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HomeMy WebLinkAboutNegotiating Agmt - Larkspur Assoc., LLC - Terminations of DDAPALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: APPROVE THE NEGOTIATING AGREEMENT WITH LARKSPUR ASSOCIATES, LLC SUBMITTED BY: Justin McCarthy, ACM for Redevelopment DATE: December 10, 2009 CONTENTS: Negotiating Agreement Recommendation By Minute Motion: 1. Approve the Negotiating Agreement with Larkspur Associates, LLC; and 2. Authorize the Chairman to execute the Agreement. Executive Summary The Larkspur Hotel Disposition and Development Agreement (DDA) entered default when the developer was unable to secure financing, and to close on the development site in the fall of 2008. The developer, Larkspur Associates, LLC, was in the process of securing financing in October of 2008 in the midst of the collapse of the credit markets. The inability to secure construction financing and the termination of the project's pre - development line of credit brought the project to a halt. The proposed Negotiating Agreement is intended to formalize the termination of the DDA and grant the developer a 12-month window in which to tender a new proposal for the Redevelopment Agency's consideration. During this 12-month period, the Redevelopment Agency can use the property or consider other proposals at its sole discretion. Background The Agency entered into a DDA with Larkspur Associates, LLC (the Developer), on July 29, 2008, to purchase land at the northeast corner of Larkspur and Shadow Mountain to develop, construct, and operate a 154-room boutique hotel project. In accordance with the agreement, escrow on the property would have closed at the end of January 2009 or an outside date of March 30, 2009. G:\rda\Monica Loredo\Word\McCarthy\2009\Staff Reports\2009\Larkspur Negotiating Agrmnt docx Staff Report Negotiating Agreement with Larkspur Associates, LLC. March 12, 2009 Page 2 of 3 The developer expended approximately $1.3 million in pursuit of the project, but was unable to secure financing in the fall of 2008 when the capital markets collapsed. At that time the project came to a halt. The developer negotiated an amendment with the Agency to provide more time. The amendment was approved by the Agency. However, the amendment was not executed by the developer after determining it would not be able to perform under the terms of the amendment. The developer has indicated that it cannot secure financing given the state of the capital markets and the difficulty in financing hotels, in particular. Hotels have been one of the hardest hit of commercial real estate assets in the current economy. And, there are over 300 hotels in California that are reported in default on loans. In an effort to protect its investment, Larkspur Associates did request a "standstill" agreement in which the previous DDA would stay in force for a period of time until financing could be secured. Staff was not prepared to recommend such an arrangement. However, the developer would still like an opportunity to tender a new proposal if it can secure financing. To this end, the accompanying Negotiating Agreement gives the developer a 12-month window to tender a proposal while leaving the Agency the flexibility to respond to alternatives. The salient terms of the Negotiating Agreement are as follows: • The developer acknowledges that the previous DDA has terminated. • The Negotiating Agreement grants the developer a 12-month Proposal Period. At the end of the 12 months, the agreement terminates without notice and all rights and obligations cease. • ENA Fees currently in arrears ($118,830) will be secured by a note accruing interest at 7% to be paid by the developer as a condition of execution of a new DDA by the Agency. Should the Negotiating Agreement be terminated or expire without approval of a DDA by the Agency; the fees will be waived. • Additional ENA fees will accrue during the term of the Negotiating Agreement to be paid only as a condition of the Agency's execution of a new DDA. These fees will be calculated based on the higher of 7% or the City's LAIF rate of return plus 300 basis points. • The developer has the right to tender a new proposal on terms generally consistent with the previous DDA for the Agency's consideration. The Agency may approve or disapprove the proposal in its "sole and absolute discretion." • The Agency may entertain other proposals or use the property at its discretion. In the event the Agency receives a development proposal from a third party, the G:\rda\Monica Loredo\Word\McCarthy\2009\Staff Reports\2009\Larkspur Negotiating Agrmnt.docx Staff Report Negotiating Agreement with Larkspur Associates, LLC. March 12, 2009 Page 3 of 3 developer will be granted 90 