cost sharing agreement with lb hills and trendwest resorts oct. 27, 2003(0)

7/29/2019 Cost Sharing Agreement With LB HILLS and Trendwest Resorts Oct. 27, 2003(0)

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COST SHARING AGREEMENT

This COST-SHARING AGREEMENT (this "Agreement") is entered into as of October27, 2003, by and between LB HILLS GOLF LLC, a limited liability company ("Seller"), andTRENDWEST RESORTS, INtC., an Oregon corporation ("Purchaser"), with reference to thefollowing facts:

RECITALS:A. Seller and Purchaser are parties to that certain Purchase and Sale Agreement

(Indio Resort) dated as of June 6, 2003 (the "Purchase Agreement"), whereby Seller has agreedto sell to Purchaser and Purchaser has agreed to purchase from Seller, certain real property moreparticularly described in the Purchase Agreement (the "Property"). Capitalized terms usedherein and not otherwise defined shall have the meaning given to such term in the PurchaseAgreement.

B. Seller and Purchaser have agreed, on the terms and conditions set forth herein,that Purchaser shall pay to or reimburse Seller for a portion of the costs Seller has or will incur tocause the completion of the Improvements (as hereinafter defined).

THEREFORE, in consideration of the foregoing and in reliance upon the mutualpromises herein contained, the parties agree as follows:

1.mprovements. Exhibit "A" attached hereto and incorporated herein by thisreference sets forth the improvements (the "Improvements") to be performed by Seller upon theterms and conditions set forth herein, which Improvements shall be constructed in accordancewith the requirements of that certain Development Agreement with the City of Indio dated as ofDecember 16, 1996 (the "Development Agreement"), the requirements of the GovernmentalAuthorities (hereinafter defined) and the Purchase Agreement. Seller has or will submit to theCity of Indio (the "City") the plans and specifications detailing the Improvements prepared bySeller in accordance with the foregoing requirements (the "Plans and Specifications"). Sellershall select in its sole, but commercially reasonable discretion, qualified contractors andsubcontractors to perform the Improvements. Subject to the qualification set forth in Section6(f), Seller shall complete the Improvements on or before the later of (i) February 1, 2005 or (ii)fourteen (14) months after Purchaser commences its clearing and grading of the Property. Sellershall use commercially reasonable efforts to promptly commence and diligently prosecute tocompletion the Improvements from and after the later to occur of the Closing Date and theapproval by the City of the Plans and Specifications and the Improvements. Seller makes norepresentations or warranties of any kind with respect to the construction of the Improvementsother than to warrant and represent that (a) Seller shall use commercially reasonable efforts tocause the Improvements to be constructed in a good and workmanlike manner and (b) theImprovements will be constructed in accordance with the requirements of the DevelopmentAgreement, the Purchase Agreement and all requirements for the construction of theImprovements imposed by the City of Indio and any applicable governmental authorities("Governmental Authorities").

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2. Cost Estimate. Purchaser acknowledges that it has reviewed and by executionand delivery of this Agreement approves construction of the Improvements listed in Exhibit A inaccordance with all requirements for the construction of the Improvements imposed by theGovernmental Authorities. Purchaser further acknowledges and agrees that Purchaser shall haveno right to dispute in any manner the Improvements except as otherwise expressly set forthherein. Purchaser agrees and acknowledges that Exhibit "A" represents a good faith descriptionby Seller and Purchaser of the presently anticipated scope of the Improvements, but that suchscope of the Improvements may change due to factors beyond the control of Seller. Seller andPurchaser agree and acknowledge that: (i) if the costs incurred by Seller to cause theperformance of the Improvements exceed the cost estimate upon which Purchaser's Share wasbased, Purchaser shall not be obligated for any portion of such difference; and (ii) if the costestimate is greater than the costs incurred by Seller to cause the performance of theImprovements, Purchaser shall not be entitled to any refund or credit as a result therefrom.

