September 9, 2020 Executive Session Directors Report

September 9, 2020 Executive Session Directors Report

Directors Report

Executive Session

September 9, 2020

September 9, 2020 Minutes A. Minutes- August 13, 2020

MEETING OF THE BOARD OF DIRECTORS WEDNESDAY, SEPTEMBER 9, 2020 VIRTUAL (Video/Phone) AGENDA (Board Version) EXECUTIVE SESSION – 10 A.M. PT

Executive Sessions are provided by statute (Civil Code §4935) so Boards can address issues involving Privileged Information and matters of a Private Nature. As a result, Owners do not have a right to attend Executive Sessions. I. CALL TO ORDER A. Minutes – August 13, 2020 B. Legal C. Contracts 1. Espresso Bar 2. ES Kitchen Management/Control/Use 3. CVWD Property 4. Amazon Hub 5. Real Estate Commissions D. Personnel 1. Board Candidates Review E. Member Delinquencies/Discipline 1. RV Covers and Lot Maintenance F. General Manager Report on Past/Future Confidential Matters XII. ADJOURNMENT

Executive Session of the Board of Directors Thursday August 13, 2020 Virtual (Webinar/Phone) Minutes

Present

Greg Farmer, President Don Renoe, Vice President Charlie Leahy, Treasurer

Mike Barber, Secretary John Boudin, Director Charles Hare, Director Also Present: Ed Vitrano, General Manager Jennifer Miranda, Resort Services Manager & Executive Assistant to the Board & General Manager Kristine Gonzalez- Controller Call to Order

Meeting called to order by President Greg Farmer 10:08 am PT. Minutes Approval A motion was made to approve the minutes from July 16, 2020. Motion – Treasurer Leahy

Second – Vice President Renoe Vote – Approved Unanimously Legal A. COVID Survey GM Vitrano reviewed, and the Board discussed the survey questions to be sent to the owners surrounding next seasons travel plans.

Contracts A. Phase 4 of Strategic Planning with McMahon

Discussion took place on whether the Board is going to move forward with hiring McMahon to create a conceptual plan for the La Palma Complex and Dog area.

Amazon Locker Controller Gonzalez answered questions about the Amazon Locker location, does it have to be available to the public, access to owners, financial impact, comparison and experience of other complexes, renter’s ability to use and cooperation of USPS.

B. Marge’s Espresso Bar

GM Vitrano reported the findings of his review of the contract for Marge’s Espresso Bar. The contract is now on a month-to-month basis. The Board authorized the GM to engage the McDougalls regarding Board’s intent to transition to new management.

Personnel A. Communications Coordinator Involvement

President Farmer discussed responsibilities of the Communication Coordinator and reviewed the idea of a possible ORPS Newsletter sample. The Board also discussed what role the Communications Coordinator may have in supporting the Oracle staff, production of the Oracle and securing advertisers. B. Succession Plan GM reviewed the skillset of the Controller, Resort Services/Executive Asst to Board, and the Facilities Manager who have expressed interest in being an Assistant GM related to becoming the GM when current GM retires in 3-5 years. Board agreed not to name an Assistant GM at this time C. Goals President Farmer introduced two forms of review for the GM to receive performance bonus a stipulated in Contract. One is a scale score to be used each trimester and Board authorized the President to establish year- end goals.

Member Delinquencies/ Discipline None

General Managers Report None

Adjournment Meeting adjourned at 11:50 am PT

Respectfully Submitted: ______________________________

___________

Mike Barber, Secretary

Date

September 9, 2020 Legal None

September 9, 2020 Contracts

1. Espresso Bar 2. ES Kitchen Management/Control/Use 3. CVWD Property 4. Amazon Hub 5. Real Estate Commissions

_________________________ 1. Espresso Bar 2. ES Kitchen Management/Control/ Use

OUTDOOR RESORT - PALM SPRINGS OWNER’S ASSOCIATION BOARD OF DIRECTORS STAFF REPORT

Board Meeting Date:

September 9, 2020

New Unfinished

Discussion

Consent Agenda

Executive Session X

Agenda Item: Description:

Espresso Bar/ES Kitchen Operation

Consider the Operation of the Espresso Bar and ES Kitchen

Submitted By:

Greg Farmer, President – Board of Directors

Date: September 1, 2020

Background: The Espresso Bar at ES has been run by Alex and Marge McDougall for many years. Marge claims that when they first took it over, it had been in operation for 1 season and they paid $5,000 to get the business. Because of Covid, they informed us that they wanted to take one year off as they were not comfortable running it with the pandemic. Based on that, the Board discussed whether or not we wanted to accept their request. Even though the Board is very appreciative for the contributions they have made running the Espresso Bar, they felt that leaving the Bar closed for the season was not acceptable. Based on that, Ed had a conversation with Alex and Marge about giving up the operation in perpetuity. See attached email exchange between Marge and Ed. In the end, they asked for two concessions. First, they wanted to continue to operate the hot dog night once a week and second, they also get $2,500 in consideration for the Espresso Bar name. The Board asked Ed to get with Richard Camacho of Bella Roma to see if he would be willing to take over the operation of the Espresso Bar. He said he was eager to do that. During a meeting with Don and Charlie we talked about the ES kitchen. Considering that we are under more scrutiny by the Health Department and Covid, we thought that maybe we should ask Richard to oversee the operation of the ES kitchen. Owners would not be able to use the kitchen for personal use but would still be able to use the LP kitchen. Lifestyle sponsored events could still utilize the kitchen but only with the oversight of Richard. For Consideration: To consider termination of contract with the McDougall’s regarding the Espresso Bar contract, pay them $2,500 and allow Alex to host weekly “hot dog night.” AND To consider amending the contract with Richard Camacho, concessionaire of the LaPalma Café, and include the operation of an Espresso Bar and negotiate a rental of both. AND To consider the closing of the ES kitchen to owners for personal use and to ask Richard to supervise the operation of the ES kitchen, allowing for Lifestyle sponsored events. Designated Funding: N/A

