improvement plans to be approved by the. Public Works Departmentand a surety : posted • to guarantee the installation- -of: required .offsite improvements =:•. . prior to permit issuance. .. . . - 6. All.public and private improvements_shall.be inspected by the Department of Public Works and a standard inspection fee: shalt be paid prior to issuance of - ' grading permits. - 7. Landscape installation on the property frontages shall be water efficient in nature and shall be in accordance with the City of Palm Desert landscape design standards. Landscaping maintenance for said landscape shall be provided by the property owner (8) Applicant shall comply with the provisions of Municipal Code Section 24.12, Fugitive Dust Control as well as Section 24.20, Stormwater Management and Discharge Control. 8. Applicant shall comply with the provisions of Municipal Code Section 24.12, Fugitive Dust Control as well as Section 24.20, Stormwater Management and Discharge Control. 9. Any and all offsite improvements shall be preceded by the approval of plans and the issuance of valid encroachment permits by the Department of Public Works. 10. In accordance with Palm Desert Municipal Code Section 26.44, complete grading plans/site improvement plans and specifications shall be submitted to 5 PLANNING COMMISSION RESOLUTION NO. 2008 provided in accordance with City Municipal Code, NFPA, UFC, and UBC and/or recognized Fire Protection Standards: The Fire Department is required to set a minimum fire flow for the remodel or construction of all commercial buildings per UFC article 87. 2. A fire flow of 1500 gpm for a 1 hour duration at 20 psi residual operating pressure must be available before any combustible materials is placed on the job site. 3. Provide, or show there exists a water system capable of .providing a gpm flow of 3000 for commercial buildings. 4. The required fire flow shall be available from a wet barrel Super Hydrant(s) 4"x 2-1 /2"x 2-1/2") located not Tess than 25'. or more than 150' from any portion of a commercial building measured via vehicular travelways. 5. Water plans must be approved by the Fire Marshal and -include verification that the water system will produce the required fire flow... 6. Install a complete NFPA 13 fire sprinkler system. This applies to all buildings with a 3000 square foot total cumulative floor area. The Fire Marshal shall approve the locations of all post indicator valves and .fire department connections. All valves and connections shall not. be less than 25' from the building and within 50' of an approved hydrant. Exempted are one and two family dwellings. 7. All valves controlling the water supply for automatic sprinkler systems and water -flow switches shall be monitored and alarmed per UBC Chapter 9. 8. Install a fire alarm system as required by the UBC Chapter 3. 9. Install portable fire extinguishers per NFPA 10, but not less than 2A1OBC extinguisher per 3000 square feet and not over 75' walking distance. A "K" type fire extinguisher is required in all commercial kitchens. 10. Install a Hood/Duct automatic fire extinguishing system per NFPA 96 in all public and private cooking operations except single-family residential usage. 7 t,KCHITRAM . . • . • • • . . DESIGN G R OUP LHA Architects 122 S. Vine Ave.. Ontario. CA 91762 Phone (909) 460-1291 Fax (909) 391-1031 The Richard J. Heckmann International Center for Entrepreneurial Management DESIGN CONCEPTS Entrepreneurship is the creative use of available resources. The essence of entrepreneurship is manifest in the design of the Heckmann Center through the creative utilization of the natural resources of the desert: wind, earth, water, and sun: • The architecture reinforces the existence of an urban comer (Cook and Frank Sinatra) with the subtle gesture of the building form wrapped in a massive natural stone wall. • The orientation of the building allows the creation of a protective courtyard (known as the intellectual oasis) -- a place for gathering and reflection as well as taking in the impressive mountain terrain to the north. • The selection of materials for all finishes (stone, copper, wood and exposed steel) allows the buildings to blend with the surrounding natural context. • The movable vertical louvers facilitate wind control in the intemal courtyard to create at will a dynamic or quite gathering space. • The aqueduct utilizes reclaimed water to celebrate the wise use of desert water and facilitate the humidification of the environment. Environmental Design Strategies for Heckmann Center by: Dr. Hofu Wu, AIA The design of the Heckmann, Center is based on environmental principles derived from native inhabitants and indigenous desert living. The natural elements of sun, water, wind and earth are unavoidable forces impinging upon human settlement. Passive cooling strategies are developed to fend off the harsh summer climate and give sensitive attention toward a sustainable future. The Heckmann Center's design concept is that of a building within a sheltered envelope. A semi -outdoor, but protected, buffer zone is created within a massive thermal outer layer, while the actual building is enshrined within this modified buffer zone. This intermediate buffer zone ensures minimum heat transfer of external load to the interior spaces. Four major passive cooling strategies were deployed within and around the Heckmann Center, they are: Evaporative Cooling, Night Sky Radiation, Natural Ventilation and Thermal Mass Storage. Ari 0o�, 4(44MERGO4 P402k4iN4doN .,eDact (yw.t(ae) WALT*air I II I /X/ e zEt4clor Gli.'(Ll6rfi�' FROM �J02TF} • sacra o s.! Dom`( Gtro 4 [die mom armcce. aci s) (a) Evaporative Cooling: Taking advantage of the arid desert climate, evaporative cooling trades off heat to cool the dry air and is a natural and low energy cooling system. Water droplets, water ponds and plants transpire moisture to the dry air, and reduce the air temperature within the protected buffer zone. The air is moved around the building to create an air curtain that prohibits direct heat gain of the interior shell. The courtyard space is cooled and comfortable air temperatures are achieved by this evaporative cooling effect. In addition, the building structure provides shading from the sun. (b) Night Sky Radiation: Due to the low humidity in desert air, outgoing night sky radiation is of such great potential that Ancient Persians harvested ice at night. This phenomenon of night sky cooling is tapped in the Heckmann building to reduce the temperature of the thermal mass of the building envelope and the reclaimed water circulating in the roof aqueduct. With proper protection from convective heat gain from warm air, the water body is being cooled through night sky radiation. In addition, the masonry thermal mass wall can be cooled off through both evaporative and ventilative cooling of night air. (c) Natural Ventilation: The wind and stack effects of air movement can be utilized when the air temperature is at least 3°F lower than the indoor air and surface temperatures. The prevailing wind is utilized (with evaporative cooling when the air is warm) to cool off the building envelope. In the absence of wind (calm conditions), the stack effect cools the building as warm air rises to the upper part of the buffer zone. It is then exhausted to the outside, forced by the exchange of exterior air being ushered in through low inlets with earth mass or evaporative cooling processes. �1" Stair bw RJrDWTNIII ItiG Roof /AweDucr • Ktrr►f'r WIRT%&Altor. • +►�•�� 41b0$ 1416$ to Mount few Met �c'jiorl 6CALE N t-IT TIME CoNO(TQN (ca2LING viA4--t h M aermlEG4-E6) (d) Thermal Mass Storage: An earthen roof with drought -resistant plants covers the roof area along with the roof aqueduct that uses reclaimed water as thermal storage. Water has the greatest heat capacity (1 Btu / lb. of water / degree Fahrenheit) among natural elements. In addition, a thick, south -facing masonry wall provides appropriate time lag to delay heat penetration for at least 12 hours after the peak temperature of the day. These four strategies work independently and simultaneously to reduce the heat stress of the desert climate. They also create an energy and resource efficient oasis for the Heckmann Center. Detailed modeling and future computer simulations will fine tune the energy and comfort performance of the interior environment. The architecture of Heckmann Center combines many timeless historical precedents and the use of advanced technologies in seeking environmental solutions and design. Mar 05 01 01:52p Norberto F. Mardi (909) 391-1031 P.2 THE UNIVERSITY OF CALIFORNIA RIVERSIDE SATELLITE CAMPUS PALM DESERT, CALIFORNIA ARCHITRAM emu es . s s ■ DESIGN GROUP BHA Architects 122sea/rviui e4Ori als,G017112 P11ene:(P0f)410-1201 w w w.•► e b i !rent . e• w Fat:(Y0Y)]111.1 031 The Heckmann International Center for Entrepreneurial Management and the adjacent Conference Center anchor the future 20-acre UCR Satellite Campus organized around the theme of Entrepreneurship and is located adjacent to the Cal State San Bernardino off -campus facility. The Heckmann Center and the Conference Center's focal location defines their referential role within the master plan for the site, reinforced with the presence of the courtyard /Oasis as place of gathering and reflection. The rest of the future mini -campus will grow organized along a water axis. culminating at the water clock (clepsidra), as a symbol of the valuable presence of the water in the desert environment. The design reflects. in a metaphorical way, how the natural elements of the desert interact to continually transform the spaces, surprisingly engaging the users in that dynamic process. The design of the enclosed spaces and the building's physical configuration on the site symbolizes and facilitates human interaction and teamwork, in which visual contact throughout the complex increases participation in all creative endeavors. The architecture of the complex subtly articulates the relationship between the natural elements of the Coachella Valley, from the location of each functional component to the selection of design strategies throughout the project. The earth is represented in the use of natural building materials such as stone, wood and metals. The building's orientation, fenestration and insulation deal with the sun's presence creating energy efficient spaces and celebrating the pristine natural light of the desert. The conservation and recycling of water (rainfall and reclaimed water), organized in a continuous cycle of aqueducts, ponds and canals, will assure the efficient cooling and comfortable environmental humidity. Finally, by controlling and redirecting the wind with wind -brakes, louvers and other devices, dynamically transform the environment of the interior and exterior spaces of the complex and improve the temperature balance. The project is being built in two phases. Phase 1 is composed of the construction of the Heckmann Center, a structure with 18,983 SF of enclosed area and 2,226 SF of semi -covered area for a total of 21.209 SF with an additional exterior trellis totaling 3,625 SF. In addition Phase 1 will also includes the development of the entire 7-acre site. The Heckmann Center is the instructional and research component of the complex. It consists of: a large seminar room/amphitheater, breakout rooms, seminar rooms. a laboratory, faculty offices, lecturer's offices, administrative offices, an elevator lobby, a breezeway, UCR information bureau, a board room, small conference rooms, a studio space and lounge, scholar suites, fitness center, jacuzzi, terraces, a kitchen, cafeteria, outdoor dining, and support areas. Phase 2 will involve the construction of the Conference Center is composed of 10,770 SF of enclosed area and 3,619 SF of semi -covered area for a total of 14,461 SF. The Conference Center is the academic extension to the Heckmann Center and the future UCR Satellite Campus. It consists of a lecture/recital hall with projection room, storage/dressing rooms, ticket booth, information office, breakout rooms, showroom, kitchenette, and support areas. r • • • • I pi wi - .--, *mom sfY 3 lob �a3N >2 cp o aUIELI1 a0fjeP3 IEOI-IBE (606) tpJe4 -J ol.-+agJoW d8S:t0 t0 SO Jew EXHIBIT C FORM OF LEASE RWGIMAN1 614980 11 EXHIBIT C FORM OF LEASE This LEASE (the "Lease") is made as of , 2001 (the "Effective Date") by and between the PALM DESERT REDEVELOPMENT AGENCY, a public body corporate and politic (the "Agency" or "Lessor"), and RICHARD J. HECKMANN FOUNDATION, a California mutual benefit corporation (the "Developer" or "Lessee"). All attachments and exhibits hereto are incorporated herein by this reference. 1. SUBJECT OF LEASE. The purpose of this Lease is to effectuate (1) the Redevelopment Plan for the Project Area 2 (the "Redevelopment Plan"), in the City of Palm Desert, California (the "City"), by facilitating improvements to real property within the Project Area as defined in the Redevelopment Plan; and (2) that certain Disposition and Development Agreement, dated as of , 2001 (the "DDA"), by and between the Agency, Developer, And The Regents Of The University Of California, on behalf of its Riverside campus ("UCR"); by providing for the ground lease of Parcel A Property (as defined in the DDA) to Lessee and the development and construction thereon of certain improvements to be known as the International Center for Entrepreneurial Management ("ICEM") as described in the DDA (the "Improvements"). The Redevelopment Plan and DDA, which are available in the offices of Agency as public records, are incorporated herein by reference and made a part hereof as though fully set forth herein. 2. LEASE OF THE PARCEL A PROPERTY. Agency, for and in consideration of the terns, covenants, and agreements hereinafter reserved and contained on the part of Lessee to be paid, kept, performed and observed by Lessee, hereby leases to Lessee, and Lessee hereby leases from Agency, that certain real property in the City of Palm Desert (the "City") being more particularly described on Exhibit A attached hereto and made a part hereof and as shown on the Parcel Map attached hereto as Exhibit B ("the Parcel A Property"). RWGIMANI 623145 5 1 3. ADDITIONAL DEFINITIONS. In addition to other defined terms set forth in this Lease, following definitions shall also apply to this Lease: 3.1 Center. Heckmann and UCR are in the process of planning an ICEM to be located within the A. Gary Anderson Graduate School of Management ("AGSM"), University of California, Riverside. The ICEM will require an initial facility and sufficient acreage to allow for needed expansion in the future. UCR desires that the ICEM be located on the Parcel A Property, which 7 acres are adjacent to the approximately fifty-five (55) acres of that certain real property owned by the California State University ("CSU"), located at the northeast corner of Frank Sinatra Drive and Cook Street within the City of Palm Desert, California, within one mile of Interstate 10 and four miles from State Route 111 (the "CSU Property"). The ICEM will include facilities that will be available for joint use by UCR and CSU. 3.2 Improvements means any and all buildings, facilities, landscaping, infrastructure, utilities, and other improvements for the Center to be built on the Site or any part thereon. 3.3 Project. The term "Project" means the entirety of (i) the development of the Improvements, the Parcel A Property, the real property and related offsite improvements, to be constructed, operated, and managed in accordance with this Lease and the DDA. 3.4 Site means that certain real property depicted and legally described in Exhibit A, which shall be or is contemplated to be the site on which Heckmann shall construct the Center Improvements. 4. LEASE TERM. 4.1 Construction Term. Lessee shall lease the Parcel A Property from Agency and Agency shall lease the Parcel A Property to Lessee for a term commencing on the Effective Date (the "Commencement Date") and ending on the date that is the earlier of: a) the date that UCR receives fee simple title to the Parcel A Property under the Grant Deed that is Exhibit D of the DDA, or b) September 30, 2004 (the "Term"). The termination date shall be inserted in the space below and initialed by the parties (the "Construction Term"), unless sooner terminated as provided for herein: Date of Release of Construction Term: September 30, 2004. Lessor: Lessee: 5. DEVELOPMENT OF THE PROJECT. Lessee shall cause the construction on the Project which shall consist of construction of the Center and the Improvements, all as required by the DDA, including but not limited to the Schedule of Performance referenced therein. RWGIMANI 623145 5 2 6. USE OF THE PARCEL A PROPERTY. 6.1 Use of the Parcel A Property. Lessee covenants and agrees for itself, its successors and assigns, that during the Term and thereafter, the Parcel A Property and the Improvements shall be devoted to those uses as set forth in this Lease, the DDA, and the Redevelopment Plan. In the event of any inconsistency between the foregoing documents. the most restrictive of the documents shall control. 6.2 Only Lawful Uses Permitted. Except as otherwise provided for in this Lease or DDA, Lessee shall not use the Parcel A Property or the Improvements for any purpose that is in violation of any law, ordinance or regulation of any federal, state, county or local governmental agency, body or entity. Furthermore, Lessee shall not maintain or commit any nuisance, as now or hereafter defined by any applicable statutory or decisional law, on the Parcel A Property or the Improvements, or any part thereof. 6.3 Assessment Districts. Lessee shall comply with all rules and regulations of any assessment district of the City with jurisdiction over the Parcel A Property. 7. LEASE CONSIDERATION. 7.1 Net Lease. Except as otherwise provided in this Lease or the DDA, it is the intent of the parties hereto that this Lease shall be absolutely net to the Agency and that Lessee shall pay all costs, taxes, charges, and expenses of every kind and nature against the Parcel A Property and the Improvements which may arise or become due during the Term, and which, except for execution hereof, would or could have been payable by Agency. 7.2 Lease Consideration. The parties acknowledge that the completion of the Center Improvements pursuant to the DDA constitutes good and valuable consideration for this Lease. 8. UTILITIES AND TAXES. 8.1 Utilities. Lessee shall pay or cause to be paid, all charges for gas, electricity, water, sewer, garbage collection, and other utilities furnished to the Parcel A Property and the Improvements and all sewer use charges, tap in fees, permit fees, hookup or similar charges or assessments for any and all utilities levied against the Parcel A Property for any period included within. the Term. 8.2 Real Estate Taxes. (a) As used herein, the term "real estate taxes" shall mean all real estate taxes, possessory interest taxes, assessments for improvements to the Parcel A Property, municipal or county water and sewer rates and charges, or any other assessments or taxes, which shall be RWGIMAN 1 623145 5 3 levied against the Parcel A Property, or any interest therein, and which become a lien thereon and accrues during the Term. (b) Any real estate taxes which are payable by Lessee hereunder shall be prorated between Agency and Lessee as of the Commencement Date and then again at the expiration or earlier termination of the Term. (c) Lessee shall have the right to contest the amount or validity of any real estate taxes, in whole or in part, by appropriate administrative and legal proceedings, without any costs or expense to Agency, and Lessee may postpone payment of any such contested real estate taxes pending the prosecution of such proceedings and any appeals so long as such proceedings shall operate to prevent the collection of such real estate taxes and the sale of the Parcel A Property and any Improvements to satisfy any lien arising out of the nonpayment of the same, and Lessee furnishes a bond to Agency securing the payment of the same in the event a decision in such contest shall be adverse to Lessee. 8.3 Personal Property. Lessee covenants and agrees to pay before delinquency all personal property taxes, assessments and liens of every kind and nature upon all personalty as may be from time to time situated within the Parcel A Property. 8.4 Possessory Interest. Pursuant to the California Revenue and Taxation Code, the Parcel A Property is required to be assessed and taxed in the same manner as privately owned property. Lessee shall pay or cause to be paid before any fine, penalty, interest or cost may be added thereto for the nonpayment thereof, all real estate taxes which may be levied against any and all interests in the Parcel A Property and any Improvements during the Term, and not merely the assessed value of the leasehold interest in the Parcel A Property; provided, however, that Lessee may apply for and receive any applicable exemption from the payment of property taxes and assessments. Agency shall use reasonable efforts to cause the Parcel A Property to be assessed as a separate parcel. Pursuant to the provisions of the California Revenue and Taxation Code, Agency hereby provides notice to Lessee that Lessee's leasehold interest created by this Lease may result in a possessory interest tax being levied against Lessee, and that in such event Lessee shall be obligated to pay such tax. 9. OWNERSHIP OF IMPROVEMENTS, FIXTURES AND FURNISHINGS. 9.1 Ownership During Term. All Improvements constructed on the Parcel A Property by Lessee as provided in the DDA and as permitted by this Lease shall, during the Tenn, be and remain the property of Lessee; provided, however, that Lessee shall have no right to waste the Improvements, or to destroy, demolish or remove the Improvements except as otherwise permitted pursuant to this Lease; and, (ii) Lessee's rights and powers with respect to the Improvements are subject to the terms and limitations of this Lease. Agency and Lessee covenant for themselves and all persons claiming under or through them that the Improvements are real property. RWGIMANI 623145 5 4 9.2 Ownership at Termination. Upon termination of this Lease, all improvements, fixtures and furnishings shall, without compensation to Agency, remain Lessee's property and/or be transferred to UCR as described in the DDA. Provided however, if this Lease is terminated prior to the end of the Term due to a default by Lessee, including, without limitation, the failure to construct the Improvements on the Site, then upon such termination only, the Improvements shall become Agency's property, free and clear of all liens, encumbrances, and claims to or against them by Lessee, UCR, or any third person, firm, or entity, including but not limited to any mortgagee or lender. 10. INDEMNIFICATION: FAITHFUL PERFORMANCE. Lessee shall not suffer or permit any liens to be enforced against the fee simple estate in reversion of Agency as to the Parcel A Property and the improvements thereon, nor against Lessee's leasehold interest, for any reason, including but not limited to by reason of work, labor, services, or materials supplied or claimed to have been supplied to Lessee or anyone holding the Parcel A Property, or any part thereof, through or under Lessee, and Lessee agrees to defend, indemnify, and hold Agency and City and their respective officers, officials, employees, agents, and representatives, harmless against such liens. If any such lien shall at any time be filed against the Parcel A Property, Lessee shall, within thirty (30) days after notice to Lessee of the - filing thereof, cause the same to be discharged of record; provided, however, that Lessee shall have the right to contest the amount or validity, in whole or in part, of any such lien by appropriate proceedings but in such event, Lessee shall notify Agency and promptly bond such lien in the manner authorized by law with a responsible surety company qualified to do business in the State of California or provide other security acceptable to Agency. Lessee shall prosecute such proceedings with due diligence. Nothing in this Lease shall be deemed to be, nor shall be construed in any way to constitute, the consent or request of Agency, express or implied, by inference or otherwise, to any person, firm or corporation for the performance of any labor or the furnishing of any materials for any construction, rebuilding, alteration or repair of or to the improvements on the Parcel A Property, or any part thereof. Prior to commencement of construction of the Improvements on the Parcel A Property, or any repair or alteration thereto, Lessee shall give Agency not less than thirty (30) days advance notice in writing of intention to begin said activity in order that nonresponsibility notices may be posted and recorded as provided by state and local laws. 11. MAINTENANCE AND REPAIR; CAPITAL REPLACEMENT RESERVE. 11.1 Maintenance. Except as otherwise provided in this Lease or the DDA, Lessee agrees to assume full responsibility for the construction, operation and maintenance of the improvements on the Parcel A Property throughout the Term without expense to Agency, and to perform all repairs and replacements necessary to maintain and preserve the Improvements on the Parcel A Property in a clean and safe condition reasonably satisfactory to Agency and in compliance with all applicable laws. RWGIMAN1 623145 5 5 Lessee agrees to construct and maintain all interior and exterior improvements, including landscaping, on the Parcel A Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. Agency places prime importance on quality maintenance to protect its investment and to ensure that all Agency -assisted projects within the City are not allowed to deteriorate due to below -average maintenance. Normal wear and tear of the improvements on the Parcel A Property will be acceptable to Agency assuming Lessee agrees to construct and perform all necessary repairs to improvements to assure the Parcel A Property is maintained in first-class condition. In addition, Lessee shall keep the Parcel A Property free from all graffiti and any accumulation of debris or waste material. Lessee agrees that Agency shall not be required to perform any construction (other than to the public improvements and only then at the Agency's option), maintenance, repairs or services or to assume any expense in connection with the improvements on the Parcel A Property. Lessee hereby waives all rights to make repairs or to cause any work to be performed at the expense of Agency as provided for in Section 1941 and 1942 of the California Civil Code. The Lessee shall - construct and maintain the improvements on the Parcel A Property in conformity with the Palm Desert Municipal Code. Notwithstanding the foregoing, in the event Lessee breaches any of the covenants contained in this Article 11, and such default continues for a period of ten (10) days after written notice from Agency (with respect to graffiti, debris, waste material, and general maintenance), or thirty (30) days after written notice from Agency (with respect to landscaping, repairs, and building improvements), then Agency, in addition to whatever other remedy it may have at law or in equity, shall have the right to enter upon the Parcel A Property and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, Agency and/or City are permitted (but are not required) to enter upon the Parcel A Property and perform all acts and work necessary to protect, maintain, and preserve the improvements on the Parcel A Property. All costs incurred by Agency pursuant to exercise of its right to enter the Parcel A Property and perform works of maintenance or construction plus a fifteen percent (15%) administrative charge, shall be paid by Lessee within thirty (30) days of receipt of an invoice from Agency. Payment of such invoice by Lessee shall not come from or reduce any rent or other monies due Agency pursuant to this Lease. The following standards shall be complied with by Lessee, and its contractors, maintenance staff and maintenance contractors: (a) Lessee shall construct and maintain the improvements on the Parcel A Property, including all common areas, all interior and exterior facades, and all exterior areas of all buildings, in a safe and sanitary fashion suitable for a educational/commercial project. The Lessee agrees to provide utility services, administrative services, supplies, contract services, RWGIMANI 623145 5 6 maintenance, maintenance reserves, and management for the Parcel A Property including exterior and interior spaces, common area spaces and public rights -of -way for the related projects which are located on the Parcel A Property. The services provided by the Lessee shall include, but not be limited to, providing all utilities, property, fire and liability insurance in the amounts set forth in this Lease, all property taxes and personal propertytaxes, any and all assessments, maintenance and replacement of all exterior landscaping, and all administration and overhead required. (b) Landscape maintenance shall include, but not be limited to: watering/irrigation; fertilization; mowing, edging, and trimming of grass; tree and shrub pruning; trimming and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road conditions and visibility, and optimum irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. (c) Clean-up maintenance shall include, but not be limited to: maintenance of all private paths, parking areas, driveways and other paved areas in clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping prior to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the construction or maintenance operations are performed to ensure that all materials, cuttings, weeds, leaves and other debris are properly disposed of by construction or maintenance workers. (d) The improvements on the Parcel A Property shall be constructed and maintained in conformance and in compliance with the approved construction and architectural plans and design scheme of the Center Improvements described in the DDA, as the same may be amended from time to time with the approval of the Agency, ( and the City, if such approval is required). (e) All construction and maintenance work shall conform to all applicable federal, state, and local laws and regulations, including without limitation, Workers Compensation and Occupation Safety and Health Act standards and regulations for the performance of construction and maintenance. (f) Any and all chemicals, unhealthful substances, and pesticides used in and during construction and maintenance shall be applied only by persons possessing valid California applicator licenses, and in strict accordance with all governing regulations. Precautionary measures shall be employed recognizing that all areas may be open to public access. (g) Parking lots, lighting fixtures, trash enclosures, and all areas on the Parcel A Property which can be seen from the adjacent streets and properties shall be kept free from any accumulation of construction debris or waste materials by regularly scheduled maintenance. RWGIMANI 623145 5 7 12. ENVIRONMENTAL MATTERS. 12.1 Definitions. For the purposes of this Lease, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified: (a) The term "Hazardous Materials" shall mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the County of Riverside, the State of California, regional governmental authority or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous 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, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "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. §13-17), (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.C. §9601 et seq. (b) The term "Hazardous Materials Contamination" shall mean the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in or of the Parcel A Property by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time (whether before or after the Date of Lease) emanating from the Site. (c) The term "Governmental Requirements" shall mean all past, present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the city, or any other political subdivision in which the Parcel A Property is located, and any other state, county city, political subdivision, agency, instrumentality or other entity exercising jurisdiction over Agency, Lessee or the Site. 12.2 Lessee's Indemnity. Lessee shall save, protect, defend, indemnify and hold harmless Agency and the City and their respective officers, officials, employees, and agents from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, RWGIMAN1 623145 5 8 without limitation, consultants' fees, investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may now or in the future be incurred or suffered by Agency and its officers, officials, employees, or agents by reason of, resulting from, in connection with, or existing in any manner whatsoever as a direct or indirect result of (1) Lessee's use, generation, discharge, emission or release from the Parcel A Property of any Hazardous Materials or Hazardous Materials Contamination after the commencement of this Lease, including any Liabilities incurred under any Governmental Requirements relating to such Hazardous Materials or Hazardous Materials Contamination, (2) the performance by Lessee of any acts or omissions with respect to use or operation of the Parcel A Property, including, but not limited to, the performance of any act required by this Lease, and (3) the performance by Agency of any act required to be performed by the Lessee under this Lease. Lessee's obligations under this Article 12 shall survive the expiration or early termination of this Lease. 12.3 Duty to Prevent Hazardous Material Contamination. Lessee shall take all necessary precautions to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Lessee shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the standards generally applied by similar - projects in Riverside County, California as respects the disclosure, storage, use, removal, and disposal of Hazardous Materials. 12.4 Obligation of Lessee to Remediate Premises. Subject to the Agency's rights herein and under the DDA, Lessee shall, at its sole cost and expense, promptly take (i) all actions properly required by any federal, state, regional, or local governmental agency or political subdivision or any Governmental Requirements and (ii) all actions necessary to make full economic use of the Parcel A Property for the purposes contemplated by this Lease and the DDA, which requirements or necessity arise directly or indirectly from Lessee's use, generation, discharge, emission or release upon, about or beneath the Parcel A Property of any Hazardous Materials or Hazardous Materials Contamination occurring during the term of this Lease. Such actions shall include, but not be limited to, the investigation of the environmental condition of the Parcel A Property, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work. Lessee shall take all actions necessary to promptly restore the Parcel A Property to an environmentally sound condition for the uses contemplated by this Lease and the DDA notwithstanding any lesser standard of remediation allowable under applicable Governmental Requirements. 12.5 Right of Entry. Notwithstanding any other term or provision of this Lease, Lessee shall permit Agency or its agents or employees to enter the Parcel A Property at any time during normal business hours (except in the event of an emergency ), without prior notice in the event of an emergency, and with not less than twenty-four (24) hours advance notice if no emergency is involved, to inspect, monitor and/or take emergency or long-term remedial action with respect to Hazardous Materials and Hazardous Materials Contamination on or affecting the Parcel A Property or the Property, or to discharge Lessee's obligations hereunder with respect to RWGIMAN1 623145 5 9 such Hazardous Materials and Hazardous Materials Contamination when Lessee has failed to do so after written notice from Agency and expiration of a reasonable opportunity to cure such deficiency, not exceeding seven (7) days, unless such cure reasonably requires a greater period of time in which case Lessee shall be in compliance herewith if Lessee commences such cure within the same seven (7) day period. All costs and expenses incurred by Agency in connection with performing Lessee's obligations hereunder shall be reimbursed by Lessee to Agency within thirty (30) days of Lessee's receipt of Agency's written request. 12.6 Storage or Handling of Hazardous Materials. Subject to the provisions of this Lease and the DDA, Lessee, at its sole cost and expense, shall comply with all Governmental Requirements for the storage, use, transportation, handling and disposal of Hazardous Materials on or about the Parcel A Property. In the event Lessee does store, use, transport, handle or dispose of any Hazardous Materials, Lessee shall notify Agency in writing at least ten (10) days prior to their first appearance on the Parcel A Property and Lessee's failure to do so shall constitute a material default under this Lease. Lessee shall conduct all monitoring activities required or prescribed by applicable Governmental Requirements, and shall, at its sole cost and expense, comply with all posting requirements of Proposition 65 or any other similarly enacted Governmental Requirements. 13. DAMAGE OR DESTRUCTION. 13.1 Obligation to Repair and Restore Damage Due to Casualty. If the improvements on the Parcel A Property shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty, Lessee shall promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the improvements on the Parcel A Property to substantially the same condition as the improvements on the Parcel A Property are required to be maintained in pursuant to this Lease or as existed immediately prior to the casualty, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Lessee shall complete the same as soon as possible thereafter so that the improvements on the Parcel A Property can continue to be. constructed, operated and occupied in accordance with the Lease. In no event shall the repair, replacement, or restoration period exceed one (1) year from the date Lessee obtains insurance proceeds unless Agency's Executive Director, in his or her sole and absolute discretion, approves a longer period of time. Agency shall cooperate with Lessee, at no expense to Agency, in obtaining any governmental permits required for the repair, replacement, or restoration. If, however, the then -existing laws of any other governmental agencies with jurisdiction over the Parcel A Property do not permit the repair, replacement, or restoration, Lessee may elect not to repair, replace, or restore the improvements on the Parcel A Property by giving notice to Agency (in which event Lessee will be entitled to all insurance proceeds but Lessee shall be required to remove all debris from the Parcel A Property) or Lessee may reconstruct such other improvements on the Parcel A Property as are consistent with applicable land use regulations and the DDA and approved by UCR, the City, Agency, and the other governmental agency or RWGIMANI 623145 5 10 agencies with jurisdiction. In the event Lessee elects not to repair, replace, or restore, and gives Agency notice of such election as provided herein, this Lease shall terminate. 