days to tender a proposal for consideration by the Agency. If they fail to tender a proposal the Negotiating Agreement terminates. If the negotiating agreement terminates, the developer is required to tender all land use plans, designs, and specifications to the Agency. There are no guarantees in the current economy that the project will be able to secure equity and debt financing. However, the developer has requested an opportunity to recoup an investment of $1,340,975 in direct predevelopment expenditures. Of which, $424,544 was paid to the Redevelopment Agency in negotiating fees. The balance includes a down payment, design costs, and other pre -development expenditures for the hotel project. Staff is recommending approval of the agreement since it cleanly terminates the prior Disposition and Development Agreement and leaves options open for the Agency. Fiscal Impact There is no fiscal impact associated with this request. However, prior negotiation fees in arrears of $118,830 would be waived in the event that the agreement terminates without a new DDA with Larkspur Associates, LLC. Submitted by: G / tin McCarthy, ACM f velopment ACM edevelopment Approval- 1 John,POC)Atohlmuth, Executive Director 7. �C BY RDA U ��� ON — 016( VERIFIED BY Original on file with City Cll 's Office G:\rda\Monica Loredo\Word\McCarthy\2009\Staff Reports\2009\Larkspur Negotiating Agrmnt.docx NEGOTIATING AGREEMENT THIS NEGOTIATING AGREEMENT ("Agreement") is made and entered into as of December , 2009 (the "Effective Date"), by and between the PALM DESERT REDEVELOPMENT AGENCY, a California public body, corporate and politic ("Agency"), and LARKSPUR ASSOCIATES, LLC, a Nevada limited liability company ("Developer"). RECITALS WHEREAS, Agency and Developer have heretofore entered into that certain Disposition and Development Agreement, dated as of July 29, 2008 (the "DDA"); and WHEREAS, pursuant to Section 2.3.2 of the DDA, the Closing (as defined in the DDA) has failed to occur prior to the Outside Date (as defined in the DDA) and the DDA has by its terms terminated and the Agency and Developer wish to enter into this Agreement to acknowledge such termination of the DDA and establish a period of time during which the Developer may make a proposal for the development of the real property described in Exhibit A attached hereto (the "Property") to the Agency for its consideration. NOW, THEREFORE, in consideration of the above Recitals and other valuable consideration, the receipt of which is hereby acknowledged, Agency and Developer agree as follows: AGREEMENT 1. All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the DDA. 2. The Developer hereby acknowledges that the DDA has terminated pursuant to, and with the effect as provided in, Section 2.3.2 of the DDA. 3. For and in consideration of the Agency's agreement to permit the Developer to submit a proposal for the development of the Property as herein provided, the Developer hereby agrees to execute, and to cause William De Leeuw to execute, and deliver to the Agency the promissory note attached hereto as Exhibit B (the "Note") and further agrees to pay to the Agency a fee (the "Fee") per annum calculated as the product of (i) the higher of (1) seven percent (7%) or (2) the investment rate of return on monies invested in the Local Agency Investment Fund established and maintained by the State of California (as adjusted from time to time), plus three hundred (300) basis points, and multiplied by (ii) Four Million Five Hundred Twenty -Seven Thousand Dollars ($4,527,000). The Fee shall accrue from the Effective Date and shall be paid to the Agency on the date of execution (if any) by the Agency of a Proposed DDA (as hereinafter defined). In consideration of the Developer's execution and delivery of the Note and agreement to pay the Fee, the Agency hereby agrees during the period commencing on the Effective Date and ending on the date twelve (12) months thereafter (the "Proposal Period") to accept for consideration a proposal from the Developer (a "Proposal") for the development of the Property (the "Project"). Any Proposal shall be accompanied by (x) a conditional letter or letters of commitment from equity investor(s) in form and substance acceptable to the Agency and stating that the investor(s) are conditionally committed to invest equity in the Project in an P6402-0201 \ 1155555 v5.doc amount adequate to fund fifty percent (50%) of the costs of the Project, (y) financial statement(s) of the equity investor(s) in form and substance acceptable to the Agency and demonstrating a net worth equal to at least five (5) times the amount of equity described in (x), and (z) a letter of interest (in form and substance acceptable to the Agency) from a lender acceptable to the Agency and stating that the lender is interested in providing financing for the remainder of the costs of the Project in excess of those costs to be funded by the equity investor(s). 