Board Action:

Subject:

RE: Espresso bar

Date:

Thursday, September 3, 2020 4:45:57 PM

From: Marjorie Mc Dougall Sent: Thursday, August 20, 2020 3:37 PM To: Edwin Vitrano Subject: Espresso Bar Ed, We have been talking over the situation with the espresso bar and are okay with it for the most apart. We have agreed to meet you half way in regards to lowering the original price to $2500. from the prior request of $5000. As we discussed the other day, we continue to be adamant about being able to sell hot dogs each Tuesday before the movie. Alex will need to have access to the “cage” in the walk-in in order to store the hot dog supplies there. A minor detail.....the TV in there was a present to us from a good friend and we’d like to donate it to Lupe for the hair salon as she doesn’t have one. We have been up to the “shop” the last 2 days to look things over and to reorganize what’s there. It’s amazing how much stuff we have accumulated in there over the last 18 years. One of the things Alex noticed was that the many movie tapes that he kept there for when he had free time were missing. Ed, one of the things we are realizing is that at our age the time it’s taking to accomplish what we need to do in there is taking longer than anticipated. (We’re estimating about 2 weeks at this point). The excessive heat isn’t helping either. The outside “pantry” cupboard will be our last project. Looking forward to your reply! Marge & Alex

From: Marjorie Mc Dougall Sent: Thursday, August 20, 2020 3:00 PM To: Edwin Vitrano Subject: Re: Espresso bar

Ed, there seems to be something I did wrong on the most recent email I sent. I thought I had accidentally canceled it last night when in affect I had sent it on to you. Also please understand that in no way were we accusing anyone of taking those tapes. I feel beyond terrible if I said it wrong. I apologize profusely!

How much of the equipment and various supplies will be removed? I guess we’re a novice at this

sort of thing! Will it be “gutted” or some of the standing equipment in there be used? Please let us know.

Sent from my iPhone

On Aug 20, 2020, at 12:01 PM, Edwin Vitrano wrote:

Good morning, Thank you for your response. I understand that any transition can be both emotionally and physically challenging. Again, I thank you for the dedication and loyalty both of you have given to the Resort. I will work with you as best I can but there will need to be a time certain when the supplies and equipment need to be removed. May I suggest Friday, September 18 as that certain date? Are there any supplies which the new concessionaire might be interested in purchasing? The following is troubling . . . "Yesterday we went to the Espresso Bar to check it out and to see what we needed to do. Alex noticed that someone must have been in there as many of his tapes were missing as well as his Joseph Campbell DVD which he really prizes." The only folks that I know of who would have been in the area are Byron and me, together, as we recently inspected the area . . . and I guarantee nothing was taken. Neither the Lifestyle, Housekeeping, or Security departments have keys to the amenity, so tracking down these items will be difficult at best. What would you expect me to do? As I said when we met, I will take your proposal of Hot Dog Night, use of the walk- in, and monetary proposal to the Board as soon as I can. Thank you for your cooperation as the Resort meets elevated expectations of Member service. Ed Vitrano General Manager Outdoor Resort – Palm Springs -----Original Message----- From: Marjorie Mc Dougall

Sent: Thursday, August 20, 2020 1:04 AM To: Edwin Vitrano Subject: Espresso bar Ed,

Alex and I have come to a decision in re the above. As we discussed Tuesday in our meeting, we are adamant in regarding being able to sell hot dogs before the movies on Tuesday nights. It definitely seems a fair trade-off with all the other items concerned. Along that line Alex will still need the use of the “cage” in the walk-in for the hot dog supplies. The 2nd item to be considered is the sale price which we are willing to compromise in meeting you halfway to $2500.00 instead of the price of $5000.00 that we bought

the business for in 2001. Yesterday we went to the Espresso Bar to check it out and to see what we needed to do. Alex noticed that someone must have been in there as many of his tapes were missing as well as his Joseph Campbell DVD which he really prizes. In checking out what food of ours we had stored in the large freezer we realized that we’re going to need the use of it until we can find another place for it. At our age we’re going to need a few weeks to get the place cleaned out of our personal things. We’d like to donate the TV we were given, by a good friend of ours a few years ago, to Lupe for her hair salon. The very small refrigerator/freezer of ours in there has been used for a surplus of food as needed. The last item we need to take care of is to “weed out” the outside cupboard. I have an abundance of cookie jars in there, that have been used for decorations on the front counter that I intend to store at our 5th wheel. There are also many supplies for the espresso bar in there. This email appears to have become a pamphlet of sorts but I had a lot that needed to be covered. Marge & Alex

Sent from my iPhone

_________________________ 3. CVWD Property

OUTDOOR RESORT - PALM SPRINGS OWNER’S ASSOCIATION BOARD OF DIRECTORS STAFF REPORT

Board Meeting Date:

September 9, 2020

New

Unfinished

Discussion

Consent Agenda

Executive Session X

Agenda Item: Description:

CCVWD Property Consideration of Purchase

Submitted By:

Ed Vitrano, General Manager

Date: September 3, 2020

Background: As directed, I opened up negotiations with Chris Bogan, the Right-of-Way Supervisor for CVWD. As I also suggested, I asked Director Leahy to assist with it. He was good enough to edit the proposed Purchase Agreement and I sent a copy of his red-line version to Chris, which is attached. She responded, which I sent to Director Leahy, who, in-turn replied with alternative ideas. The email exchanges are also attached. President Farmer found the Notice of Foreclosure and change of Ownership of the property, which may put new light on the issue For Consideration: To continue negotiations, using Director Leahy’s suggestions, or accept the latest CVWD proposal as presented by Ms. Bogan. Designated Funding: Capital Fund

Board Action:

Subject:

FW: WSW Cat-Ramon Well 4566 (Outdoor Resorts) Thursday, September 3, 2020 1:58:03 PM

Date:

Attachments:

image001.png

From: Charles Leahy Sent: Wednesday, September 2, 2020 5:17 PM To: Edwin Vitrano ; Greg Farmer ; Don Renoe Subject: RE: WSW Cat-Ramon Well 4566 (Outdoor Resorts)

How about this:

We would much prefer to complete the entire land transaction now and be finished with legal fees, title drafting, and recordation. If we break it into two transactions, one now and one later, we will have the added legal fees, document reviews, and transaction delays

By completing the land transaction now, the future work to be done would just be the construction approvals. Until then, the fence remains and we don’t enter the 9’ strip.

By the way, we would like to clarify the language regarding “moving the wall”. The existing concrete block wall would remain as it is; it separates the row of RV’s from the well site. We would submit the detailed plans for building a new concrete block wall to define the west side of the path. Thus there will be two block walls exactly as shown on Exhibit D, labeled “Prop. Wall” and “Ex. Wall”. From: Edwin Vitrano Sent: Tuesday, September 1, 2020 8:48 PM To: Greg Farmer ; Charles Leahy ; Don Renoe Subject: Fwd: WSW Cat-Ramon Well 4566 (Outdoor Resorts)

Seems reasonable?

I don’t suspect that the CVWD would accept “in perpetuity” to be a “certain time-frame?!”

Edwin J. Vitrano General Manager Outdoor Resort Palm Springs

From: Chris Bogan Sent: Tuesday, September 1, 2020 3:03 PM To: Edwin Vitrano Subject: RE: WSW Cat-Ramon Well 4566 (Outdoor Resorts)

Edwin, we may be able to entertain selling the land outside our wall now for $30,000 and including in our agreement an option for Outdoor to come back within a certain timeframe and acquire the 9’ path for no additional compensation. This would require that the wall be moved

upon the additional land transfer. Would the board be open to this and what timeframe would you request? If agreed, we can have our legal make those changes into the agreement for your boards review.

Let me know what you think.

Thank you, Chris

From: Edwin Vitrano Sent: Friday, August 28, 2020 2:23 PM To: Chris Bogan Subject: RE: WSW Cat-Ramon Well 4566 (Outdoor Resorts)

Hi, Chris, Thanks for quick chat today . . . and patience as I learn the ropes. As discussed, please find attached the redline version created by a Board member who properly reflects the Board wishes regarding the purchase. The Board meets again on September 21 . . . if you have any urgency on closing this.

AGREEMENT FOR PURCHASE AND SALE OF REAL ESTATE Portion of APN: 673-020-004

THIS AGREEMENT FOR PURCHASE AND SALE OF REAL ESTATE (this “Agreement”), is entered into as of ___________ __, 2019 (“Effective Date”), by and between COACHELLA VALLEY WATER DISTRICT , a public agency of the State of California (“Seller”) and OUTDOOR RESORTS/PALM SPRINGS OWNERS ASSOCIATION, a California non-profit corporation (“Purchaser”). A. Seller owns that certain land for wellsite purposes (“Property”) commonly known as APN: 673-020-004 more particularly described and depicted on Exhibit “A” attached hereto and made a part hereof. B. The Property is located immediately adjacent to Outdoor Resorts Palm Springs and to Sunniva Production Campus, LLC (“Sunniva”) located in the City of Cathedral City, California that is intended as the future site of Purchaser’s dog park pursuant to License Agreement dated April 3, 2019 between Sunniva and Purchaser. D. Purchaser desires to purchase and Seller desires to sell a portion of the Property as described and depicted on attached Exhibit “B” (the “Surplus Property”) on the terms and conditions contained herein. Seller shall retain an easement for pipelines and access over the entirety of the Surplus Property (“Pipeline and Access Easement”). NOW THEREFORE , in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: ARTICLE 1 AGREEMENT TO PURCHASE AND SELL Purchaser agrees to purchase, and Seller agrees to sell, the Property at the Purchase Price (defined below) and on the terms set forth herein. In furtherance thereof Seller agrees to convey to Purchaser title to the Property together with all existing privileges, rights (including mineral rights to the extent they are transferable by Seller), easements, hereditaments, and appurtenances thereto belonging; and all right, title and interest of Seller in and to the Surplus Property, provided, however, that Seller shall retain all water rights and a Pipeline and Access Easement over the entirety of the Surplus Property for access and connection to the wellsite in the recordable Grant Deed substantially in form and content as set forth in Exhibit “C” attached hereto (“Grant Deed”). ARTICLE 2 PURCHASE TERMS 2.1 Purchase Price . The purchase price (“Purchase Price ” ) to be paid by Purchaser to Seller for the Property shall be Thirty Thousand Dollars ($30,000.00) which shall be paid as follows: upon closing.

