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HomeMy WebLinkAboutAmend Improvement Agrmt - Pronghorn (2) Page 1 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 REVIEWED __________________ LEGAL COUNSEL For Recording Stamp Only After Recording Return to: Deschutes County Community Development 117 NW Lafayette Bend, OR 97701 AMENDMENT TO IMPROVEMENT AGREEMENT (Overnight Lodging) This Amendment to Improvement Agreement (“Agreement”), relating to the construction and installation of Required Improvements (as defined herein) to be constructed in the Pronghorn Destination Resort, hereafter referred to as “Subdivision”, as required in the conditions of approval identified in the Findings and Decisions for Deschutes County File Nos. M-02-1, Final Master Plan for a destination resort (the “Master Plan”), SP-02-49, Site Plan for visitor-oriented lodging, eating and meeting facilities, SP-08-2, Site Plan for hotel and SP-08-4, Site Plan for hotel, by and between DESCHUTES COUNTY, OREGON, a political subdivision of the State of Oregon, herein after referred to as "County"; and PRONGHORN INVESTORS LLC, hereinafter referred to as "Developer." This Agreement is effective upon signature of all parties RECITALS: WHEREAS, Developer is the subdivider of the Subdivision approved under TP-02-930, TP-03-938, TP-04-950 and TP-07-1005 (collectively, the “Subdivision”) and the subdivision approved under TP-05-963 (the “Villas”), and developer of destination resort facilities under SP- 02-49, consistent with M-02-1; and WHEREAS, Developer developed forty-eight (48) “Residence Club” units that are being sold as fractional timeshares and which constitute overnight lodging units pursuant to the Master Plan and SP-02-49, as modified; and WHEREAS, Developer has now obtained site plan approval, under SP-08-2 and SP-08- 4 to construct a 64-room hotel (“Hotel A”) and an 80-room hotel (the “Hotel B”), respectively. Developer intends to utilize such hotels to satisfy the balance of its overnight lodging obligations pursuant to the Master Plan. Developer intends to develop Hotel A and Hotel B as condominium hotels, which will be sold with deed restrictions that require that the units be available for overnight lodging in accordance with the Master Plan and applicable County Ordinances. With the construction of Hotel A and Hotel B, Developer will have one hundred ninety-two (192) overnight lodging units; and WHEREAS, Deschutes County Code (“DCC”) 18.113.060(D)(2) and the Master Plan currently require that Developer meet a ratio of no more than two (2) permanent dwellings per each overnight lodging unit (such ratio, or such other higher ratio of permanent dwellings to overnight lodging units as may be hereafter approved by the County, the “Required Ratio”); and Page 2 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 WHEREAS, Developer has obtained final plat approval to develop two hundred eighty- nine (289) single-family lots within the Estates at Pronghorn (the “Estates”) and sixteen (16) Villas, and preliminary plat approval to develop eighty (80) additional single-family lots within the Estates pursuant to TP-07-1005, though Developer only intends to file final plats for seventy- nine (79) additional lots pursuant to TP-07-1005; and WHEREAS, pursuant to SP-07-55, Developer has obtained approval to develop twenty- four (24) condominium units, and Developer will either (a) develop such condominiums as fractional timeshares, or (b) deed restrict such condominiums to require that they be available for overnight lodging in accordance with the Master Plan and applicable County Ordinances; and WHEREAS, pursuant to SP-07-56, Developer has obtained approval to develop five eight-plex buildings for a total of forty (40) units, and a sufficient number of these units will be deed restricted in accordance with County ordinances to assure that the Pronghorn resort does not exceed the Required Ratio; and WHEREAS, such recorded restrictions will require that the subject units be available for overnight lodging in accordance with the Master Plan and applicable County Ordinances; and WHEREAS, upon full build out of homes on all approved Estate lots, all Villas, all condominium units and eight-plex buildings and both Hotel A and Hotel B, Developer shall assure that Pronghorn will meet the Required Ratio; and WHEREAS, DCC Section 18.113.110 provides that Developer may, in lieu of completing Required Improvements for destination resort facilities prior to closure of sale of individual lots or units within a destination resort, enter into an agreement with County for the completion of the Required