3. Purchaser's Allocation of Costs for Improvements. Purchaser and Seller haveagreed that Purchaser shall be responsible for and shall pay the sum of Seven Hundred EightyFour Thousand and No/100 Dollars ($784,000.00) ("Purchaser's Share") of the cost of theImprovements. In addition to the Purchase Price to be delivered by Purchaser to Seller pursuantto the terms and conditions set forth in the Purchase Agreement, Purchaser shall deliver thePurchaser's Share to Escrow Agent which shall be released by Escrow Agent. Escrow Agentshall release one third (33 and 1/3%) of Purchaser's Share to Seller at Closing. Seller shall haveno obligation to segregate Purchaser's Share in a separate account at any time after receipt of anyportion of the Purchaser's Share. The second third (33 1/3%) of Purchaser's Share shall bedisbursed to Seller upon its commencement of the construction of the Improvements. Sellershall simultaneously deliver notice to Purchaser and Escrow Agent when Seller commencesconstruction of the Improvements (the "Commencement Notice") and Purchaser shall have five(5) business days after the effective date of the Commencement Notice to confirm suchcommencement and to deliver notice to Escrow Agent authorizing release of those funds. Uponreceipt of that notice Escrow Agent shall release the second third (33 1/3%) of Purchaser'sShare to Seller five (5) business days after the effective date of the Commencement Notice. Thefinal third (33 1/3%) of Purchaser's Share shall be disbursed to Seller upon Seller's completionof the construction of the Improvements. Seller shall simultaneously deliver notice to Purchaserand Escrow Agent when Seller completes construction of the Improvements (the "CompletionNotice"). Purchaser shall have five (5) business days after the effective date of the CompletionNotice to confirm such completion and to deliver notice to Escrow Agent authorizing release ofthose funds. Upon receipt of that notice, Escrow Agent shall promptly release the final third (331/3%) of Purchaser's Share to Seller five (5) business days after the effective date of theCompletion Notice. In the event that the Improvements are not completed on or before the laterof (i) February 1, 2005 or (ii) fourteen (14) months after Purchaser commences its clearing andgrading of the Property, Purchaser shall be entitled to complete the Improvements and to use theremaining third of Purchaser's Share still in escrow to fund such completion.

4. Refinements. Purchaser acknowledges that the Governmental Authorities mayimpose revisions to the Plans and Specifications and/or the Improvements ("ProjectRefinements") in connection with the City's approval of the Plans and Specifications for theImprovements. Purchaser agrees and acknowledges that Seller may make revisions to the Plansand Specifications andJor the Improvements without the consent of Purchaser from time to time



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in response to requirements of the Governmental Authorities so long as such changes do notadversely affect Purchaser's development; PROVIDED, HOWEVER, that Purchaser's Shareshall not be increased as a result of any such change; and PROVIDED, FURTHER, that Sellershall provide Purchaser notice of any such revisions.

5. Cooperation. The Parties shall act in good faith and agree to use their best effortsto assist and cooperate with the other party in doing all things reasonably necessary to completethe Improvements contemplated by this Agreement; PROVIDED, HOWEVER, such cooperationshall not require either party to incur any additional significant expense or expend any significanttime. In connection with Seller's processing of the Governmental Authorities' approval of thePlans and Specifications and Improvements, Seller shall provide Purchaser with copies of allmaterial applications, documents, correspondence, agreements and maps submitted to the Cityand shall notify Purchaser of and permit Purchaser to attend any meetings and hearings with theCity. Subject to the teinis of this Agreement, Purchaser shall not directly or indirectly oppose,seek to restrict, interfere with or impose any conditions upon the development, construction oruse of the Improvements. In the event Escrow Agent has instructions from Seller and Purchaserthat are inconsistent, Escrow Agent has at its sole discretion the right to interplead the funds intoan appropriate Washington Court of competent jurisdiction for determination as to outcome anddisbursement of the funds so interpleaded. Further, Escrow Agent has the absolute right at itssole discretion the right to deduct its reasonable attorney fees and costs from the amount sointerpleaded.

6. General Provisions.(a) Recitals. The recitals are true and accurate and incorporated herein by this

reference.(b) Time of Essence. Time is of the essence of each and every provision ofthis Agreement.(c) Notices. All notices required or permitted to be given under thisAgreement shall be in writing and shall be given or made to the respective party(ies) at the

address or facsimile number set forth below by (i) personal service; (ii) mailing by registered orcertified mail, return receipt requested, postage prepaid; (iii) reputable courier that provideswritten evidence of delivery; or (iv) facsimile with the date and time imprinted duringtransmission. Notice by personal service, overnight delivery or facsimile shall be effective onreceipt as evidenced by proof of transmission or delivery and notice by mail shall be effectivethree days after mailing.