Commented [CB1]: Clint, please verify the entity name.

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2.1.1 Relocation of East Wall Modification of Existing Fence and Construction of New Block Wall. Purchaser acknowledges that at date of closing of this Agreement, the Seller’s well site is surrounded by an existing chain link fence on the southern edge, an existing block wall on the eastern edge, and an existing block wall on the northern edge as shown on Exhibit “D” , attached hereto and incorporated herein by this reference. Purchaser agrees that it will give Seller written notice of its intention to make any modifications of the existing fence and block walls incident to Purchasers commencement of occupancy of that portion of the well site conveyed herein. Purchaser shall, at its expense, perform any modification of the existing fence and construct a new block wall as shown in The existing block wall along the eastern edge of the Property shall be relocated by Purchaser as shown on Exhibit “D”. , attached hereto and incorporated herein by this reference. Purchaser’s contractor shall be responsible for obtaining a construction encroachment permit from Coachella Valley Water District at their sole cost and expense. Purchaser and/or Purchaser’s contractor shall bear all costs of modifying the chain link fence and relocating constructing the new wall including but not limited to structural engineering, permit fees, inspection fees, material costs and contractor fees and expenses. Purchaser and/or Purchaser’s contractor shall not permit the recordation of any lien or notice on either the Property or the Surplus Property and shall maintain the same in a lien free condition. Purchaser’s contractor shall be currently licensed with the California Contractor’s State License Board and provide evidence of insurance as set forth on Exhibit “F” , attached hereto and incorporated herein by this reference. Purchaser acknowledges and agrees that Southern California Edison (“SCE”) owns an easement within the Surplus Property and that the relocation of the wall shall be subject to the approval of SCE and shall not result in any interruption of service to the wellsite; 2.1.2 Installation of Wrought Iron Gates and Fence. Purchaser agrees that it will give Seller written notice of its intention to make any modification of the existing block wall at the northern edge of the well site. Purchaser shall install wrought iron gates and fence panels as shown on Exhibit “E” attached hereto and incorporated herein by this reference. Purchaser shall submit plans and specification for the gates and fence to the Seller for approval, and shall bear all costs and expenses of such installation including but not limited to City permits and permanent and construction permits from Coachella Valley Water District, engineering, construction and materials, inspection fees, material costs and contractor fees and expenses. Purchaser and/or Purchaser’s contractor shall not permit the recordation of any lien or notice on either the Property or the Surplus Property and shall maintain the same in a lien free condition. Purchaser’s contractor shall be currently licensed with the California Contractor’s State License Board and provide evidence of insurance as set forth on Exhibit “F” , attached hereto and incorporated herein by this reference. Purchaser shall not permit the recordation of any lien or notice on either the Property or the Surplus Property and shall maintain the same in a lien free condition; 2.1.3 Access Easement Restrictions on Parking. Purchaser acknowledges and agrees that Seller will access to the Property from Sunrise Drive, aka Sunrise Circle, over a portion of the Surplus Property via an access and pipeline easement to be retained by Seller in the Grant Deed attached hereto as Exhibit “C” and depicted in attached Exhibit “B” . Purchaser agrees that Seller’s existing gate may not be blocked at any time and all parking in front of the gate shall be prohibited; 2.1.4 Administrative and Legal Fee. Purchaser has deposited the sum of Fourteen Thousand Dollars ($14,000.00) (the “Deposit”) with Seller to be used toward administrative and

Commented [CB2]: I have asked Sunniva and their design engineer for details on this wrought iron fence and gate need. I am waiting for more details.

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legal expenses incurred in preparing this Agreement and consummating the transaction contemplated by this Agreement. Should the actual costs exceed the Deposit, Purchase shall pay any amount in excess of the Deposit upon receipt of an invoice for the same. Should the actual costs be less than the Deposit, the remaining balance of the Deposit shall be refunded to Purchaser; and 2.1.5 Thirty Thousand Dollars ($30,000.00). 2.2 Escrow and Title Insurance . The parties do not intend to use an escrow for the performance of this Agreement. However, Purchaser may, at Purchaser’s sole cost and expense, obtain a policy of title insurance. 2.3 Closing . The Closing shall occur following verification by Seller of the following: 2.3.1 Completion of relocation of the existing block wall along the eastern edge

of the Property as shown on Exhibit “D” ;

2.3.2 Completion of installation of wrought iron gates and fence panels as shown

on Exhibit “E” ;

2.3.3 Lien waivers and lien releases from all contractors, subcontractors and

materialmen; and

2.3.42.3.1

Payment of Thirty Thousand Dollars ($30,000.00).

2.4 Real Property Taxes; Closing Prorations and Adjustments . The parties acknowledge that because of Seller’s status as a public entity, the Property has not been subject to real property taxation during Seller’s period of ownership. Purchaser will become liable for real property taxes and assessments with respect to the Property from and after the Closing, to the extent that such taxes and assessments relate to periods following the Closing. All items of income or expense, if any, shall be prorated according to prevailing local custom in Riverside County, California. All prorations are final. 2.5 Documents To Be Delivered By Seller At Closing . At the Closing, Seller shall deliver or cause to be delivered to Purchaser, the following, each of which shall be in form reasonably satisfactory to Purchaser: 2.5.1 A duly executed and acknowledged Grant Deed to the Property in the form attached hereto as Exhibit “C” ; 2.5.2 All other documents (if any) required to be executed and delivered by Seller; and 2.5.3 Such other instruments and documents as may be reasonably required in order to carry out the purposes of this Agreement.