13.2 Continued Operations. During any period of repair, Lessee shall continue, or cause the continuation of, the construction and/or operation of the improvements on the Parcel A Property to the extent reasonably practicable from the standpoint of prudent business management. 14. SALE, ASSIGNMENT, SUBLEASE OR OTHER TRANSFER. Subject to the lease of or grant of an easement or license to the City and approved by the Agency, Lessee shall not sell, assign, sublease, or otherwise transfer this Lease or any right therein, nor make any total or partial sale, assignment, sublease, or transfer in any other mode or form of the whole or any part of the Parcel A Property or the improvements on the Parcel A Property (each of which events is referred to in this Lease as an "Assignment"), without prior written approval of Agency, which approval may be given or withheld in the Agency's sole and absolute discretion. It shall be deemed reasonable for the Agency to refuse to consent to a transfer/assignment for any reason or for no stated reason. In the event such approval is granted, - the transfer or assignment shall not be effective unless and until the assignor/transferor and assignee/transferee have signed an assignment and assumption agreement in a form and with contents approved by the Executive Director and the Agency's legal counsel. Any purported assignment without the prior written consent of Agency shall render this Lease absolutely null and void and shall confer no rights whatsoever upon any purported assignee or transferee. Agency and Lessee acknowledge and agree that neither Agency's interest or fee ownership of the Parcel A Property (including its reversionary interest therein and in the improvements on the Parcel A Property) nor Agency's right to receive rents and profits shall be subordinate to any permitted encumbrance or any other lien, mortgage, deed of trust, pledge or other encumbrance of Lessee's leasehold interest hereunder. 15. INDEMNITY. Except as otherwise provided in this Lease, during the Term, Lessee agrees that Agency and City, their agents, officers, representatives and employees, shall not be liable for any claims, liabilities, penalties, fines or for any damage to the goods, properties or effects of Lessee, its sublessees or representatives, agents, employees, guests, licensees, invitees, patrons or clientele or of any other person whomsoever, nor for personal injuries to or deaths of any persons, whether caused by or resulting from any act or omission of Lessee or its sublessees or any other person on or about the Parcel A Property and the improvements on the Parcel A Property, or in connection with the operation thereof, or from any defect in the Parcel A Property or the improvements on the Parcel A Property. Lessee agrees to indemnify, defend, and save free and harmless Agency and City and their respective officers, officials, employees, agents, and representatives against any of the foregoing liabilities and any costs and expenses incurred by Agency or City (including RWGIMAN1 623145 5 11 attorneys fees and expert witness fees) on account of any claim or claims. Lessee shall not be responsible for (and such indemnity shall not apply to) any willful acts, errors or omissions of Agency, City, or their respective officers, officials, employees, agents, and representatives. 16. INSURANCE. 16.1 Insurance to be Provided by Lessee. During the Term, Lessee, at its sole cost and expense, shall: (a) Maintain or cause to be maintained a policy or policies of insurance against loss or damage to the improvements on the Parcel A Property, resulting from fire, lightning, vandalism, malicious mischief, and such other perils ordinarily included in extended coverage fire insurance and casualty loss policies. Such policy or policies shall be required to provide coverage against loss or damage resulting from earthquake. Such insurance policy shall be maintained in an amount not less than one hundred percent (100%) of the "Full Insurable Value" of the improvements on the Parcel A Property, as defined herein in this Article 16; provided, however, that earthquake insurance may be carried for less than 100% of the Full Insurable Value of the improvements if carrying such lesser amount of earthquake insurance is the prevailing practice for similar projects in Southern California and is consistent with practice - in the insurance industry. (b) Maintain or cause to be maintained such insurance, in such amounts and with such terms and conditions as follows: (i) Employer's Liability: $1,000,000 per accident for bodily injury or disease; (ii) Automobile Liability: $1,000,000 per accident for bodily injury and property damage. • (c) Maintain or cause to be maintained, in an amount not less than One Million Dollars (S 1,000,000), combined single limit, public liability insurance to protect against loss from liability for damages on account of personal injury, including death therefrom, suffered or alleged to be suffered by any person or persons whomsoever on or about the Parcel A Property and the improvements on the Parcel A Property, or in connection with the operation thereof, resulting directly or indirectly from any acts or activities of Lessee or its sublessees, or any person acting for Lessee, or under their respective control or direction, and also to protect against loss from liability imposed by law for damages to any property of any person occurring on or about the Parcel A Property, or in connection with the operation thereof, caused directly or indirectly by or from acts or activities of Lessee of its sublessees, or any person acting for Lessee, or under their respective control or direction. Such property damage and personal injury insurance shall also provide for and protect against incurring any legal cost in defending claims for alleged loss. The required amount of insurance shall be subject to increases as Agency may reasonably require from time to time, but not more frequently than every twelve (12) months. In no event shall such increase or increases exceed the increase during such period in the CPI. Lessee agrees that provisions of this paragraph as to maintenance of insurance shall not be construed as limiting in any way the extent to which Lessee may be held responsible for the RWGIMAN1 623145 5 12 payment of damages to persons or property resulting from Lessee's activities, or the activities of any other person or persons for which Lessee is otherwise responsible. (d) Maintain or cause to be maintained worker's compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the workers' compensation laws now in force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such workers' compensation insurance shall cover all persons employed by Lessee in connection with the Parcel A Property and shall cover full liability for compensation under any such act aforesaid, based upon death or bodily injury claims made by, for or behalf of any person incurring or suffering injury or death in connection with the Parcel A Property or the improvements on the Parcel A Property or the operation thereof by Lessee. 16.2 Definition of "Full Insurable Value". The term "Full Insurable Value" as used in this Article 16 shall mean the actual replacement cost (excluding the cost of excavation, foundation and footings below the lowest floor and without deduction for depreciation) of the improvements on the Parcel A Property, including the cost of construction of the improvements on the Parcel A Property, architectural and engineering fees, and inspection and supervision. To ascertain the amount of coverage required, Lessee shall cause the Full Insurable Value to be determined from time to time by appraisal by the insurer or, if no such appraisal is available, by an appraiser mutually acceptable to Agency and Lessee, not less often than once every twelve (12) months. 16.3 General Insurance Provisions. All policies of insurance provided for in this Article 16, except for the workers' compensation insurance, shall name Lessee as the insured and Agency and the City and their respective officers, officials, employees, agents, and representatives, as additional insureds. Lessee agrees to timely pay all premiums for such insurance and, at its sole cost and expense, to comply and secure compliance with all insurance requirements necessary for the maintenance of such insurance. Lessee agrees to submit policies of all insurance required by this Article 16 of this Lease, or certificates evidencing the existence thereof, to Agency on or before the effective date of this Lease, indicating full coverage of the contractual liability imposed by this Lease. At least thirty (30) days prior to expiration of any such policy, copies of renewal policies, or certificates evidencing the existence thereof, shall be submitted to Agency. All insurance provided for under this Article 16 shall be effected under policies issued by insurers of recognized responsibility, licensed or permitted to do business in the State of California, approved by Agency. All policies or certificates of insurance shall also: (i) provide that such policies shall not be canceled or limited in any manner without at least thirty (30) days prior written notice to Agency; and (ii) provide that such coverage is primary and not contributing with any insurance as may be obtained by Agency and shall contain a waiver of subrogation for the benefit of the City and Agency. Agency and City, and their officers, officials, employees, agents and volunteers are to be covered as insureds with respect to liability arising out of Lessee's activities performed hereunder. For all claims, Lessee's insurance shall be primary insurance with respect to any insurance maintained by Agency. All such policies maintained hereunder shall contain waivers of subrogation against any and all rights, claims or RWGIMAN 1 623145 5 13 causes of action arising against Agency or City, it being understood that such policies are for their benefit. 16.4 Failure to Maintain Insurance. If Lessee fails or refuses to procure or maintain insurance as required by this Lease, Agency shall have the right, at Agency's election, and upon ten (10) days prior notice to Lessee, to procure and maintain such insurance and charge Lessee for the same. Agency shall give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured(s). 16.5 Insurance Proceeds Resulting from Loss or Damage to improvements. All proceeds of insurance with respect to loss or damage to the improvements on the Parcel A Property during the term of this Lease shall be payable, under the provisions of the policy of insurance, to Lessee, and said proceeds shall constitute a trust fund to be used for the restoration, repair and rebuilding of the improvements on the Parcel A Property in accordance with plans and specifications approved in writing by Agency and UCR. To the extent that such proceeds exceed the cost of such restoration, repair or rebuilding, then such proceeds shall be apportioned between Lessee and Agency as their interests may appear. In the event this Lease is terminated by mutual agreement of Agency and Lessee and the - improvements on the Parcel A Property are not restored, repaired or rebuilt, the insurance proceeds shall be jointly retained by Agency and Lessee and shall be applied first to any payments, costs or expenses due under this Lease (including without limitation, taxes and utilities), second to restore the Parcel A Property and the improvements thereon to their original condition and to a neat and clean condition, and finally any excess shall be apportioned between Lessee and Agency as their interests may appear. The value of each interest for the purpose of apportioning excess proceeds under this Section shall be the fair market value of such interests immediately prior to the occurrence of the damage or destruction. 17. EMINENT DOMAIN. In the event that the Parcel A Property or any part thereof shall be taken for public purposes by condemnation as a result of any action or proceeding in eminent domain, then, as between Agency and Lessee, the interests of Agency and Lessee in the award and the effect of the taking upon this Lease shall be as follows: (a) In the event of such taking of only a part of the Parcel A Property, leaving the remainder of the Parcel A Property in such location and in such form, shape and size as to be used effectively and practicably for the conduct thereon of the uses permitted hereunder, this Lease shall terminate and end as to the portion of the Parcel A Property so taken as of the date title to such portion vests in the condemning authority, but shall continue in full force and effect as to the portion of the Parcel A Property not so taken. (b) In the event of taking of only a part of the Parcel A Property, leaving the remainder of the Parcel A Property in such location, or in such form, shape or reduced size as to RWGIMAN1 623145 5 14 render the same not effectively and practicably usable, for the conduct thereon of the uses permitted hereunder, this Lease and all right, title and interest thereunder shall cease on the date title to the Parcel A Property or the portion thereof so taken vests in the condemning authority. (c) In the event the entire the Parcel A Property is taken, this Lease and all of the right, title and interest thereunder, shall cease on the date title to the Parcel A Property so taken vests in the condemning authority. (d) Promptly after a partial taking, at Lessee's expense and in the manner specified in provisions of this Lease related to maintenance, repairs, and alterations, Lessee shall restore the improvements on the Parcel A Property, to the extent of condemnation proceeds received by Lessee, so as to place them in a condition suitable for the uses and purposes for which the Parcel A Property was leased. (e) In the event of any taking under subparagraphs (a), (b) or (c) hereinabove, that portion of any award of compensation attributable to the fair market value of the real estate of the Parcel A Property or portion thereof taken shall belong to Agency. That portion of any award attributable to the fair market value of improvements constructed by Lessee, or portion thereof, shall belong to Lessee. In the event of a partial taking, where the Lease remains in effect - and Lessee is obligated to restore or repair the improvements on the Parcel A Property or any portion thereof, then Lessee shall be entitled to any portion of the award attributable to severance damages to the remaining improvements on the Parcel A Property to the extent necessary to restore or repair the improvements on the Parcel A Property and any remaining severance damages shall be payable to Agency. Said award shall be used for the restoration, repair or rebuilding of the improvements on the Parcel A Property in accordance with plans and specifications approved in writing by Agency to the extent necessary to restore or repair the improvements and any remaining severance damages shall be payable to Agency. The value of each interest for the purpose of apportionment under this Section shall be the fair market value of such interests at the time of the taking. (f) Notwithstanding the foregoing provisions of this Section, Agency may, in its discretion and without affecting the validity and existence of this Lease, transfer Agency's interests in the Parcel A Property in Lieu of condemnation to any authority entitled to exercise the power of eminent domain. In the event of such transfer by Agency, Lessee and Agency shall retain whatever rights they may have to recover from said authority the fair market value of their respective interests in the improvements on the Parcel A Property taken by the authority. (g) All valuations to be made pursuant to this Article 17 shall be made in accordance with applicable law. 18. OBLIGATION TO REFRAIN FROM DISCRIMINATION. 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, national origin or ancestry in the RWGIMANI 623145 5 15 leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Parcel A Property and the improvements on the Parcel A Property, and Lessee itself or any person claiming under or through it shall not establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees thereof or any portion thereof, or in the providing of goods, services, facilities, privileges, advantages and accommodation. Lessee shall refrain from restricting the rental, sale, or lease of the Parcel A Property and the improvements on the Parcel A Property, or any portion thereof, on the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of any person. All such leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 18.6 In Leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through it, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased .nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased? 18.7 In Contracts: "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, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 19. NONDISCRIMINATION IN EMPLOYMENT. Lessee, for itself and its successors and assigns, agrees that during the construction and operation of the improvements provided for in this Lease, and during any work of repair or replacement, Lessee shall not discriminate against any employee or applicant for employment on the basis of any category or status not permitted by law. RWGIMAN1 623145 5 16 20. LABOR STANDARDS. Lessee shall comply, and require all contractors and subcontractors employed pursuant to this Lease, to comply with all applicable labor standards provisions of the California Labor Code and federal law, including payment of prevailing wage if applicable. 21. COMPLIANCE WITH LAW. Lessee agrees, at its sole cost and expense, to comply and secure compliance with all the requirements now in force, or which may hereafter be in force, of all municipal, county, state and federal authorities, pertaining to the Parcel A Property and the construction of improvements thereon, as well as operations conducted thereon, and to faithfully observe and secure compliance with, in the use of the Parcel A Property and the improvements thereon all applicable county and municipal ordinances and state and federal statutes now in force or which may hereafter be in force, and to pay before delinquency all taxes, assessments, and fees, if any, assessed or levied upon Lessee or the improvements on the Parcel A Property, including the land and any buildings, structures, machines, appliances or other improvements of any nature whatsoever, erected, installed or maintained on the Parcel A Property or by reason of the business or other activities of Lessee upon or in connection with the improvements on the Parcel A Property. The judgment of any court of competent jurisdiction, or the admission of Lessee in any action or proceeding against them, or any of them, whether Agency be a party thereto or not, that Lessee, has violated any such ordinance or statute in the use of the Parcel A Property or the improvements on the Parcel A Property shall be conclusive of that fact as between Agency and Lessee. 22. ENTRY AND INSPECTION. Agency reserves and shall have the right during reasonable business hours (except in cases of emergency), upon twenty-four (24) hours prior notice (except in cases of emergency) to Lessee by the Executive Director of Agency, to enter the Parcel A Property for the purpose of viewing and ascertaining the condition of the same, or to protect its interests in the Parcel A Property and the improvements on the Parcel A Property or to inspect the operations conducted thereon. 23. RIGHT TO MAINTAIN. In the event that the entry or inspection by Agency pursuant to Section 22 hereof discloses that the Parcel A Property or the improvements on the Parcel A Property are not in a decent, safe, and sanitary condition, Agency shall give written notice to Lessee specifying the unacceptable condition or conditions. Lessee shall then have thirty (30) days to cure, correct, or remedy the condition(s), unless a lesser period is required to protect the health or safety of the tenants or residents of the community. If such cure, correction, or remedy, is not reasonably completed in such thirty (30) day period, Lessee shall not be in default if the cure, correction, or remedy is commenced within the same thirty (30) day period and is ,.iligently prosecuted to RWGIMANI 623145 5 17 completion. If the condition(s) are not cured, corrected, or remedied with the above time periods. Agency shall have the right upon notice to Lessee (except in case of emergency, in which event no notice shall be necessary), to have any necessary maintenance work done for and at the expense of Lessee and Lessee hereby agrees to pay promptly any and all costs incurred by Agency in having such necessary maintenance work done in order to keep the Parcel A Property and the improvements located on the Parcel A Property in a decent, safe and sanitary condition. The rights reserved in this Section shall not create any obligations on Agency or increase obligations elsewhere in this Lease imposed on Agency. 24. EVENTS OF DEFAULT AND REMEDIES. 24.8 Events of Default by Lessee. The occurrence of one or more of any of the following events shall constitute an "Event of Default" by Lessee hereunder if Lessee shall have not cured, corrected, or remedied such failure within thirty (30) days following the service on Lessee of a written notice from Agency specifying the failure complained of, or if it is not practicable to cure or remedy such failure within such thirty (30) day period (which impracticality shall not apply to monetary defaults), within such longer period as shall be reasonable under the circumstances provided that Lessee has commenced to cure within the same thirty (30) day period: (a) Construction of the improvements on the Parcel A Property are not commenced within the time set forth in the DDA; or (b) Lessee shall, in whole or in part, abandon or surrender the Parcel A Property, or the improvements thereon, or attempt to assign, transfer, or encumber its interests hereunder, in whole or in part, without Agency's prior consent as required by this Lease; or (c) Lessee shall fail or refuse to pay, within ten (10) days of notice from Agency, any amount or sum required by this Lease to be paid by Lessee; or (d) Any of the parties to the DDA, not including the Agency, but including but not limited to Lessee, are in default of any of such parties' respective obligations under the DDA; or (e) Lessee shall fail to perform any covenant or condition of the DDA and/or this Lease; or (f) Lessee shall voluntarily file or have involuntarily filed against it any petition under any bankruptcy or insolvency act or law and the same shall not be dismissed within sixty (60) days thereafter; or (g) Lessee shall be adjudicated a bankrupt; or RWGIMANI 623145 5 18 (h) Lessee shall make a general assignment for the benefit of creditors in violation of the terms of this Lease. 24.9 Remedies of Aeencv. In the event of any such default as described in Section 24.1 Agency may, at its option and in its sole discretion, take any or all of the following actions: (a) Correct or cause to be corrected said default and charge the costs thereof (including costs incurred by Agency in enforcing this provision) to the account of Lessee, which charge shall be due and payable within thirty (30) days after presentation by Agency of a statement of all or part of said costs; (b) Correct or cause to be corrected said default and pay the costs thereof (including costs incurred by Agency in enforcing this provision) from the proceeds of any insurance; (c) Exercise its right to maintain any and all actions at law or suits in equity to compel Lessee to correct or cause to be corrected said default; (d) Have a receiver appointed to take possession of Lessee's interest in the Parcel A Property and the improvements on the Parcel A Property, with power in said receiver to administer Lessee's interest in the Parcel A Property and the improvements on the Parcel A Property, to collect all funds available to Lessee in connection with its operation and maintenance of the Parcel A Property and the improvements on the Parcel A Property; and to perform all other actions consistent with Lessee's obligations under this Lease as the court deems proper; (e) Maintain and operate the Parcel A Property and the improvements on the Parcel A Property, without terminating this Lease; (f) Terminate this Lease by written notice to Lessee. 24.10 Right of Agency in the Event of Termination of Lease. Upon termination of this Lease pursuant to Section 24.2, it shall be lawful for Agency to re-enter and repossess the Parcel A Property and the improvements on the Parcel A Property and Lessee, in such event, does hereby waive any demand for possession thereof, and agrees to surrender and deliver the Parcel A Property and the improvements on the Parcel A Property peaceably to Agency immediately upon such termination in good order, condition and repair, except for reasonable wear and tear. Notwithstanding any other provision of this Lease or the DDA, Lessee agrees that upon such termination, title to all the improvements on the Parcel A Property shall vest in Agency. Even though Lessee has breached the Lease and abandoned the Parcel A Property, this Lease shall continue in effect for so long as Agency does not give written notice that it is RWGIMANI 623145 5 19 terminating Lessee's right to possession, and Agency may enforce all of its rights and remedies under this Lease. No ejectment, re-entry or other act by or on behalf of Agency shall constitute a termination unless Agency gives Lessee notice of termination in writing. Subject to Section 24.6, terrnination of this Lease shall not relieve or release Lessee from any obligation incurred pursuant to this Lease prior to the date of such termination. Subject to Section 24.7, terrnination of this Lease shall not relieve Lessee from the obligation to pay any sum due to Agency or from any claim for damages against Lessee. 24.11 Damaees. Subject to Section 24.6, damages which Agency recovers in the event of default under this Lease shall be those which are then available under applicable California case and statutory law to lessors for leases in the State of California. 24.12 Rights and Remedies are Cumulative. The remedies provided by this Article 24 are not exclusive and shall be cumulative to all other rights and remedies possessed by Agency. The exercise by Agency of one or more 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 Lessee. 24.13 Limitation of Aeencvs Liability. Notwithstanding anything to the contrary in this Lease or in the DDA, (i) the liability of Agency shall be limited to its interest in the Parcel A Property, and any rents, issues, and profits arising the Parcel A Property and the improvements on the Parcel A Property, and proceeds of condemnation or other monies hereunder; (ii) no other assets of Agency shall be affected by or subject to being applied to the satisfaction of any liability which Agency may have to Lessee or to another person by reason of this Lease; and (iii) any judgment, order, decree or other award in favor of Lessee shall be collectible only out of, or enforceable in accordance with, the terms of this Lease and Agency's interest in the Parcel A Property. Notwithstanding the foregoing, it is expressly understood and agreed that the aforesaid limitation on liability shall in no way restrict or abridge Agency's continued liability for any fraud or willful acts or grossly negligent misrepresentations made by Agency in connection with this Lease. 24.14 Termination of DDA. In the event the DDA is terminated, this Lease shall automatically terminate, provided, however, such termination shall not limit party's right to assert or recover any damages pursuant to the terms of the DDA. 25. MISCELLANEOUS. 25.15 Governing Law. The laws of the State of California shall govern the interpretation and enforcement of this Lease. RWGIMANI 623145 5 20 25.16 Legal Actions. In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Lease. Such legal actions must be instituted in the Superior Court of Riverside County, State of California, in any other appropriate court in that County, or in the Federal District Court in the District of California in which the Parcel A Property is located. 25.17 Acceptance of Service of Process. In the event that any legal action is commenced by Lessee against Agency, service of process on Agency shall be made by personal service upon the Chairman or Executive Director of Agency, or in such other manner as may be provided by law. In the event that any legal action is commenced by Agency against Lessee, service of process on Lessee shall be made by in any manner as may be provided by law, and shall be effective whether made within or without the State of California. 25.18 Attorneys' Fees And Court Costs. In the event that either Agency or Lessee shall bring or commence an action to enforce the terms and conditions of this Lease or to obtain damages against the other party arising from any default under or violation of this Lease, the prevailing party shall be entitled to and shall be paid reasonable attorneys' fees, expert witness fees, and court costs therefor, in addition to whatever other relief such prevailing party may be entitled. 25.19 Inspection of Books And Records. Agency has the right (at Lessee's office located in Southern California, upon not less than forty-eight (48) hours' notice, and during normal business hours) to inspect the books and records of Lessee pertaining to the Parcel A Property as pertinent to the purposes of this Lease. Lessee also has the right (at Agency's office, upon not less than forty-eight (48) hours' notice, and at all reasonable times) to inspect the books and records of Agency pertaining to the Parcel A Property as pertinent to the purposes .of this Lease. 25.20 Interest. Any amount due Agency that is not paid when due shall bear interest from the date such amount becomes due until it is paid. Interest shall be at a rate equal to the rate earned by the Local Agency Investment Fund ("LAIF") plus two and three -eighths percent (2.375%) [EXAMPLE: if the LAIF rate is 6%, the applicable interest rate under this Paragraph 26.6 would be 8.375%] 25.21 Notices. All notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements, appointments or designations hereunder by either party to the other shall be in writing and shall be given either by (i) personal service, (ii) delivery by reputable document delivery service that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified or registered mail, return receipt requested, postage prepaid, and addressed as follows: RWGIMAN1 623145 5 21 Agency: With a copy to: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Telephone: (760) 346-0611 Facsimile: (760) 341-6372 Attention: Executive Director Richards, Watson & Gershon A Professional Corporation 333 South Hope Street, 38th Floor Los Angeles, California 90071 Attention: William L. Strausz, Esq. Telephone: (213) 626-8484 Facsimile: (213) 626-0078 Lessee: The Richard J. Heckmann Foundation Attn: or to such other address as either party shall later designate for such purposes by written notice to the other party. Notices personally delivered or delivered by document delivery service shall be effective upon receipt; provided, however that refusal to accept delivery shall constitute receipt. Mailed notices shall be effective as of Noon on the third business day following deposit with the United States Postal Service. Any notices attempted to be delivered to an address from which the receiving party has moved without notice to the delivering party shall be effective as of Noon on the third day after the attempted delivery or deposit in the United States mail. 25.22 Time is of the Essence. Time is of the essence in the performance of the terms and conditions of this Lease. 25.23 Non -Merger of Fee And Leasehold Estates. If both Agency's and Lessee's estates in the Parcel A Property, the improvements on the Parcel A Property, or both, become vested in the same owner, this Lease shall nevertheless not be destroyed by application of the doctrine of merger except at the express election of Agency. The expiration or termination of this Lease, or voluntary or involuntary surrender by Lessee, or the mutual cancellation of this Lease, shall not work as a merger and shall, at the option of Agency, terminate all or any existing tenancies, subleases, or subtenancies or may, at the option of Agency, operate as an assignment to Agency of any or all such existing subleases or subtenancies. 25.24 Holding Over. The occupancy of the Parcel A Property after the expiration of the Term of this Lease shall be construed to be a tenancy from month to month, and all other terms and conditions of this Lease shall continue in full force and effect. RWGIMANI 623145 5 22 25.25 Conflict of Interest. No member, official or employee of Agency shall have any personal interest, direct or indirect, in this Lease nor shall any such member, official or employee participate in any decision relating to the Lease which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. Lessee warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Lease. 25.26 Non -Liability of Agency Officials And Employees. No member, official, officer, employee, agent, or representative of Agency shall be personally liable to Lessee, or any successor in interest, in the event of any default or breach by Agency or for any amount which may become due to Lessee or successor or on any obligations under the terms of this Lease. 25.27 Relationship. The relationship between the parties hereto shall at all times be deemed to be that of landlord and tenant. The parties do not intend nor shall this Lease be deemed to create a partnership or joint venture. 25.28 Waivers And Amendments. All waivers of the provisions of this Lease must be in writing and signed by the appropriate authorities of Agency or Lessee. The waiver by Agency - of any breach of any term, covenant, or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition, or any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of any payment hereunder by Agency shall not be deemed to be a waiver of any preceding breach of Lessee of any term, covenant or condition of this Lease, regardless of Agency's knowledge of such preceding breach at the time of acceptance of such payment. Failure on the part of Agency to require or exact full and complete compliance with any of the covenants or conditions of this Lease shall not be construed as in any manner changing the terms hereof and shall not prevent Agency from enforcing any provision hereof. All amendments hereto must be in writing and signed by the appropriate authorities of Agency and Lessee. 25.29 Non -Merger With Other Documents Referenced Herein. None of the terms, covenants or conditions set forth in the DDA, or other documents or agreements referenced in this Lease shall be deemed to be merged with this Lease. 25.30 Entire Agreement. This Lease, with the incorporation of the DDA, sets forth the entire understanding of the parties with respect to Lessee's ground lease of the Parcel A Property. 25.31 Counterparts. This Lease may be executed in counterparts, each of which, when this Lease has been signed by all the parties hereto, shall be deemed an original. 25.32 Severability. If any provision of this Lease or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this Lease and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforceable to the greatest extent permitted by law. RWGIMANI 623145 5 23 25.33 Terminology. All personal pronouns used in this Lease, whether used in the masculine, feminine, or neuter gender, shall include all other genders; the singular shall include the plural, and vice versa. Titles of sections are for convenience only, and neither limit nor amplify the provisions of the Lease itself. Except for terms expressly defined in this Lease, all terms shall have the same meaning as set forth in the DDA. 25.34 Recordation. A short form memorandum of this Lease, in the form attached hereto as Exhibit C, shall be recorded at or within one (1) week after the time the Lease has been signed by all the parties hereto. 25.35 Binding Effect. This Lease, and the terms, provisions, promises, covenants and conditions hereof, shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns. 25.36 Estoppel Certificate. Each of the parties shall at any time and from time to time upon not less than thirty (30) days' prior notice by the other, execute, acknowledge and deliver to such other party a statement in writing certifying that this Lease is unmodified and is in full force and effect (or if there shall have been modifications that this Lease is in full force and effect as - modified and stating the modifications), and the dates to which the rent has been paid by Lessee, and stating whether or not to the best knowledge of the signer of such certificate such other party is in default in performing or observing any provision of this Lease, and, if in default, specifying each such default of which the signer may have knowledge, and such other matters as such other party may reasonably request, it being intended that any such statement delivered by Lessee may be relied upon by Agency or any successor in interest to Agency or any prospective mortgagee or encumbrancer thereof, and it being further intended that any such statement delivered by Agency may be relied upon by any prospective assignee of Lessee's interest in this Lease or any prospective mortgagee or encumbrancer thereof. Reliance on any such certificate may not extend to any default as to which the signer of the certificate shall have had no actual knowledge. 