Improvements and provide a good and sufficient form of security, consistent with DCC Section 18.124.050, to provide for the completion of the Required Improvements; and WHEREAS, the construction estimates for Hotel A and Hotel B are, respectively, Three Million Four Hundred Twenty-Four Thousand Four Hundred Seventy-Eight and 65/100 Dollars ($3,424,478.65) and Four Million Three Hundred Forty-Five Thousand Three Hundred Thirty- Eight and 84/100 Dollars ($4,345,338.84) for a total of Seven Million Seven Hundred Sixty-Nine Thousand Eight Hundred Seventeen and 49/100 Dollars ($7,769,817.49); and WHEREAS, Developer’s predecessor-in-interest, High Desert Development Company, LLC, and the County previously entered into Improvement Agreement (Clubhouse, Visitor- Oriented Overnight Lodging, Dining/Meeting Facilities), DC Contract No. 2002-451 (as amended, the “Original Improvement Agreement”), which Original Improvement Agreement, as amended and extended, includes an obligation on Developer to complete the construction of certain overnight lodging units by May 1, 2008; and WHEREAS, pursuant to the Original Improvement Agreement, the Developer deposited funds to be held in a trust account (the “Trust Account”) with the County in the amount of Seven Million Four Hundred Thousand Dollars ($7,400,000), which funds, including accrued interest, are now in the sum of Eight Million Six Hundred Ninety-One Thousand Four Hundred Thirty- Four and 79/100 Dollars ($8,691,434.79); and WHEREAS, the amount of the Trust Account is more than the amount of the required security for completion of construction of Hotel A and Hotel B, which is 110% of the estimated Page 3 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 construction costs or Eight Million Five Hundred Forty-Six Thousand Seven Hundred Ninety- Nine and 24/100 Dollars ($8,546,799.24); and WHEREAS, Developer’s interest in the Trust Account is and shall remain subject to the Assignment of Developer’s Interest in Trust Account Under Improvement Agreement (the “Assignment”) signed by the County on April 7, 2004, by Pronghorn Development Company, Inc., Developer’s predecessor-in-interest High Desert Development Company LLC, and Gerald S. Casilli and Jeanne L. Casilli, Trustees of the Casilli Revocable Trust UTA dated October 15, 1996 (“Casilli”) on April 13, 2004, by which Developer granted a security interest to Casilli in Developer’s interest in the Trust Account; and WHEREAS, The Assignment was recorded on April 22, 2004, as document no. 2004- 22791 in the Real Property Records of Deschutes County, Oregon; and WHEREAS, the deadline for Developer to complete construction of the overnight lodging units under the Original Improvement Agreement is about to expire, and Developer desires to change the nature of the overnight lodging units to be constructed to meet the balance of its obligation to construct overnight lodging units to comply with the Required Ratio, and such “Required Improvements” will be Hotel A and Hotel B; and WHEREAS, Developer has requested that the Trust Account serve as the security for completion of the Required Improvements under this Agreement; and WHEREAS, the Required Improvements under this Agreement do not constitute a Public Improvement as the term is defined in ORS 279A.010(1)(aa); and WHEREAS, the Subdivision is exempt from the provisions of ORS 92.305 to 92.495 for the reason that County's comprehensive land use plan and implementing ordinances are acknowledged under ORS 192.251; now, therefore, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES above mentioned, for and in consideration of the mutual promises hereinafter stated, as follows: 1. Recitals. The Recitals to this Agreement set forth above are hereby incorporated herein as if fully set out, shall constitute contractual provisions and are not mere recitals. 2. Real Property Description. The real property subject to this Agreement, hereinafter the “Real Property” is described on attached Exhibit A. 3. Exhibits. The exhibits set forth below and attached to the Agreement are hereby incorporated herein by reference: 3.1. Exhibit A – Legal Description of Real Property owned by Developer. 3.2. Exhibit B – List of Required Improvements and cost estimates ($7,769,817.49) – submitted by the Developer and Developer’s contractor, Kirby Nagelhout Construction Co. (“Contractor”) 3.3. Exhibit C -- Deschutes County Subdivision approval with list of conditions, File No. TP-07-1005. Page 4 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 3.4. Exhibit D – Deschutes County Site Plan approval with list of conditions, File No. SP-08-2. 