To LB Hills: LB Hills Golf LLCdo Lehman Brothers399 Park AvenueNew York, New York 10022Attn: Mr. Robert G. TurnerFax No:646) 758-5417Phone No:212) 526-5811

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and with a copy to:

To Trendwest:

Gibson, Dunn & Crutcher LLPOne Montgomery Street, 315 1 FloorSan Francisco, California 94104Attn: Fred L. Pillon, Esq.and Deborah A. Cussen, Esq.Fax No:415) 986-5309Phone No:415) 393-8200Trendwest Resorts, Inc.9805 Willows RoadRedmond, Washington 98052Attn: Mr. Mark Lukens and Ms. Carmen. CookFax No:425) 498-3059Phone No:425) 498-2500

To Escrow Agent: First American Title Insurance2101 Fourth Avenue, Suite 712Seattle, WA 98121-2387Attn: Dave StuczynskiFax No: (206) 448-6348Phone No: (206) 615-3160

Subject to clause (I) below, either Owner may (and shall if it acquires a Propertyfrom LB Hills or Trendwest) change its address for notices by at least three (3) days' advancewritten notice to the other Owner and upon recordation in the Official Records of the County of anotice of change of address ("Notice of Address Change").

(c) Assignments and Successors. This Agreement may only be assignedpursuant to Section 11(c) of the Purchase Agreement. Subject to the foregoing, this Agreementshall be binding on the parties and their respective heirs, successors and assigns.

(d) Notices. All notices required or permitted to be given under thisAgreement shall be in writing and shall be given or made pursuant to Section 11(d) of thePurchase Agreement.

(e) Effectiveness of this Agreement. This Agreement shall take effect uponthe Closing Date.

(0orce Majeure. Neither party shall be liable for nonperformance or delayin performance by any event reasonably beyond the control of such party, including, wars,hostilities, revolutions, riots, civil commotion, national emergency, strikes, lockouts, epidemics,fire, flood, earthquake, force of nature, explosion, embargo, or any Act of God, or any law,proclamation, regulation, ordinance, other act or order of any court, government or governmentalagency, or any other circumstance, event or occurrence beyond its reasonable control.

(g)aiver. Failure of either party at any time to require performance of anyprovision of this Agreement shall not limit the party's right to enforce the provision. Waiver of4ost Sharing AgmtFINAL 10-15 with Exhbit.DOC


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any breach of any provision shall not be a waiver of any succeeding breach of the provision or awaiver of the provision itself or any other provision.

(h) Attorneys' Fees. In the event suit or action is instituted to interpret orenforce the terms of this Agreement, the prevailing party shall be entitled to recover from theother party such sum as the court may adjudge reasonable as attorneys' fees in the preparation ofits case at trial, on any appeal, on any petition for review or in any insolvency or bankruptcyproceeding, in addition to all other sums provided by law. In the event any judgment is obtainedby the prevailing party, all such costs and attorneys' fees shall be included in the judgment.

(i) Integration. This Agreement and Exhibit "A" attached hereto (which ushereby incorporated by reference), and all documents referenced in this Agreement constitute theentire agreement between the parties. There are no oral or other agreements. This Agreementmay not be modified, amended, or otherwise changed except by a writing executed by the Partyto be charged.

(j) Applicable Law. This Agreement shall be construed, applied and enforcedin accordance with the laws of the State of California.

(k) Subsequent Modifications. This Agreement and any of its terms may onlybe changed, waived, discharged or terminated by a written instrument signed by the party againstwhom enforcement of the change, waiver, discharge or termination is sought.

(1 )ounterparts; Facsimile Signatures. This Agreement, along with anyamendments or addendum, may be executed simultaneously or in counterparts, each of whichshall be deemed an original, and all of which together shall constitute but one and the sameAgreement. Facsimile transmission of a signed copy of this Agreement or any amendment oraddendum, and the retransmission of any signed facsimile transmission shall be the same asdelivery of an original.

(m) Saturday, Sunday, and Legal Holidays. If the time for performance of anythe terms, conditions and provisions hereof shall fall on a Saturday, Sunday or legal holiday, thenthe time of such performance shall be extended to the next business day thereafter.