4. Any Proposal submitted by the Developer shall be accompanied by a new draft disposition and development agreement ("Proposed DDA") which shall include basic economic terms generally similar to those contained in the DDA and, among other things, the following: (a) A description of the Project including a detailed description of the proposed uses, square footage and related infrastructure improvements. (b) The Developer shall acquire the Property and shall develop and construct the Project thereon at its own cost and expense, and in so doing shall make expenditures pursuant to a budget that shall be approved by the Agency in the exercise of its reasonable discretion. The construction of the Project shall be commenced and completed pursuant to a schedule of performance to be incorporated in the Proposed DDA and approved by the Agency in the exercise of its sole discretion ("Schedule of Performance"). (c) Prior to the close of escrow under the Proposed DDA, Developer shall obtain (i) all governmental permits required for the construction of the Project, and (1i) equity investment and lending commitments from equity investors and lenders acceptable to the Agency and sufficient to finance the acquisition of the Property and the construction of the Project. (d) Following the execution of the Proposed DDA and consistent with the Schedule of Performance, Agency will sell the Property to Developer for a sum not less than Four Million Five Hundred Twenty -Seven Thousand Dollars ($), plus all costs or expenses incurred by Agency in the acquisition of the Property. The sale of the Property to the Developer shall be on an "AS IS" basis, without representation or warranty by the Agency as to the condition of the Property (including the presence of hazardous materials) or its suitability for the purposes of the construction or operation of the Project. (e) Neither the Property nor the Project shall be pledged by the Developer as security for any financing or refinancing other than a construction and/or permanent loan with respect to the Project, which shall be negotiated between the Developer and the lender and shall be subject to review and approval by the Agency, which approval shall be given or withheld in the reasonable discretion of the Agency. (f) The obligations of the Developer contained in the Proposed DDA shall constitute covenants running with the Property. The Proposed DDA will provide for the issuance of a Certificate of Completion upon Developer's satisfaction of its development obligations thereunder, and the Proposed DDA will provide that any covenants that are to survive the issuance of the Certificate of Completion shall be included in the deed for the Property from the Agency to the Developer and shall run with the land. The Proposed DDA P6402-0201\1155555v5.doc shall provide that a default by the Developer prior to the completion of construction of the Project will result in a reversion of title to the Property to the Agency. (g) The Proposed DDA will not commit or obligate either the Agency or the City of Palm Desert ("City") to provide any form of assistance to the Developer (including, without limitation, financial assistance to owners, developers, tenants or users in the Project) in its development of the Project. The Developer will secure all necessary tenants, developers, owners or users for the Project in compliance with all applicable law, including the Community Redevelopment Law. (h) The Developer shall covenant and agree that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property and the Project, nor shall the Developer or any person claiming under or through the Developer, 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 and Project, and the Developer shall cause the foregoing provisions (or such form of such provisions as are required by applicable law) to be contained in any contracts, leases or other agreements respecting the Project. (i) The Developer shall bear all costs and expenses of any title, environmental, engineering, financial, or other analyses or reports pertaining to the Project. (j) The Developer shall represent that its undertakings pursuant to the Proposed DDA are for the purpose of redevelopment of the Property and not for speculation in land holding. Prior to completion of construction of the Project, no voluntary or involuntary successor in interest of Developer, except for a permitted mortgagee with respect to the Property, shall acquire any interest in or rights or powers under the Proposed DDA except as expressly set forth therein. The