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2.6 Documents To Be Delivered By Purchaser At Closing . At the Closing Purchaser shall deliver to Seller, the following, each of which shall be in form reasonably satisfactory to Seller: 2.6.1 The Purchase Price, plus or minus adjustments, credits and prorations provided for herein; and 2.6.2 A Documentary Transfer Tax Affidavit as required by the Riverside County Assessor-County Clerk-Recorder; 2.6.3 A Preliminary Change of Ownership Report; and 2.6.4 Such other instruments and documents as may be reasonably required in order to carry out the purpose of this Agreement. 2.7 Conditions to Seller’s Obligations . The Closing and Seller’s obligations to consummate the transaction contemplated by this Agreement are subject to the satisfaction of the following conditions (or Seller’s waiver thereof) which are for Seller’s sole benefit, on or prior to the dates designated below for the satisfaction of such conditions, or the Closing in absence of a specified date: 2.7.1 Purchaser’s Obligations . As of the Closing, Purchaser shall have timely performed all of the obligations required by the terms of this Agreement to be performed by Purchaser; and 2.7.2 Purchaser’s Representations . As of the Closing, all representations and warranties made by Purchaser to Seller in this Agreement shall be true and correct as of the Closing. 2.8 Conditions to Purchaser’s Obligations . The Closing and Purchaser’s obligations to consummate the transaction contemplated by this Agreement are subject to the satisfaction of the following conditions (or Purchaser’s waiver thereof) which are for Purchaser’s sole benefit, on or prior to the dates designated below for the satisfaction of such conditions, or the Closing in absence of a specified date: 2.8.1 Seller’s Obligations . As of the Closing, Seller shall have timely performed all of the obligations required by the terms of this Agreement to be performed by Seller; and 2.8.2 Seller’s Representations . As of the Closing, all representations and warranties made by Seller to Purchaser in this Agreement shall be true and correct as of the Closing. If and to the extent that any condition to Purchaser’s obligation to consummate the purchase of the Property fails to be satisfied, then Buyer may either (a) waive such condition and proceed with the Closing, or (b) terminate the Agreement in which event neither party shall have any further obligation to the other party. 2.9 Covenants . Prior to the Closing or termination of this Agreement,

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2.9.1 Seller agrees: (a) Seller will not enter into any new lease agreements, license agreements or similar agreements with respect to the Surplus Property, (b) Seller will not encumber the Surplus Property, (c) enter into any maintenance or service agreement that will survive the Closing and (d) construct any new improvements on the Surplus Property; and 2.9.2 Purchaser covenants to prosecute the relocation of the existing block wall and installation of wrought iron gates and fence panels diligently and to complete all such work in a workmanlike manner, maintaining the Property and the Surplus Property in a clean, neat and lien free condition. ARTICLE 3 REVIEW PERIOD 3.1 Purchaser’s Review Period . Purchaser’s Review Period (“Review Period”) shall expire twenty-five (25) days after the execution of this Agreement, unless terminated earlier by Purchaser. If Purchaser has not approved, disapproved or waived all contingencies by written notice to Seller prior to the expiration of Purchaser’s Review Period (which approval, disapproval or waiver shall be at the sole and absolute discretion of Purchaser) then all feasibility contingencies of Purchaser shall be deemed disapproved and this Agreement shall be terminated. Any written approval by Purchaser pursuant to this Section shall be without conditions or qualifications and any written notice from Purchaser pursuant to this Section 3.1 containing conditions or qualifications will be deemed disapproval. 3.1.1 Prior to the expiration of the Review Period, Purchaser shall have the right, at Purchaser’s sole cost and expense, to obtain and review a preliminary title report (“Title Report”) for the Property. Prior to the expiration of the Review Period, Purchaser shall provide written notice to Seller or any objections to the Title Report. Seller shall have five (5) business days after the receipt of an objection notice from Purchaser to elect to cure any objection to the Title Report raised by Purchaser. If Seller agrees to cure an objection to the Title Report, such cure shall be a condition to the obligation of Purchaser to proceed with the Closing. If Seller fails to provide a response to Purchaser’s objection to the Title Report, Seller shall be deemed to have elected to refuse to cure such title objection in which event Purchaser shall have two (2) business days after the expiration of Seller’s five-business day review period to elect to either (i) waive Purchaser’s objections and proceed with the Closing or (ii) terminate this Agreement. 3.1.2 Purchaser shall have the right, and Seller shall reasonably cooperate with Purchaser as necessary and at no cost to Seller, to obtain such zoning, variances, permits, approvals and other entitlements (“Entitlements”) as may be necessary or desirable to Purchaser to obtain for Purchaser’s intended development or use of the Property; provided, however, that in no event shall any Entitlements be binding upon Seller or the Property, nor shall such Entitlements be binding upon the Surplus Property prior to the Closing or upon termination of this Agreement and provided further that the receipt of such Entitlements shall not be a condition to Closing. 3.2 Purchaser’s Investigations of the Property . During the Review Period, Purchaser and its agents and contractors shall have the right to conduct such investigations and enter upon the Property to conduct, at Purchaser’s expense, such tests and investigations as may be necessary for Purchaser to determine whether any matter would materially hinder or make