25.37 Force Maieure. The time within which Agency or Lessee is obligated herein to perform any obligation hereunder, other than an obligation that may be performed by the payment of money, shall be extended and the performance excused when the delay is caused by fire, earthquake or other acts of God, strike, lockout, acts of public enemy, riot, insurrection or other cause beyond the reasonable control of the applicable party. 25.38 Ouiet Eniovment. Agency does hereby covenant, promise and agree to and with Lessee that Lessee, for so long as Lessee is not in default hereof, shall and may at all times peaceably and quietly have, hold, use, occupy and possess the Parcel A Property throughout the Term. 25.39 Agency Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by Agency, the Executive Director of Agency or his or her RWGIMANI 623145 5 24 designee is authorized to act on behalf of Agency unless specifically provided otherwise herein or the law otherwise requires. [end - signature page follows] RWGIMANI 623145 5 25 1N WITNESS WHEREOF, the parties hereto have caused this Lease to be executed by their lawfully authorized officers. Date: ATTEST: Agency Secretary APPROVED AS TO FORM: Agency: PALM DESERT REDEVELOPMENT AGENCY, a public body corporate and politic By: Chairman LESSEE: THE RICHARD J. HECKMANN FOUNDATION, a California mutual benefit corporation By: Title: By: Title: Richards, Watson & Gershon, a professional corporation, Agency Attorney By: RWGIMANI 623145 5 26 EXHIBIT A TO GROUND LEASE LEGAL DESCRIPTION [to be attached] RWGIMANI 623145 5 1 GERALD FORD DRIVE -rt�rt 1 P.O.B. 67 67 R.S. 103/68-69 8.54 ACRES 33 34 fA T.P.O.B. A 9 49'S9'E 7113.33' RING ROAD R = 912.50' W 9r5072 E _265259' FRANK SINA TRA DRIVE LINE AND CURVE DATA BRG. / DELTA RADIUS LENGTH N89°49'59"E NO°10'0I"W N89°49'59"E N42° l 1'33"E SOO°09'28"E S89°50'32"W N87°03'59"W S89°49'59"W 1 1 °31'45" 965.50' 92.52' 81.00' 82.84' 998.61' 660.76' 205.00' 480.80' 151.87' 194.28' SCALE 1 "=300' PREPARED BY. • E"PwCCa7 . • . aurvc Co ._, 3400 E Corn et*. fan 10f73 710 raw faw10f Lam A.o zt a 10022 Poo 0cv,. CU 92260 313. 72f • 2362 710.773. 0000 r4[ • 323. 726 :2321 rf2 • 760 • 773. 6603 LEGEND PROPERTY TO BE DEEDED UCR HECUIMANN CENTER DYED PLAT DESCRIPTION POR. SECTIONS 33 & 34 SEC. 33-34 , T. 4 S., R. 6 E, S.B.M. SHEwT 1 OP 1 FILE REP. / 01-704 LEGAL DESCRIPTION All those portions of Sections 33 and 34, in Township 4 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South. Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, which bears S89°49'59"W 783.33 feet from the Southeast corner of said Section 33; Thence N89°49'59"E 92.52 feet along the South line of said Section 33; Thence NO°10'01"W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N89°49'59"E 82.84 feet along said parallel line and the Northerly right of way of Frank Sinatra Drive to the True Point of Beginning; Thence N42°11'33"E 998.61 feet to the beginning of a non tangent curve concave Northeasterly and having a radius of 965.50 feet; a radial line of said curve through said point bears S37°44'14"W; Thence Southeasterly 194.28 feet through an angle of 11°31'45"; Thence non tangent to said curve S00°09'28"E 660.76 feet to a point on the Northerly right of way of said Frank Sinatra Drive; Thence S89°50'32"W 205.00 feet along said Northerly right of way; Thence N87°03'59"W480.80 feet; Thence S89°49'59"W 151.87 feet to the True Point of Beginning; The parcel described herein contains 8.537 acres, more or less. JMS Engineering, Inc. 73-710 Fred Waring Drive Palm Desert, California 92260 (760) 773-6600 Wed Max 07 10:30:01 2001 PROJECT: D:\JMS-Jobs\01-704 Heckmann\01-704 Heckmann West Parcel.pro Pt# Bearing Curve Data Distance Northing Easting 0 0 N42°11'33"E 998.61 ft N90°00'00"W 0.00 ft 10081.5106 10821.3733 0 10821.3733 S58°01'38"E 193.95 ft Radius Point: 0 11584.9116 Radius: 965.50 ft Delta: 11°31'45" Left Arc: 194.28 ft Middle Ordinate: 4.88 ft External: 4.91 ft Deg of Curvature: 5°56'04" Arc Definition Tangent: 97.47 ft 10718.6736 0 0 0 0 0 0 N90°00'00"W S00°09'28"E S89°50'32"W N87°03'59"W S89°49'59"W 0.00 ft 660.76 ft 205.00 ft 480.80 ft 151.87 ft 10718.6736 10057.9161 10057.3516 10081.9583 10081.5158 10175.1193 10845.8093 10845.8093 11436.7340 11010.3371 11010.3371 11012.1566 10807.1574 10326.9875 10175.1181 Closing latitude Closing departure Closing bearing Closing distance Total traverse length Total error of closure Error of closure in latitute Error of closure in departure Area Area = 0.00525 = -0.00114 = S12°13'04"E = 0.00537 = 2690.99 (2691.32) = 1/501427 = 1/513047 = 1/2369391 = 371872.53 sq ft. = 8.537 ACRES. EXHIBIT B TO GROUND LEASE MAP RWG1MAN 1 _623145_5 1 (909) 391-1031 p.3 Mar 05 01 01:52p Norberto F. Nardi ff • x EXHIBIT C TO GROUND LEASE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attn: City Clerk Exempt From Recording Fee Pursuant to Government Code Section 6103 MEMORANDUM OF LEASE THIS MEMORANDUM OF LEASE ("Memorandum") is hereby entered into as of , 2001, by and between the Palm Desert Redevelopment Agency, a public body corporate and politic (the "Agency"), and the Richard J. Heckmann Foundation, a California mutual benefit corporation (the "Lessee"). RECITALS A. Agency and Lessee have entered into a Ground Lease (hereinafter "Lease") dated , 2001, for that certain parcel of real property which is legally described in Exhibit A attached hereto and incorporated herein by reference (the "Property"). A copy of the Lease is available for public inspection at Agency's office at 73-510 Fred Waring Drive, Palm Desert, California 92260. B. The Lease provides that a short form memorandum of the Ground Lease shall be executed and recorded in the Official Records of Riverside County, California. NOW, THEREFORE, the parties hereto certify as follows: 1. Agency, pursuant to the Lease, has leased the Property to the Lessee upon the terms and conditions provided for therein, generally for the construction, development and operation thereon of an education center. 2. Unless earlier terminated, the term of the Lease shall expire on September 30, 2004. RWGIMANI_623145 5 1 This Memorandum of Lease is not a complete summary of the Ground Lease, and shall not be used to interpret the provisions of the Lease. ATTEST: Agency Secretary Palm Desert Redevelopment Agency, a public body corporate and politic By: Chairman THE RICHARD J. HECKMANN FOUNDATION Bv Title: Bv Title: RWGIMANI 623145 5 2 STATE OF CALIFORNIA ) ss. COUNTY OF RIVERSIDE On , 2001 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she./they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary public [SEAL] STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On , 2001 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she./they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary public [SEAL] RWGIMAN1 623145 5 1 STATE OF CALIFORNIA COUNTY OF RIVERSIDE On , 2001 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary public [SEAL) RWGIMANI 623145 5 2 EXHIBIT A TO MEMORANDUM OF LEASE, LEGAL DESCRIPTION RWGIMAN1 623145 5 3 P.D.B. 67 67 1 R.S. 103/68-69 8.54 ACRES 331 34 r.P.O.a N6'104919-E 711.JJ' € RING ROAD R = 91250' V19'567E 265759' FRANK SINA TRA DRIVE LINE AND CURVE DATA NO. BRG. / DELTA RADIUS LENGTH ti N89°49'59"E — 92.52' c3 NO° 10'01"W — 81.00' u N89°49'59"E — 82.84' t© N42°11'33"E — 998.61' 1 © SOO°09'28"E — 660.76' 10 S89°50'32"W — 205.00' 10 N87°03'59"W — 480.80' 10 S89°49'59"W — i51.8T 101 1 1°31'45" APPROVED BY:' CRY 0P PALM DESERT /OSB'P, S GADGIAA' Off 6A8'R DATE £C.E 42138 EXP. 3-91-04 965.50' 194.28' PREPARED BY: a 1 SCALE 1"=300' 1606 C Ma s.° toe rf-ro 6s666.6.06 L°oa So Aram CA S°°UJ Mow Ca fine 323.7/6 7345 711•771 r•. u3 r»•ni, n. no•m.uos LEGEND PROPERTY TO BE DEEDED UCR HECIallANN CENTER DFYA'D PLOT DASTRIPTION POR. SECTIONS 33 & 34 .SEC. 33-34 , T. 4 S., R. 8 E., S.B.A4. SREg7' 1 OP 1 P111 Jur 0/-704 LEGAL DESCRIPTION All that portion of Sections 33 and 34, in Township 4 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, which bears S89°49'59"W 783.33 feet from the Southeast corner of said Section 33; Thence N89°49'59"E 92.52 feet along the South line of said Section 33; Thence NO°10'01"W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N89°49'59"E 82.84 feet along said parallel line and the Northerly right of way of Frank Sinatra Drive to the True Point of Beginning; Thence N42°11'33"E 998.61 feet to the beginning of a non tangent curve concave Northeasterly and having a radius of 965.50 feet; a radial line of said curve through said point bears S37°44'14"W; Thence Southeasterly 194.28 feet through an angle of 11°31'45"; Thence non tangent to said curve S00°09'28"E 660.76 feet to a point on the Northerly right of way of said Frank Sinatra Drive; Thence S89°50'32"W 205.00 feet along said Northerly right of way; Thence N87°03'59"W480.80 feet; Thence S89°49'59"W 151.87 feet to the True Point of Beginning; The parcel described herein contains 8.537 acres, more or less. JMS Engineering, Inc. 73-710 Fred Waring Drive Palm Desert, California 92260 (760) 773-6600 Wed Mar 07 10:30:01 2001 PROJECT: D:\JMS-Jobs\01-704 Heckmann\01-704 Heckmann West Parcel.pro Pt8 Bearing Curve Data Distance Northing Easting 0 0 0 0 0 0 0 0 0 N42'11'33"E N90'00'00"W S58'01'38"E Radius Point: Radius: Delta: Arc: Middle Ordinate: External: Deg of Curvature: Tangent: N90°00'00"W S00° 09' 28"E S89°50'32"W N87°03'59"W S89°49'59"W 10081.5106 10175.1193 10821.3733 10845.8093 10821.3733 10845.8093 193.95 ft 0 11584.9116 11436.7340 965.50 ft 11°31'45" Left 194.28 ft 4.88 ft 4.91 ft 5°56'04" 97.47 ft 998.61 ft 0.00 ft 0.00 ft 660.76 ft 205.00 ft 480.80 ft 151.87 ft Arc Definition 10718.6736 10718.6736 10057.9161 10057.3516 10081.9583 10081.5158 11010.3371 11010.3371 11012.1566 10807.1574 10326.9875 10175.1181 Closing latitude Closing departure Closing bearing Closing distance Total traverse length Total error of closure Error of closure in latitute Error of closure in departure Area Area = 0.00525 = -0.00114 = S12°13'04"E = 0.00537 = 2690.99 (2691.32) = 1/501427 = 1/513047 = 1/2369391 = 371872.53 sq ft. = 8.537 ACRES. EXHIBIT D FORM OF GRANT DEED Recording Requested by and when recorded return to Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attn: City Clerk and mail tax statements to: University of California, Riverside campus Assessor's Parcel Map No.: Exempt from Recording Fees Pursuant to Government Code § 6103 GRANT DEED The undersigned grantor(s) declare(s): Documentary transfer tax is $ FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic ("Grantor"), hereby GRANTS to THE UNIVERSITY OF CALIFORNIA, ON BEHALF OF ITS RIVERSIDE CAMPUS ("Grantee") the following described real property, including all water, oil, mineral, gas, and geothermal rights, and including the right to extract the same from said real property, if and to the extent any such rights are held by the Grantor (collectively, the "Property") located in the City of Palm Desert, County of Riverside, State of California: See Exhibit A attached hereto and incorporated herein by reference. SUBJECT TO, all easements, covenants, conditions, restrictions, and rights of way of record. RESERVING AND EXCEPTING THEREFROM, RWGIMAN1_614980.11 D-I 1. This Grant of the Property is subject to the Redevelopment Plan for Project Area 2 of the Palm Desert Redevelopment Agency and a Disposition and Development Agreement (the "Agreement") entered into by and between Grantor and Grantee dated as of 2001, the terms of which are incorporated herein by reference. A copy of the Agreement is available for public inspection at the offices of the Grantor, 73-510 Fred Waring Drive, Palm Desert, California 92260. The Property is conveyed further subject to all easements, rights of way, covenants, conditions, restrictions, reservations and all other matters of record. 2. The Property is conveyed upon the conditions hereinafter specified, upon the violation or failure of any of which title to said Property shall revert to and vest in Grantor, or its successor in interest; provided, however, that no reversion of the Property shall occur unless and until a failure or violation of one of the conditions hereafter specified actually occurs, and Grantor gives Grantee written notice thereof specifying the particular failure or violation in the manner and time period provided in paragraph 5 of this Grant Deed and, at the expiration of the time stated in the Agreement as dependent upon the type of failure and from the receipt by Grantor of such notice, the failure has not been remedied or the violation has not ceased. The conditions are: 1. The Property shall be used for the construction, operation, and maintenance thereon of improvements for the use and operation of higher educational facilities as part of the University of California, Riverside, including university or college related service and administrative facilities, or other educational facilities, in perpetuity. 3. By acceptance hereof, Grantee agrees, for itself, its successors and assigns, to refrain from restricting the rental, sale or lease of the Property on the basis of race, color, creed, religion, ancestry, sex, marital status, national origin or age of any person in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee itself or any persons claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. The foregoing covenants shall run with the land. All deeds, leases or contracts entered into with respect to the Property shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, national origin, sex, marital status, age or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Iand herein conveyed, nor shall the grantee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: That RWGIMAN 1 614980 11 D-2 there be no discrimination against or segregation of any person or group of persons, on account of age, race, color, creed, religion, sex, marital status, national origin, or ancestry. in the leasing, subleasing, transferring, use or occupancy, tenure or enjoyment of the land herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, age, national origin, sex, marital status or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 4. All covenants contained in this Grant Deed shall run with the land and shall be binding for the benefit of Grantor and its successors and assigns and such covenants shall run in favor of the Grantor and for the entire period during which the covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies provided herein or otherwise available, and to maintain any actions at law or suits in equity or other property proceedings to enforce the curing of such breach. The covenants contained in this Grant Deed RWGIMAN 1 614980 11 D-3 shall be for the benefit of and shall be enforceable only by the Grantor and its successors and assigns. IN WITNESS WHEREOF, the undersigned has executed this Grant Deed as of the date set forth below. Dated: RIVERSIDE PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic By: Attest: By: Carlos L. Ortega, Executive Director Secretary UNIVERSITY OF CALIFORNIA, By: Raymond L. Orbach, Chancellor RWGIMANI 614980 11 D-4 State of California County of } } } On , 200_, before me, , a Notary Public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) RWGIMAN1 614980 11 D-5 EXHIBIT E FORM OF OPTION AGREEMENT THIS OPTION AGREEMENT (this "Agreement"), dated as of , 200_, by and between the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic ("Seller"), and THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, RIVERSIDE, a ("Buyer"). RECITALS A. Seller is the owner of that certain real property located at the northeast comer of Frank Sinatra Drive and Cook Street within the City of Palm Desert, California, within one mile of Interstate 10 and four miles from State Route 111, containing approximately thirteen (13) acres, which is more particularly described in Exhibit A attached hereto and incorporate herein by this reference (the "Property"). Buyer plans to purchase the Property and expand the International Center for Entrepreneurial Management (the "ICEM"), which will be part of the A. Gary Anderson Graduate School of Management, University of California, Riverside, and will be located on approximately seven (7) acres of real property adjacent to the Property (the "Project"). B. In connection with the Project and this Agreement, Buyer, Seller and The Richard J. Heckmann Foundation, a California mutual benefit corporation ("Heckmann"), have entered into a Disposition and Development Agreement dated of even date herewith (the "DDA"). C. Buyer desires to obtain an option to purchase the Property from Seller for development of the Project and Seller is willing to grant such an option to Buyer on the terms and conditions hereinafter set forth. AGREEMENT IN CONSIDERATION of the above recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows: ARTICLE I GRANT OF OPTION Section 1.1 Option and Term. As of the date hereof, Seller grants to Buyer an option (the "Option") to purchase from Seller, subject to the terms, covenants and conditions set forth herein, the Property together with any and all rights, privileges and easements appurtenant thereto owned by Seller. The term of the Option (the "Term") shall commence upon the date when construction of the ICEM by Heckmann is complete as provided in the DDA and shall expire at midnight upon the earlier of (a) the date which is twenty-five (25) years thereafter, RWGIMAN 1614980 11 E-1 unless extended or terminated as provided herein, or (b) the date of termination of, or default by Buyer under, the DDA. Section 1.2 Exercise. So long as the following conditions precedent are met: (a) Buyer is not in default hereunder or under the DDA, (b) Buyer has received fee simple title to Parcel A (as defined in the DDA) from Seller and Heckmann has completed its construction of the ICEM thereon, which construction is approved by and acceptable to Seller, (c) Buyer certifies or provides proof satisfactory to Seller that Buyer has the necessary funding sufficient to construct and maintain improvements for the expansion of AGSM's educational facilities, which improvements are approved by the Agency, on all or a substantial portion of Parcel B of the Site, and (d) Buyer agrees in writing that such improvements shall be used and maintained solely as education facilities as required by the DDA, then Buyer may exercise the Option to purchase the Property by giving Seller written notice (the "Option Notice"), in the manner specified by Article VIII hereunder, of its intent to exercise the Option prior to the expiration of the Term. Section 1.3 Purchase Price for the Property. The Purchase Price for the Property shall be the sum of $0.00. Section 1.4 Maintenance of Property During Option Period. During the Term, Seller shall have no obligation with respect to the maintenance of the Property. ARTICLE II TITLE AND SURVEY All survey and title review matters regarding the Property shall have been approved pursuant to the terms of the DDA and shall not be conditions to any closing hereunder. ARTICLE III BUYER'S EXAMINATION Section 3.1 Buyer's Independent Investigation Period,. Seller grants to Buyer a NINETY (90) day review period during which time Buyer is permitted to enter upon the Property as provided in Section 3.2 herein, investigate all matters surrounding Buyer's intended use of the Property and other relevant investigations concerning the Property ("Buyer's Independent Investigation Period"). Buyer acknowledges and agrees that prior to the delivery of the Option Notice it will have been given a full opportunity to inspect and investigate each and every aspect of the Property, either independently or through agents of Buyer's choosing, including, without limitation: (a) All matters relating to title, together with all governmental and other legal requirements such as taxes, assessments, zoning, use permit requirements and building codes. (b) The physical condition of the Property. Such examination of the physical condition of the Property may include an examination for the presence or absence of hazardous or toxic materials, substances or wastes, or petroleum products or by-products (collectively, RWGIMAN1 614980 11 E-2 "Hazardous Materials"), which shall be performed or arranged by Buyer at Buyer's sole expense. (c) Any recorded easements and/or visible access rights affecting the Property. (d) Any other documents or agreements of significance affecting the Property, provided such documents or agreements have been recorded, are part of the public records or are otherwise disclosed by Seller. (e) All other matters affecting the Property. Section 3.2 Entry onto the Property by Buyer. Seller agrees to permit Buyer or its representatives to enter onto the Property at any time during Buyer's Independent Investigation Period for the purpose of making reasonable studies, investigations, engineering tests or surveys. All such studies, investigations, tests or surveys are to be made at Buyer's expense. Prior to any entry to perform any invasive testing Buyer shall give Seller seventy-two (72) hours' advance written notice thereof directed to Mr. Carlos Ortega, telephone: (760) 346-0611, facsimile (760) 341-6372, including with such notice the identity of the company or persons who will perform such testing and the proposed scope of the testing. If Buyer or its agents, employees or contractors take any sample from the Property in connection with any such testing, Buyer shall provide to Seller a portion of such sample being tested to allow Seller, if it so chooses, to perform its own testing. Seller, or its representative(s), may be present to observe any testing or other inspection performed on the Property. Buyer shall promptly deliver to Seller copies of any reports relating to any studies, investigations, testing or other inspection of the Property performed by Buyer or its agents, employees or contractors. In the event Buyer does not purchase the Property, any damage to the Property caused by Buyer's investigations shall be restored to as good a condition as previously existed, including without limitation the appropriate closure of any test wells which may be drilled on the Property. Buyer shall maintain, and shall assure that its contractors maintain, public liability and property damage insurance in the amount of at least Two Million Dollars (S2,000,000) and in form and substance adequate to insure against all liability of Buyer and its agents, employees or contractors arising out of any entry or inspections of the Property pursuant to the provisions hereof, and Buyer shall provide Seller with evidence of such insurance coverage within five (5) days of Seller's request and prior to any entry upon the Property. Buyer shall defend, indemnify and hold Seller harmless from any; against any costs, damages, liabilities, losses, expenses, liens or claims (including, without limitation, reasonable attomey's fees) arising out of or relating to any entry on the Property by Buyer, its agents, employees or contractors in the course of performing the inspections, testing or inquiries provided for in this Agreement. The foregoing indemnity shall survive beyond the Closing, or if the sale is not consummated, beyond the termination of this Agreement. Section 3.3 Buyer's Acknowledgment. BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER IS SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN "AS IS," "WHERE IS" AND "WITH ALL FAULTS" BASIS AND THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ITS AGENTS, OR BROKERS AS TO ANY MATTERS RWGIMANI 614980 11 E-3 CONCERNING THE PROPERTY, INCLUDING WITHOUT LIMITATION: (i) the quality, nature, adequacy and physical condition of the Property, (ii) the quality, nature, adequacy, and physical condition of soils, geology and any ground water, (iii) the existence, quality, nature, adequacy and physical condition of utilities serving the Property, (iv) the development potential of the Property, and the Property's use, habitability, merchantability, or fitness, suitability, value or adequacy of the Property for any particular purpose, (v) the zoning or other legal status of the Property or any other public or private restrictions on use of the Property, (vi) the compliance of the Property or its operation with any applicable codes, laws, regulations, statutes, ordinances, covenants, conditions and restrictions of any governmental or quasi- governmental entity or of any other person or entity, (vii) the presence of Hazardous Materials on, under or about the Property or the adjoining or neighboring property, (viii) the condition of title to the Property, (ix) any agreements affecting the Property and (x) the economics of the Property. Section 3.4 Release. Without limiting the above, Buyer on behalf of itself and its successors and assigns waives its right to recover from, and forever releases and discharges, Seller, Seller's subsidiaries, parents and affiliates, the partners, trustees, shareholders, directors, officers, employees and agents of each of them, and their respective heirs, successors, personal representatives and assigns (collectively, the "Seller Related Parties"), from any and all demands, claims, legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens, judgments, costs or expenses whatsoever (including, without limitation, attorney's fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of or in any way be connected with the physical condition of the Property or any law or regulation applicable thereto, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.A. Sections 6901 et seq.), the Resources Conservation and Recovery Act of 1976 (42 U.S.A. Section 6901 et seq.), the Clean Water Act (33 U.S.A. Section 1251, et seq.), the Safe Drinking Water Act (14 U.S.A. Section 1401 et seq.), the Hazardous Materials Transportation Act (49 U.S.A. Section 1801, et seq.), the Toxic Substance Control Act (15 U.S.A. Section 2601, et seq.), the California Hazardous Waste Control Law (California Health and Safety Code Section 25100, et seq.), the Porter -Cologne Water Quality Control Act (California Water Code Section 13000 et seq.), and the Safe Drinking Water and Toxic Enforcement Act of 1986 (California Health and Safety Code Section'25249.5, et. seq.). However, in no event shall the foregoing be construed as a release of any third parties other than Seller and the Seller Related Parties, and the foregoing shall not release the Seller or the Seller Related Parties from any liability arising out of Seller's or the Seller Related Parties' willful misconduct or negligent actions occurring after the date hereof. Buyer expressly waives the benefits of Section 1542 of the California Civil Code, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR." Initials of Buyer Seller Section 3.5 Representations and Warranties of Seller. Seller represents and warrants to Buyer that Seller is a public body, corporate and politic, duly organized, validly existing and in good standing under the laws and the Constitution of the State of California and that this RWGIMAN 1614980 11 E-4 Agreement and all documents executed by Seller which are to be delivered to Buyer (i) are or at the time of Closing will be duly authorized, executed and delivered by Seller and (ii) are or at the time of Closing will be legal, valid and binding obligations of Seller. Section 3.6 Representations and Warranties of Buyer. Buyer represents and warrants to Seller that Buyer is a an arm of the State of California and receives its authority from the California Education Code and that this Agreement, and all documents executed by Buyer which are to be delivered to Seller (i) are or at the time of Closing will be duly authorized, executed and delivered by Buyer, (ii) are or at the time of Closing will be legal, valid and binding obligations of Buyer, and (iii) do not and at the time of Closing will not violate any provision of any agreement or judicial order to which Buyer is a party or to which Buyer is subject. Section 3.7 Survival of Representations and Warranties. All representations and warranties of Seller and Buyer contained in this Agreement shall survive the Closing, provided that in the case of breach of either the Buyer's or Seller's representations, each must give each other written notice of any claim it may have for a breach of any such representation or warranty within six (6) months of the Closing. Any claim which either Party may have at any time, whether known or unknown, which is not asserted within such 6-month period shall not be valid or effective, and Seller shall have no liability with respect thereto. ARTICLE IV CLOSING AND ESCROW Section 4.1 Conveyance. Conveyance shall be by special warranty deed subject to the exceptions above set forth. Section 4.2 Evidence of Title. Prior to Closing, Buyer shall obtain at Buyer's sole cost a California Land Title Association ("CLTA") or an American Land Title Association ("ALTA") Policy of Title Insurance in the amount of the Purchase Price and which is reasonably acceptable to Seller, committing to insure in the Buyer good and merchantable title in fee simple, free and clear of all liens and encumbrances except those set forth in Section 2.1(b) hereof. All title policies and endorsements of any kind shall be at Buyer's sole cost and expense. Section 4.3 Escrow Instructions. Upon execution of this Agreement, the parties hereto shall deposit an executed counterpart of this Agreement with a California licensed title company that is mutually selected by Buyer and Seller (the "Title Company"), and this instrument shall serve as the instructions to the Title Company as the escrow holder for consummation of the purchase and sale contemplated hereby. Seller and Buyer agree to execute such reasonable additional and supplementary escrow instructions as may be appropriate to enable the Title Company to comply with the terms of this Agreement; provided, however, that in the event of any conflict between the provisions of this Agreement and any supplementary escrow instructions, the terms of this Agreement shall control. Section 4.4 Closing. The closing of the sale hereunder (the "Closing") shall be held and delivery of all items to be made at Closing under the terms of this Agreement shall be made at the offices of the Title Company within sixty (60) days after Seller's receipt of the Option Notice before 1:00 p.m. local time, or such other later date and time as Buyer and Seller may mutually RWGIMAN1 614980 11 E-5 agree upon in writing (the "Closing Date"). Such date and time may not be extended without the prior written approval of both Seller and Buyer. Section 4.5 Deposit of Documents. (a) At or before the Closing, Seller shall deposit into escrow the following items: (1) the duly executed and acknowledged Deed conveying the Property to Buyer subject to all matters of record and all governmental laws and restrictions affecting the Property; (2) an affidavit pursuant to Section 1445 (b) (2) of the Federal Code, that Seller is not a "foreign person" within the meaning of Section 1445 (f) (3) of the Federal Code; and properly executed California Form 590 certifying that Seller has a permanent place of business in California or is qualified to do business in California. (b) Buyer and Seller shall each deposit such other instruments as are - reasonably required by the Title Company or otherwise required to close the escrow and consummate the purchase and sale of the Property in accordance with the terms hereof. Section 4.6 Proration. (a) Real property taxes and assessments; water, sewer and utility charges; annual permits and/or inspection fees (calculated on the basis of the period covered); and any other expenses normal to the operation and maintenance of the Property shall be prorated as of 12:01 a.m. on the date the deed is recorded, on the basis of a 365- day year. Seller and Buyer hereby agree that if any of the aforesaid proration cannot be calculated as soon as reasonably practicable after the Closing Date, then either party owing the other party a sum of money based on such subsequent proration(s) shall promptly pay said sum to the other party. (b) Any transfer taxes applicable to the sale, title premiums, and recording charges shall be paid by Buyer, as shall escrow fees as the parties intend that any and all expenses of the escrow and the sale and transfer of the Property shall be paid by Buyer. Section 4.7 Possession. Possession of the Property shall be given to Buyer on the Closing Date. RWGIMAN 1614980 11 ARTICLE V TERMINATION UPON DEFAULT E-6 Upon any default by Buyer in the payment of any amounts due hereunder or under the DDA, Seller may elect, by written notice to Buyer, to terminate this Agreement unless such monetary default is cured to Seller's satisfaction within fifteen (15) days of Buyer's receipt of Seller's notice. Upon any non -monetary default by Buyer pursuant to this Agreement or the DDA, Seller may elect, by written notice to Buyer, to terminate this Agreement unless such non - monetary default is cured to Seller's satisfaction within thirty (30) days of Buyer's receipt of Seller's notice, provided, however, that such 30-day period shall be extended to a maximum of sixty (60) days if Buyer has commenced such cure within the thirty (30) day period and is diligently prosecuting such cure to completion. Upon any such termination of this Agreement, neither party shall have any further rights, obligations, or liabilities hereunder except as expressly provided herein for matters surviving such termination, and except that Buyer shall indemnify and hold Seller harmless from and against any costs, damages, liabilities, losses, expenses, liens and claims including, without limitation, reasonable attorney's fees arising out of any default. ARTICLE VI NOTICES Section 6.1 Notices. When notices are provided for herein, the same shall be in writing and served upon the parties at the addresses listed in this Section. Any notice shall be either (i) sent by U.S. registered or certified mail, return receipt requested, in which case it shall be deemed delivered three (3) business days after being deposited in the U.S. mail; or (ii) sent by nationally recognized overnight courier, in which case it shall be deemed delivered one (1) business day after deposit with such courier; or (iii) sent by telecommunication ("Fax") during normal business hours in which case it shall be deemed delivered on the day sent, provided as to items (ii) and (iii) that a duplicate original is sent by registered or certified mail, return receipt requested on the same day the original notice was sent. The addresses and Fax numbers listed in this Section may be changed by written notice to the other parties, provided, however, that no notice of change of address or Fax number shall be effective until the date of delivery of such notice. Copies of notices are for informational purposes only and a failure to give or receive copies of any notice shall not be deemed a failure to give notice. SELLER: With a Copy to: Mr. Carlos L. Ortega Executive Director Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Telephone: (760) 346-0611 Facsimile: (760) 341-6372 Richards, Watson & Gershon A Professional Corporation 333 South Hope Street, 38th Floor Los Angeles, California 90071 Attention: William L. Strausz, Esq. Telephone: (213) 626-8484 Facsimile: (213) 626-0078 RWGIMAN1 614980 11 E-7 BUYER: University of California, Riverside With a copy to: Or to such other address as either party may from time to time specify in writing to the other party. Any notice shall be effective only upon delivery. ARTICLE VII MISCELLANEOUS Section 7.1 Annlicable Law. This Agreement shall be controlled, construed, and enforced according to the laws of the state of California. Section 7.2 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and may not be modified except in writing by both parties hereto. Section 7.3 Buyer's Assignment. Buyer's rights and obligations hereunder shall not be assignable without the prior written consent of Seller, provided that Buyer shall in no event be released from any of its obligations or liabilities hereunder if Seller approves of any such assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. Section 7.4 Seller's Consent. Except as expressly set forth herein to the contrary, whenever any document or action contemplated herein requires the consent or approval of Seller, such consent or approval shall be given by Seller in its sole and absolute discretion. Section 7.5 Time. Time is of the essence in the performance of each party's respective obligations contained herein. Section 7.6 Attornev's Fees. If either party hereto fails to perform any of its obligations under this Agreement or if any dispute arises between the parties hereto concerning the meaning or interpretation of any provision of this Agreement, then the defaulting party or the party not prevailing in such dispute, as the case may be, shall pay any and all costs and expenses incurred by the other party on account of such default and/or in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements. Any such attomy's fees and other expenses incurred by either party in enforcing a judgment in its favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorneys' fees obligation is intended to be severable from the other provisions of this Agreement and to survive and not be merged into any such judgment. Section 7.7 No Merger. The obligations contained hereunder shall not merge with the transfer of title to the Property but shall remain in effect until fulfilled. RWGIMAN 1 614980 11 E-8 Section 7.