3.5. Exhibit E – Deschutes County Site Plan approval with list of conditions, File No. SP-08-4. 3.6. Exhibit F – Construction Schedule for Required Improvements – submitted by the Developer and Developer’s Contractor. 3.7. Exhibit G – Construction Contract between Developer and Developer’s Contractor. 3.8 Exhibit H – Contractor List per DCC 17.24.120(A)(1). [I don’t think we have any objection to this, but I do not believe it’s necessary. We’re bonding site plan improvements and not subdivision improvements. Thus, DCC 18.124.050, rather than 17.24.120 applies.] 4. Identification of Required Improvements. 4.1. Developer shall install and complete, or cause to be installed and completed, the remaining improvements required by the Master Plan, the Original Improvement Agreement and SP-08-2, SP-08-4 and TP-07-1005, as set forth in Exhibit B to the extent that the same remain to be completed. 4.2. These improvements consist of one hundred forty-four (144) overnight lodging units and are referred to in this Agreement as the “Required Improvements.” 4.3 All final plats within the Subdivision shall note and be subject to this Agreement 5. Construction of Required Improvements. 5.1 The Required Improvements shall be installed and completed to County and/or State of Oregon specifications, as applicable, and the plans and construction specifications related thereto. 5.2 The Developer shall cause the Required Improvements to be inspected and receive approval from County and/or the State of Oregon not later than five (5) years from the date of this Agreement (“Completion Date”), unless the Completion Date is extended by amendment to this Agreement. 5.3. Developer shall also promptly repair all existing and constructed facilities, within and without the Real Property, damaged during any such installation, on or before the Completion Date. The Completion Date may, if the County deems it to be in the public interest to do so, be extended in writing. 5.4. Any extension of the Completion Date shall constitute a new Completion Date for the purposes of this Agreement. 6. Warranty of Improvements. Page 5 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 6.1. Developer hereby warrants that the Required Improvements shall remain free from defects in materials or workmanship and that the Required Improvements continue to meet County and/or State of Oregon standards for twelve (12) months following the Completion Date ("Warranty Period"). 6.2. Upon completion and approval of any portion of the Required Improvements, Developer shall obtain a bond or other security in favor of, and reasonably acceptable to, the County in the amount of ten percent (10%) of the construction costs of such improvements to secure the warranty obligations under this section. 7. License to Enter and Remain on Property. 7.1. Developer hereby grants County and County's employees, engineers, consultants, agents, contractors, subcontractors and suppliers license to come onto and remain on such portions of the Real Property as necessary to make inspections of the Required Improvements. 7.2. If County determines that any portion of the Required Improvements has not been completed by the Completion Date, County or its employees, engineers, consultants, agents, contractors, subcontractors and suppliers may enter onto and remain on the applicable portions of the Real Property and may cause the applicable portion of the Required Improvements to be installed and completed. 8. Right to Draw on Security. 8.1. Upon failure of the Developer to complete the Required Improvements by the Completion Date, County may draw upon the Trust Account for any and all costs and expenses anticipated to be incurred by County, as determined by County, in the completion of the Required Improvements. 8.2. For the purposes of this Agreement and access to any security offered and accepted to secure Developer's performance, Developer's failure to complete the Required Improvements shall include failure to install or have installed any portion of the Required Improvements to County specifications, approved plans or applicable building specialty codes and failure to complete any required inspections by the Completion Date. 9. Ingress and Egress. Prior to or contemporaneous with recording any instrument conveying any platted lot located on the Real Property, Developer shall provide each owner or purchaser with legal rights of ingress and egress to the owner or purchaser of the platted lot. 10. No County Guarantee. County does not guarantee that any of the Required Improvements referred to in this Agreement will be constructed, maintained or operated. 