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economically unfeasible Purchaser’s intended use of the Surplus Property. Prior to Purchaser or its agents or contractors entering upon the Surplus Property pursuant to this Article 3, Purchaser shall (a) give Seller twenty-four (24) hours prior notice of such entry, and (b) provide satisfactory evidence to Seller that Purchaser, or its agents or contractors, have obtained commercial general liability insurance, with limits of not less than $2,000,000.00 per occurrence and $4,000,000.00 in aggregate; workers compensation insurance in statutory limits and employers liability insurance with limits not less than $1,000,000.00 each incident; and umbrella excess liability insurance excess of the underlying commercial general liability and employers liability insurance with limits not less than $1,000,000.00 per occurrence and 2,000,000.00 aggregate. 3.3 Indemnification . Purchaser will defend, indemnify and hold Seller free and harmless from and against any and all claims, damages and liabilities relating to or arising out of Purchaser’s exercise of its rights under Section 3.2 above provided that Purchaser shall not responsible for any latent defects that are merely discovered by Purchaser and not intentionally exacerbated by Purchaser. Purchaser will assure that all costs associated with its conduct of the investigations are fully satisfied and that the Property is not subjected to any liens with respect thereto. 3.4 Copies of Reports . In the event of a material default by Purchaser, Purchaser shall provide to Seller copies of all reports resulting from Purchaser’s exercise of its rights under this Article 3. Such reports will be provided without cost to Seller and without warranty or representation from Purchaser with respect to the information contained therein. ARTICLE 4 REPRESENTATIONS AND WARRANTIES 4.1 Seller’s Representations and Warranties . Seller is selling the Surplus Property AS-IS with all faults, but represents and warrants to Purchaser as follows: 4.1.1 Authority . Seller has full power and authority to sell, convey and transfer the Surplus Property as provided for in this Agreement and this Agreement is binding and enforceable against Seller. 4.1.2 Hazardous Materials . To Seller’s actual knowledge, Seller has not caused any Hazardous Materials to be placed or disposed of on or at the Surplus Property or any part thereof in any manner or quantity which would constitute a violation of any Environmental Law, nor has Seller received any written notices that the Surplus Property is in violation of any Environmental Law. As used herein, (a) the term “Hazardous Materials” shall mean any hazardous, toxic or dangerous substance, material, waste, gas or particulate matter which is defined as such for purposes of regulation by any local government authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a hazardous waste, hazardous material, hazardous substance, extremely hazardous waste, or restricted hazardous waste under any provision of California law, (ii) petroleum, (iii) asbestos, (iv) polychlorinated biphenyl, (v) radioactive material, (vi) designated as a hazardous substance pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Sec. 1251 et seq. (33 U.S.C. Sec. 1317), (vii) defined as a hazardous waste pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Sec. 6901 et seq. (42 U.S.C. Sec. 6903), or (viii)

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defined as a hazardous substance pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Sec. 9601 et seq. (42 U.S.C. Sec. 9601); and (b) the term “Environmental Laws” shall mean all statutes specifically described in the definition of Hazardous Materials and all other federal, state or local laws, regulations or orders relating to or imposing liability or standards of conduct concerning any Hazardous Material. 4.1.3 With respect to the Surplus Property, there are no existing or pending contracts of sale, options to purchase, rights of first refusal (or the like) or other unrecorded agreements or understandings with third parties regarding the ownership or use of the Property. 4.1.4 There are no pending or, to the best of Seller’s knowledge, contemplated eminent domain or condemnation proceedings affecting or which may affect any portion of the Surplus Property. 4.2 Purchaser’s Representations and Warranties . Except as expressly set forth in this Agreement, Purchaser is relying upon no warranties, express or implied, oral or written, from Seller regarding the Surplus Property and, upon Closing, Purchaser will have accepted the Surplus Property as-is, with all faults. Purchaser represents and warrants to Seller as follows: 4.2.1 Agreements . Neither the execution and delivery of this Agreement by Purchaser nor the consummation of the transactions contemplated hereby will result in any breach or violation of or default under any judgment, decree, order, mortgage, lease, agreement, indenture or other instrument to which Purchaser is a party. 4.2.2 Authority . Purchaser is a duly organized corporation in good standing with the California Secretary of State and Purchaser has full power and authority to execute this Agreement and purchase the Property as provided for in this Agreement and this Agreement is binding and enforceable against Purchaser. 4.2.3 As-Is Acquisition . PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) VALUE; (B) THE INCOME TO BE DERIVED FROM THE SURPLUS PROPERTY; (C) THE NATURE, QUALITY OR CONDITION OF THE SURPLUS PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY; (D) THE COMPLIANCE OF OR BY THE SURPLUS PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY; (E) COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATION, ORDERS OR REQUIREMENTS, INCLUDING BUT NOT LIMITED TO, TITLE III OF THE AMERICANS WITH DISABILITIES ACT OF 1990, CALIFORNIA HEALTH & SAFETY CODE, THE FEDERAL WATER POLLUTION CONTROL ACT, THE FEDERAL RESOURCE CONSERVATION AND RECOVERY ACT, THE U.S. ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., PART 261,