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Section 7.9 Seller's Assignment. Seller may assign all or any part of its rights and obligations hereunder to any successor in Seller's interest in the Property. From and after the date of such assignment, Seller shall be released of all obligations hereunder. If Seller assigns its interest to an affiliated body or entity, such affiliated body or entity shall assume the obligations of Seller hereunder which accrue from and after the date of the assignment. Section 7.10 Limited Liability. The obligations of Seller are intended to be binding only upon the Property of Seller and shall not be personally binding upon, nor shall any resort be had to, the private properties of any of its officers, directors or shareholders, or any employees or agents of Seller or of its affiliated entities. Section 7.11 Amendments. This Agreement may be amended or modified only by a written instrument signed by Buyer and Seller. Section 7.12 Confidentialitv and Return of Documents. Buyer and Seller shall each maintain as confidential any and all information obtained about the other and shall not disclose - such information to any third party. If this Agreement terminates, Buyer shall return to Seller all materials relating to the Property which Buyer received from Seller or any other party. This provision shall survive the Closing or any termination of this Agreement. Section 7.13 Intemretation of Agreement. The article, section and other headings of this Agreement are for convenience and reference only and shall not be construed to affect the meaning of any provision contained herein. Where the context so requires, the use of the singular shall include the plural and vice versa and the use of the masculine shall include the feminine and the neuter. The term "person" shall include any individual, partnership, joint venture, corporation, trust, unincorporated association, any other entity and any government or any department or agency thereof, whether acting in an individual, fiduciary or other capacity. The parties hereto have executed this Agreement as of the respective dates written below. SELLER: BUYER: PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic THE UNIVERSITY OF CALIFORNIA, on behalf of its Riverside campus By: By: Carlos L. Ortega, Executive Director Date: Date: ATTEST: By: Secretary Raymond L. Orbach, Chancellor RWGIMAN1 614980 11 E-9 EXHIBIT F SCHEDULE OF PERFORMANCE RWGIMAN1 614980 11 asw E0 10 20 J" tLOt-t6E t6p61 EXHIBIT G ON -SITE IMPROVEMENTS 1. Earthwork 2. Site Concrete 3. Site Utilities 4. Site Improvements 5. Landscape Subtotal Overhead & profit (15%) Subtotal Architect, Engineering, Staking (8%) Subtotal Contingency (5%) Less Improvements in Heckmann funds Total UCR On -site infrastructure $ 202,641.00 342,291.00 88,900.00 579,092.00 149.300.00 $1,362,224.00 204.333.60 $1,566,557.60 125.324.61 $1,691,882.21 84.594.11 $1,776,476.32 460.200.00 $1,316,276.32 OFF -SITE IMPROVEMENTS 1. Frank Sinatra Improvements (1st Phase) 2. 18" Water Main Frank Sinatra Drive 3. Sewer Main SE portion Berger Circle Total Off -site TOTAL ON -SITE TOTAL OFF -SITE TOTAL LOAN $ 264,641.00 144,310.00 178.851.00 $ 587,802.00 $1,316,276.32 587.802.00 $1,904,078.32 $2,000,000.00 FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT THIS FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (together with each of its Exhibits, "Amendment"), dated as of December 12 , 2002 (the "Effective Date") is entered into by and among the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus ("UCR"), and, the RICHARD J. HECKMANN FOUNDATION, a California nonprofit mutual benefit corporation ("Heckmann") and is executed with reference to the following circumstances as described herein. RECITALS A. Agency, Heckmann and UCR entered into a Disposition and Development Agreement, dated as of March 22, 2001 (together with each of its Exhibits, the "DDA") regarding the construction of an International Center of Entrepreneurial Management ("ICEM") to be operated under the auspices of the A. Gary Anderson Graduate School of Management ("AGSM"), University of California, Riverside. Under the DDA, the ICEM required an initial facility composed of approximately eight (8) acres of land ("Parcel A"), improvements and buildings and access to sufficient acreage to allow for expected expansion in the future. Under the DDA, the ICEM improvements (the "Center Improvements" under the DDA) were to be constructed by Heckmann and UCR and were to include facilities available for joint use by UCR and CSU, as are more particularly described in the DDA. B. Under the DDA, UCR also acquired an option to acquire fee title to an additional parcel of land of approximately eleven (11) acres of real property ("Parcel B"), that is adjacent to Parcel A, in order to accommodate possible expansion of the ICEM in the future or other uses consistent with the Redevelopment Plan and UCR's mission. Parcels A and B (collectively, the "Site") are close to the center of the Coachella Valley and educational facilities located thereon will be centrally located to serve the residents of the City of Palm Desert. C. Under the DDA, Agency, UCR and Heckmann agreed, among other things, that: (i) Agency would enter into a lease, as more particularly described in the DDA, for construction, furnishing and equipping of certain elements of the Center Improvements; (ii) Agency would loan up to $2 million in funds for on- and off -site improvements to be completed by Heckmann as part of the Center Improvements (the "Loan"); (iii) upon completion of development and construction of those elements of the improvements, Heckmann would convey title to all the facilities and improvements that it constructs on the leased land to UCR; (iv) Agency would convey to UCR fee simple title to Parcel A upon Heckmann's completion of construction of the leased land improvements thereon as defined by UCR's written acceptance of the improvements and issuance of a certificate of occupancy for the improvements; and (v) Agency would, upon completion P6402\0001 \712328.4 and acceptance of the improvements, grant a twenty-five year option to UCR to acquire fee simple title to Parcel B for further expansion and development of the ICEM or for other UCR mission -related teaching, research and public service uses thereon. D. UCR now desires to restructure the conveyance of Parcel A in order to satisfy certain state requirements related to funding of the ICEM and the construction of the Phase I Center Improvements (as defined below). Also, the parties desire to amend the respective legal descriptions of Parcels A and B to be the new descriptions contained in Exhibit A-1. Specifically, UCR seeks to obtain title to Parcel A immediately and to separate Parcel A into two parcels to be known as the "Phase I Parcel" and the "Phase II Parcel," which are more particularly described on Exhibit B-1 attached hereto and incorporated by reference herein. No lease will be required between Agency and Heckmann. Instead, UCR shall construct certain improvements on the Phase I Parcel (the "Phase I Center Improvements") pursuant to UCR procedures and policies and construction contracts ("University Construction Contracts") and UCR shall construct certain of the improvements on the Phase II Parcel (the "Phase II Center Improvements"). E. Agency, UCR, and Heckmann desire to enter into this Amendment in order to amend the DDA to provide for a revised description of the Project (as defined in the DDA) to allow for several phases of construction, the immediate transfer of Parcel A to UCR; the elimination of the lease to Heckmann; and the release of Heckmann from further obligation to Agency under the DDA. Agency recognizes the benefit to the region and its citizens of having UCR acquire and operate an ICEM. UCR recognizes that it is in the best interests of the State and its citizens to develop the ICEM for purposes of its higher education mission. F. A material inducement to Agency to enter into this Amendment is UCR's covenant to construct, and commitment to maintain, the ICEM and related facilities in accordance with the terms of the DDA and this Amendment. G. Agency completed the report required by California Health and Safety Code Sections 33433 and 33679. H. Agency and City held the public hearings required by Califomia Health and Safety Code Sections 33433 and 33445 on December , 2002, and UCR held the public hearing required by California Health and Safety Code Section 33445 on May 16, 2002. AGREEMENT NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants contained in the DDA and this Amendment the parties hereto agree as follows: P6402\0001\712328.4 2 1. Recitals. The foregoing Recitals are hereby adopted and incorporated into this Amendment by the parties. Further, the legal descriptions of Parcels A and B, as shown on attached Exhibit A-1, and the legal descriptions of Phase I Parcel and the Phase 11 Parcel, as shown on the attached Exhibit B-1, are hereby incorporated and adopted for describing the dimensions of such parcels in this Amendment and the DDA. 2. Article 1 of the DDA is hereby incorporated. ARTICLE 1 DEFINITIONS. Definitions. All terms as used in this Amendment shall have the same meanings given in the DDA unless expressly provided to the contrary in this Amendment. Further, all references to "Lease" are hereby deleted, including without limitation, Section 1.1.12. Section 1.1.16 of the DDA is hereby deleted and the following provision substituted: 1.1.16 Proiect means any and all buildings, facilities, landscaping, infrastructure, utilities and other improvements which will comprise the ICEM, which UCR and Agency currently contemplate, will be located on the Site. The parties acknowledge that the Project will be constructed in several phases, as described in Recital D. New Section 1.1.18 is hereby added as follows: 1.1.18 Commencement of Construction means that date upon which all of the following shall have occurred: (a) UCR shall have secured all necessary approvals of the Project, including, without limitation, any approval required by the University of California's Board of Regents or Office of the President; (b) UCR shall have available all funding necessary to pay for the construction of the subject improvements; (c) UCR, and all other parties thereto, shall have executed the University Construction Contracts to be utilized by UCR with respect to the subject improvements; and (d) UCR shall have issued and delivered the Notice to Proceed as defined in the University Construction Contracts referenced in (c) above. 3. Article 2 of the DDA is hereby deleted in its entirety and the following provisions substituted: ARTICLE 2 SALE OF PARCEL A AND OPTION OF PARCEL B. Section 2.1 Transfer of Parcel A and Option of Parcel B. Subject to and in accordance with the terms and conditions hereinafter set forth, the parties hereto agree that: (a) Pursuant to a Grant Deed, the form of which is attached hereto as Exhibit D-1, and in accordance with the terms of the DDA and this Amendment, Agency shall transfer to UCR, and UCR agrees to accept from Agency, fee simple title to Parcel A, including all water, mineral, oil, gas, and geothermal rights to said parcel, and including P6402\0001 \712328.4 3 the right to extract the same from said parcel, to the extent such mineral rights are owned by Agency; (b) Contemporaneously with the execution of this Amendment, Agency and UCR shall execute the Option Agreement which is attached hereto as Exhibit E-1 and incorporated herein by reference (the "Option Agreement"). Section 2.2 Purchase Price. The purchase price for each of Parcel A and Parcel B to be paid by UCR (the "Purchase Price") shall be the sum of $1.00, being the fair reuse value pursuant to the terms and conditions of the DDA and this Amendment. Section 2.3 Condition of the Site. Agency hereby grants UCR permission to enter onto the Site prior to the Parcel A Close of Escrow (defined below) for the purpose of performing tests and inspections of the Site as UCR shall deem necessary in its sole and absolute discretion, including tests for the presence of Hazardous Materials and /or geotechnical testing of the soil. UCR shall indemnify, hold harmless, and defend Agency against, and hold Agency and the Site harmless from, all losses, costs, damages, liabilities, liens, and expenses, including, without limitation, reasonable attorneys' fees ("Claims"), arising out of such entry and activities by UCR, its agents, employees, representatives, contractors or subcontractors, but only in proportion to and to the extent that such Claims arise from the negligent or wrongful acts or omissions of UCR, its officers, agents, or employees, and excepting from the scope of the indemnity such Claims which arise out of the negligence or willful acts of Agency and/or City or their respective officers, agents and employees. 2.3.1 At any time during its inspection of the Site, but prior to the date that is 10 days prior to the Parcel A Close of Escrow, UCR shall approve or disapprove of the condition of Parcel A (the "Parcel A Approval Condition"). If UCR disapproves of the condition Parcel A, the DDA, this Amendment and the Escrow shall terminate. UCR shall provide to Agency its approval or disapproval in writing. UCR has been afforded access to the Site as described in this Section 2.3 and opportunity to inspect the Site, and shall be afforded additional access and an additional opportunity to inspect under the Option Agreement, and shall rely solely upon its own inspection(s) of the Site and determination as to whether the physical condition of the Site shall be suitable for the intended purposes of the ICEM. UCR SPECIFICALLY ACKNOWLEDGES AND AGREES THAT AGENCY IS SELLING THE SITE ON AN "AS IS," "WHERE IS" AND "WITH ALL FAULTS" BASIS AND THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, UCR IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM AGENCY, CITY, THEIR AGENTS, OFFICERS, EMPLOYEES, REPRESENTATIVES, OR BROKERS, AS TO ANY MATTERS CONCERNING THE SITE, INCLUDING WITHOUT LIMITATION: (i) the quality, nature, adequacy and physical condition of the Site, (ii) the quality, nature, adequacy, and physical condition of soils, geology and any ground water, (iii) the existence, quality, nature, adequacy and physical condition of utilities serving the Site, (iv) the development potential of the Site, and the Site's use, habitability, merchantability, P6402\0001 \712328.4 4 or fitness, suitability, value or adequacy of the Site for any particular purpose, (v) the zoning of the Site or any other public or private restrictions on use of the Site, (vi) the compliance of the Site or its operation with any applicable codes, laws, regulations, statutes, ordinances, covenants, conditions and restrictions of any governmental entity or of any other person or entity, (vii) the presence of Hazardous Materials on, under or about the Site or the adjoining or neighboring property, (viii) the condition of title to the Site, (ix) any agreements affecting the Site and (x) the economics of the Site. 2.3.2 Release. Without limiting the above, UCR, on behalf of itself and its successors and assigns, waives its rights to recover from, and forever releases and discharges, Agency and City, their respective council members, affiliates, partners, trustees, shareholders, directors, officers, employees and agents of each of them, and their respective heirs, successors, representatives, successors, assigns and attorneys (collectively, the "Agency Related Parties"), from any and all demands, claims, legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens, judgments, costs or expenses whatsoever (including, without limitation, attorney's fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of or in any way be connected with the physical condition of the Site or any law or regulation applicable thereto, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.A. Sections 6901 et seq.), the Resources Conservation and Recovery Act of 1976 (42 U.S.A. Section 6901 et seq.), the Clean Water Act (33 U.S.A. Section 1251, et seq.), the Safe Drinking Water Act (14 U.S.A. Section 1401 et seq.), the Hazardous Materials Transportation Act (49 U.S.A. Section 1801, et seq.), the Toxic Substance Control Act (15 U.S.A. Section 2601, et seq.), the California Hazardous Waste Control Law (California Health and Safety Code Section 25100, et seq.), the Porter -Cologne Water Quality Control Act (California Water Code Section 13000 et seq.), and the Safe Drinking Water and Toxic Enforcement Act of 1986 (Califomia Health and Safety Code Section 25249.5, et. seq.). However, in no event shall the foregoing be construed as a release of any third parties other than the Agency Related Parties, and the foregoing shall not release Agency or Agency Related Parties from any liability arising out of Agency's or Agency Related Parties' willful misconduct or negligent actions occurring after the Effective Date hereof. 2.3.2.1 Agency has made no representation or warranty with respect to the Site except for those representations and warranties contained in the DDA or this Amendment, and that Agency will make no representations and warranties with respect to the Site, other than those contained in the DDA or this Amendment or any of their respective exhibits. 2.3.2.2 UCR is inspecting Parcel A with the objective of causing the construction of the Phase I Center Improvements and the Phase I1 Center Improvements thereon. 2.3.2.3 Agency has made no representation or warranty as to the accuracy or completeness of any reports or other materials prepared by any P6402\0001\712328.4 5 persons, and UCR is not relying on the accuracy or completeness of any reports or other materials prepared by or at the direction of Agency or Agency Related Parties. 2.3.2.4 The Site will be conveyed by the Agency in an "as is" condition. Agency has made no representation or warranty with respect to the use, fitness for a particular purpose, zoning, value, improvements, infrastructure, square footages or any other condition of the Site. UCR agrees that Agency has no obligation to remedy any faults, defects, or other adverse conditions described in any report or other material obtained by UCR, or delivered by Agency to UCR, including the remediation of any Hazardous Materials on the Site or, except as otherwise provided in Section 2.3.2, any liability with respect thereto. Further, subject to any claims by UCR arising out of the DDA, or this Amendment, including, without limitation, any claim for breach of covenant or breach of representation or warranty, UCR, on behalf of itself and its successors, affiliates, partners, and assigns, hereby fully and entirely releases and discharges the Agency Related Parties and of each of them alone, of and from any and all claims, causes of action, or demands, liabilities, damages, and losses, of whatever nature, anticipated or unanticipated, known or unknown, on account of the presence of any Hazardous Materials in, on, under, or about the Site or in connection with the physical condition of the Site or any portion thereof. UCR declares and represents that it is effecting and executing this release of City and Agency after having read all of this release and with full understanding of its meaning and effect and after having received full legal advice as to its rights from an attorney. THIS RELEASE CONSTITUTES AN EXPLICIT WAIVER BY UCR OF EACH AND ALL OF THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH STATES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." BY INITIALLING BELOW, UCR HEREBY WAIVES THE PROVISIONS OF SECTION 1542 IN CONNECTION WITH THE MATTERS WHICH ARE THE SUBJECT OF THE FOREG IN RIVERS AND RELEASES. UC Section 2.4 Condition of Title: Title Insurance. 2.4.1 UCR obtained from Stewart Title of California, Inc. (the 'Title Company"), a preliminary title report covering Parcel A, dated as of April 12, 2002, together with copies of all documents relating to title exceptions referred to in the preliminary title report (the "Preliminary Title Report"). In addition, UCR has received an ALTA Survey of Parcel A dated June 26, 2002 (the "Survey") and the Preliminary Title P640210001\712328.4 6 Report reflects exceptions to title disclosed by the Survey. UCR shall approve or disapprove in writing each exception shown on the Preliminary Title Report within ten (10) business days following the Effective Date, subject, however, to UCR's right to review an updated Preliminary Title Report (the "Updated Preliminary Title Report") at least twelve business days prior to Parcel A Close of Escrow, and to approve or disapprove in writing any additional title exceptions not shown in the Preliminary Title Report, which approval or disapproval shall be given by UCR to Agency within ten business days of UCR's receipt of the Updated Preliminary Title Report. The failure of UCR to approve or disapprove any title exception within the time periods established in this Section 2.4.1 shall be deemed an approval thereof by UCR for all purposes hereof. The title exceptions contained in the Preliminary Title Report and the Updated Preliminary Title Report which UCR approves in accordance with this Section 2.4.1 shall be referred to as the "Approved Exceptions". Notwithstanding the foregoing, Agency shall be under no obligation to remove any title exception which is not an Approved Exception, (any title exception which is not an Approved Exception shall be referred to as a "Disapproved Exception") unless the same is a financial obligation of Agency, but Agency agrees to cooperate in good faith with UCR in UCR's efforts to eliminate any Disapproved Exception, provided Agency is not obligated to pay any sums to the holder of such encumbrance to obtain the release thereof unless the same is a financial obligation of Agency. Following the Effective Date, Agency covenants and agrees not to further encumber the Site voluntarily without the prior written permission of UCR. 2.4.2 If UCR is unable to obtain a discharge, satisfaction, release, or termination of any Disapproved Exception, or if, subject to Agency's covenant in Section 2.4.1, Agency does not elect to do so, then UCR shall have the right, no later than two business days prior to Parcel A Close of Escrow, to: 2.4.2.1 waive the Disapproved Exception and proceed with Parcel A Close of Escrow, accepting title to Parcel A subject to the Disapproved Exception, or 2.4.2.2 terminate the DDA and this Amendment, in which event UCR and Agency shall be relieved of all further obligation and liability to each other under the DDA and this Amendment; or 2.4.2.3 extend the Parcel A Close of Escrow for up to thirty (30) days by written notice to the Agency at no additional cost to UCR or Agency. Section 2.5 Commencement of Construction of the Phase I Center Improvements. Commencement of Construction of the Phase I Center Improvements shall occur on or before the first anniversary date of the Parcel A Close of Escrow; provided, that UCR shall not be in default so long as it is diligently pursuing and enforcing all of its rights under the University Construction Contracts to cause the Commencement of Construction of the Phase I Center Improvements, and the Agency's sole remedy in the event that Commencement of Construction of the Phase I Improvements has not occurred as provided in this Section 2.5 shall be as set forth in Section 3.4.1. P6402\00011712328.4 7 Section 2.6 .Opening and Closing of Escrow — Parcel A. Within (10) days after the Effective Date of this Amendment, Agency and UCR shall cause an escrow (the "Parcel A Escrow") to be opened with Escrow Holder for the transfer of Parcel A by Agency to UCR. Agency and UCR shall deposit with Escrow Holder a fully executed duplicate original of the DDA and this Amendment, which shall serve as the escrow instructions. Agency and UCR shall provide such additional escrow instructions as shall be necessary and consistent with the DDA and this Amendment. Escrow Holder is authorized to act under the DDA and this Amendment and to carry out its duties as Escrow Holder hereunder. Escrow shall close within thirty (30) days after the opening of the Escrow (the "Parcel A Close of Escrow"), unless an extension of time is agreed to in writing by Agency and UCR, or as otherwise provided in section 2.4.2.3. Section 2.7 Conveyance of Parcel A. Upon satisfaction of the conditions to convey title to Parcel A, Agency shall convey fee simple title to the Parcel A to UCR pursuant to the Grant Deed. Title to Parcel A shall be conveyed subject to (i) the Approved Exceptions and any Disapproved Exceptions waived by UCR pursuant to Section 2.4.2, (ii) the covenants, conditions and restrictions benefiting and burdening Parcel A as described in the Grant Deed, and (iii) any other matters which arise out of the actions of UCR or its agents and representatives, but including all water, mineral, oil, gas, and geothermal rights to Parcel A, including the right to extract the same from Parcel A held by Agency, if any. At the Parcel A Close of Escrow, UCR may, at UCR's sole cost and expense, purchase a CLTA or an ALTA Owner's Standard Coverage Policy of Title Insurance ("Title Policy"), issued by the Title Company, in favor of UCR, insuring that title in Parcel A is vested in UCR free and clear of all liens, easements, covenants, conditions, restrictions, and other encumbrances of record, other than those described in subparagraphs (i), (ii) and (iii) (the "Permitted Exceptions"). Any and all policies of title insurance or special endorsements shall be obtained by UCR at its own cost and expense. Section 2.8 Escrow Charges. UCR shall be responsible for paying any and all charges related to the escrow and transfer of Parcel A, including without limitation, all Escrow charges, and all recording fees, documentary and local transfer taxes that are legally applicable to a transaction with respect to Parcel A. Section 2.9 Conditions to Close of Escrow — Parcel A. The respective obligations of Agency and UCR under this Amendment and the DDA to close the escrow for the conveyance of Parcel A shall be subject to the satisfaction or waiver of each of the following conditions, which in the case of Sections 2.9.3, 2.9.4 and 2.9.7 shall also be covenants of the respective party: 2.9.1 [Intentionally Reserved] 2.9.2 The representations and warranties of Agency and UCR contained in the DDA and this Amendment shall be true and correct as of the Parcel A Close of Escrow. This condition shall be performed by each party for the benefit of the other. P6402\0001\712328.4 8 2.9.3 For the benefit of Agency, UCR shall have delivered all documents required to be delivered by UCR pursuant to the DDA and this Amendment. 2.9.4 For the benefit of UCR, Agency shall have delivered all documents required to be delivered by Agency pursuant to the DDA and this Amendment. 2.9.5 For the benefit of UCR, the Title Company shall have issued (a) a commitment to issue a Policy of Title Insurance, as required herein, upon Parcel A Close of Escrow, subject only to the Permitted Exceptions on Parcel A, with liability equal to such sum as requested by UCR, showing fee title to Parcel A vested in UCR, and (b) a commitment to issue a policy of title insurance with respect to the Option Agreement in form and substance reasonably satisfactory to UCR (the "Option Policy). 2.9.6 For the benefit of UCR and the Agency, UCR has received or has the unconditional right to receive a gift in an amount of not less than Six Million Dollars ($6,000,000). 2.9.7 For the benefit of Agency, UCR shall have delivered to the Agency's Executive Director (a) a copy of the standard University of California Capital Improvement Budgets for Phase I Center Improvements and the Phase II Center Improvements, (b) a copy of the Phase I Center Improvements Construction Bid Recap Sheet prepared by Roel Construction on May 20, 2002, (c) the Phase I and Phase II Center Improvements Peer Review Cost Estimate, and (d) the form of the University Construction Contracts to be utilized by UCR with respect to the Phase I Center Improvements and the Phase II Center Improvements. 2.9.8 To the extent not otherwise contained in Section 2.9.7(a), (b) or (c), for the benefit and approval of the Agency, UCR shall have delivered to the Agency's Executive Director (a) a detailed sources and uses of funds for the Project, identifying the origin of such source of funds for the construction of the Project and the existence thereof or expected delivery date thereof, (b) evidence of the means by which UCR will have the unconditional right to receive the gift described in Section 2.9.6, and (c) evidence that the proceeds of the Agency Loan shall be allocated to the construction of governmentally owned public improvements to be used by the general public. Section 2.10 Parcel A Closing Deadline. If the conditions in Section 2.9 are not satisfied or waived and Parcel A Escrow has not closed by March 31, 2003, or such later date as the Agency and UCR may otherwise agree as provided in Section 2.6, then either Agency or UCR shall have the right to terminate the DDA and this Amendment, unless otherwise agreed to in writing by the parties. Section 2.11 Deposits into Escrow. Agency and UCR agree to deliver to Escrow Holder, prior to the Parcel A Close of Escrow, the following instruments and documents, the delivery of each of which shall be a condition precedent to the Parcel A Close of Escrow: P6402\0001\712328.4 9 2.11.1. The Grant Deed, duly executed and acknowledged by Agency, and accepted by UCR, conveying a fee simple interest in Parcel A to UCR; 2.11.2 A Memorandum of Option Agreement for Parcel B of the Site, in the form attached hereto as part of Exhibit E-1, duly executed and acknowledged by Agency and UCR; 2.11.3 Agency's affidavit as contemplated by California Revenue and Taxation Code §18662 (the "Withholding Affidavit"); 2.11.4 A Certification of Non -Foreign Status signed by Agency in accordance with Internal Revenue Code Section 1445 (the "FIRPTA Certificate"); and 2.11.5 Such proof of Agency's and UCR's authority and authorization to enter into this transaction as the Title Company may reasonably require in order to issue UCR's policy of owner's title insurance with respect to Parcel A and the Option Policy. Section 2.12 Escrow Closinct Actions. Upon the Parcel A Close of Escrow, Escrow Holder shall close such Escrow as follows: 2.12.1 Record the Grant Deed (marked for return to UCR) with the Riverside County Recorder; 2.12.2 Record the Memorandum of Option Agreement (marked for return to UCR) with the Riverside County Recorder; 2.12.3 Obtain conformed copies of all instruments so recorded, bearing the County Recorder's file marks, and deliver a copy of same to both Agency and UCR; 2.12.4 Issue the Title Policy and the Option Policy, or cause the Title Company to issue the Title Policy and the Option Policy, to UCR, with UCR as the insured; 2.12.5 If applicable, prorate any taxes, assessments, rents, and other charges, if any, as of the Parcel A Close of Escrow, if and to the extent UCR shall be liable for payment thereof after the Parcel A Close of Escrow; 2.12.6 Charge UCR for those costs and expenses to be paid by UCR under the terms of the Escrow and disburse any net funds remaining after the preceding disbursements to UCR; 2.12.7 Prepare and deliver to both UCR and Agency one signed copy of Escrow Holder's closing statement showing all receipts and disbursements of Escrow; and 2.12.8 Deliver to UCR the FIRPTA Certificate and the Withholding Affidavit. P6402\0001 \712328.4 10 Section 2.13, Additional Provisions. Agency and UCR may execute additional appropriate escrow instructions, if necessary, as prepared by the Escrow Holder which are consistent herewith. If there is any inconsistency between the terms hereof and the terms of the additional escrow instructions, the terms hereof shall control unless an intent to amend the terms hereof is expressly stated in such instructions. Any amendment of these escrow instructions shall be in writing and signed by both Agency and UCR. At the time of any amendment, Escrow Holder shall agree to carry out its duties as escrow holder under such amendment. Escrow Holder is instructed to send copies of notices, demands and communications between Agency and UCR, to or from Agency or to or from UCR, to both parties to the addresses and in the manner established in Section 7.1 of this Amendment. Section 2.14 Additional Termination Rights. 2.14.1 Bv UCR. In addition to any other rights of UCR to terminate the DDA and this Amendment, UCR shall have such right of termination under any of the following circumstances: 2.14.1.1 Within one hundred eighty (180) days of the Parcel A Close of Escrow UCR is unable, despite good faith efforts, to secure all necessary approvals for the Project, including, without limitation, any approval required by the University of Califomia's Board of Regents or Office of the President; or 2.14.1.2 [Reserved]; or 2.14.1.3 Within one hundred eighty (180) days of the Parcel A Close of Escrow UCR, despite good faith efforts, has not secured all final CEQA approvals deemed necessary by UCR for the Project; or 2.14.1.4 UCR, at any time, after the Parcel A Close of Escrow discovers an environmental condition with respect to the Site, or any part thereof, which environmental condition would, as determined by UCR in its sole and absolute discretion, either (i) materially impair UCR's ability to construct the Phase I Center Improvements, or the Phase 11 Center Improvements, or any part thereof, or (ii) materially increase the cost of constructing the Phase I Center Improvements or the Phase II Center Improvements. 2.14.2 Bv Aaencv or UCR. In addition to any other rights of Agency or UCR to terminate the DDA and this Amendment, Agency and UCR shall have such right of termination if, within ninety (90) days of the Parcel A Close of Escrow, UCR has not delivered to Agency written confirmation that ail funds (other than the proceeds of the Loan) necessary for the construction of the Phase I Center Improvements have been deposited in a designated Financial Plant Account and shall be unconditionally available for funding of the construction of the Phase I Center Improvements. If UCR or Agency terminates the DDA and this Amendment pursuant to the terms of section 2.14, UCR shall promptly reconvey Parcel A to the Agency free and clear of all encumbrances and liens that may have been created by or consented to by P6402\0001 \712328.4 11 UCR, and the Agency shall accept title to Parcel A. In addition, at the time of such reconveyance, UCR shall repay to Agency all amounts which as of such date have been disbursed to UCR pursuant to the Loan, without interest. 4. Sections of Article 3 of the DDA are hereby amended: ARTICLE 3 CONSTRUCTION. USE. MAINTENANCE. AND NON-DISCRIMINATION OBLIGATIONS. a) Section 3.1 of the DDA is hereby deleted and the following provisions substituted: Section 3.1 Construction of the Phase I Center Improvements and Loan. UCR agrees that it shall cause the construction of the Phase I Center Improvements to be completed and a final certificate of occupancy to be issued therefor on or before August 31, 2005, as such date may be extended pursuant to the provisions of Section 7.3, (the "Completion Date"), as such timing is more particularly set forth in the revised Schedule of Performance attached hereto as Exhibit F-1 and made a part hereof, it being the intent of the parties to replace the Schedule of Performance attached to the DDA with the revised Schedule of Performance set forth in Exhibit F-1. The parties acknowledge that the cost of constructing the Project, including the costs for developing and constructing the Phase I Center Improvements, and the Phase II Center Improvements, and the cost of all infrastructure on and off of the Site, shall be at the cost, expense, and responsibility of Agency and UCR as follows: 3.1.1 UCR Construction. The parties acknowledge that UCR shall be responsible for the costs described in the University of California Capital Improvements Budget (CIB) (the "Construction Budget"). As described in the Construction Budget, the costs include overhead, insurance, contingency, architectural and other professional fees and other ancillary costs associated with the construction of the Phase I Center Improvements, consisting of an approximately 20,000 square foot building, and other costs associated with grading, parking, access driveways, bringing utilities to the building, and landscaping, all of which are more particularly described in the revised Exhibit G-1 attached hereto and incorporated hereby to replace Exhibit G to the DDA (the "On and Off Site Improvements"). Also, unless expressly provided in Section 3.1.2 below, UCR shall construct, and shall be responsible for costs that are directly associated with construction of the off -site improvements associated with the construction of the Phase 1 Center Improvements, including, but not limited to, street improvements, bringing utilities to the Site, and traffic control, all of which are more particularly described in revised Exhibit G-1 attached hereto ("UCR Off -Site Costs"). Also, UCR shall be responsible for all costs directly associated with the construction of the Phase II Center Improvements. Notwithstanding anything to the contrary contained herein, UCR shall not commence construction of the Project until it shall have secured all necessary approvals of the Project, including, without limitation, any approval required by the University of California's Board of Regents or Office of the President. P6402\0001\712328.4 12 3.1.2 Acsencv Construction. UCR acknowledges that as of the Effective Date the Agency has completed the construction of and has paid for certain off -site improvements associated with the construction of the Center Improvements which consist of expansion of Frank Sinatra Drive and extension of a water line to the Site, as such specific off -site Improvements are described on the attached revised Exhibit H-1 (the "Agency Off -Site Improvements"). 3.1.3 Agency Loan. Up to an amount not to exceed Two Million Dollars ($2,000,000.00), Agency shall loan funds to UCR (the "Loan") in connection with the Project. The Loan shall be evidenced by a promissory note (the "Promissory Note"), the form of which is attached hereto as Exhibit I-1. If on or before the first anniversary date of the Parcel A Close of Escrow, UCR has not executed the Promissory Note and commenced to draw down the proceeds thereof in conformance with the terms and conditions of the Loan, then Agency's loan commitment under this Section 3 shall expire and be of no further force or effect. 3.1.4 Funding of Loan and Disbursement of Loan Proceeds. The Loan shall commence to be disbursed upon satisfaction of the conditions of Article Ill of this Agreement. Disbursements under the Loan shall be made only upon submission of Loan payment requests by UCR to Agency for completed components of the Phase I Center Improvements or the On Site and Off Site Improvements and Agency shall pay to UCR the amount of such approved reimbursement requests within 30 days of UCR's submittals. The Loan payment request submittals shall be substantially in the form attached hereto as Exhibit M-1. Loan proceeds may not be used to pay soft costs associated with the Phase I Center Improvements or the On Site or Off Site Improvements such as overhead, insurance, architectural or engineering fees, or costs or expenses of a similar nature. 