(n) Invalidity of Provisions. If any provision of this Agreement is declaredinvalid or is unenforceable for any reason, such provision shall be deleted from such documentand shall not invalidate any other provision contained in the document.

(o) Confidentiality. All information delivered to Purchaser hereunder orotherwise obtained by Purchaser shall be kept confidential by Purchaser and shall not bedisclosed to any third party except for disclosures necessary in connection with Purchaser'sdecision whether or not to purchase the Property, including disclosures to governmental agenciesin connection with its timeshare registration.

(p) Post-Closing Confidentiality. The terms of this transaction shall not bedisclosed to third parties without the consent of both of Seller and Purchaser. There is to be nopress release regarding the transaction unless it is approved by both Seller and Purchaser.

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[SIGNATURE PAGE FOLLOWS)

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Date:o 5Date: /1343

PURCHASER:TRENDWEST RESORTS, INB yName: /4/1/

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed induplicate as of the day and year first above written.SELLER:LB HILLS GOLF, LLC

By: PAMI LLC, a Delaware limited liability company,its managing Member

By: Property Asset Management, Inc.a Delaware corporation, its sole member

By:Name: Date:

FIR ST AM ERICAN TITLE COM PANYBy:Name:hg_ii "gosh 9 - rate: 1 a4"/A.2Await .

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ame:ert . TurnerIN WITNESS WHEREOF, the Parties have caused this Agreement to be executed induplicate as of the day and year first above written.SELLER:LB HILLS GOLF, LLCBy: PAMI LLC, a Delaware limited liability company,i ts managing M emberBy: Prope y Asset Management, Inc.a Dporation, its sole memberP U R C H A S E R :T R E N DW E ST R E SO R T S , IN C .B y:Name:B y:Name:ESCROW AGENT:F IR S T A M E R I C A N T IT L E C OM P A N YB y:Name:Date: /Date:Date:Date:


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EXHIBIT ASITE DEVELOPMENT COSTS

PHASE II IMPROVEMENTS (Golf Center Dr.)(Per Conditions of Approval)

ITEM QUANTITYNIT PRICE COST Tr en d West Shar eI. Golf Center Parkway4" AC over 14" CL 62,040 SF.30 $42,692.008" Curb & gutter 1320 LF2.00 $5,840.006" Barrier curb 2,640 LF.00 $1,120.006" Sidewalk 1,320 LF.00 $1,880.00Signing and striping 1 LS,500.00 $,500.00Median Landscaping 17,160 SF.50 $2,900.00Street Lights 8 EA2,500.00 $0,000.00

$56,932.00 50.6% $ 130,007.59II. Traffic Signal $25,000.00 50.6% $ 63,250.00Seco ndary Access (3,960') $05,532.00 28.4% $6,771.09IV . Water Connection to 44th Avenue12" Dip 3,960 LF0.00 $9,200.00FHA 9 EA,800.00 $5,200.0012" TEE 1 EA00.00 $00.0012" GV 3 EA,040.00 $,120.00Connection at 44th 1 LS15,000.00 $5,000.00$23,420.00 28.4% $5,051.28V. IIDConduit system 4,000 LF5.00 $60,000.00Cabling 4,000 LF5.00 $80,000.00$40,000.00 50.6% $ 222,640.00VI . T e l e p h o n eConduit system 4,000 LF5.00 $00,000.00$00,000.00 50.6% $0,600.00VII. TelevisionConduit 4,000 LF0.00 $0,000.00$0,000.00 50.6% $ 20,240.00

VIII. Engineering $5,000.00 33.3% $ 24,975.00IV. Construction Staking $0,000.00 33.3% $3,320.00X. Geot echnical $,500.00 33.3% $,497.50$ 1,513,384.00 $ 649,352.4610% Continget0.0% $51,338.40 $ 64,935.25$ 1,664,722.40 $ 714,287.71General Conditions $3,236.12 33.3% $7,717.63Liabilty Insurance $6,647.22 33.3% $,543.53SUBTOTAL: $ 1,764,605.74 $ 747,548.86OH & P.0% $8,230.29 $ 37,377.44$ 1,852,836.03 $ 784,926.30


cost sharing agreement with lb hills and trendwest resorts oct. 27, 2003(0)

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