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THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED, THE RESOURCE CONSERVATION AND RECOVERY ACT OF 1976, THE CLEAN WATER ACT, THE SAFE DRINKING WATER ACT, THE HAZARDOUS MATERIALS TRANSPORTATION ACT, THE TOXIC SUBSTANCE CONTROL ACT, AND REGULATIONS PROMULGATED UNDER ANY OF THE FOREGOING; (F) THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, ON, UNDER, OR ADJACENT TO THE SURPLUS PROPERTY; (G) THE CONTENT, COMPLETENESS OR ACCURACY OF ANY DUE DILIGENCE MATERIALS DELIVERED BY SELLER TO PURCHASER OR PRELIMINARY REPORT REGARDING TITLE; (H) DEFICIENCY OF ANY UNDERSHORING; (I) DEFICIENCY OF ANY DRAINAGE; (J) THE FACT THAT ALL OR A PORTION OF THE SURPLUS PROPERTY MAY BE LOCATED ON OR NEAR AN EARTHQUAKE FAULT LINE OR A FLOOD ZONE; OR (K) WITH RESPECT TO ANY OTHER MATTER. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT IT HAS OR WILL HAVE BEEN GIVEN THE OPPORTUNITY TO INSPECT THE SURPLUS PROPERTY AND REVIEW INFORMATION AND DOCUMENTATION AFFECTING THE SURPLUS PROPERTY, AND THAT, EXCEPT FOR SELLER’S EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN, PURCHASER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE SURPLUS PROPERTY AND REVIEW OF SUCH INFORMATION AND DOCUMENTATION, AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION MADE AVAILABLE TO PURCHASER OR PROVIDED OR TO BE PROVIDED BY OR ON BEHALF OF SELLER WITH RESPECT TO THE SURPLUS PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. PURCHASER AGREES TO FULLY AND IRREVOCABLY RELEASE ALL SUCH SOURCES OF INFORMATION AND PREPARERS OF INFORMATION AND DOCUMENTATION AFFECTING THE SURPLUS PROPERTY WHICH WERE RETAINED BY SELLER FROM ANY AND ALL CLAIMS THAT THEY MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST SUCH SOURCES AND PREPARERS OF INFORMATION FOR ANY COSTS, LOSS, LIABILITY, DAMAGE, EXPENSE, DEMAND, ACTION OR CAUSE OF ACTION ARISING FROM SUCH INFORMATION OR DOCUMENTATION. EXCEPT FOR SELLER’S EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN SECTION 4.1 ABOVE, SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE SURPLUS PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER PERSON. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, EXCEPT FOR SELLER’S EXPRESS REPRESENTATIONS ANDWARRANTIES CONTAINED IN SECTION 4.1 ABOVE, THE SALE OF THE SURPLUS PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN AS IS CONDITION AND BASIS WITH ALL FAULTS, AND THAT SELLER HAS NO OBLIGATIONS TO MAKE REPAIRS, REPLACEMENTS OR IMPROVEMENTS EXCEPT AS MAY OTHERWISE BE EXPRESSLY STATED HEREIN. PURCHASER REPRESENTS, WARRANTS AND COVENANTS TO SELLER THAT, EXCEPT FOR SELLER’S EXPRESS REPRESENTATIONS AND

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WARRANTIES SPECIFIED IN THIS AGREEMENT, PURCHASER IS RELYING SOLELY UPON PURCHASER’S OWN INVESTIGATION OF THE SURPLUS PROPERTY.

4.2.4 General Waiver . With respect to the waivers and releases set forth in Section 4.2.3, above, Purchaser expressly waives any of its rights granted under California Civil Code Section 1542, which provides as follows: A general release does not extend to claims which the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release, and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party. ___________________ Purchaser’s Initials

ARTICLE 5 DEFAULTS; REMEDIES

5.1 PURCHASER’S DEFAULT AND LIQUIDATED DAMAGES . PURCHASER AND SELLER AGREE THAT SHOULD PURCHASER DEFAULT IN PURCHASER’S OBLIGATION TO PURCHASE THE PROPERTY WITHIN THE TIME AND IN THE MANNER SPECIFIED IN THIS AGREEMENT, SELLER SHALL BE RELEASED FROMALL OBLIGATIONS AT LAW OR IN EQUITY TO CONVEY THE SURPLUS PROPERTY TO PURCHASER. Seller’s Initials: _________ Purchaser’s Initials: _________ ________ In addition, Seller may pursue against Purchaser any and all other rights and remedies available at law or in equity, to obtain from Purchaser (on an AS IS basis and subject to the rights of third parties): (a) copies of all soil tests, environmental studies, and other tests and studies pertaining to the Surplus Property obtained by Purchaser, and (b) reimbursement for the payment of any costs and expenses incurred by Seller and properly allocable to Purchaser under Article 3 or Section 6.15. 5.2 Seller’s Default . If the transaction contemplated hereby does not close by reason of a material, uncured default by Seller in any of the terms hereof, then Purchaser may terminate this Agreement and pursue against Seller as Purchaser’s sole and exclusive remedy, an action to compel Seller’s specific performance of this Agreement. In no event shall Seller be liable to Purchaser for indirect or consequential damages, including, without limitation, any loss or damage suffered by Purchaser in connection with any lost profit or other agreement or understanding with any third party for the use, lease or purchase of the Surplus Property.