3.1.5 Conditions to Disbursement of Proceeds of the Loan,. Agency shall disburse the proceeds of the Loan to UCR, which sum shall be used for the purposes described in Section 3.1.4 and for no other purpose, only upon satisfaction of the conditions precedent set forth below. The conditions precedent are as follows: 3.1.5.1 UCR shall have executed and delivered to Agency the Promissory Note; 3.1.5.2 UCR shall have provided to Agency certificates of insurance (or copies of the insurance policies) as set forth in Section 6; 3.1.5.3 UCR shall not have committed an Event of Default (as defined in Section 5.1) of its obligations hereunder to Agency, and there shall exist no event, omission or failure of condition that would constitute an Event of Default after notice under the DDA, and neither the DDA nor the Loan commitment shall have been otherwise terminated as herein provided. P6402\0001 \712328.4 13 This Agreement, together with the Promissory Note and any other documents executed pursuant to this Agreement to evidence the Loan, are collectively referred to herein as the "Loan Documents." 3.1.6 Interest on, Payment, and Maturity of Loan. The outstanding principal balance and interest on the Loan shall be due and payable on the earlier of (a) the eighth anniversary of the Completion Date or (b) August 31, 2013 (the "Maturity Date"). No interest shall accrue nor interest or principal payments be due until the earlier of (a) the third anniversary of the Completion Date or (b) August 31, 2008 (the "Accrual Date"). Thereafter, interest shall accrue, and be paid annually in arrears, at the rate of 4% per annum simple interest on the declining balance of the Loan principal, if any. The Loan shall be repaid in five annual payments of equal principal amounts, and accrued interest thereon, beginning on the first anniversary of the Accrual Date. Provided, however, that upon any Event of Default by UCR, any unpaid principal and accrued interest shall bear interest until paid at an interest rate equivalent to the Local Agency Investment Fund ("LAIF") rate for the corresponding time period. If there is an Event of Default by UCR, then all sums outstanding on the Loan shall become immediately due and payable at the option of Agency. Subject to Section 3.1.2, any costs for construction of the Project beyond the Loan provided for herein shall be the responsibility of UCR. 3.1.7 Environmental Indemnity. As a condition to making the Loan, Agency requires UCR to provide certain indemnities concerning existing and future Hazardous Materials as follows (the "Environmental Indemnity"): 3.1.7.1 UCR covenants and agrees, at its sole cost and expense, to indemnify, protect and save the Agency Related Parties harmless against and from any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses of any kind or of any nature whatsoever (including, without limitation, reasonable attomeys' and experts' fees and disbursements) which may at any time be imposed upon, incurred by or asserted or awarded against the Agency Related Parties and arising from or out of any Hazardous Materials on, in, under or affecting all or any portion of Parcel A or any surrounding areas contaminated by Hazardous Materials emanating from and having their source at Parcel A ("Surrounding Areas"), including, without limitation, (i) the costs of removal of any and all Hazardous Materials from all or any portion of Parcel A or any Surrounding Areas, (ii) additional costs required to take precautions required by applicable law to protect against the release of Hazardous Materials on, in, under or affecting Parcel A into the air, any body of water, any other public domain or any Surrounding Areas, and (iii) costs incurred to comply, in connection with all or any portion of Parcel A or any Surrounding Areas, with all applicable laws, orders, judgments and regulations with respect to Hazardous Materials; provided, however, the foregoing indemnity shall not apply to any event arising from or out of Agency's or Agency Related Parties' negligent actions or willful misconduct occurring after the Effective Date hereof. Agency's rights under this Environmental Indemnity shall be in addition to all rights of Agency under the DDA, the Amendment, and under the Promissory Note, and under any other of the Loan Documents, and P6402\0001\712328.4 14 payments by UCR under this Environmental Indemnity shall not reduce UCR's obligations and liabilities under any of the Loan Documents. To -the extent of any inconsistency between this Environmental Indemnity and any other of the Loan Documents, the provisions of this Environmental Indemnity shall govern. UCR's liability under this Environmental Indemnity shall survive the termination of the DDA and the other Loan Documents. 3.1.7.2 The liability of UCR under this Environmental Indemnity shall in no way be limited or impaired by, and UCR hereby consents to and agrees to be bound by, any amendment or modification of the provisions of the Loan Documents to or with Agency by UCR. In addition, the liability of UCR under the Loan Documents shall terminate upon repayment of the Loan in full, but the liability of UCR under this Environmental Indemnity shall in no way be limited or impaired by (i) any extensions of time for performance required by any of the Loan Documents, (ii) any sale, assignment or execution on the Note, (iii) any exculpatory provision in any of the Loan Documents limiting Agency's recourse to Parcel A or to any other security, or limiting Agency's rights to a deficiency judgment against UCR, (iv) the accuracy or inaccuracy of the representations and warranties made by UCR under any of the Loan Documents, (v) the release of UCR or any other person from performance or observance of any of the agreements, covenants, terms or conditions contained in any of the Loan Documents by operation of law, Agency's voluntary act, or otherwise, (vi) the release or substitution in whole or in part of any security for the Promissory Note, or (vii) Agency's failure to perfect, protect, secure or insure any security interest or lien given as security for the Promissory Note; and, in any such case, whether with or without notice to UCR and with or without consideration. 3.1.7.3 Notwithstanding anything to the contrary contained herein, the Environmental Indemnity shall be deemed not to apply to any condition on, in, under or affecting Parcel A occurring after Agency or any other party other than UCR shall have become the owner of Parcel A subsequent to the Parcel A Close of Escrow, but the provisions hereof shall be fully applicable to any condition existing prior to the Agency's becoming the owner of Parcel A subsequent to the Parcel A Close of Escrow, even though such condition is not discovered until after Agency acquires title to Parcel A. 3.1.7.4 No delay on Agency's part in exercising any right, power or privilege under the DDA, this Amendment, or any of the Loan Documents shall operate as a waiver of any such privilege, power or right relative to this Environmental Indemnity. Any one or more of any other party liable upon or in respect of this Environmental Indemnity, or the Loan, may be released without affecting the liability of any party not so released. 3.1.7.5 This Environmental Indemnity shall be binding upon UCR and inure to the benefit of Agency and their respective representatives, successors and assigns. Notwithstanding the foregoing, UCR, without the prior written consent of Agency in each instance, may not assign, transfer or set over to another, in whole or in part, all or any part of its or their benefits, rights, duties and obligations P6402\0001\712328.4 15 hereunder, including, but not limited to, performance of and compliance with conditions hereof. 3.1.7.6 UCR hereby acknowledges and agrees that each representation and warranty in this Environmental Indemnity, together with any indemnity obligation applicable to a breach of any such representation and warranty, is intended to be an "environmental provision" for purposes of California Code of Civil Procedure Section 736. 3.1.8 Disbursements in Excess of Maximum Loan Amount. In the event the total disbursements by the Agency exceed the maximum Loan amount, the total of all disbursements shall be secured by the Promissory Note. Section 3.2 The second sentence of Section 3.2 of the DDA is hereby deleted and the following sentence substituted: "Should demand or support for such operation fail to find adequate student interest or financial support, UCR may use the property to support its activities which are educational, research or public service in nature as part of the mission of University of California, including university or college related service and administration facilities and for no other purpose whatsoever, except as provided herein, for a period of twenty- five (25) years from the Parcel A Close of Escrow (as herein defined)". Section 3.4 Section 3.4 of the DDA is hereby deleted and the following provisions substituted: Section 3.4 Agency Right of Reverter. 3.4.1 Construction Related. (a) Construction Does Not Commence. If on the first anniversary date of the Parcel A Close of Escrow (the "First Anniversary") Commencement of Construction has not occurred with respect to the Phase 1 Center Improvements or the Phase II Center Improvements, then Parcel A shall revert to Agency one -hundred -and -eighty (180) days following the date Agency provides written notification to UCR that Agency elects to exercise its right of reverter under this subparagraph (a). The parties acknowledge that Agency's right of reverter set forth in this subparagraph (a) is, subject to any remedies available to Agency under the Loan Documents, Agency's sole and exclusive remedy in the event that Commencement of Construction of the Phase I Center Improvements or the Phase II Center Improvements does not occur by the First Anniversary and UCR shall have no further liability or obligation under this First Amendment or the DDA; provided, however, if Parcel A reverts to Agency under this subparagraph (a), title to Parcel A shall be free and clear of any and all liens and encumbrances that may have been created by or with the approval of UCR, other than utility easements and reasonable access easements. (b) Construction Commences. If Commencement of Construction of either the Phase( Center Improvements or the Phase II Center Improvements occurs before the P6402\0001 \712328.4 16 First Anniversary, then Agency shall have no right of reverter with respect to either the Phase I Parcel or the Phase II Parcel, except as provided in subparagraph (c) below. (c) Failure to Comply With Schedule of Performance. (i) If the Phase I Center Improvements are not complete by the Completion Date as such date may be adjusted pursuant to Section 7.3, then the Phase I Parcel, together with all improvements thereon, shall revert to Agency one -hundred -and -eighty (180) days following the date Agency provides written notification to UCR that Agency elects to exercise its right of reverter under this subsection (c) (i) unless, during such one -hundred -and -eighty (180) day period, the Phase I Center Improvements are substantially completed or Commencement of Construction has occurred with respect to the Phase II Center Improvements. The parties acknowledge that Agency's right of reverter set forth in this subparagraph (c) (i) is, subject to any remedies available to Agency under the Loan Documents, Agency's sole and exclusive remedy in the event that the Phase I Center Improvements are not complete by the Completion Date, and Agency's right of reverter under this subparagraph is otherwise available, and UCR shall have no further liability or obligation under this First Amendment or the DDA; provided, however, if the Phase I Parcel together with all improvements thereon reverts to Agency under this subparagraph (c) (i) title to such property shall be free and clear of any and all liens and encumbrances that may have been created by or with the approval of UCR, other than utility easements and reasonable access easements. 3.4.2 Use Related. (a) Phase I Parcel. If during the period following completion of construction of the Phase I Center Improvements and the twenty-fifth (25th) anniversary of the Parcel A Close of Escrow (such period is defined as the "Phase I Use Reversionary Period") UCR fails for a continuous period of more than three hundred and sixty-five (365) consecutive days to operate and maintain the Phase I Center Improvements (excluding periods during which the Phase I Center Improvements are subject to substantial repair, maintenance or alteration work) in accordance with the provisions of section 3.2 of the DDA, then UCR must offer to sell the Phase I Parcel together with all improvements thereon, in accordance with the provisions of this subparagraph (a) within -one -hundred - and -eighty (180) days of Agency's written notification to UCR requiring such offer to be made; provided, however, UCR shall not be under any obligation to make such offer if during such one -hundred -and -eighty (180) day period UCR begins to operate and maintain the Phase I Center Improvements in accordance with the provisions of Section 3.2 of the DDA. If UCR does not cure, then it must first offer the Phase I Parcel, at fair market value, to CSU, and if CSU elects not to purchase, then UCR must offer the Phase I Parcel to Agency. Fair market value shall be determined by agreement of UCR and CSU, or UCR and Agency, as appropriate, provided that in the case of Agency's repurchase, the fair market value of the land (excluding any improvements thereon) shall be deemed to be $1.00. If the parties are unable to reach agreement within ninety (90) days of UCR's offer (hereinafter, the "Negotiating Period"), then fair market value shall be determined by the Appraisal Method described in Section 3.4.3 and the resulting appraisal shall constitute the fair market value of the Phase I Parcel, including improvements thereon. Should neither CSU nor Agency elect to purchase the Phase I P6402\0001 \712328.4 17 Parcel from UCR, then thereafter UCR shall be free to sell, use or maintain the Phase I Parcel for any purpose whatsoever. The parties acknowledge that the right of Agency to require UCR to offer to sell Phase I Parcel, together with all improvements thereon, in accordance with this subparagraph (a) shall be, subject to any remedies available to Agency under the Loan Documents, Agency's sole and exclusive remedy in the event UCR does not maintain and operate the Phase 1 Center Improvements in accordance with theprovisions of section 3.2 of the DDA during the Phase I Use Reversionary Period and UCR, following its compliance with the provisions of this subparagraph, shall have no further liability or obligation with respect to the Phase I Parcel or the Phase I Center Improvements under this First Amendment or the DDA. (b) Phase II Center Improvements. The parties acknowledge that the cost of the design and construction of the Phase 11 Center Improvements will be funded by the State of California (the "State") through the issuance of lease revenue bonds which will be secured by a lease of the Phase II Parcel to the State. In turn, the State will lease the Phase II Parcel and all improvements constructed thereon to UCR. All of the documents which will be executed by UCR in connection with such lease revenue bond transaction are referred to in this First Amendment as the "State Financing Documents." Agency has reviewed the proposed forms of the State Financing Documents. Agency acknowledges that if UCR operates and maintains the Phase II Center Improvements in a manner which is consistent with the requirements of the State Financing Documents, Agency shall have no rights whatsoever with respect to the Phase II Center Improvements. In addition, Agency acknowledges that if UCR fails to so maintain and operate the Phase II Center Improvements as required under the State Financing Documents, the State has certain rights with respect to the Phase II Parcel and the Phase II Center Improvements which are more particularly described in the State Financing Documents. UCR agrees to use good faith efforts during its negotiations with the State with respect to the State Financing Documents to ensure that the State Financing Documents provide that: if the State exercises some or all of its rights under the State Financing Documents and following such exercise UCR has no further rights to occupy or operate the Phase II Center Improvements, all right, title and interest in the Phase II Parcel and the Phase II Center Improvements will be conveyed to Agency at the time bonds which will be secured by the State Financing Documents have been retired in full and the State has no further liability or obligation to any bond holder. (c) Parcel B. If during the Phase I Use Reversionary Period UCR fails for a continuous period of more than three hundred and sixty-five (365) consecutive days to use or maintain Parcel B (if then owned by UCR) (excluding periods during which any improvements located thereon are subject to substantial repair, maintenance or alteration work) in accordance with the provisions of section 3.2 of the DDA, then UCR must offer to sell Parcel B (if then owned by UCR), together with all improvements thereon, in accordance with the provisions of this subparagraph (a) within -one -hundred - and -eighty (180) days of Agency's written notification to UCR requiring such offer to be made; provided, however, UCR shall not be under any obligation to make such offer if during such one -hundred -and -eighty (180) day period UCR begins to use or maintain Parcel B in accordance with the provisions of Section 3.2 of the DDA. If UCR does not cure, then it must first offer Parcel B, at fair market value, to CSU, and if CSU elects not P6402\0001 \712328.4 18 to purchase, then UCR must offer Parcel B to Agency. Fair market value shall be determined by agreement of UCR and CSU, or UCR and Agency, as appropriate, provided that in the case of Agency's repurchase, the fair market value of the land (excluding any improvements thereon) shall be deemed to be $1.00. If the parties are unable to reach agreement within ninety (90) days of UCR's offer (hereinafter, the "Negotiating Period"), then fair market value shall be determined by the Appraisal Method described in Section 3.4.3 and the resulting appraisal shall constitute the fair market value of Parcel B, including improvements thereon. Should neither CSU nor Agency elect to purchase Parcel B from UCR, then thereafter UCR shall be free to sell, use or maintain Parcel B for any purpose whatsoever. The parties acknowledge that the right of Agency to require UCR to offer to sell Parcel B, together with all improvements thereon, in accordance with this subparagraph (c) shall be, subject to any remedies available to Agency under the Loan Documents, Agency's sole and exclusive remedy in the event UCR does not use or maintain Parcel B in accordance with the provisions of Section 3.2 of the DDA during the Phase I Use Reversionary Period and UCR, following its compliance with the provisions of this subparagraph, shall have no further liability or obligation with respect to Parcel B (or any improvements located thereon) under this First Amendment or the DDA. 3.4.3 Appraisal Method. For all purposes under the DDA and this Amendment, if the parties are unable to agree on the fair market value of any real or personal property, including, without limitation, Parcel A, the Center Improvements, or the Site, then the parties agree to obtain an appraisal to determine fair market value in accordance with the method described in this Section 3.4.3 (the "Appraisal Method"). Fair market value shall be determined by an appraisal performed by an independent, non -employee, MAI certified appraiser (a "Qualified Appraiser") who is selected by UCR from a list of three Qualified Appraisers proposed by the acquiring party ("Appraiser List"). The acquiring party shall identify and submit the Appraiser List in writing to UCR within thirty (30) days after the expiration of the Negotiating Period (the "Appraisers Notice"). Within thirty (30) days after receipt of the Appraisers List (the "Selection Period"), UCR shall notify the acquiring party in writing of the name of the Qualified Appraiser selected. If UCR does not notify the acquiring party of its selection within the Selection Period, then the acquiring party shall select the appraiser from the Appraisers List. The fair market value determined by the resulting appraisal shall constitute the purchase price of the real and personal property, including improvements, to be paid by the acquiring party to UCR. The selected Qualified Appraiser's reasonable and customary costs shall be paid by the acquiring party. Section 3.5 Section 3.5 of the DDA is hereby deleted and the following provisions substituted: Section 3.5 Restriction on UCR's Transfer of the Site and Rights and Obligations Under this Amendment. During the Phase I Use Reversionary Period, except as provided in Section 3.2 of the DDA, UCR shall not convey, sell, encumber, hypothecate, lease or otherwise transfer (collectively, "Transfer") the Site, or any portion thereof, or any interest therein, without the prior written consent of Agency, which consent may or P6402\0001\712328.4 19 may not be given in. the sole and absolute discretion of Agency, except as provided in Section 3.2 of the DDA. 5. Sections of Article 4 of the DDA are hereby amended: ARTICLE 4 DEVELOPMENT OF THE PROJECT. Section 4.1 is hereby deleted and the following provision substituted: Section 4.1 Development of Parcel A. After transfer of Parcel A to UCR, UCR shall construct and develop, or cause to be developed pursuant to the University Contract Documents, the Phase I Center Improvements and Off- and On -Site Improvements on the Phase I Parcel in accordance with any and all applicable federal, state and local laws, rules and regulations in connection with such construction, and all terms, conditions and requirements of the DDA and this Amendment. Any further development of the Parcel A shall be subject to review as provided for in Section 4.2. Section 4.3 is hereby deleted and the following provision substituted: Section 4.3 Air Emissions. UCR, during construction and operation of the Center Improvements thereafter, will work with the South Coast Air Quality Management District (SCAQMD) to minimize its impact upon the air quality of the Coachella Valley region. UCR is committed to mitigation measures related to regional and project impacts upon air quality. Section 4.4 is hereby deleted and the following provision substituted: Section 4.4 Compliance by Contractors. UCR shall require contractors to take appropriate measures necessary to reduce construction related impacts upon local traffic, air quality and noise. Section 4.5 is hereby deleted and the following provision substituted: Section 4.5 Erosion Control. UCR shall implement erosion control measures to protect against the impacts of construction and project generated urban runoff. Section 4.6 is hereby deleted and the following provision substituted: Section 4.6 Safety. UCR shall coordinate campus development with local law enforcement and fire protection agencies, and establish a campus office of public safety as the ICEM develops. Once established, the office would enter into mutual aid agreements with appropriate local agencies, as required by law. Section 4.7 is hereby deleted and the following provision substituted: Section 4.7 Community. UCR shall reasonably cooperate with City and Agency, and other local agencies, to develop programs for reducing impacts of campus development with respect to housing, air quality, traffic, public services and noise. UCR P640210001\712328.4 20 shall use reasonable efforts to coordinate initial Parcel A and ICEM development with local school districts, community colleges, and other public independent colleges and universities in the region. UCR shall use reasonable efforts to coordinate toxic materials disposal plans and procedures with any necessary agencies. UCR shall use reasonable efforts to coordinate campus efforts with the community concerning alternative powered vehicle use and ride sharing programs. Section 4.8 is hereby deleted and the following provision substituted: Section 4.8 Local. State and Federal Laws. UCR shall be responsible for determining the applicability of all laws and regulations to the Project and shall hold City and Agency harmless from any claim, cost, expense, or cause of action related to such determinations and their actions and inactions in furtherance of such determinations. Section 4.9 is hereby deleted and the following provision substituted: Section 4.9 Anti -discrimination During Construction. UCR for itself and its successors and assigns, agrees that it shall not discriminate against any employee or applicant for employment because of age, sex, marital status, race, handicap, color, religion, creed, ancestry, or national origin in the construction of the Center Improvements, as required by law. Section 4.10 is hereby deleted and the following provision substituted: Section 4.10 Taxes. Assessments. Encumbrances and Liens. UCR shall pay when due, to the extent UCR is legally obligated to do so, all real property taxes and assessments, if any, assessed or levied on the Site. Section 4.11 is hereby deleted and the following provision substituted: Section 4.11 No Agency Created. In performing this Agreement, UCR is not the agent of Agency or City. Agency and City are not agents of UCR. Neither Agency nor City shall have any responsibility whatsoever for payment to any contractor or supplier of UCR. UCR shall not have any responsibility whatsoever for payment to any contractor or supplier of Agency or City. New Sections 4.12, 4.13, and 4.14 are hereby added as follows: Section 4.12 Preliminary Notices. UCR agrees that copies of all preliminary notices delivered pursuant to Section 3097 of the California Civil Code (a) to UCR and (b) to Parcel A, addressed to "City of Palm Desert" "Palm Desert Redevelopment Agency" "Lender," or "Construction Lender," shall be promptly delivered to Agency. UCR further agrees that Agency and Agency's agents shall have the right at reasonable times during the term of the Loan to enter upon Parcel A to post such notices and other written or printed material thereon as they may deem reasonably necessary or desirable for Agency's protection as the lender. P6402\0001 \712328.4 21 Section 4.13 Right of Entry. During the term of the Agency Loan, representatives of Agency shall have the reasonable right of access to the Site without charges or fees, at normal construction hours during the period of construction upon at least one (1) day's prior notice, for the purposes of the DDA and this Amendment, including, but not limited to, the inspection of the work being performed in constructing the Project as provided in the DDA and this Amendment; provided, that Agency shall not unreasonably interfere with the construction or operation of the Project in conducting such inspections. UCR acknowledges that Agency is under no duty to supervise or to inspect the work of construction, the labor performed, the materials used therein or any books and records, and that any inspection by Agency of the construction of the Center Improvements is for the sole purpose of protecting the security of Agency, and that such inspection is not to be construed as a representation by Agency that there is or will be a strict compliance on the part of UCR with plans and specifications, or that the construction is or will be free from faulty material or defective work quality. UCR agrees that any inspections by Agency are for the sole purpose of preserving Agency's rights hereunder and that neither UCR nor any other person is entitled to rely upon the same with respect to materials, construction quality, compliance with the plans for the Project or otherwise. UCR intends and agrees to conduct its own investigations and inspections of the construction, the labor performed and materials supplied to determine that the quality of the Project and all other requirements of the construction are being performed in a manner satisfactory to UCR. UCR agrees to immediately notify Agency, in writing, should the same be materially unsatisfactory. A failure to inspect the construction of the Project, any part thereof, or any books and records relating thereto, shall not constitute a waiver of any of Agency's rights hereunder. Inspection not followed by notice of default shall not constitute a waiver of any default then existing; nor shall it constitute an acknowledgment that there has been or will be compliance with the plans for the Project or that the construction is free from defects. Section 4.14 Construction Responsibilities. As between Agency and UCR, UCR shalt be solely responsible for all aspects of its business and conduct in connection with the Site and Center Improvements, including, without limitation, the quality and suitability of the plans and specifications and their compliance with all governmental requirements and the Loan Documents, the supervision of the work of construction, the qualifications, financial condition and performance of all architects, engineers, contractors, material suppliers, consultants and property managers, the accuracy of all applications for payment and loan draw requests, and the proper application of all disbursements. Agency is not obligated to supervise, inspect or inform UCR or any third party of any aspect of the construction of the Center Improvements or any matter referred to above. 6. Sections of Article 5 of the DDA are hereby amended: Section 5.1 is hereby deleted and the following provision substituted: Section 5.1 Defaults — Definition. Occurrence of any or all of the following breaches shall constitute a default ("Event of Default") under this Agreement: P6402\0001\712328.4 22 5.1.1 Subject to the provisions of Article 3, UCR's failure to comply with the use restrictions, the maintenance requirements, and/or the non-discrimination or other restrictive covenants covering the Site in accordance with Article 3 hereunder. 5.1.2 A breach of any material term of the DDA or this Amendment or any of its Exhibits by any party hereto not involving the payment of money, and failure of such party to cure such breach within the time period stated, or if no cure period is stated, then within thirty (30) days after the non -defaulting party has given notice to the defaulting party; provided, however, if such breach is not reasonably curable within such thirty (30) day period, then such party shall be deemed in Default only if such party does not commence to cure such breach within such thirty (30) day period and thereafter fails to diligently pursue a cure of such breach to completion unless the provision breached provides otherwise; 5.1.3 Agency's failure or refusal to provide any material requested approvals without good faith or a legitimate reason which could cause UCR to be deemed in breach of this Agreement or default or threat thereof; 5.1.4 Any breach of the DDA, this Amendment or any of its Exhibits, by any party hereto involving the payment of money, and the continuance of such breach for a period of thirty (30) days after the non -defaulting party has given written notice to the defaulting party, as specified in Section 7.1. Section 5.3 is hereby deleted and the following provision substituted: Section 5.3 No Personal Liability. No representative, agent, attorney, consultant, or employee of Agency shall personally be liable to UCR or any successor in interest of UCR, in the event of any Event of Default or breach by Agency, or for any amount which may become due to UCR or its successor(s) in interest, on any obligation under the terms of this Agreement. No representative, agent, attorney, consultant, or employee of UCR shall personally be liable to Agency or any successor in interest of Agency, in the event of any Event of Default by UCR, or for any amount which may become due to Agency or any successor in interest, on any obligation under the terms of this Agreement. 7. Sections 6.1 and 6.2 are hereby deleted and the following provisions substituted: ARTICLE 6. INDEMNITY AND INSURANCE. Section 6.1 UCR's Indemnity. UCR shall indemnify, defend, protect, and hold harmless Agency Related Parties, from and against all losses, liabilities, claims, damages, costs and expenses (including all reasonable out-of-pocket litigation costs and reasonable attorney's fees) and demands of any nature whatsoever, related directly or indirectly to, or arising out of or in connection with this Amendment and the matters contemplated hereby, including without limitation: P6402\0001 \712328.4 23 (i) the development of the Center Improvements on such Parcel(s) of the Site or the use, ownership, management, occupancy, or possession of such Parcel(s) of the Site, (ii) any of UCR's activities on such Parcel(s) of the Site (or the activities of UCR's agents, employees, lessees, representatives, licensees, guests, invitees, contractors, subcontractors, or independent contractors on such Parcel(s) of the Site), except to the extent such losses or liabilities are caused by the negligence or willful misconduct of Agency or City or its agents or contractors, but only in proportion to and to the extent such losses, liabilities, claims, damage, costs, expenses and demands are caused by or result from the negligent or intentional acts or omissions of UCR, its officers, agents, or employees. UCR shall defend, at UCR's expense, including attorneys' fees and costs, Agency Related Parties, in any legal action or threatened legal action (including arbitrations and mediations) based upon such alleged acts or omissions. Agency and City may in their discretion participate in the defense of any such legal action. These provisions are in addition to, and not in lieu of, the insurance required to be provided by Section 6.3 hereof. Except as provided in Section 3.1.7.3 hereof, UCR's indemnification obligations under this Section 6.1 shall survive the termination of the DDA and the other Loan Documents. Section 6.2 Insurance. 6.2.1 Insurance to be Provided by UCR. During the term of the Loan, UCR, for Parcel A, at its sole cost and expense, shall insure its activities in connection with the Site and obtain, keep in force and maintain insurance as follows: a. General Liability Self -Insurance Program (contractual liability included) with minimum limits as follows: 1. Each Occurrence $1,000,000.00 2. Products/Completed Operations Aggregate $3,000,000.00 3. Personal and Advertising Injury $1,000,000.00 4. General Aggregate $3,000,000.00 Such combined single -limit public liability insurance shall protect against loss from liability for damages on account of personal injury, including death, suffered or alleged to be suffered by any person or persons whomsoever on Parcel A and the improvements on Parcel A, or in connection with the operation thereof, resulting directly from any acts or activities of UCR, and also to protect against loss from liability imposed by law for damages to any property of any person occurring on Parcel A, or in connection with the operation thereof, caused directly by or from acts or activities of UCR. P6402\0001 \712328.4 24 b. Business Automobile Liability Self -Insurance Program for owned, non - owned, or hired automobiles with a combined single limit of not less than One Million Dollars ($1,000,000.00) per occurrence. c. Property, Fire and Extended Coverage Self -Insurance Program in an amount sufficient to reimburse UCR for all of its equipment, trade fixtures, inventory, fixtures and other personal property located on or in Parcel A, including leasehold improvements hereinafter constructed or installed. Such policy or policies of insurance shall insure against loss or damage to the improvements on Parcel A resulting from fire, lightning, vandalism, malicious mischief, and such other perils ordinarily included in extended coverage fire insurance and casualty Toss policies. Such insurance policy or policies shall be maintained in an amount not less than one hundred percent (100%) of the "Full Insurable Value" of the improvements on Parcel A, as defined herein. d. Workers' Compensation as required by California law, either self -insured or issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the workers' compensation laws now in force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such workers' compensation insurance shall cover all persons employed by UCR in connection with Parcel A and shall cover full liability for compensation under any such act aforesaid, based upon death or bodily injury claims made by, for or on behalf of any person employed by UCR incurring or suffering injury or death in connection with Parcel A or the improvements on Parcel A or the operation thereof by UCR. e. UCR, prior to disbursement of the Loan, shall furnish Agency with certificates of insurance evidencing compliance with all of the requirements set forth in this Section 6.2 and such certificates shall provide for thirty (30) days advance written notice to Agency of any material modification, change or cancellation of any of the above insurance coverages. f. The required amount of insurance shall be subject to increases as Agency may reasonably require from time to time, but not more frequently than every twelve (12) months. In no event shall such increase or increases exceed the increase during such period in the CPI for Riverside County, California. UCR agrees that the provisions of this section as to maintenance of insurance shall not limit the liability of UCR or be construed as limiting in any way the extent to which UCR may be held responsible for the payment of damages to persons or property resulting from UCR's activities. UCR may assign its insurance obligations under this Section 6.2.1, provided Agency is insured as required hereunder. 6.2.2 Definition of "Full Insurable Value". The term "Full Insurable Value" as used in this Section shall mean the actual replacement cost (excluding the cost of excavation, foundation and footings below the lowest floor and without deduction for depreciation) of the improvements on the Parcel A, including the cost of construction of the improvements on Parcel A, architectural and engineering fees, and inspection and supervision. To ascertain the amount of coverage required, UCR shall cause the Full P6402\0001 \712328.4 25 Insurable Value to be determined from time to time by appraisal by the insurer or, if no such appraisal is available, by an appraiser acceptable to UCR and Agency, not Tess often than once every sixty (60) months. 