Proposed DDA may not be assigned by the Developer without the express written consent of the Agency, which consent may be granted or withheld in the exercise of the Agency's reasonable discretion. (k) The Developer shall provide a third party guaranty of its obligations under the proposed DDA in form and substance acceptable to the Agency. (1) From the date of execution of the Proposed DDA until the close of escrow thereunder (the "Fee Period"), the Developer shall pay the Fee to the Agency on the first of each month during the Fee Period and on the closing date or the earlier termination of the Proposed DDA. 5. The Developer and the Agency understand and agree that neither party is obligated to enter into a Proposed DDA. Neither the submission of this Agreement by the Agency to the Developer, nor the execution of this Agreement by either party, shall constitute an option or offer to acquire or sell any real property by either party or a commitment by the Agency to expend any financial resources on the Project, it being intended hereby that obligations to acquire or sell the Property or any portion thereof or any interest therein shall 3 P6402-0201\1155555v5.doc become effective only following the approval and execution of a Proposed DDA by the Agency and the Developer. Upon submission by the Developer of a Proposal and a Proposed DDA acceptable to the staff of the Agency, the staff shall cause the Proposed DDA to be submitted to Agency's governing board and to the City Council of the City as provided by and in conformance with Section 33433 of the Health and Safety Code of the State of California at their next scheduled meetings at which such matters may be heard. The Developer understands and agrees that the Agency's governing board may approve or disapprove the Proposed DDA in the exercise of its sole and absolute discretion. The Developer also understands and agrees that if a Proposed DDA is approved by Agency's governing board, the execution of the Proposed DDA shall be contingent upon the Developer's payment of all principal and accrued interest on the Note and an amount equal to all Fees that shall have accrued from the Effective Date to the date of execution of the Proposed DDA. Notwithstanding anything to the contrary contained in this Agreement or in the Note, the principal of and accrued interest under the Note and all Fees accrued during the Proposal Period shall be forgiven by the Agency in the event this Agreement is terminated and the Agency has not approved and executed a Proposed DDA. 6. This Agreement shall automatically terminate if the Agency either rejects a Proposal, or does not approve and authorize the execution of a Proposed DDA (in the exercise of its sole and absolute discretion) within ninety (90) days following the date of the submission of a Proposal by the Developer. In addition, the Agency may terminate this Agreement if the Developer should fail to comply with and perform in a timely manner, to the reasonable satisfaction of the Agency, all provisions hereof on the Developer's part to be performed. The Agency shall provide fifteen (15) days written notice to the Developer which specifies any such reasonable dissatisfaction or reasonable belief and the Agency shall not terminate this Agreement if the Developer cures the deficiencies specified by the Agency to the reasonable satisfaction of the Agency within such fifteen (15) day period. Notwithstanding anything to the contrary contained herein, this Agreement shall automatically terminate, without the need for notice, upon (i) the expiration of the Proposal Period (12 months following the Effective Date) or (ii) the execution of a Proposed DDA by the Agency and the Developer. Upon termination of this Agreement, except as otherwise expressly set forth herein, neither the Developer nor the Agency will have any further rights, duties or obligations hereunder. 7. Upon the termination or expiration of this Agreement prior to the execution of a Proposed DDA by the Agency, Developer shall transfer to the Agency, at no cost or expense to Agency, all of Developer's interest, if any, in any land use plan, site plan, and all plans and specifications prepared by or on behalf of the Developer in connection with a Proposal. 