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ARTICLE 6 MISCELLANEOUS

6.1 Payment of Real Estate Brokers and Consultants . Each party represents to the other that no real estate broker has been used in connection with this transaction unless pursuant to a separate agreement. Purchaser agrees to indemnify, defend and hold Seller harmless from and against any claim for a real estate broker’s commission or fee by any party claiming to have represented Purchaser in connection with this transaction. Seller agrees to indemnify, defend and hold Purchaser harmless from and against any claim for a real estate broker’s commission or fee by any party claiming to have represented Seller in connection with this transaction. The indemnification obligations under this Section 6.1 shall survive the Closing or any termination of this Agreement for any reason whatsoever. 6.2 Notices . All notices and other communications which are required to be, or which may be given under this Agreement shall be in writing, and shall be delivered at the addresses set out hereinbelow. Notice may be given by personal delivery, recognized overnight courier, by United States mail or by facsimile transmission in the manner set forth below. Notice shall be deemed to have been duly given (a) if by personal delivery, on the first to occur of the date of actual receipt or refusal of delivery by any person at the intended address, (b) if by overnight courier, on the first (1st) Business Day after being delivered to a recognized overnight courier, (c) if by mail, on the third (3rd) Business Day after being deposited in the United States mail, certified or registered mail, return receipt requested, postage prepaid, or (d) by facsimile transmission shall be deemed to have been given on the next business day after being transmitted, as evidenced by the confirmation slip generated by the sender’s facsimile machine addressed as follows: If to Seller: Coachella Valley Water District

75515 Hovley Lane East Palm Desert, CA 92211 Attn: General Manager Telephone: (760) 398-2651

With a copy to:

Best Best & Krieger LLP 3390 University Avenue, 5 th Floor Riverside, CA 92501 Attn: Jeff Ferre Telephone: (951) 686-1450

If to Purchaser:

Outdoor Resorts/ Palm Springs Owners Association 69411 Ramon Road Cathedral City, CA 92234 Attn: Clint Atherton Ed Vitrano, General Manager Telephone: (760) 328-3834

or to such other address as either party may from time to time specify as its address for the receipt of notices hereunder, in a notice to the other party. Notices given by an attorney shall be deemed to constitute notice from that party.

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6.3 Possession . Possession of the Surplus Property shall be delivered to Purchaser at the Closing. 6.4 Assignment . Purchaser may not assign or pledge any of its rights hereunder without the prior written consent of Seller. Subject to the foregoing, this Agreement shall be binding upon the parties hereto and each of their successors and assigns. 6.5 Entire Agreement . This Agreement embodies the entire understanding of the parties and there are no further or other agreements or understandings, written or oral, in effect between the parties relating to the subject matter hereof except as may be set forth in writing executed by both parties contemporaneously with or subsequent to this Agreement. 6.6 Severability . If any term or provision of this Agreement or any application thereof shall be invalid or unenforceable, the remainder of this Agreement and other applications thereof shall not be affected thereby. 6.7 Captions; Number . The captions contained in this Agreement are for the convenience of reference only, and shall not affect the meaning, interpretation or construction of this Agreement. As used in this Agreement, the singular form shall include the plural and the plural shall include the singular, to the extent that the context renders it appropriate. 6.8 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. 6.9 Governing Law . This Agreement has been executed and delivered, and is to be performed, in the State of California, and this Agreement and all rights, obligations and liabilities hereunder shall be governed by, and construed in accordance with, the internal laws of the State of California. Purchaser hereby irrevocably waives any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any federal or state court sitting in Riverside County, California. 6.10 Time of the Essence . Time is of the essence of this Agreement. 6.11 Modification . The provisions of this Agreement may not be amended, changed or modified orally, but only by an agreement in writing signed by the party against whom any amendment, change or modification is sought. 6.12 Waiver . Except as otherwise expressly provided in this Agreement, no waiver by a party of any breach of this Agreement or of any warranty or representation hereunder by the other party shall be deemed to be a waiver of any other breach by such other party (whether preceding or succeeding and whether or not of the same or similar nature) and no acceptance of payment or performance by a party after any breach by the other party shall be deemed to be a waiver of any breach of this Agreement or of any representation or warranty hereunder by such other party whether or not the first party knows such breach at the time it accepts such payment or performance. Except as otherwise expressly provided in this Agreement, no failure or delay by a party to exercise any right it may have by reason of the default of the other party shall operate as

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a waiver of default or modification of this Agreement or shall prevent the exercise of any right by the first party while the other party continues to be so in default. 6.13 Business Days . Except as otherwise provided in this Agreement, if any date specified in this Agreement for the Closing Date or for commencement or expiration of time periods for termination or approvals or for notice occurs on a day other than a Business Day, then any such date shall be postponed to the following Business Day. As used herein, “Business Day” shall mean any day other than a Saturday, Sunday, a holiday observed by national banks or a day that is a non-working day for Seller. 6.14 Attorney Fees . In the event of any dispute arising out of the enforcement or interpretation of this Agreement, the prevailing party shall be entitled to reasonable attorney fees and costs, to include any attorney fees or costs on appeal. 6.15 Termination Due to Lack of Execution . If Purchaser has not provided a signed copy of this Agreement to Seller within thirty (30) days following Seller’s delivery of this Agreement to Purchaser, Seller may elect to terminate this Agreement and the transaction described herein by written notice to Purchaser.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOLLOWS

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IN WITNESS WHEREOF , the parties have executed this Agreement as of the date first written above. SELLER: COACHELLA VALLEY WATER DISTRICT, a public agency of the State of California

By: Name: J. M. Barrett Its:

General Manager

PURCHASER: OUTDOOR RESORTS / PALM SPRINGS OWNERS ASSOCIATION, a California non-profit corporation

Commented [CB3]: Clint to verify entity name

By: Name: Title: President

By: Name: Title: Secretary

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