6.2.3 General Insurance Provisions. All policies of insurance provided for in this Section 6.2, except for worker's compensation insurance, shall provide that the Agency and City and their respective officers, officials, employees, agents, and representatives shall be additional insureds, but such provision shall apply only in proportion to and to the extent of the negligent acts or omissions of UCR and its officers, agents and employees. UCR agrees to timely pay all premiums for such insurance and, at its sole cost and expense, to comply and secure compliance with all insurance requirements necessary for the maintenance of such insurance. UCR agrees to submit policies of all insurance required by this Section, or certificates evidencing the existence thereof, to Agency on or before the effective date of the Parcel A Close of Escrow for UCR, indicating full coverage of the contractual liability imposed by this Section. At least thirty (30) days prior to expiration of any such policy, copies of renewal policies, or certificates evidencing the existence thereof, shall be submitted to Agency. All insurance provided for under this Section shall be effected under policies issued by insurers of recognized responsibility, licensed or permitted to do business in the State of Califomia, and approved by Agency. All policies or certificates of insurance shall also: (1) provide that such policies shall not be canceled or limited in any manner without at least thirty (30) days' prior written notice to Agency; and (ii) provide that such coverage is primary and not contributing with any insurance as may be obtained by Agency and shall, with respect to property damage insurance only, contain waivers of subrogation against any and all rights, claims or causes of action arising against Agency or City, it being understood that such policies are for the benefit of City and Agency. 6.2.4 Failure to Maintain Insurance. If UCR fails or refuses to procure or maintain insurance as required by this Section, Agency shall have the right, at Agency's election, and upon ten (10) days' prior notice to UCR, to procure and maintain such insurance and charge UCR for the same. Agency shall give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured(s). 6.2.5 Insurance Proceeds Resulting from Loss or Damage to Improvements. All proceeds of insurance with respect to loss or damage to the improvements on Parcel A shall be payable, under the provisions of the policy of insurance, to UCR, and said proceeds shall constitute a trust fund to be used for the restoration, repair and rebuilding of the improvements on Parcel A in accordance with plans and specifications approved in writing by Agency and UCR. To the extent that such proceeds exceed the cost of such restoration, repair or rebuilding, then such proceeds shall be apportioned between UCR and Agency, as their interests may appear. 8. Sections of Article 7 of the DDA are hereby amended: Section 7.1 of the DDA is hereby deleted and the following provision substituted: P6402\0001\712328.4 26 Section 7.1 Notices. All notices and demands required or allowed to be given hereunder shall be given in writing by U.S. certified mail, postage prepaid, and return receipt requested, or by personal delivery. Notices shall be considered given upon the earlier of (a) personal delivery or (b) two (2) business days after deposit or delivery shown on the return receipt in the United States mail, postage prepaid, certified or registered, retum receipt requested. Notices shall be addressed as provided below for the respective party; provided that if any party gives notice in writing of a change of name or address, notices to such party shall thereafter be given as demanded in that notice: Agency: With a copy to: UCR: Mr. Carlos L. Ortega Executive Director Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Telephone: (760) 346-0611 Facsimile: (760) 341-6372 Richards, Watson & Gershon A Professional Corporation 355 South Grand Avenue, 40th Floor Los Angeles, Califomia 90071 Attention: William L. Strausz, Esq. Telephone: (213) 626-8484 Facsimile: (213) 626-0078 University of California, Riverside Attn: C. Michael Webster, Vice Chancellor Administration 4123 Hinderaker Hall Riverside, CA 92521 Telephone: (909) 787-2680 Facsimile: (909) 787-2381 With a copy to: University of California, Riverside Attn: Lisa Hjulberg, Real Estate Services Manager B-206 Highlander Hall Riverside, California 92512 Telephone: (909) 787-3388 Facsimile: (909) 787-3299 And to: P6402\0001 \712328.4 27 University of California Office of the President Attn: Real Estate Services Group 1111 Franklin St. 6th Floor Oakland, California 94607-5200 Telephone: (510) 987-9033 Facsimile: (510) 987-0199 Section 7.3 of the DDA is hereby deleted and the following provision substituted: Section 7.3 Force Maieure. Notwithstanding anything to the contrary in this Agreement, UCR's unexcused material failure to complete the Center Improvements required to be completed according to this Agreement within three (3) years from the date of this Agreement shall be a breach hereof; provided, however, nonperformance shall be excused when performance is prevented or delayed by reason of any of the following forces reasonably beyond the control of such party: (i) war, insurrection, riot, flood, severe weather, earthquake, fire, casualty, acts of public enemy, govemmental restriction, litigation, acts or failures to act of any governmental agency or entity, including Agency, or (ii) inability to secure necessary labor, materials or tools, strikes, lockouts, delays of any contractor, subcontractor or supplier. In the event of an occurrence described in clauses (i) and (ii) above, such nonperformance shall be excused and the time of performance shall be extended by the number of days the matters described in clauses (i) and (ii) above prevent or delay performance. Section 7.11 of the DDA is hereby deleted and the following provision substituted: Section 7.11 No Third Party Beneficiaries other than City. City shall be a named third party beneficiary of this Agreement. This Agreement is made and entered into for the sole protection and benefit of the Agency, UCR, City and each of their respective successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. New Sections 7.14 and 7.15 are hereby added: Section 7.14 Inspection of Books and Records. Agency has the right at all reasonable times, upon twenty-four hours advance written notice setting forth the reason, to inspect the books and records of UCR pertaining to the Site and development thereof as pertinent to the purposes of the DDA and this Amendment. UCR also has the right at all reasonable times to inspect the books and records of Agency pertaining to the Site and development thereof as pertinent to the purpose of the DDA and this Amendment. Section 7.15 Approvals in Writing. Wherever the DDA or this Amendment requires Agency or UCR to approve any contract, document, plan, proposal, or other matter, such approval, or if appropriate, disapproval, shall not be unreasonably withheld P6402100011712328.4 28 or delayed, unless otherwise expressly provided. Any approvals required or permitted under the terms of the DDA or this Amendment shall be in writing and signed by the party hereto against whom such approval is asserted, or its or his designed representative, with the right to approval 8. Heckmann Release. The parties release Heckmann from any further obligation to Agency under the terms of the DDA and Heckmann waives any further right or obligation to Agency under the DDA. To the extent not otherwise covered by this Amendment and as legally permissible, any and all rights and obligations of Heckmann under the DDA shall be deemed the rights and obligations of UCR. 9. DDA Restatement. Except as specifically amended by this Amendment, all terms, covenants, and conditions of the DDA are hereby restated and incorporated herein by reference. 10. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument. For purposes of this Amendment, facsimile signatures shall be deemed to be original signatures, and shall be followed by the immediate overnight delivery of original signature pages. [Signature page follows] P6402\0001\712328.4 29 IN WITNESS WHEREOF, the parties hereto have entered into this Amendment as of the day and year first above written. "UCR": THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus By: Title: BSI-�P. MULLINIX SEI'IOR VICE PRESIDENT BUSINESS AND FINANCE RICHARD J. HECKMANN FOUNDATION, a By Title: By Title: APPROVED AS TO FORM: Richards, Watson & Gershon, a professional corporation By: Agency Attorney "Agency": PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic By: Title: ATTEST: By: Secretary P6402\0001\712328.4 30 IN WITNESS WHEREOF, the parties hereto have entered into this Amendment as of the day and year first above written. "UCR": THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus By: Title: RICHARD J. HECKMANN FOUNDATION, a it Title: itao• Title: By Title: APPROVED AS TO FORM: Richards, Watson & Gershon, a professional corporation By: Agency Attorney "Agency": PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic By: Title: ATTEST: By: Secretary P6402\0001\712328.4 30 IN WITNESS WHEREOF, the parties hereto have entered into this Amendment as of the day and year first above written. "UCR": "Agency": THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic By: By: Title: Title: EXECUTIVE DIRECTOR ATTEST: _g_Osa 4s-_r_s_,-) - — _t-ik- By. Secr tary RICHARD J. HECKMANN FOUNDATION, a By Title: By Title: APPROVED AS TO FORM: Richards, Watson & Gershon, a professional corporation Bye, f 1 Agency Attorney P6402100011712328.4 30 LIST OF EXHIBITS. Exhibit A-1 Exhibit B-1 Exhibit C-1 Exhibit D-1 Exhibit E-1 Exhibit F-1 Exhibit G-1 Exhibit H-1 Exhibit 1-1 Exhibit J-1 Exhibit K-1 Exhibit L-1 Exhibit M-1 Legal Description and Site Plan of Parcels A & B Legal Description and Site Plan of Phase I & 1I Parcels [Intentionally Reserved] Form of Grant Deed Form of Option Agreement and Memorandum of Option Revised Schedule of Performance On- and Off -Site Improvements Agency Off -Site Improvements Promissory Note [Intentionally Reserved] [Intentionally Reserved] [Intentionally Reserved] Loan Payment Request P640210001\712328.4 31 EXHIBIT A-1 UCR — Parcel A Legal Description All those portions of Sections 33 and 34, in Township 4 South, Range 6 East, San Bemardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South, Range 6 East, San Bemardino Meridian, in the County of Riverside, State of Califomia, which bears S 89° 49' 59" W 783.33 feet from the Southeast comer of Section 33 in Township 4 South, Range 6 East; Thence N 89° 49' 59" E 92.52 feet along the South line of said Section 33; Thence N 0° 10' 01" W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N 89° 49' 59" E 82.84 feet along said parallel line and the Northerly right of way line of Frank Sinatra Drive to the true point of beginning; Thence N 42° 11' 33" E 998.61 feet to the beginning of a non -tangent curve, concave Northeasterly, and having a radius of 965.50 feet; a radial line of said curve through said point bears S 37° 44' 14" W; Thence Southeasterly along said curve 194.29 feet through an angle of 11 ° 31' 46"; Thence non -tangent to said curve S 0° 09' 28" E 637.76 feet; Thence S 89° 50' 32" W 35.01 feet to the beginning of a non -tangent curve concave Northwesterly, and having a radius of 18.00 feet; a radial line of said curve through said point bears S 85° 01' 34" E; Thence Southwesterly along said curve 31.93 feet through an angle of 101 ° 38' 27"; Thence non -tangent to said curve S 44° 50' 32" W 10.43 feet to said Northerly right of way line of Frank Sinatra Drive; Thence S 89° 50' 32" W 139.49 feet; Thence N 87° 03' 59" W 480.80 feet; Thence S 89° 49' 59" W 151.87 feet to the true point of beginning. The parcel described herein contains 370,820 square feet, more or Tess. P6402\0001 \712328.4 A-1 /I P.O.B. RS. 103/68-69 or LINE AND CURVE DATA I NO. BRG. / DELTA RADIUS LI NO°10'01"W N89•49'59"E N42•11'33"E SO°09'28"E A119°50132"W S44.50'32"W I © S89°50'32"W le N87'03'59"W ..t) S89°49'59"W 0 11°31'46" @ I 101°38'27' N89°49'S9"E 965.50' 18.00' L')(IflG RING ROAD R =91250' /.// /// A / j / ////// ,/,,/,./j//'�,,//. ' I/2/ // / / // ,/ / ,•/ /;,/j,/ / j/// j;; / . .' •/�. / / , , / , /, ,--, - ./,/,/‘.,../: ///. ,/ '// •,-(j', < // ,// /„ //, ,,,, // /: /�// / //'; /////'/ / '//'.I4 . j• j ;i. ZJ / . // 1 fiRAIVIC SINATRA DRIVE LENGTH 92.52' 81.00' 82.84' 998.61' 637.76' 35.01' 10.43' 139.49' • 480.80' 151.87 194.29' 31.93' L0. KING. INC. 2151 CONVENTION CENTER WAY SIA1E 100 ONTARIO. CA 91764 (909) 937-0200 LEGEND • UCR/PHASE I & 2 SCALE I "=200' c. CITY OF PALM DESERT llC7ACM'' 1 * POI?. SECTION 93 & 34 EXHIBIT A-1 UCR -- Parcel B Legal Description All that portion of Section 34, in Township 4 South, Range 6 East, San Bemardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South, Range 6 East, San Bemardino Meridian, in the County of Riverside, State of California, which bears S 89° 49' 59" W 783.33 feet from the Southeast comer of Section 33 in Township 4 South, Range 6 East; Thence N 89° 49' 59" E 92.52 feet along the South line of said Section 33; Thence N 0° 10' 01" W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N 89° 49' 59" E 82.84 feet along said parallel line and the Northerly right of way line of Frank Sinatra Drive; Thence N 42° 11' 33" E 998.61 feet to the beginning of a non -tangent curve, concave Northeasterly, and having a radius of 965.50 feet; a radial line of said curve through said point bears S 37° 44' 14" W; Thence Southeasterly along said curve 194.29 feet through an angle of 11 ° 31' 46" to the true point of beginning; Thence continuing Southeasterly along said curve 761.54 feet through an angle of 45° 11' 32" to the beginning of a compound curve, concave Southwesterly, and having a radius of 34.50 feet; a radial line of said curve through said point of compound curvature bears N 18° 59' 04" W; Thence Southeasterly along said curve 51.36 feet through an angle of 85° 17' 47"; Thence tangent to said curve S 23° 41' 17" E 127.01 feet to the beginning of a tangent curve concave Southwesterly and having a radius of 452.50 feet; Thence Southeasterly along said curve 185.83 feet through an angle of 23° 31' 49"; Thence S 0° 09' 28" E 194.00 feet; Thence S 89° 50' 32" W 11.50 feet; Thence S 44° 50' 32" W 124.45; Thence S 89° 50' 32" W 100.00 feet; Thence S 88° 30' 19" W 600.17 feet; Thence S 89° 50' 32" W 37.45 feet; P6402\0001\712328.4 A-3 Thence N 45° 09' 45" W 32.53 feet; Thence S 89° 50' 32" W 11.50 feet; Thence N 0° 09' 28" W 637.76 feet to the true point of beginning. The parcel described herein contains 490,668 square feet, more or Tess. P6402\00011712328.4 A-4 ,P.O\L I - 3 _ COOK rL-- LOCUM ETREET �,S RS. 103/68-69 LD. KING. INC. 2151 CONVENTION CENTER WAY SUITE 100 ONTARIO. CA 91764 (909) 937-0200 SCALE 1"=300' LEGEND BRG. / DELTA N89•4919"E NO°10'01"W N89•4919"E N42°11'33"E S23°41'17"E SO°09'28"E S89°5032"W S44°50'32"W S89°50'32"W S88•30'19"W S89°50'32"W N45°09'45"W S89°50'32"W NO°09'28"W 11°31'46" 45°1132" 85° 17'4T 23°31'49" FuTuREPHASES RADIUS 965.50' 965.50' 34.50' 452.50' CITY OF PALM DESERT OCB/IDTVR! PBdS&S ..�. .,,, POR. SEC1TON 44 SC1t ,r.LS,l6's.SL LENGTH 92.52' 81.00' 82.84' 998.61' 127.01' 194.00' 11.50' 124.45' - 100.00' 600.1T 37.45' 32.53' 11.50' 637.76' 19419' 761.54' 51.36' 185.83' EXHIBIT B-1 UCR — Phase 1 Parcel Legal Description All those portions of Sections 33 and 34, in Township 4 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, which bears S 89° 49' 59" W 783.33 feet from the Southeast corner of Section 33 in Township 4 South, Range 6 East; Thence N 89° 49' 59" E 92.52 feet along the South line of said Section 33; Thence N 0° 10' 01" W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N 89° 49' 59" E 82.84 feet along said parallel line and the Northerly right of way line of Frank Sinatra Drive to the true point of beginning; Thence N 42° 11' 33" E 632.10 feet; Thence S 0° 00' 00" E 276.35 feet; Thence N 90° 00' 00" E 99.00 feet; Thence N 0° 00' 00" E 35.00 feet; Thence N 9Q° 00' 00" E 32.00 feet; Thence S 0° 00' 00" E 35.00 feet; Thence N 90° 00' 00" E 280.91 feet; Thence S 0° 09' 28" E 192.57 feet; Thence S 89° 50' 32" W 35.01 feet to the beginning of a non -tangent curve concave northwesterly, and having a radius of 18.00 feet; a radial line of said curve through said point bears S 85° 01' 34" E; Thence Southwesterly along said curve 31.93 feet through an angle of 101 ° 38' 27"; Thence non -tangent to said curve S 44° 50' 32" W 10.43 feet to said Northerly right of way line of Frank Sinatra Drive; Thence S 89° 50' 32" W 139.49 feet; Thence N 87° 03' 59" W 480.80 feet; Thence S 89° 49' 59" W 151.87 feet to the true point of beginning. The parcel described herein contains 189,157 square feet, more or less. P6402\0001\712328.4 B-1 col '7 T.P.O.B. P.O.B. 4I: RS 103/6849 — FRANK SINATRA DRIVE LINE AND CURVE DATA S89•5032"W NO. BRG. / DELTA RADIUS LENGTH S44°SO'326W N89.49'S9"E — 92.52' S89°50'32"W • NO'l0'Oi"W — 81.00' N87°03'S9"W © N89.49'S9"E — 82.84' S89'49'S9"W I © N42•11'33"E — 632.10' c0 101°387r I ©l SO°00'00"E — 27635 ® 11°31'46" 1 t� 1 . N90°00'00"E — 99.00' 0 NO°00'00"E — 35.00' © N90°00'00"E — 32.00' LEGEND S0°00'00"E — 35.00' N90°00'00"E — 280.91' UCR/PHASE I 1 S0°09'28"E — 192.57' L')(IflC LO. KING, INC. 2151 CONVENTION CENTER WAY SUITE 100 ONTARIO. CA 91764 (909) 937-0200 35.01' 10.43' 139.49' 480.80' 151.87 18.00' 31.93' 965.50' 19429' € RING ROAD R = 912.50' 147P1017 Jr CITY OF PALM DESERT oz,4'I4sr 1 MISCHP12, FOR SECTION 33 & 34 SIC sit 84, r. 4 S. g 8 S. SAX SCALE 1 "=200' EXHIBIT B-1 UCR -- Phase 2 Parcel Legal Description All those portions of Sections 33 and 34, in Township 4 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, which bears S 89° 49' 59" W 783.33 feet from the Southeast comer of Section 33 in Township 4 South, Range 6 East; Thence N 89° 49' 59" E 92.52 feet along the South line of said Section 33; Thence N 0° 10' 01" W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N 89° 49' 59" E 82.84 feet along said parallel line and the Northerly right of way line of Frank Sinatra Drive; Thence N 42° 11' 33" E 632.10 feet to the true point of beginning; Thence continuing N 42° 11' 33" E 366.50 feet to the beginning of a non -tangent curve, concave Northeasterly, and having a radius of 965.50 feet; a radial line of said curve through said point bears S 37° 44' 14" W; Thence Southeasterly along said curve 194.29 feet through an angle of 11 ° 31' 46"; Thence non -tangent to said curve S 0° 09' 28" E 445.19 feet; Thence N 90° 00' 00" W 280.91 feet; Thence N 0° 00' 00" E 35.00 feet; Thence N 90° 00' 00" W 32.00 feet; Thence S 0° 00' 00" W 35.00 feet; Thence N 90° 00' 00" W 99.00 feet; Thence N 0° 00' 00" E 276.35 feet to the true point of beginning. The parcel described herein contains 181,662 square feet, more or Tess. P6402\0001 \712328.4 B-3 • RS 103/68-69 ti c P.O.B. RING ROAD R =91250' i /// T.P.O.B. / //, //3 j 4 �//i/ �%/ice ....._;',/,,,. /1 ,/,.....,„„, �.�. ,, .wr rsra jr —y— FRANK SINATRA DRIVE 1 4j3 LINE AND CURVE DATA NO. BRG. / DELTA U N89.49'59"E © NO°10'01"W 0 N89°49'59"E © N42°11'33"E Mr N42°11'33"E SO°09'28"E O N90°00'00"W 3NO.00100"E N90°00'00"W SO°00'00"W N90°00'00"W NO°00'00"E 11 °31'46" RADIUS 965.50' LENGTH 92.52' 81.00' 82.84' 632.10' 366.50' 445.19' 280.9Y 35.00' 32.00' 35.00' 99.00' 276.35' 194.29' LEGEND ' UCR/PHASE 2 SCALE 1 "=200' L'XmG LD. KING. INC. 2151 COMEN110N CENIER WAY SUITE 100 CNTARIO. CA 91764 (909) 937-0200 CITY OF PALM DESERT 1Ta/?iELST Z DISCOPtION POR. SECI2ON 33 & 34 .age Y MOT 1 Of 1 gas / Exhibit D-1 FORM OF GRANT DEED Recording Requested by and when recorded return to and mail tax statements to: Regents of the University of California, 1111 Franklin Street Oakland, CA 94607-5200 Attn: Director of Real Estate Assessor's Parcel Map No.: Exempt from Recording Fees Pursuant to Government Code § 6103 GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic ("Grantor"), hereby GRANTS to THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, A CALIFORNIA CORPORATION, ON BEHALF OF ITS RIVERSIDE CAMPUS ("Grantee") the following described real property, including all water, oil, mineral, gas, and geothermal rights, and including the right to extract the same from said real property, if and to the extent any such rights are held by the Grantor (collectively, the "Property") located in City of Palm Desert, County of Riverside, State of California: See Exhibit A attached hereto and incorporated herein by reference. SUBJECT TO, all easements, covenants, conditions, restrictions, and rights of way of record. RESERVING AND EXCEPTING THEREFROM, 1. This Grant of the Property is in furtherance of the purposes of the Redevelopment Plan for Project Area 2 of the Palm Desert Redevelopment Agency and a Disposition and Development Agreement entered into by and between Grantor and Grantee dated as of March 22, 2001, as amended pursuant to the terms of a First Amendment, dated December 2002, the terms of which are incorporated herein by reference (as so amended, the "Agreement"). A copy of the Agreement is available for public inspection at the offices of the P6402\0001 \712328.4 Grantor, 73-510 Fred Waring Drive, Palm Desert, California 92260. The Property is conveyed further subject to all easements, rights of way, covenants, conditions, restrictions, reservations and all other matters of record. 2. The Property is conveyed upon the conditions hereinafter specified, upon the violation or failure of any of which title to said Property may revert to and vest in Grantor as provided in the Agreement; provided, however, that no reversion of the Property shall occur unless and until a failure or violation of one of the conditions hereafter specified actually occurs, and Grantor gives Grantee written notice thereof specifying the particular failure or violation in the manner and time period provided in Section 7.1 of the Agreement, and such failure or violation shall not have been cured or remedied within the time period provided therefor in the Agreement. The conditions are: A. The Property and the improvements located thereon shall be developed and used in the manner and for the period of time provided in the Agreement, including, but not limited to, Section 3.2 and Section 3.4.2 thereof. B. By acceptance hereof, Grantee agrees, for itself, its successors and assigns, to refrain from restricting the rental, sale or lease of the Property on the basis of race, color, creed, religion, ancestry, sex, marital status, national origin or age of any person in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee itself or any persons claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. The foregoing covenants shall run with the land. All deeds, leases or contracts entered into with respect to the Property shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (i) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, national origin, sex, marital status, age or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (ii) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: That there be no discrimination against or segregation of any person or group of persons, on account of age, race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use or occupancy, tenure or enjoyment of the land herein P6402\0001 \712328.4 D-2 leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the land herein leased." (iii) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, age, national origin, sex, marital status or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 3. All covenants and conditions contained in this Grant Deed, or incorporated herein by reference to the Agreement, shall run with the land and shall be binding for the benefit of Grantor and its successors and assigns and such covenants and conditions shall run in favor of the Grantor and for the entire period during which the covenants and conditions shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants and conditions relate. The Grantor, in the event of any breach of any such covenants and conditions, shall have the right to exercise all of the rights and remedies provided herein or in the Agreement, or otherwise available, and to maintain any actions at law or suits in equity or other property proceedings to enforce the curing of such breach. The covenants and conditions contained in this Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor and its successors and assigns. IN WITNESS WHEREOF, the undersigned has executed this Grant Deed as of the date set forth below. Dated: P6402\0001 \712328.4 PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic By: Title: Attest: B y: Secretary D-3 THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, A CALIFORNIA CORPORATION, ON BEHALF OF ITS RIVERSIDE CAMPUS By: Title: State of California } } County of } On , 200_, before me, , a Notary Public, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) P6402\0001\712328.4 D-4 P6402\0001 \712328.4 ADD CERTIFICATE OF ACCEPTANCE FROM UCR D-5 EXHIBIT E-1 FORM OF OPTION AGREEMENT THIS OPTION AGREEMENT (this "Agreement"), dated as of December , 2002 (the "Effective Date"), by and between the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic ("Seller"), and THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus ("Buyer"). RECITALS A. Seller is the owner of that certain real property located at the northeast corner of Frank Sinatra Drive and Cook Street within the City of Palm Desert, California, within one mile of Interstate 10 and four miles from State Route 111, containing approximately eleven (11) acres, which is more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the "Property"). Buyer desires to have an option to purchase the Property if Buyer desires to expand the International Center for Entrepreneurial Management (the "ICEM") to be operated under the auspices of the A. Gary Anderson Graduate School of Management, University of California, Riverside, that will be located on approximately eight (8) acres of real property adjacent to the Property (the "Project"). B. In connection with the Project and this Agreement, Buyer, Seller and The Richard J. Heckmann Foundation, a California mutual benefit corporation ("Heckmann"), have entered into a Disposition and Development Agreement dated as of March 22, 2001, that has been amended pursuant to the terms of a First Amendment of Disposition and Development Agreement, dated of even date herewith (the "DDA"). Capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the DDA. C. Buyer desires to obtain an option to purchase the Property from Seller in order to facilitate the expansion of the Project and Seller is willing to grant such an option to Buyer on the terms and conditions hereinafter set forth. AGREEMENT IN CONSIDERATION of the above recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows: P6402\0001 \712328.4 ARTICLE I GRANT OF OPTION Section 1.1 Option and Term. As of the date hereof, Seller grants to Buyer an option (the "Option") during the Term (as hereinafter defined) hereof to purchase from Seller, subject to the terms, covenants and conditions set forth herein, the Property together with any and all rights, privileges and easements appurtenant thereto owned by Seller. The term of the Option (the "Term") shall commence upon the date when construction of the Phase I Center Improvements or Phase II Center Improvements by Buyer is complete as provided in the DDA and shall expire at midnight upon the earlier of (a) the date which is twenty-five (25) years thereafter, unless terminated as provided herein, or (b) the date of termination of, or Event of Default by Buyer under, the DDA. Notwithstanding anything to the contrary contained in this Agreement, this Agreement shall terminate on February 28, 2006 if prior to such date (which date of February 28, 2006 is the contemplated completion date for the construction of the Phase II Center Improvements and which date shall be extended by the same number of days as the completion date for the construction of the Phase II Center Improvements may be extended under the DDA) construction of the Phase I Center Improvements or Phase II Center Improvements has not been completed as provided in the DDA. Section 1.2 Exercise. If the following conditions precedent are met: (a) Buyer is not in default hereunder or an Event of Default by Buyer has not occurred under the DDA, (b) Buyer owns fee simple title to Parcel A and has completed construction of either the Phase I Center Improvements or the Phase II Center Improvements as provided in the DDA, (c) Buyer certifies or provides proof satisfactory to Seller that Buyer has the necessary funding sufficient to construct and maintain improvements for the expansion of ICEM's educational facilities (which expansion facilities shall be subject to review pursuant to Section 4.2 of the DDA) (the "Expansion Facilities"), and (d) Buyer agrees in writing that the Expansion Facilities shall be constructed upon all or a substantial portion of the Property and be used and maintained as required by the DDA, then Buyer, during the Term, may exercise the Option to purchase the Property by giving Seller written notice (the "Option Notice"), in the manner specified by Article VI hereunder, of its intent to exercise the Option prior to the expiration of the Term. Section 1.3 Purchase Price for the Property. The Purchase Price for the Property shall be the sum of $1.00, based upon the fair reuse value of the Property subject to the terms, conditions, and covenants of the DDA. Section 1.4 Maintenance of Property During Option Period. During the Term, but only prior to the Buyer's exercise of the Option, Seller shall maintain the Property in a manner consistent with Seller's practices used with respect to other vacant property owned by Seller and shall not voluntarily encumber the Property without the prior written consent of Buyer which shall not be unreasonably withheld or delayed. P6402.00011712328.4 E-2 ARTICLE II [INTENTIONALLY RESERVED1 ARTICLE III BUYER'S EXAMINATION Section 3.1 Buyer's Independent Investigation Period. Seller grants to Buyer a ONE HUNDRED TWENTY (120) day review period, the start of which shall be established by Buyer providing a written notice to Seller, during which time Buyer is permitted to enter upon the Property as provided in Section 3.2 herein, investigate all matters surrounding Buyer's intended use of the Property and other relevant investigations concerning the Property ("Buyer's Independent Investigation Period"). Buyer acknowledges and agrees that prior to the delivery of the Option Notice it will have been given a full opportunity to inspect and investigate each and every aspect of the Property, either independently or through agents of Buyer's choosing, including, without limitation: (a) All matters relating to title, together with all governmental and other legal requirements such as taxes, assessments, zoning, use permit requirements and building codes. (b) The physical condition of the Property. Such examination of the physical condition of the Property may include an examination for the presence or absence of hazardous or toxic materials, substances or wastes, or petroleum products or by-products (collectively, "Hazardous Materials"), which shall be performed or arranged by Buyer at Buyer's sole expense. (c) Any recorded easements and/or visible access rights affecting the Property. (d) Any other documents or agreements of significance affecting the Property, provided such documents or agreements have been recorded, are part of the public records or are otherwise disclosed by Seller. (e) All other matters affecting the Property. Section 3.2 Entry onto the Pronertv by Buyer. Seller agrees to permit Buyer or its representatives to enter onto the Property at any time during Buyer's Independent Investigation Period for the purpose of making reasonable studies, investigations, engineering tests or surveys. All such studies, investigations, tests or surveys are to be made at Buyer's expense. Prior to any entry to perform any invasive testing Buyer shall give Seller seventy-two (72) hours' advance written notice thereof directed to Mr. Carlos Ortega, telephone: (760) 346-0611. facsimile (760) 341-6372, including with such notice the identity of the company or persons wno will perform such testing and the proposed scope of the testing. If Buyer or its agents, employees or contractors take any sample from the Property in connection with any such testing, Buyer shall P6402\0001 \712328.4 E-3 provide to Seller a portion of such sample being tested to allow Seller, if it so chooses, to perform its own testing. Seller, or its representative(s), may be present to observe any testing or other inspection performed on the Property. Buyer shall promptly deliver to Seller copies of any reports relating to any studies, investigations, testing or other inspection of the Property performed by Buyer or its agents, employees or contractors. In the event Buyer does not exercise the Option, any damage to the Property caused by Buyer's investigations shall be restored to as good a condition as previously existed, including without limitation the appropriate closure of any test wells which may be drilled on the Property. Buyer shall maintain, and shall assure that its contractors maintain, public liability and property damage insurance in the amount of at least Two Million Dollars ($2,000,000) and in form and substance adequate to insure against all liability of Buyer and its agents, employees or contractors arising out of any entry or inspections of the Property pursuant to the provisions hereof, provided that in Buyer's case, Buyer shall be entitled to maintain an equivalent program of self-insurance. Buyer shall provide Seller with evidence of all such insurance coverage within five (5) business days of Seller's request and prior to any entry upon the Property. Buyer shall defend, indemnify and hold Seller harmless from and against any costs, damages, liabilities, losses, expenses, liens or claims (including, without limitation, reasonable attorney's fees) arising out of or relating to any entry on the Property by Buyer, its agents, employees or contractors in the course of performing the inspections, testing or inquiries provided for in this Agreement, but only in proportion to and to the extent that any such costs, damages, liabilities, losses, expenses, liens or claims (including, without limitation, attorney's fees) arise from the negligent or wrongful acts or omissions of Buyer, its officers, agents, or employees. The foregoing indemnity shall survive beyond the Closing, or if the sale is not consummated, beyond the termination of this Agreement. Section 3.3 Buyer's Acknowledgment. BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER IS SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN "AS IS," "WHERE IS" AND "WITH ALL FAULTS" BASIS AND THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ITS AGENTS, OR BROKERS AS TO ANY MATTERS CONCERNING THE PROPERTY, INCLUDING WITHOUT LIMITATION: (i) the quality, nature, adequacy and physical condition of the Property, (ii) the quality, nature, adequacy, and physical condition of soils, geology and any ground water, (iii) the existence, quality, nature, adequacy and physical condition of utilities serving the Property, (iv) the development potential of the Property, and the Property's use, habitability, merchantability, or fitness, suitability, value or adequacy of the Property for any particular purpose, (v) the zoning or other legal status of the Property or any other public or private restrictions on use of the Property, (vi) the compliance of the Property or its operation with any applicable codes, laws, regulations, statutes, ordinances, covenants, conditions and restrictions of any governmental or quasi- governmental entity or of any other person or entity, (vii) the presence of Hazardous Materials on, under or about the Property or the adjoining or neighboring property, (viii) the condition of title to the Property, (ix) any agreements affecting the Property and (x) the economics of the Property. Section 3.4 Release. Without limiting the above, Buyer on behalf of itself and its P6402\0001 \712328.4 E-4 successors and assigns waives its right to recover from, and forever releases and discharges, Seller, Seller's subsidiaries, parents and affiliates, the partners, trustees, shareholders, directors, officers, employees and agents of each of them, and their respective heirs, successors, personal representatives and assigns (collectively, the "Seller Related Parties"), from any and all demands, claims, legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens, judgments, costs or expenses whatsoever (including, without limitation, attorney's fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of or in any way be connected with the physical condition of the Property or any law or regulation applicable thereto, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.A. Sections 6901 et seg.), the Resources Conservation and Recovery Act of 1976 (42 U.S.A. Section 6901 et EN.), the Clean Water Act (33 U.S.A. Section 1251, et semc .), the Safe Drinking Water Act (14 U.S.A. Section 1401 et IN.), the Hazardous Materials Transportation Act (49 U.S.A. Section 1801, et seg.), the Toxic Substance Control Act (15 U.S.A. Section 2601, et seg.), the California Hazardous Waste Control Law (California Health and Safety Code Section 25100, et sec.), the Porter -Cologne Water Quality Control Act (California Water Code Section 13000 et semc .), and the Safe Drinking Water and Toxic Enforcement Act of 1986 (California Health and Safety Code Section 25249.5, et. semc .). However, in no event shall the foregoing be construed as a release of any third parties other than Seller and the Seller Related Parties, and the foregoing shall not release the Seller or the Seller Related Parties from any liability arising out of Seller's or the Seller Related Parties' willful misconduct or negligent actions occurring after Closing (as hereinafter defined). Buyer expressly waives the benefits of Section 1542 of the California Civil Code, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR." Initials of Buyer Seller Section 3.5 Representations and Warranties of Seller. Seller represents and warrants to Buyer that Seller is a public body, corporate and politic, duly organized, validly existing and in good standing under the laws and the Constitution of the State of California and that this Agreement and all documents executed by Seller which are to be delivered to Buyer (i) are or at the time of Closing will be duly authorized, executed and delivered by Seller and (ii) are or at the time of Closing will be legal, valid and binding obligations of Seller. Section 