8. Notwithstanding anything to the contrary contained in this Agreement, the Agency shall have the right in the exercise of its sole discretion and during the Proposal Period to use the Property for any purpose and to accept for consideration any proposals from third parties for the development of the Property. Upon the receipt of any such proposal from a third party, the Agency shall provide written notice thereof to the Developer and the Developer shall have ninety (90) days following the date of such notice to submit a Proposal to the Agency which shall comply in all respects with the requirements of Section 4. If the Developer does not submit a Proposal to the Agency within such ninety (90) day period, this Agreement shall automatically terminate and the Agency shall be free to dispose of the Property in the exercise of its sole and absolute discretion. M P6402-0201 \ 1 155555v5.doc 9. Any notice, request, approval or other communication to be provided by one party to the other shall be in writing and provided by personal service or a form of express mail or service and addressed as follows: If to the Developer: Larkspur Associates, LLC 75656 Via Serena Indian Wells, California 92210 Attention: William De Leeuw Tel: (888) 756-2448 Fax: (858) 454-2196 William De Leeuw 5723 Desert View Drive La Jolla, California 92037 Tel: (858) 353-0619 Fax: (858) 454-2196 If to the Agency: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attention: Justin McCarthy Tel: (760) 346-0611 Fax: (760) 346-0574 10. This Agreement constitutes the entire agreement of the parties hereto with respect to the matters contained herein. There are no agreements or understandings between the parties and no representations by either party to the other as an inducement to enter into this Agreement, except as expressly set forth herein. All other prior negotiations or agreement between the parties are superseded by this Agreement. This Agreement may not be altered, amended or modified except by a writing executed by both parties. The Agency shall have no obligation to enter into a Proposed DDA and no Proposed DDA shall be binding upon the Agency unless and until its is approved and adopted by the Agency in the exercise of its sole and absolute discretion, and then duly executed by the officers of the Agency duly authorized to do so. This Agreement may not be assigned by the Developer without the express written consent of the Agency, which consent may be granted or withheld in the exercise of the Agency's sole and absolute discretion. 11. If either party should bring any legal proceeding relating to this Agreement, or to enforce any provision hereof, the party in whose favor judgment is rendered shall be entitled to recover reasonable attorneys' fees and expenses of litigation from the other. The interpretation and enforcement of this Agreement shall be governed by the laws of the State of California. 12. For and in consideration of Agency entering into this Agreement, the Developer hereby waives its right to recover from and fully and irrevocably releases the Agency and the Agency's employees, officers, and representatives (collectively, the "Agency Parties") from any and all claims, actions or causes of action that Developer may now have or hereafter acquire against any of the Agency Parties for any costs, loss, liability, damages, expenses, or demands accruing from or related to this Agreement, the DDA or the matters contained herein. This 5 P6402-0201\1155555v5.doc release includes claims, actions or causes of action which the Developer is not presently aware or which Developer does not suspect to exist which, if known by Developer, would materially affect the Developer's release of the Agency Parties. DEVELOPER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 ("SECTION 1542"), WHICH IS SET FORTH BELOW: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." BY INITIALING BELOW, DEVELOPER HEREBY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE MATTERS WHICH ARE THE SUBJECT OF THE FOREGOING WAIVERS AND RELEASES. Developer's Initials The releases by Developer herein contained shall survive the expiration or termination of this Agreement. 13. This Agreement may be executed simultaneously or in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. [Signatures follow on next page] 6 P6402-0201\1155555v5.doc IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. "Agency" PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic By: Name: Title: Attest: Secretary APPROVED AS TO FORM: Richards, Watson & Gershon ME Agency Counsel "Developer" LARKSPUR ASSOCIATES, LLC By: Name: Title: By: Name: Title: 7 P6402-0201\1155555v5.doc EXHIBIT A Legal Description of the Property ALL OF LOTS 6 AND 7, A PORTION OF LOT 1 AND A PORTION OF LOT 5 IN BLOCK Q OF PALM DESERT UNIT NO. 1, AS PER MAP RECORDED IN BOOK 21, PAGES 50 TO 54 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 7; THENCE ON THE EASTERLY LINE OF SAID LOT 7 AND ITS SOUTHERLY PROLONGATION, SOUTH 0°08'35" EAST, 400.00 FEET TO THE NORTHERLY LINE OF SHADOW MOUNTAIN DRIVE, 60.00 FEET WIDE; THENCE ON SAID NORTHERLY LINE, 500 SOUTH 89°44'35" WEST, 199.96 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 20.00 FEET; THENCE NORTHWESTERLY ON SAID CURVE THROUGH A CENTRAL ANGLE OF 90006'50", A DISTANCE OF 31.46 FEET TO THE EASTERLY LINE OF LARKSPUR LANE, 60 FEET WIDE; THENCE TANGENT TO SAID CURVE AND ON THE EASTERLY LINE, NORTH 00°08'35" WEST, 379.96 FEET TO THE NORTHWEST CORNER OF SAID LOT 7; THENCE ON THE NORTHERLY LINE OF SAID LOT 7, NORTH 8944'35" EASTER, 62.11 FEET; THENCE LEAVING SAID NORTHERLY LINE, NORTH 66°04'55" EAST, 96.85 FEET; THENCE NORTH 73°15'25" EAST, 36.83 FEET; THENCE SOUTH 13°49'41" EAST, 19.88 FEET; THENCE SOUTH 12°31'53" WEST, 30.76 FEET TO THE AFOREMENTIONED NORTHERLY LINE OF LOT 7; THENCE ON SAID NORTHERLY LINE, NORTH 89044'35" EAST, 36.01 FEE TO THE POINT OF BEGINNING. 