3.6 Representations and Warranties of Buyer. Buyer represents and warrants to Seller that Buyer is a constitutional corporation established by the Constitution of the State of California and that this Agreement, and all documents executed by Buyer which are to be delivered to Seller (i) are or at the time of Closing will be duly authorized, executed and delivered by Buyer, (ii) are or at the time of Closing will be legal, valid and binding obligations of Buyer, and (iii) do not and at the time of Closing will not violate any provision of any agreement or judicial order to which Buyer is a party or to which Buyer is subject. P6402\0001 \712328.4 E-5 Section 3.7 Survival of Representations and Warranties. All representations and warranties of Seller and Buyer contained in this Agreement shall survive the Closing, provided that in the case of breach of either the Buyer's or Seller's representations, each must give each other written notice of any claim it may have for a breach of any such representation or warranty within six (6) months of the Closing. Any claim which either party may have at any time, whether known or unknown, which is not asserted within such 6-month period shall not be valid or effective, and the respective party shall have no liability with respect thereto. ARTICLE IV CLOSING AND ESCROW Section 4.1 Conveyance. Conveyance shall be by the Grant Deed subject to all matters of record. Section 4.2 Evidence of Title. Prior to Closing, and as a condition of Closing for Buyer's benefit, Buyer shall obtain at Buyer's sole cost a California Land Title Association ("CLTA") or an American Land Title Association ("ALTA") Policy of Title Insurance in an amount reasonably determined by Buyer, committing to insure in Buyer good and merchantable title in fee simple, free and clear of all liens and encumbrances except those which are reasonably acceptable to Buyer. All title policies and endorsements of any kind shall be at Buyer's sole cost and expense. Section 4.3 Escrow Instructions. Upon execution of this Agreement, the parties hereto shall deposit an executed counterpart of this Agreement with a California licensed title company that is mutually selected by Buyer and Seller (the "Title Company"), and this instrument shall serve as the instructions to the Title Company as the escrow holder for consummation of the purchase and sale contemplated hereby. Seller and Buyer agree to execute such reasonable additional and supplementary escrow instructions as may be appropriate to enable the Title Company to comply with the terms of this Agreement; provided, however, that in the event of any conflict between the provisions of this Agreement and any supplementary escrow instructions, the terms of this Agreement shall control. Section 4.4 Closing. The closing of the sale hereunder (the "Closing") shall be held and delivery of all items to be made at Closing under the terms of this Agreement shall be made at the offices of the Title Company within sixty (60) days after Seller's receipt of the Option Notice before 1:00 p.m. local time, or such other later date and time as Buyer and Seller may mutually agree upon in writing (the "Closing Date"). Such date and time may not be extended without the prior written approval of both Seller and Buyer. Section 4.5 Deposit of Documents. (a) At or before the Closing, Seller shall deposit into escrow the following items: (1) the duly executed and acknowledged Grant Deed conveying the Property to Buyer; P640210001\712328.4 E-6 (2) an affidavit pursuant to Section 1445 (b) (2) of the Federal Code, that Seller is not a "foreign person" within the meaning of Section 1445 (f) (3) of the Federal Code; and properly executed California Form 590 certifying that Seller has a permanent place of business in California or is qualified to do business in California. (b) Buyer and Seller shall each deposit such other instruments as are reasonably required by the Title Company or otherwise required to close the escrow and consummate the purchase and sale of the Property in accordance with the terms hereof. Section 4.6 Prorations. (a) Real property taxes and assessments; water, sewer and utility charges; annual permits and/or inspection fees (calculated on the basis of the period covered); and any other expenses normal to the operation and maintenance of the Property shall be prorated as of 12:01 a.m. on the date the deed is recorded, on the basis of a 365-day year. Seller and Buyer hereby agree that if any of the aforesaid prorations cannot be calculated as soon as reasonably practicable after the Closing Date, then either party owing the other party a sum of money based on such subsequent proration(s) shall promptly pay said sum to the other party. (b) Any transfer taxes applicable to the sale, title premiums, and recording charges shall be paid by Buyer, as shall escrow fees as the parties intend that any and all expenses of the escrow and the sale and transfer of the Property shall be paid by Buyer. Section 4.7 Possession. Possession of the Property shall be given to Buyer on the Closing Date. ARTICLE V TERMINATION UPON DEFAULT Upon any default by Buyer in the payment of any amounts due hereunder or under the DDA, Seller may elect, by written notice to Buyer, to terminate this Agreement unless such monetary default is cured to Seller's satisfaction within fifteen (15) days of Buyer's receipt of Seller's notice. Upon any non -monetary default by Buyer pursuant to this Agreement or the DDA, Seller may elect, by written notice to Buyer, to terminate this Agreement unless such non - monetary default is cured to Seller's satisfaction within thirty (30) days of Buyer's receipt of Seller's notice, provided, however, that such 30-day period shall be extended to a maximum of sixty (60) days if Buyer has commenced such cure within the thirty (30) day period and is diligently prosecuting such cure to completion. Without limiting the foregoing, this Agreement may be terminated by Seller as provided in the DDA. Upon any such termination of this Agreement, neither party shall have any further rights, obligations, or liabilities hereunder except as expressly provided herein for matters surviving such termination. P6402\00011712328.4 E-7 ARTICLE VI NOTICES Section 6.1 Notices. When notices are provided for herein, the same shall be in writing and served upon the parties at the addresses listed in this Section. Any notice shall be either (i) sent by U.S. registered or certified mail, return receipt requested, in which case it shall be deemed delivered three (3) business days after being deposited in the U.S. mail; or (ii) sent by nationally recognized overnight courier, in which case it shall be deemed delivered one (1) business day after deposit with such courier; or (iii) sent by telecommunication ("Fax") during normal business hours in which case it shall be deemed delivered on the day sent, provided as to items (ii) and (iii) that a duplicate original is sent by registered or certified mail, return receipt requested on the same day the original notice was sent. The addresses and Fax numbers listed in this Section may be changed by written notice to the other parties, provided, however, that no notice of change of address or Fax number shall be effective until the date of delivery of such notice. Copies of notices are for informational purposes only and a failure to give or receive copies of any notice shall not be deemed a failure to give notice. SELLER: Mr. Carlos L. Ortega Executive Director Palm Desert Redevelopment Seller 73-510 Fred Waring Drive Palm Desert, California 92260 Telephone: (760) 346-0611 Facsimile: (760) 341-6372 With a Copy to: Richards, Watson & Gershon A Professional Corporation 355 South Grand Avenue, 40th Floor Los Angeles, California 90071 Attention: William L. Strausz, Esq. Telephone: (213) 626-8484 Facsimile: (213) 626-0078 BUYER: P6402\0001 \ 712328.4 University of California, Riverside Attn: C. Michael Webster Vice Chancellor Administration 4123 Hinderaker Hall Riverside, California 92521 Telephone: (909) 787-2680 Facsimile: (909) 787-2381 E-8 With a copy to: And to: University of California, Riverside Attn: Lisa Hjulberg, Real Estate Services Manager B-206 Highlander Hall Riverside, California 92512 Telephone: (909) 787-3388 Facsimile: (909) 787-3299 University of California Office of the President Attn: Real Estate Services Group 1111 Franklin Street, 6th Floor Oakland, California 94607-5200 Telephone: (510) 987-9033 Or to such other address as either party may from time to time specify in writing to the other party. Any notice shall be effective only upon delivery. ARTICLE VII MISCELLANEOUS Section 7.1 Applicable Law. This Agreement shall be controlled, construed, and enforced according to the laws of the state of California. Section 7.2 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and may not be modified except in writing by both parties hereto. Section 7.3 Buyer's Assignment. Buyer's rights and obligations hereunder shall not be assignable without the prior written consent of Seller (which consent may be given or withheld in the exercise of Seller's sole discretion), provided that Buyer shall in no event be released from any of its obligations or liabilities hereunder if Seller approves of any such assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. Section 7.4 Seller's Consent. Except as expressly set forth herein to the contrary, whenever any document or action contemplated herein requires the consent or approval of Seller, such consent or approval shall be given by Seller in its sole and absolute discretion. Section 7.5 Time. Time is of the essence in the performance of each party's respective obligations contained herein. Section 7.6 Attorney's Fees. If either party hereto fails to perform any of its obligations under this Agreement or if any dispute arises between the parties hereto concerning the meaning or interpretation of any provision of this Agreement, then the defaulting party or the party not prevailing in such dispute, as the case may be, shall pay any and all costs and expenses incurred P6402\0001 \712328.4 E-9 by the other party on account of such default and/or in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements. Any such attorney's fees and other expenses incurred by either party in enforcing a judgment in its favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorneys' fees obligation is intended to be severable from the other provisions of this Agreement and to survive and not be merged into any such judgment. Section 7.7 No Merger. The obligations contained hereunder shall not merge with the transfer of title to the Property but shall remain in effect until fulfilled. Section 7.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Section 7.9 Seller's Assignment. Seller may assign all of its obligations hereunder to an affiliated body or entity which shall assume the obligations of Seller hereunder which accrue from and after the date of such assignment. Section 7.10 Limited Liability. The obligations of Seller are intended to be binding only upon the Property of Seller and shall not be personally binding upon, nor shall any resort be had to, the private properties of any of its officers, directors or shareholders, or any employees or agents of Seller or of its affiliated entities. Section 7.11 Amendments. This Agreement may be amended or modified only by a written instrument signed by Buyer and Seller. Section 7.12 Confidentiality and Return of Documents. Buyer and Seller shall each maintain as confidential any and all information obtained about the other and shall not disclose such information to any third party, except pursuant to law. If this Agreement terminates, Buyer shall return to Seller all materials relating to the Property which Buyer received from Seller or any other party. This provision shall survive the Closing or any termination of this Agreement. Section 7.13 Interpretation of Agreement. The article, section and other headings of this Agreement are for convenience and reference only and shall not be construed to affect the meaning of any provision contained herein. Where the context so requires, the use of the singular shall include the plural and vice versa and the use of the masculine shall include the feminine and the neuter. The term "person" shall include any individual, partnership, joint venture, corporation, trust, unincorporated association, any other entity and any government or any department or Seller thereof, whether acting in an individual, fiduciary or other capacity. Section 7.14 Memorandum of Option. The parties shall execute and acknowledge a Memorandum of Option in the form attached hereto as Exhibit B. Buyer shall have the right to record the Memorandum in the Office of the Recorder of Riverside County, California. (signature page follows) P6402\0001 \712328.4 E-10 The parties hereto have executed this Agreement as of the respective dates written below. SELLER: BUYER: PALM DESERT REDEVELOPMENT REGENTS OF THE UNIVERSITY AGENCY, a public body, corporate and OF CALIFORNIA, a California corporation, politic on behalf of its Riverside campus By: Date: ATTEST: By: Secretary APPROVED AS TO FORM: Richards, Watson & Gershon, a professional corporation By: Agency Attorney P6402\0001\712328.4 By: Date: By: Date: E-11 EXHIBIT A TO OPTION AGREEMENT UCR — Parcel B Leal Description All that portion of Section 34, in Township 4 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, which bears S 89° 49' 59" W 783.33 feet from the Southeast corner of Section 33 in Township 4 South, Range 6 East; Thence N 89° 49' 59" E 92.52 feet along the South line of said Section 33; Thence N 0° 10' 01" W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N 89° 49' 59" E 82.84 feet along said parallel line and the Northerly right of way line of Frank Sinatra Drive; Thence N 42° 11' 33" E 998.61 feet to the beginning of a non -tangent curve, concave Northeasterly, and having a radius of 965.50 feet; a radial line of said curve through said point bears S 37° 44' 14" W; Thence Southeasterly along said curve 194.29 feet through an angle of 11 ° 31' 46" to the true point of beginning; Thence continuing Southeasterly along said curve 761.54 feet through an angle of 45° 11' 32" to the beginning of a compound curve, concave Southwesterly, and having a radius of 34.50 feet; a radial line of said curve through said point of compound curvature bears N 18° 59' 04" W; Thence Southeasterly along said curve 51.36 feet through an angle of 85° 17' 47"; Thence tangent to said curve S 23° 41' 17" E 127.01 feet to the beginning of a tangent curve concave Southwesterly and having a radius of 452.50 feet; Thence Southeasterly along said curve 185.83 feet through an angle of 23° 31' 49"; Thence S 0° 09' 28" E 194.00 feet; Thence S 89° 50' 32" W 11.50 feet; Thence S 44° 50' 32" W 124.45; Thence S 89° 50' 32" W 100.00 feet; Thence S 88° 30' 19" W 600.17 feet; Thence S 89° 50' 32" W 37.45 feet; Thence N 45° 09' 45" W 32.53 feet; Thence S 89° 50' 32" W 11.50 feet; P6402\0001\712328.4 E-12 Thence N 0° 09' 28" W 637.76 feet to the true point of beginning. The parcel described herein contains 490,668 square feet, more or less. P6402\0001 \712328.4 E-13 EXHIBIT B TO OPTION AGREEMENT FORM OF MEMORANDUM OF OPTION RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attn: Executive Director Exempt From Recording Fee Pursuant to Govemment Code Section 6103 MEMORANDUM OF OPTION THIS MEMORANDUM OF OPTION ("Memorandum") is hereby entered into as of December _, 2002, by and between PALM DESERT REDEVELOPMENT AGENCY, a public body corporate and politic ("Seller"), and THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus ("Buyer"). RECITALS A. Seller is the owner of that certain real property located at the northeast corner of Frank Sinatra Drive and Cook Street within the City of Palm Desert, California, within one mile of Interstate 10 and four miles from State Route 111, containing approximately eleven (11) acres, which is more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the "Property"). Buyer desires to have an option to purchase the Property if Buyer desires to expand the International Center for Entrepreneurial Management (the "ICEM") to be operated under the auspices of the A. Gary Anderson Graduate School of Management, University of California, Riverside, that will be located on approximately eight (8) acres of real property adjacent to the Property (the "Project"). B. In connection with the Project, Buyer, Seller and The Richard J. Heckmann Foundation, a California mutual benefit corporation ("Heckmann"), have entered into a Disposition and Development Agreement, dated as of March 22, 2001, that has been amended pursuant to the terms of a First Amendment of Disposition and Development Agreement, dated of even date herewith (the "DDA"). Also, pursuant to the DDA, Seller and Buyer entered into an Option Agreement, dated of even date herewith, regarding the potential sale of the Property (the "Option Agreement"). Pursuant to the DDA and the Option Agreement, the parties agreed, among other things, to execute this Memorandum for recording in the Office of the Recorder of Riverside County, California. P6402\0001\712328.4 E-14 C. Copies of the DDA and the Option Agreement are available for public inspection at Seller's office at 73-510 Fred Waring Drive, Palm Desert, California 92260. NOW, THEREFORE, the parties hereto certify as follows: 1. Seller, pursuant to the Option Agreement, has granted Buyer an option to purchase the Property upon the terms and conditions provided for therein, for the purposes of the development, operation and maintenance thereon of an educational facility for the benefit of the community of the City of Palm Desert. 2. Unless earlier terminated, the term of the Option Agreement shall expire as provided in Section 1.1 of the Option Agreement. 3. This Memorandum is not a complete summary of the DDA or the Option Agreement and shall not be used to interpret the provisions of any of the documents. Witness the signatures of the authorized representatives of the parties as of the date first set forth above but actually on the dates set forth in the acknowledgments below. SELLER: PALM DESERT REDEVELOPMENT AGENCY By: Executive Director BUYER: REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus By: Title: By: Title: P6402\0001 \712328.4 ATTEST: Secretary E-15 STATE OF CALIFORNIA ) COUNTY OF ) ss. On , 2002 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she./they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary public [SEAL] STATE OF CALIFORNIA ) ) ss. COUNTY OF ) On , 2002 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she./they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary public [SEAL] P6402\00011712328.4 E-16 STATE OF CALIFORNIA ) ) ss. COUNTY OF ) On , 2002 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary public [SEAL] STATE OF CALIFORNIA COUNTY OF On , 2002 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary public [SEAL] P6402\0001 \ 712328.4 E-17 EXHIBIT A TO MEMORANDUM OF OPTION UCR — Parcel B Legal Description All that portion of Section 34, in Township 4 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, which bears S 89° 49' 59" W 783.33 feet from the Southeast comer of Section 33 in Township 4 South, Range 6 East; Thence N 89° 49' 59" E 92.52 feet along the South line of said Section 33; Thence N 0° 10' 01" W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N 89° 49' 59" E 82.84 feet along said parallel line and the Northerly right of way line of Frank Sinatra Drive; Thence N 42° 11' 33" E 998.61 feet to the beginning of a non -tangent curve, concave Northeasterly, and having a radius of 965.50 feet; a radial line of said curve through said point bears S 37° 44' 14" W; Thence Southeasterly along said curve 194.29 feet through an angle of 11 ° 31' 46" to the true point of beginning; Thence continuing Southeasterly along said curve 761.54 feet through an angle of 45° 11' 32" to the beginning of a compound curve, concave Southwesterly, and having a radius of 34.50 feet; a radial line of said curve through said point of compound curvature bears N 18° 59' 04" W; Thence Southeasterly along said curve 51.36 feet through an angle of 85° 17' 47"; Thence tangent to said curve S 23° 41' 17" E 127.01 feet to the beginning of a tangent curve concave Southwesterly and having a radius of 452.50 feet; Thence Southeasterly along said curve 185.83 feet through an angle of 23° 31' 49"; Thence S 0° 09' 28" E 194.00 feet; Thence S 89° 50' 32" W 11.50 feet; Thence S 44° 50' 32" W 124.45; Thence S 89° 50' 32" W 100.00 feet; Thence S 88° 30' 19" W 600.17 feet; Thence S 89° 50' 32" W 37.45 feet; Thence N 45° 09' 45" W 32.53 feet; Thence S 89° 50' 32" W 11.50 feet; P6402\0001 \712328.4 E-18 Thence N 0° 09' 28" W 637.76 feet to the true point of beginning. The parcel described herein contains 490,668 square feet, more or less. P6402\0001 \712328.4 E-19 EXHIBIT F-1 Schedule of Performance Heckmann Center Milestone Dates (Revised 11/25/02) Activity University Project Approval Architect Appointment Schematic Design Campus Planning Advisory Committee Palm Desert City Council Approval DDA DDA/Land Transfer Regents Design Approval CEQA State Public Works Board Approval Design Documents Construction Documents State Department of Finance Approval Department of State Architect Approval Advertise/Bid Construction Start Construction Completion P6402\0001\712328.4 Phase I December-02 Nov. 2002 (estimated) Complete Complete December-02 January-03 March-03 March-03 N/A Complete December-02 N/A Complete March-03 April-03 August 31, 2005 Phase II Complete Complete Complete Complete December-02 January-03 March-03 March-03 April-03 Complete March -May 2003 July-03 June-03 August-03 September-03 February-06 F-1 EXHIBIT G-1 On- and Off -Site Imarovements SITE CLEARANCE AND EARTHWORK Due to the nature of the terrain on the Site, there will be a substantial amount of earth movement. Work will include clearing and grubbing of approximately 305,000 square feet of surface area, the excavation of approximately 13,000 cubic yards of material, and the creation of and improvement to embankments, both natural and created. The Phase I Parcel will also be graded to allow for ground water drainage to designated areas, and to allow for the installation of required utilities. SITE CONCRETE AND IMPROVEMENTS The work to be completed generally consists of the installation of 6" curb and gutter, concrete flatwork, concrete ramps, concrete steps, concrete walls, numerous retaining walls of varying heights, and the preparation of gravel areas on the Phase I Parcel. Included will be walkways, outdoor eating areas, outdoor assembly areas, "Intellectual Oasis" tiered seating areas, and the necessary ingress and egress ramps from the parking area and service delivery areas. The primary buildings are described in detail in the working drawings and specifications for the Phase I Center Improvements, entitled "The Richard J. Heckmann International Center for Entrepreneurial Management (Phase I)," dated May 6, 2002; Architram Design Group, Design Architect, and LHA, Executive Architect, a copy of which is on file in the office of the City Clerk. SITE UTILITIES The site utility work will be done for the benefit and use of both phases of construction of the ICEM. Included will be the installation of water lines, fire hydrant assemblies, and detector valves in concrete vaults to the specifications of the Coachella Valley Water District. Other utilities will include adequate supply capability for the provision of electrical power, natural gas, telephone communications, and data information requirements. Termination of these utility facilities will be made to points that can be easily connected to the Phase II building. Storm drains will also be installed, as will a 12" VCP sewer main. The general alignment follows the proposed path of Berger Circle Road, and terminates in an existing facility in Gerald Ford Drive. The system will be owned and maintained by Coachella Valley Water District. LANDSCAPE AND IRRIGATION Landscaping and irrigation will be installed on the Phase I Parcel using "Desert Sensitive" materials similar to those existing in the immediate vicinity. P6402\0001 \712328.4 G-1 Exhibit H-1 Agency Off -Site Improvements SCOPE OF WORK The Agency has completed the following work within Frank Sinatra Drive: a 43' road widening, traffic signal installation, signing and stripping, installation of 1800' of 18" storm drain pipe, construction of a 70' x 80' retention basin, installation of 3280 lineal feet of 18" ductile iron pipe, and installation of 1140 lineal feet of 12' ductile iron pipe. The general items of work that were done consisted of: mobilization, clearing and grubbing; grading for roadway widening; curb and gutter, median with cobble stone and sidewalks; crushed aggregate base; asphalt concrete pavement; removal of asphalt concrete pavement and aggregate base (unclassified excavation) and reconstruction; asphalt rubber hot mix (ARHM) overlay; HPDE pipe; catch basins; removal of existing median curb; adjustment of manhole frame and covers to grade; adjustment of water and gas valve covers to grade, Ductile Iron Pipe, fire hydrants and all fittings; installation of traffic signals, installation of striping, signs, pavement markings and pavement markers; and installation of traffic control devices required during construction of the improvements. P6402\0001 \712328.4 H-1 Exhibit 1-1 PROMISSORY NOTE $2,000,000.00 Palm Desert, California Dated: , 2003 FOR VALUE RECEIVED, the undersigned, THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus ("Maker"), hereby promises to pay to the order of the Palm Desert Redevelopment Agency, a public body, corporate and politic ("Holder"), at Palm Desert, California, without deduction or offset, the sum of Two Million Dollars ($2,000,000.00) or such lesser amount, as may actually be disbursed to Maker (the "Loan"). This "Promissory Note" (this "Note") is issued pursuant to and arises out of the terms and conditions of the Disposition and Development Agreement between Maker and Holder, dated as of March 22, 2001, as amended by First Amendment to Disposition and Development Agreement, dated as of December , 2002 (the "DDA") regarding the construction of certain improvements to be owned by Maker (the "Development). Capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the DDA. The outstanding principal balance of and interest on this Note shall be due and payable on the earlier of (a) the eighth anniversary of the Completion Date or (b) August 31, 2013 (the "Maturity Date"). No interest shall accrue nor interest or principal payments be due until the earlier of (a) the third anniversary of the Completion Date or (b) August 31, 2008 (the "Accrual Date"). Thereafter, interest shall accrue, and be paid annually in arrears, at the rate of 4% per annum simple interest on the declining balance of the Loan principal, if any. The Loan shall be repaid in five annual payments of equal principal amounts, and accrued interest thereon, beginning on the first anniversary of the Accrual Date. Provided, however, that upon any Event of Default by UCR, any unpaid principal and accrued interest shall bear interest until paid at an interest rate equivalent to the Local Agency Investment Fund ("LAIF") rate for the corresponding time period. If there is an Event of Default by UCR, then all sums outstanding on this Note shall become immediately due and payable at the option of Agency. Repayment of the Note shall be only from gift funds dedicated to the Richard J. Heckmann International Center for Entrepreneurial Management or, if such gift funds are insufficient, from the UCR allocation of University Opportunity Funds. Notwithstanding anything to the contrary contained herein, Maker shall not be required to make any payments hereunder to the extent that the outstanding principal balance of the Loan, and all accrued interest thereon, is paid in full. Any unpaid balance of interest and principal shall be due and payable on the Maturity Date. Maker may prepay, without penalty or premium, any amount of the interest on or principal of this Note prior to the Maturity Date. Prepayments shall be credited first against accrued interest, if any, and the balance shall be credited to principal. This Note shall be governed by and construed in accordance with the laws of the State of California. P6402\0001 \712328.4 All parties who are obligated to pay any portion of the indebtedness represented by this Note, whether as principal, surety, guarantor, or endorser, hereby waive presentment for payment, demand, protest, notice of protest and notice of dishonor, and all other notices to which they might otherwise be entitled, and further waive all defenses based on release of security, extension of time, or other indulgence given in respect to payment of this Note, to whomsoever given, and further waive all defenses, generally, except the defense of actual payment of this Note according to its tenor. Neither the failure of Holder to exercise its right to accelerate, nor reinstatement of this Note after such exercise, shall constitute a waiver of the right to exercise such rights at any other time. This Note is to be construed so as to give effect to the intent of the parties to conform strictly to the law, and all interest payable on account of this Note shall be reduced, if necessary, to the highest amount allowable under the usury laws or other laws governing this transaction, should this transaction not be exempt from the same. The undersigned hereby covenants and agrees to pay all costs and expenses of collection, whether by suit or otherwise, at any time or from time to time incurred, including without limitation attorney's fees and all costs and expenses actually incurred in connection with such collection efforts. Subject to the foregoing, the terms of this Note shall be binding upon and inure to the benefit, as the case or context may require, of the respective heirs, successors in interest and assigns of the undersigned and the Holder. Time is of the essence with respect to each and every provision hereof. If any provision hereof is found to be invalid or unenforceable by a court of competent jurisdiction, the invalidity thereof shall not affect the enforceability of the remaining provisions of this Note. "Maker" THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus By Title: and By Title: P6402\0001 \712328_4. DOC 1-2 Exhibit M-1 Loan Payment Reciuest TO: Palm Desert Redevelopment Agency ("Agency") FROM: The Regents of the University of California, on behalf of its Riverside Campus ("UCR") DATE: , 200_ Pursuant to Section 3.1.4 of that certain Disposition and Development Agreement dated March 22, 2001 by and among the Agency, Richard J. Heckmann Foundation ("Heckmann") and UCR, as amended by that certain First Amendment to Disposition and Development Agreement dated as of December , 2002 by and among the Agency, Heckmann and UCR (as so amended, the "DDA"), UCR hereby requests disbursement of $ of the Loan (as defined in the DDA) ("Draw Proceeds"). UCR hereby certifies to the Agency as of the date hereof that: (i) Draw Proceeds will be used by UCR to pay for (or reimburse UCR for the previous payment by UCR of) the work described in the attached contractor's certificate, (ii) to the best of UCR's knowledge, such work has been completed in accordance and in full compliance with the DDA and the University Construction Contracts (as defined in the DDA), and (iii) to the best of UCR's knowledge, the attached contractor's certificate is true and correct in all material respects. P6402\0001 \712328_4. DOC THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus By: Title: M-1 NOV-26-2002 16:21 FROM RICH RDS WATSON g GERSFCN TO 17603416372 P.02/08 VOLUME 4 PART II: CONSTRUCTION DOCUMENTS —MODELS AND INSTRUCTIONS Exhibit 4 Application for Payment Cover Sheet and Instructions APPROVED DOCUMENT —This document Is approved by the Oboe d ile President and Once of the Densest Caissl for use by the Facility and is available an computer *We (see -.1 ._ on is r» Facets, MrwatZ111gwed Ooolanmp si:..._. PURPOSE OP DOCUMENT: Provides a st ndani form for contactor pr nrsM soplicegons. CROSS-REFERENCES TO FACILITIES MANUAL (FM): fll:4.11.$ CONTENTS: AAoicaOon for throned d form wah Schedules 1 through 4 FOR USE WITH: / Lag Fate Short Fann Nei Form (Not Anolleable to Some Documents) (LF) (SP) (8F) COMPLETED elf: / Fling In Addthp No Oda Tad Required rrs USE IS: / Raaarsd °prom Compl,don Instructions: 1. The contractor completes the form, indua1ng Schedules 1 through 4 (as applicable). Modifications and Additions: (None) Comments: (None) J University of California' Facilities Manual Volume 4 Office of the President ll: LF-EX4-1 Revision (0) 01/01/96 NOU-26-2002 16: 21 FROM R I CHARDS WATSON % GERS ON TO 17603416372 VOLUME 4 PART Ui CONSTRUCTION DOCUMENTS —MODELS AND INSTRUCTIONS Exhibit 4 Application for Payment APPLICATION FOR PAYMENT Number. Pesiod to: TO UNNERSITY: THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, (Facility Name) AND UNIVERSITY'S REPRESENTATIVE: FROM CONTRACTOR: ADDRESS: PROJECT NAME: PROJECT NUMBER FACILITY: CONTRACT DATE APPLICATION DATE: CHANGE ORDER SUMMARY: Additindt EWmgisma Change Orders approved in previous month`: r Total: Change Orders approved this month: Number. Date Approved: Total: NET CHANGE BY CHANGE ORDERS: Application is made for payment under the Ccrnttact as shown below and in Schedule 1 attached hereto: 1. ORIGINAL CONTRACT SUM S 2. NET CHANGE BY CHANGE ORDERS S 3. CONTRACT SUM TO DATE (Line 1 t Line 2) 4. TOTAL AMOUNT COMPLETED ( DATE (Column E on Schedule 1) S 5. RETENTION: 10% of Compl Wait (Column H on Schedule I) S a. Current Value of Securities sited in Escrow S b. Current Value of Retention tkposited in Escrow $ c. Retention Held by Universit$ S Current Retention Value (a +t b + c) S 6. TOTAL EARNED LESS RETENTION (Line 4 less Line 5) S 7. TOTAL AMOUNT PREVIOUSLY!PAID S January 2, 1996 Revision: 3.1 LF:EX4 1 Exhibit 4 f UV--b—ak'>i1U 1 b; GG r x ri K i U-1<1)5 wi 1 UN b U k`,H[N I U L bli,;41 b.372 P . 04, ee VOLUME 4 PART II: CO TRUCTION DOCUMENTS —MODELS AND INSTRUCTIONS Exhibit 4 Appiic Lion for Payment 8. CURRENT PA'IMENT DUE (Line bless Line 7) $ 9. BALANCE TO FINISH, PLUS RETENTION (Line 3 Ia s Line 6) S The undersigned Coolzactor hereby represents and warrants to University that all Work, for which Certificates For Payment have previously belan issued and payment received from University, is free and clear of all clause, stop notices, security interests, and . , r . , w ces in favor of Contractor, any Subcontractor, and any other persons or firm entitled to make claims by reason of having provided Iab4r, materials, or equipment related to the Work. The following es are attached and incorporated herein, and made a part of this Application For Payment•. Schedule 1 C • Breakdown Schedule Schedule 2 - - of Curran Market Value of Securities in Escrow in Lieu of Retention Schedule 3 of Subcontractors Schedule 4 • laration of Releases of Ctaima By: DECLARATION 1, (Contractor) (Name) (Title) , hereby declare that I am the of Contractor submitting this Application For Payment that I am duly authorized to execute and de iver this Application For Payment on behalf of Contractor: and that all information set forth in this Application For Payment and all Schedules attached hereto are true, accurate, and complete as of its date. 1 declare, under penalty of perjury, that lie foregoing is true and correct and that this declaration was subscribed at on January 2. 