8 P6402-0201 \ 1155555 v5. doc EXHIBIT B FORM OF PROMISSORY NOTE PROMISSORY NOTE $118,830.47 Palm Desert, California December _, 2009 FOR THE VALUE RECEIVED the undersigned, WILLIAM DE LEEUW and LARKSPUR ASSOCIATES, LLC, a Nevada limited liability company (hereinafter collectively, "Maker"), hereby promises to pay to the order of the PALM DESERT REDEVELOPMENT AGENCY, a California public body, corporate and politic ("Holder") at Palm Desert, California, or at such other place as the Holder shall from time to time designate in writing, without deduction or offset, the sum of One Hundred Eighteen Thousand Eight Hundred Thirty Dollars and Forty -Seven Cents ($118,830.47) together with interest thereon at the rate of seven percent (7%) per annum. All sums of principal and accrued interest shall be due and payable on the date of execution (if any) by the Maker and Holder of a Proposed DDA (as defined in that certain Negotiating Agreement (the "Agreement") dated as of December , 2009 by and between the Maker and the Holder). Maker may prepay, without penalty or premium, any amounts due under this Note prior to the due date hereof. Notwithstanding anything to the contrary contained in this Note, the principal of and accrued interest on this Note shall be forgiven and discharged by the Holder, at the time, and upon satisfaction of the conditions thereto as set forth the Agreement. If Holder fails to receive from Maker any payment due hereunder on its due date, or if Maker breaches or defaults on any obligation or covenant of Maker contained in the Agreement and if such breach or default is not cured within ten (10) days after written notice thereof is given in the manner described below, then, at Holder's option, the entire principal balance and accrued interest owing hereunder shall, at once, become immediately due and payable and until paid shall thereafter bear interest at the rate of ten percent (10%) per annum. This Note shall be governed by and construed in accordance with the laws of the State of California. Maker hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment of this Note, and expressly agrees that, without in any way affecting the liability of Maker hereunder, the Holder may modify or waive any terms of the Agreement or other document executed in connection with or pursuant to the Agreement. Maker further waives, to the fullest extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand on this Note. The obligations of William De Leeuw and Larkspur Associates, LLC under this Note shall be joint and several. 9 P6402-0201\1155555v5.doc Maker 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, actual attorney's fees and all costs and expenses actually incurred in connection therewith. 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. Any notice, demand or document which Maker or Holder is required or may desire to give or deliver to the other hereunder shall be in writing and may be delivered personally or given by facsimile transmission or overnight mail addressed as follows: To Maker: Larkspur Associates, LLC 75656 Via Serena Indian Wells, California 92210 Attention: William De Leeuw Tel: (888) 756-2448 Fax: (858) 454-2196 and William De Leeuw 5723 Desert View Drive La Jolla, California 92037 Tel: (858) 353-0619 Fax: (858) 454-2196 To Holder: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attention: Justin McCarthy Tel: (760) 346-0611 Fax: (760) 346-0574 Copy to: Richards, Watson & Gershon 355 South Grand Avenue, 40th Floor Los Angeles, CA 90071-3101 Attention: Jim G. Grayson Tel.: (213) 626-8484 Fax: (213) 626-0078 10 P6402-0201 \ 1 155555 v5.doc subject to the right of Maker or Holder to designate a different address by notice similarly given. Any notice, demand or documents to be given, delivered or made by facsimile transmission or overnight mail shall be deemed to have been given or delivered or made as well as received two (2) days after the day on which the same is sent addressed as above provided. LARKSPUR ASSOCIATES, LLC By: Name: Title: By: Name: Title: WILLIAM DE LEEUW 11 P6402-0201 \ 1 155555v5.doc