1996 Revision: 3.1 LF:EX4 r 19; , State of 2 (Signature) (Print Name) Exhibit 4 NOU-26-2002 16:22 FROM RICHARDS WATSON & GERSHON TO 17603416372 P.a5'08 PROJEC PROJE( a O W z gigIA° iti1 z ge w igg?.l < %a O8Or4 1 :°g 151°4 t) w 00 Ot-26-2002 16:23 FROM RICHARDS WATSON 8 GERSHON TO 17603416372 VOLUME 4 PART I1: CONSTRUCTION DOCUMENTS —MODELS AND INSTRUCTIONS Exhibit 4 Application for Payment PROJECT NAME: 1 CONTRACTOR PROJECT NUMBER APPLICATION NUMBER SCHEDULE 2 TO AP CATION FOR PAYMENT EcuRnCER7TFICA N IICRO OF CURRENT MARKET VALUE OF S W IN LIEU OF RETENTION As of , 19(not earder than 5 days prior to the date of the Application For Payment of which this certification is a part). the aggregate maritm value of securities on deposit in Escrow Account No. with is By: (Escrow Agent) (Name) (Title) (Escrow Agent) Dollars (S By: Date: Date: (Contractor) (Name) (Title) NOTE: Notary acknowledgment for Contractor and Escrow Agent must be attached. January 2, 1996 Revision: 3.1 LF:EX4 Exhibit 4 NOV-26 2002 16:23 FROM R I CHARDS WATSON 8 GERSHON TO 176034163?2 P.07/0B VOLUME 4 PART II: CONSTRUCTION DOCUMENTS —MODELS AND INSTRUCTIONS Exhibit 4 Application for Payment PROJECT NAME: CONTRACTOR PROJECT NUMBER APPLICATION NUMBER SCHEDULE 3 TO APPLICATION FOR PAYMENT LIST OF SUBCONTRACTORS Su_ . haz listed below are all Subcontractors furnishing labor, services, or materials for the period referred to in the Application For Payment referenced above, of which this Schedule 3 is a part; Name of Subcontractor January 2, 1996 Revision: 3.1 LF:EX4 5 Subcontracted Date Work Work Activity Activity Comnleted By: Date: (Contractor) (Name) (Title) Exhibit 4 43U —26-2002 16: 23 FROM R I 4-IARDS L TON & GERSHON TO 17 416372 P.ee,aa VOLUME 4 PART II: CONSTRUCTION DOCU11 ENTS--MODELS AND INSTRUCTIONS Exhibit 4 Application for Payment PROJECT NAME: CONTRACTOR PROJECT NUMBER: APPLICATION NUMBER SCHEDULE 4 TO Contractor hereby certifies that - her4s are releases and waivers of claims and stop notices from all Subcontractors fLrniahing labor, services, or , - covered by the Certificate For Payment dated ,19 . except , . listed below: January 2, 1996 Revision: 3.1 LF:EX4 6 By: Date: (Contractor) (Name) (Title) Exhibit 4 TOTAL P.08 OPTION AGREEMENT THIS OPTION AGREEMENT (this "Agreement"), dated as of January 31, 2003 (the "Effective Date"), by and between the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic ("Seller"), and THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus ("Buyer"). RECITALS A. Seller is the owner of that certain real property located at the northeast corner of Frank Sinatra Drive and Cook Street within the City of Palm Desert, California, within one mile of Interstate 10 and four miles from State Route 111, containing approximately eleven (11) acres, which is more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the "Property"). Buyer desires to have an option to purchase the Property if Buyer desires to expand the International Center for Entrepreneurial Management (the "ICEM") to be operated under the auspices of the A. Gary Anderson Graduate School of Management, University of California, Riverside, that will be located on approximately eight (8) acres of real property adjacent to the Property (the "Project"). B. In connection with the Project and this Agreement, Buyer, Seller and The Richard J. Heckmann Foundation, a California mutual benefit corporation ("Heckmann"), have entered into a Disposition and Development Agreement dated as of March 22, 2001, that has been amended pursuant to the terms of a First Amendment of Disposition and Development Agreement, dated of even date herewith (the "DDA"). Capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the DDA. C. Buyer desires to obtain an option to purchase the Property from Seller in order to facilitate the expansion of the Project and Seller is willing to grant such an option to Buyer on the terms and conditions hereinafter set forth. AGREEMENT IN CONSIDERATION of the above recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows: ARTICLE I GRANT OF OPTION Section 1.1 Option and Term. As of the date hereof, Seller grants to Buyer an option (the "Option") during the Term (as hereinafter defined) hereof to purchase from Seller, subject to the terms, covenants and conditions set forth herein, the Property P6402\0001 \721061.1 together with any and all rights, privileges and easements appurtenant thereto owned by Seller. The term of the Option (the "Term") shall commence upon the date when construction of the Phase 1 Center Improvements or Phase II Center Improvements by Buyer is complete as provided in the DDA and shall expire at midnight upon the earlier of (a) the date which is twenty-five (25) years thereafter, unless terminated as provided herein, or (b) the date of termination of, or Event of Default by Buyer under, the DDA. Notwithstanding anything to the contrary contained in this Agreement, this Agreement shall terminate on February 28, 2006 if prior to such date (which date of February 28, 2006 is the contemplated completion date for the construction of the Phase II Center Improvements and which date shall be extended by the same number of days as the completion date for the construction of the Phase II Center Improvements may be extended under the DDA) construction of the Phase I Center Improvements or Phase II Center Improvements has not been completed as provided in the DDA. Section 1.2 Exercise. If the following conditions precedent are met: (a) Buyer is not in default hereunder or an Event of Default by Buyer has not occurred under the DDA, (b) Buyer owns fee simple title to Parcel A and has completed construction of either the Phase I Center Improvements or the Phase II Center Improvements as provided in the DDA, (c) Buyer certifies or provides proof satisfactory to Seller that Buyer has the necessary funding sufficient to construct and maintain improvements for the expansion of ICEM's educational facilities (which expansion facilities shall be subject to review pursuant to Section 4.2 of the DDA) (the "Expansion Facilities"), and (d) Buyer agrees in writing that the Expansion Facilities shall be constructed upon all or a substantial portion of the Property and be used and maintained as required by the DDA, then Buyer, during the Term, may exercise the Option to purchase the Property by giving Seller written notice (the "Option Notice"), in the manner specified by Article VI hereunder, of its intent to exercise the Option prior to the expiration of the Term. Section 1.3 Purchase Price for the Pronertv. The Purchase Price for the Property shall be the sum of $1.00, based upon the fair reuse value of the Property subject to the terms, conditions, and covenants of the DDA. Section 1.4 Maintenance of Property During Option Period. During the Term, but only prior to the Buyer's exercise of the Option, Seller shall maintain the Property in a manner consistent with Seller's practices used with respect to other vacant property owned by Seller and shall not voluntarily encumber the Property without the prior written consent of Buyer which shall not be unreasonably withheld or delayed. P6402\0001 \721061.1 ARTICLE II [INTENTIONALLY RESERVED] 2 ARTICLE III BUYER'S EXAMINATION Section 3.1 Buyer's Independent Investigation Period. Seller grants to Buyer a ONE HUNDRED TWENTY (120) day review period, the start of which shall be established by Buyer providing a written notice to Seller, during which time Buyer is permitted to enter upon the Property as provided in Section 3.2 herein, investigate all matters surrounding Buyer's intended use of the Property and other relevant investigations concerning the Property ("Buyer's Independent Investigation Period"). Buyer acknowledges and agrees that prior to the delivery of the Option Notice it will have been given a full opportunity to inspect and investigate each and every aspect of the Property, either independently or through agents of Buyer's choosing, including, without limitation: (a) All matters relating to title, together with all governmental and other legal requirements such as taxes, assessments, zoning, use permit requirements and building codes. (b) The physical condition of the Property. Such examination of the physical condition of the Property may include an examination for the presence or absence of hazardous or toxic materials, substances or wastes, or petroleum products or by-products (collectively, "Hazardous Materials"), which shall be performed or arranged by Buyer at Buyer's sole expense. (c) Any recorded easements and/or visible access rights affecting the Property. (d) Any other documents or agreements of significance affecting the Property, provided such documents or agreements have been recorded, are part of the public records or are otherwise disclosed by Seller. (e) All other matters affecting the Property. Section 3.2 Entry onto the Property by Buyer. Seller agrees to permit Buyer or its representatives to enter onto the Property at any time during Buyer's Independent Investigation Period for the purpose of making reasonable studies, investigations, engineering tests or surveys. All such studies, investigations, tests or surveys are to be made at Buyer's expense. Prior to any entry to perform any invasive testing Buyer shall give Seller seventy-two (72) hours' advance written notice thereof directed to Mr. Carlos Ortega, telephone: (760) 346-0611, facsimile (760) 341-6372, including with such notice the identity of the company or persons who will perform such testing and the proposed scope of the testing. If Buyer or its agents, employees or contractors take any sample from the Property in connection with any such testing, Buyer shall provide to Seller a portion of such sample being tested to allow Seller, if it so chooses, to perform its own testing. Seller, or its representative(s), may be present to observe any testing or other inspection performed on the Property. Buyer shall promptly deliver to Seller copies of P6402\0001 \721061.1 3 any reports relating to any studies, investigations, testing or other inspection of the Property performed by Buyer or its agents, employees or contractors. In the event Buyer does not exercise the Option, any damage to the Property caused by Buyer's investigations shall be restored to as good a condition as previously existed, including without limitation the appropriate closure of any test wells which may be drilled on the Property. Buyer shall maintain, and shall assure that its contractors maintain, public liability and property damage insurance in the amount of at least Two Million Dollars ($2,000,000) and in form and substance adequate to insure against all liability of Buyer and its agents, employees or contractors arising out of any entry or inspections of the Property pursuant to the provisions hereof, provided that in Buyer's case, Buyer shall be entitled to maintain an equivalent program of self-insurance. Buyer shall provide Seller with evidence of all such insurance coverage within five (5) business days of Seller's request and prior to any entry upon the Property. Buyer shall defend, indemnify and hold Seller harmless from and against any costs, damages, liabilities, losses, expenses, liens or claims (including, without limitation, reasonable attorney's fees) arising out of or relating to any entry on the Property by Buyer, its agents, employees or contractors in the course of performing the inspections, testing or inquiries provided for in this Agreement, but only in proportion to and to the extent that any such costs, damages, liabilities, losses, expenses, liens or claims (including, without limitation, attorney's fees) arise from the negligent or wrongful acts or omissions of Buyer, its officers, agents, or employees. The foregoing indemnity shall survive beyond the Closing, or if the sale is not consummated, beyond the termination of this Agreement. Section 3.3 Buyer's Acknowledgment. BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER IS SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN "AS IS," "WHERE IS" AND "WITH ALL FAULTS" BASIS AND THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ITS AGENTS, OR BROKERS AS TO ANY MATTERS CONCERNING THE PROPERTY, INCLUDING WITHOUT LIMITATION: (i) the quality, nature, adequacy and physical condition of the Property, (ii) the quality, nature, adequacy, and physical condition of soils, geology and any ground water, (iii) the existence, quality, nature, adequacy and physical condition of utilities serving the Property, (iv) the development potential of the Property, and the Property's use, habitability, merchantability, or fitness, suitability, value or adequacy of the Property for any particular purpose, (v) the zoning or other legal status of the Property or any other public or private restrictions on use of the Property, (vi) the compliance of the Property or its operation with any applicable codes, laws, regulations, statutes, ordinances, covenants, conditions and restrictions of any governmental or quasi- governmental entity or of any other person or entity, (vii) the presence of Hazardous Materials on, under or about the Property or the adjoining or neighboring property, (viii) the condition of title to the Property, (ix) any agreements affecting the Property and (x) the economics of the Property. P6402\0001 \721061.1 4 Section 3.4 Release. Without limiting the above, Buyer on behalf of itself and its successors and assigns waives its right to recover from, and forever releases and discharges, Seller, Seller's subsidiaries, parents and affiliates, the partners, trustees, shareholders, directors, officers, employees and agents of each of them, and their respective heirs, successors, personal representatives and assigns (collectively, the "Seller Related Parties"), from any and all demands, claims, legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens, judgments, costs or expenses whatsoever (including, without limitation, attorney's fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of or in any way be connected with the physical condition of the Property or any law or regulation applicable thereto, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.A. Sections 6901 et semc .), the Resources Conservation and Recovery Act of 1976 (42 U.S.A. Section 6901 et se_c .), the Clean Water Act (33 U.S.A. Section 1251, et seq.), the Safe Drinking Water Act (14 U.S.A. Section 1401 et seg.), the Hazardous Materials Transportation Act (49 U.S.A. Section 1801, et sq.), the Toxic Substance Control Act (15 U.S.A. Section 2601, et sec.), the California Hazardous Waste Control Law (California Health and Safety Code Section 25100, et seg.), the Porter -Cologne Water Quality Control Act (California Water Code Section 13000 et semc .), and the Safe Drinking Water and Toxic Enforcement Act of 1986 (California Health and Safety Code Section 25249.5, et. seg.). However, in no event shall the foregoing be construed as a release of any third parties other than Seller and the Seller Related Parties, and the foregoing shall not release the Seller or the Seller Related Parties from any liability arising out of Seller's or the Seller Related Parties' willful misconduct or negligent actions occurring after Closing (as hereinafter defined). Buyer expressly waives the benefits of Section 1542 of the California Civil Code, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR." Initials of Buyer Seller Section 3.5 Representations and Warranties of Seller. Seller represents and warrants to Buyer that Seller is a public body, corporate and politic, duly organized, validly existing and in good standing under the laws and the Constitution of the State of California and that this Agreement and all documents executed by Seller which are to be delivered to Buyer (i) are or at the time of Closing will be duly authorized, executed and delivered by Seller and (ii) are or at the time of Closing will be legal, valid and binding obligations of Seller. Section 3.6 Representations and Warranties of Buyer. Buyer represents and warrants to Seller that Buyer is a constitutional corporation established by the Constitution of the State of California and that this Agreement, and all documents P6402\0001\721061.1 5 executed by Buyer which are to be delivered to Seller (i) are or at the time of Closing will be duly authorized, executed and delivered by Buyer, (ii) are or at the time of Closing will be legal, valid and binding obligations of Buyer, and (iii) do not and at the time of Closing will not violate any provision of any agreement or judicial order to which Buyer is a party or to which Buyer is subject. Section 3.7 Survival of Representations and Warranties. All representations and warranties of Seller and Buyer contained in this Agreement shall survive the Closing, provided that in the case of breach of either the Buyer's or Seller's representations, each must give each other written notice of any claim it may have for a breach of any such representation or warranty within six (6) months of the Closing. Any claim which either party may have at any time, whether known or unknown, which is not asserted within such 6-month period shall not be valid or effective, and the respective party shall have no liability with respect thereto. ARTICLE IV CLOSING AND ESCROW Section 4.1 Conveyance. Conveyance shall be by the Grant Deed subject to all matters of record. Section 4.2 Evidence of Title. Prior to Closing, and as a condition of Closing for Buyer's benefit, Buyer shall obtain at Buyer's sole cost a California Land Title Association ("CLTA") or an American Land Title Association ("ALTA") Policy of Title Insurance in an amount reasonably determined by Buyer, committing to insure in Buyer good and merchantable title in fee simple, free and clear of all liens and encumbrances except those which are reasonably acceptable to Buyer. All title policies and endorsements of any kind shall be at Buyer's sole cost and expense. Section 4.3 Escrow Instructions. Upon execution of this Agreement, the parties hereto shall deposit an executed counterpart of this Agreement with a California licensed title company that is mutually selected by Buyer and Seller (the "Title Company"), and this instrument shall serve as the instructions to the Title Company as the escrow holder for consummation of the purchase and sale contemplated hereby. Seller and Buyer agree to execute such reasonable additional and supplementary escrow instructions as may be appropriate to enable the Title Company to comply with the terms of this Agreement; provided, however, that in the event of any conflict between the provisions of this Agreement and any supplementary escrow instructions, the terms of this Agreement shall control. Section 4.4 Closing. The closing of the sale hereunder (the "Closing") shall be held and delivery of all items to be made at Closing under the terms of this Agreement shall be made at the offices of the Title Company within sixty (60) days after Seller's receipt of the Option Notice before 1:00 p.m. local time, or such other later date and time as Buyer and Seller may mutually agree upon in writing (the "Closing Date"). Such date P6402\0001\721061.1 6 and time may not be extended without the prior written approval of both Seller and Buyer. Section 4.5 Deposit of Documents. (a) At or before the Closing, Seller shall deposit into escrow the following items: (1) the duly executed and acknowledged Grant Deed conveying the Property to Buyer; (2) an affidavit pursuant to Section 1445 (b) (2) of the Federal Code, that Seller is not a "foreign person" within the meaning of Section 1445 (f) (3) of the Federal Code; and properly executed California Form 590 certifying that Seller has a permanent place of business in California or is qualified to do business in California. (b) Buyer and Seller shall each deposit such other instruments as are reasonably required by the Title Company or otherwise required to close the escrow and consummate the purchase and sale of the Property in accordance with the terms hereof. Section 4.6 Prorations. (a) Real property taxes and assessments; water, sewer and utility charges; annual permits and/or inspection fees (calculated on the basis of the period covered); and any other expenses normal to the operation and maintenance of the Property shall be prorated as of 12:01 a.m. on the date the deed is recorded, on the basis of a 365-day year. Seller and Buyer hereby agree that if any of the aforesaid proration cannot be calculated as soon as reasonably practicable after the Closing Date, then either party owing the other party a sum of money based on such subsequent proration(s) shall promptly pay said sum to the other party. (b) Any transfer taxes applicable to the sale, title premiums, and recording charges shall be paid by Buyer, as shall escrow fees as the parties intend that any and all expenses of the escrow and the sale and transfer of the Property shall be paid by Buyer. Section 4.7 Possession. Possession of the Property shall be given to Buyer on the Closing Date. ARTICLE V TERMINATION UPON DEFAULT Upon any default by Buyer in the payment of any amounts due hereunder or under the DDA, Seller may elect, by written notice to Buyer, to terminate this Agreement P6402\0001 \721061.1 7 unless such monetary default is cured to Seller's satisfaction within fifteen (15) days of Buyer's receipt of Seller's notice. Upon any non -monetary default by Buyer pursuant to this Agreement or the DDA, Seller may elect, by written notice to Buyer, to terminate this Agreement unless such non -monetary default is cured to Seller's satisfaction within thirty (30) days of Buyer's receipt of Seller's notice, provided, however, that such 30-day period shall be extended to a maximum of sixty (60) days if Buyer has commenced such cure within the thirty (30) day period and is diligently prosecuting such cure to completion. Without limiting the foregoing, this Agreement may be terminated by Seller as provided in the DDA. Upon any such termination of this Agreement, neither party shall have any further rights, obligations, or liabilities hereunder except as expressly provided herein for matters surviving such termination. ARTICLE VI NOTICES Section 6.1 Notices. When notices are provided for herein, the same shall be in writing and served upon the parties at the addresses listed in this Section. Any notice shall be either (i) sent by U.S. registered or certified mail, return receipt requested, in which case it shall be deemed delivered three (3) business days after being deposited in the U.S. mail; or (ii) sent by nationally recognized overnight courier, in which case it shall be deemed delivered one (1) business day after deposit with such courier; or (iii) sent by telecommunication ("Fax") during normal business hours in which case it shall be deemed delivered on the day sent, provided as to items (ii) and (iii) that a duplicate original is sent by registered or certified mail, return receipt requested on the same day the original notice was sent. The addresses and Fax numbers listed in this Section may be changed by written notice to the other parties, provided, however, that no notice of change of address or Fax number shall be effective until the date of delivery of such notice. Copies of notices are for informational purposes only and a failure to give or receive copies of any notice shall not be deemed a failure to give notice. SELLER: Mr. Carlos L. Ortega Executive Director Palm Desert Redevelopment Seller 73-510 Fred Waring Drive Palm Desert, California 92260 Telephone: (760) 346-0611 Facsimile: (760) 341-6372 With a Copy to: P6402\0001 \721061.1 Richards, Watson & Gershon A Professional Corporation 355 South Grand Avenue, 40th Floor Los Angeles, California 90071 Attention: William L. Strausz, Esq. Telephone: (213) 626-8484 Facsimile: (213) 626-0078 8 BUYER: With a copy to: And to: University of California, Riverside Attn: C. Michael Webster Vice Chancellor Administration 4123 Hinderaker Hall Riverside, California 92521 Telephone: (909) 787-2680 Facsimile: (909) 787-2381 University of California, Riverside Attn: Lisa Hjulberg, Real Estate Services Manager B-206 Highlander Hall Riverside, California 92512 Telephone: (909) 787-3388 Facsimile: (909) 787-3299 University of California Office of the President Attn: Real Estate Services Group 1111 Franklin Street, 6th Floor Oakland, California 94607-5200 Telephone: (510) 987-9033 Or to such other address as either party may from time to time specify in writing to the other party. Any notice shall be effective only upon delivery. ARTICLE VII MISCELLANEOUS Section 7.1 Aonlicable Law. This Agreement shall be controlled, construed, and enforced according to the laws of the state of California. Section 7.2 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and may not be modified except in writing by both parties hereto. Section 7.3 Buyer's Assignment. Buyer's rights and obligations hereunder shall not be assignable without the prior written consent of Seller (which consent may be given or withheld in the exercise of Seller's sole discretion), provided that Buyer shall in no event be released from any of its obligations or liabilities hereunder if Seller approves of any such assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. Section 7.4 Seller's Consent. Except as expressly set forth herein to the contrary, whenever any document or action contemplated herein requires the consent or approval of Seller, such consent or approval shall be given by Seller in its sole and absolute discretion. P6402\0001 \721061.1 9 Section 7.5 Time. Time is of the essence in the performance of each party's respective obligations contained herein. Section 7.6 Attornev's Fees. If either party hereto fails to perform any of its obligations under this Agreement or if any dispute arises between the parties hereto concerning the meaning or interpretation of any provision of this Agreement, then the defaulting party or the party not prevailing in such dispute, as the case may be, shall pay any and all costs and expenses incurred by the other party on account of such default and/or in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements. Any such attorney's fees and other expenses incurred by either party in enforcing a judgment in its favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorneys' fees obligation is intended to be severable from the other provisions of this Agreement and to survive and not be merged into any such judgment. Section 7.7 No Merger. The obligations contained hereunder shall not merge with the transfer of title to the Property but shall remain in effect until fulfilled. Section 7.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Section 7.9 Seller's Assignment. Seller may assign all of its obligations hereunder to an affiliated body or entity which shall assume the obligations of Seller hereunder which accrue from and after the date of such assignment. Section 7.10 Limited Liability. The obligations of Seller are intended to be binding only upon the Property of Seller and shall not be personally binding upon, nor shall any resort be had to, the private properties of any of its officers, directors or shareholders, or any employees or agents of Seller or of its affiliated entities. Section 7.11 Amendments. This Agreement may be amended or modified only by a written instrument signed by Buyer and Seller. Section 7.12 Confidentiality and Return of Documents. Buyer and Seller shall each maintain as confidential any and all information obtained about the other and shall not disclose such information to any third party, except pursuant to law. If this Agreement terminates, Buyer shall return to Seller all materials relating to the Property which Buyer received from Seller or any other party. This provision shall survive the Closing or any termination of this Agreement. Section 7.13 Interpretation of Agreement. The article, section and other headings of this Agreement are for convenience and reference only and shall not be construed to affect the meaning of any provision contained herein. Where the context so requires, the use of the singular shall include the plural and vice versa and the use of the masculine shall include the feminine and the neuter. The term "person" shall include any P6402\0001 \721061.1 10 individual, partnership, joint venture, corporation, trust, unincorporated association, any other entity and any government or any department or Seller thereof, whether acting in an individual, fiduciary or other capacity. Section 7.14 Memorandum of Ontion. The parties shall execute and acknowledge a Memorandum of Option in the form attached hereto as Exhibit B. Buyer shall have the right to record the Memorandum in the Office of the Recorder of Riverside County, Califomia. (signature page follows) P6402\0001 \721061.1 11 The parties hereto have executed this Agreement as of the respective dates written below. SELLER: PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and corporation, politic By: Date: ATTEST: By: Secretary APPROVED AS TO FORM: Richards, Watson & Gershon, a professional corporation Agency Attorney P6402\0001 \72 1061.1 12 BUYER: REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California on behalf of its Riverside campus 0.By. � SE'PH MULLINIY /N10R VICE PRESIDENT BUSINESS AND FINANCE Date: Pe-b . EXHIBIT A UCR -- Parcel B Legal Descrintion All that portion of Section 34, in Township 4 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, which bears S 89° 49' 59" W 783.33 feet from the Southeast corner of Section 33 in Township 4 South, Range 6 East; Thence N 89° 49' 59" E 92.52 feet along the South line of said Section 33; Thence N 0° 10' 01" W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N 89° 49' 59" E 82.84 feet along said parallel line and the Northerly right of way line of Frank Sinatra Drive; Thence N 42° 11' 33" E 998.61 feet to the beginning of a non -tangent curve, concave Northeasterly, and having a radius of 965.50 feet; a radial line of said curve through said point bears S 37° 44' 14" W; Thence Southeasterly along said curve 194.29 feet through an angle of 11 ° 31' 46" to the true point of beginning; Thence continuing Southeasterly along said curve 761.54 feet through an angle of 45° 11' 32" to the beginning of a compound curve, concave Southwesterly, and having a radius of 34.50 feet; a radial line of said curve through said point of compound curvature bears N 18° 59' 04" W; Thence Southeasterly along said curve 51.36 feet through an angle of 85° 17' 47"; Thence tangent to said curve S 23° 41' 17" E 127.01 feet to the beginning of a tangent curve concave Southwesterly and having a radius of 452.50 feet; Thence Southeasterly along said curve 185.83 feet through an angle of 23° 31' 49"; Thence S 0° 09' 28" E 194.00 feet; Thence S 89° 50' 32" W 11.50 feet; Thence S 44° 50' 32" W 124.45; Thence S 89° 50' 32" W 100.00 feet; Thence S 88° 30' 19" W 600.17 feet; Thence S 89° 50' 32" W 37.45 feet; Thence N 45° 09' 45" W 32.53 feet; Thence S 89° 50' 32" W 11.50 feet; P6402\0001 \721061.1 A-1 Thence N 0° 09' 28" W 637.76 feet to the true point of beginning. The parcel described herein contains 490,668 square feet, more or less. P6402\0001 \721061.1 A-2 EXHIBIT B FORM OF MEMORANDUM OF OPTION RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attn: Executive Director Exempt From Recording Fee Pursuant to Government Code Section 6103 MEMORANDUM OF OPTION THIS MEMORANDUM OF OPTION ("Memorandum") is hereby entered into as of January 31, 2003, by and between PALM DESERT REDEVELOPMENT AGENCY, a public body corporate and politic ("Seller"), and THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus ("Buyer"). RECITALS A. Seller is the owner of that certain real property located at the northeast comer of Frank Sinatra Drive and Cook Street within the City of Palm Desert, California, within one mile of Interstate 10 and four miles from State Route 111, containing approximately eleven (11) acres, which is more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the "Property"). Buyer desires to have an option to purchase the Property if Buyer desires to expand the International Center for Entrepreneurial Management (the "ICEM") to be operated under the auspices of the A. Gary Anderson Graduate School of Management, University of California, Riverside, that will be located on approximately eight (8) acres of real property adjacent to the Property (the "Project"). B. In connection with the Project, Buyer, Seller and The Richard J. Heckmann Foundation, a California mutual benefit corporation ("Heckmann"), have entered into a Disposition and Development Agreement, dated as of March 22, 2001, that has been amended pursuant to the terms of a First Amendment of Disposition and Development Agreement, dated of even date herewith (the "DDA"). Also, pursuant to the DDA, Seller and Buyer entered into an Option Agreement, dated of even date herewith, regarding the potential sale of the Property (the "Option Agreement"). Pursuant to the DDA and the Option Agreement, the parties agreed, among other things, P6402\0001 \721061.1 B-1 to execute this Memorandum for recording in the Office of the Recorder of Riverside County, California. C. Copies of the DDA and the Option Agreement are available for public inspection at Seller's office at 73-510 Fred Waring Drive, Palm Desert, California 92260. NOW, THEREFORE, the parties hereto certify as follows: 1. Seller, pursuant to the Option Agreement, has granted Buyer an option to purchase the Property upon the terms and conditions provided for therein, for the purposes of the development, operation and maintenance thereon of an educational facility for the benefit of the community of the City of Palm Desert. 2. Unless earlier terminated, the term of the Option Agreement shall expire as provided in Section 1.1 of the Option Agreement. 3. This Memorandum is not a complete summary of the DDA or the Option Agreement and shall not be used to interpret the provisions of any of the documents. Witness the signatures of the authorized representatives of the parties as of the date first set forth above but actually on the dates set forth in the acknowledgments below. SELLER: PALM DESERT REDEVELOPMENT AGENCY By: Executive Dir BUYER: REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, on behalf of its Riverside campus By: Title: By: Title: P6402\0001\721061.1 B-2 ATTEST: Secretary STATE OF CALIFORNIA ) COUNTY OF ) ss. On , 2003 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she./they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary public [SEAL] STATE OF CALIFORNIA ) ss. COUNTY OF On , 2003 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she./they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary public [SEAL] P6402\0001 \721061.1 B-3 STATE OF CALIFORNIA ) ) ss. COUNTY OF ) On , 2003 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary public [SEAL] STATE OF CALIFORNIA ) ss. COUNTY OF On , 2003 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. Notary public [SEAL] P6402\0001\721061.1 B-4 EXHIBIT A TO MEMORANDUM OF OPTION UCR -- Parcel B Legal Description All that portion of Section 34, in Township 4 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, which bears S 89° 49' 59" W 783.33 feet from the Southeast corner of Section 33 in Township 4 South, Range 6 East; Thence N 89° 49' 59" E 92.52 feet along the South line of said Section 33; Thence N 0° 10' 01" W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N 89° 49' 59" E 82.84 feet along said parallel line and the Northerly right of way line of Frank Sinatra Drive; Thence N 42° 11' 33" E 998.61 feet to the beginning of a non -tangent curve, concave Northeasterly, and having a radius of 965.50 feet; a radial line of said curve through said point bears S 37° 44' 14" W; Thence Southeasterly along said curve 194.29 feet through an angle of 11 ° 31' 46" to the true point of beginning; Thence continuing Southeasterly along said curve 761.54 feet through an angle of 45° 11' 32" to the beginning of a compound curve, concave Southwesterly, and having a radius of 34.50 feet; a radial line of said curve through said point of compound curvature bears N 18° 59' 04" W; Thence Southeasterly along said curve 51.36 feet through an angle of 85° 17' 47"; Thence tangent to said curve S 23° 41' 17" E 127.01 feet to the beginning of a tangent curve concave Southwesterly and having a radius of 452.50 feet; Thence Southeasterly along said curve 185.83 feet through an angle of 23° 31' 49"; Thence S 0° 09' 28" E 194.00 feet; Thence S 89° 50' 32" W 11.50 feet; Thence S 44° 50' 32" W 124.45; Thence S 89° 50' 32" W 100.00 feet; Thence S 88° 30' 19" W 600.17 feet; Thence S 89° 50' 32" W 37.45 feet; Thence N 45° 09' 45" W 32.53 feet; P6402\0001\721061.1 B-5 Thence S 89° 50' 32" W 11.50 feet; Thence N 0° 09' 28" W 637.76 feet to the true point of beginning. The parcel described herein contains 490,668 square feet, more or less. P640210001 \721061.1 B-6 1 RIVE, Ui CALROIINIA RIVERSIDE John M. Wohlmuth City Manager City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 RE: UCR Request to Exercise Option for Parcel "B" Fee Title Dear John, Capital Programs 1223 University Avenue; Suite 240 Riverside, CA 92521-0101 June 5, 2012 In conjunction with the Disposition and Development Agreement (DDA) (2001) and First Amendment (2002), UCR wishes to exercise the option to acquire fee title for "Parcel B" as described in the DDA documents (approximately 11 acres). UCR's interest in acquiring fee title for Parcel B is in the context of ongoing development of program opportunities for UCR's School of Medicine (50M) in the Palm Desert area. Detailed program development will commence in July 2012 under the aegis of the SOM's Dean, Richard Olds. Some of the program areas intended for location and development on the Parcel B site include, but are not limited to the following; • Health, Wellness, and Patient Education facilities; • Graduate Medical Education facilities; • Continuing Medical Education facilities; • Teaching and Clinical Care facilities; • Medical Offices and Faculty Offices; • Potential Future Graduated Senior Living facilities; and, • infrastructure and Parking associated with the above. As plans for Parcel B develop, UCR would welcome the chance for review and input from the City of Palm Desert. In this context UCR would also be open to explore any partnership opportunities with the City of Palm Desert that would benefit the community. 1 look forward to working on the next steps of the Parcel B fee title acquisition with your office. Sincerely,) / J TimothlD. Ralston, AIA Associate Vice Chancellor — Capital Programs Cc: Assistant Vice Chancellor Walton Chief Operating Officer Hedges Phone 951-827-2433 Fax 951.827-3299 UCR -- Parcel B Legal Description All that portion of Section 34, in Township 4 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, described as follows: Beginning at the Northwest corner of Section 3, Township 5 South, Range 6 East, San Bernardino Meridian, in the County of Riverside, State of California, which bears S 89° 49' 59" W 783.33 feet from the Southeast corner of Section 33 in Township 4 South, Range 6 East; Thence N 89° 49' 59" E 92.52 feet along the South line of said Section 33; Thence N 0° 10' 01" W 81.00 feet to a line that is parallel with and distant 81.00 feet Northerly from said South line of Section 33; said point being shown on a Record of Survey recorded in Book 103, Pages 68 and 69, of Records of Survey of said County; Thence N 89° 49' 59" E 82.84 feet along said parallel line and the Northerly right of way line of Frank Sinatra Drive; Thence N 42° 11' 33" E 998.61 feet to the beginning of a non -tangent curve, concave Northeasterly, and having a radius of 965.50 feet; a radial line of said curve through said point bears S 37° 44' 14" W; Thence Southeasterly along said curve 194.29 feet through an angle of 11 ° 31' 46" to the true point of beginning; Thence continuing Southeasterly along said curve 761.54 feet through an angle of 45° 11' 32" to the beginning of a compound curve, concave Southwesterly, and having a radius of 34.50 feet; a radial line of said curve through said point of compound curvature bears N 18° 59' 04" W; Thence Southeasterly along said curve 51.36 feet through an angle of 85° 17' 47"; Thence tangent to said curve S 23° 41' 17" E 127.01 feet to the beginning of a tangent curve concave Southwesterly and having a radius of 452.50 feet; Thence Southeasterly along said curve 185.83 feet through an angle of 23° 31' 49"; Thence S 0° 09' 28" E 194.00 feet; Thence S 89° 50' 32" W 11.50 feet; Thence S 44° 50' 32" W 124.45; Thence S 89° 50' 32" W 100.00 feet; Thence S 88° 30' 19" W 600.17 feet; Thence S 89° 50' 32" W 37.45 feet; Thence N 45° 09' 45" W 32.53 feet; P6402\0001\721061.1 B-5 Thence S 89° 50' 32" W 11.50 feet; Thence N 0° 09' 28" W 637.76 feet to the true point of beginning. The parcel described herein contains 490,668 square feet, more or less. P6402\0001\721061.1 B-6 UCRPD Development 'APO aaaaa8 FUTURE Pl1RKI NG STRUCTURE S c u p N C a o �o o 8 m A O `_�S t �f W_tovi L e_ N$ 'mR' U d m a o W 8 CO d w U to a. C OJ a 0 10 Conceptual North to South Section I Looking West Conceptual East to West Section I Looking North 0 OA 0 0 C 0 0 L a E` E ry W� xA � n W r v O E a K E 6 z 0. o UC_ CC -,721E=.1 • •-- flit • - $. k- m BERGEF RD `4" • 441.7. . • • UCR Option Parcel • ; PASEO GUSTO DEL 663AZON PASEO DIVERTO VIA DE i:A PAZ „ 44.; dAL:CE VIBRANTE- )._tt ' UCR Option Parcel P7I CAL STATE SAN BERNARDINO Date: 6/2012 PALM DESERT CITY BOUNDARY NM' UNIVERSITY OF CALIFORNIA RIVERSIDE VICINITY MAP