11. License to Use Permits, Specifications and Plans. 11.1. If County determines that any portion of the Required Improvements has not been satisfactorily completed as specified by the Completion Date, Developer shall, upon request of the County, license to County all of Developer's applicable Page 6 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 Permits, plans, specifications, shop drawings, instruments, permits and approvals, and other documents necessary or useful in the completion of or related in any manner to the applicable portion of the Required Improvements. 11.2. The Developer shall be responsible for providing within any contracts for supply or labor and materials used in connection with constructing the Required Improvements, that such contract rights are assignable by Developer. 11.3 Upon such request, Developer shall deliver physical possession of such Permits, plans, specifications, shop drawings, instruments, permits, approvals, and other documents to the County. 11.4 County may assign the license referred to in this section for any purpose related to completion of the Required Improvements without further approval from Developer. 12. No Third Party Beneficiaries. 12.1. Except for the express rights of Casilli under the Assignment and this Agreement, County and Developer are the only parties to this Agreement and are the only parties entitled to enforce its terms. 12.2. Nothing in this Agreement gives or provides any benefit or right, whether directly, indirectly, or otherwise, to third persons unless such third persons are individually identified by name in this Agreement and expressly described as intended beneficiaries of this Agreement. 13. Restoration of Monuments. Developer shall restore any monument erected or used for the purpose of designating a survey marker or boundary of any town, tract, plat or parcel of land which monument is broken, damaged, removed or destroyed, during the course of work provided for or anticipated by this Agreement, whether intentional or otherwise, by the Developer or Developer's agents, employees or independent contractors. 14. Costs of Inspection. Developer shall pay to County the actual costs incurred by County in the inspection of the completed Required Improvements plus any fees, such as plan check fees and structural, electrical, plumbing and other specialty codes inspection fees normally associated with the review and inspection of any improvements on the Real Property. 15. Security for Required Improvements. The Developer’s security shall consist of: funds previously deposited by Developer with the County Treasurer, which with accumulated interest now total Eight Million Six Hundred Ninety-One Thousand Four Hundred Thirty- Four and 79/100 Dollars ($8,691,434.79). 15.1. This amount is One Hundred Forty-Four Thousand Six Hundred Thirty-Five and 55/100 Dollars ($144,635.55) more than the required security of Eight Million Five Hundred Forty-Six Thousand Seven Hundred Ninety-Nine and 24/100 Dollars ($8,546,799.24). 15.2. The required security represents 110% of the estimated costs, as set forth in Exhibit A hereto, of completing the Required Improvements to county standards. Page 7 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 The County shall release funds from the Trust Account to Developer in accordance with this Section 15, subject to Casilli’s rights under the Assignment. 15.3. The Trust Account shall be interest-bearing for the benefit of the Developer; provided, however, in the event that the County draws from the Trust Account in accordance with the terms hereof, the County shall have the right to also draw accrued and unpaid interest in the Trust Account in accordance with this Agreement. 15.4. County shall provide quarterly accounting of all funds in the Trust Account, including all interest accrued thereon. 15.5. The parties agree that the Developer’s contingent interests in the Trust Account remain subject to the Assignment. 16. Developer's Obligation for Costs. 16.1. Developer expressly acknowledges, understands, and agrees that this Agreement shall not relieve Developer from the obligation to complete and fully pay for the Required Improvements and other costs and fees set forth in this Agreement. 16.2. Should Developer fail to perform its responsibilities under this Agreement in any manner, Developer agrees to compensate County for all costs, related to Developer's failure to perform its obligation to complete and warrant the Required Improvements and pay costs and fees. 17. Release of Security or Obligation. 17.1 After the Required Improvements have been inspected and approved by the County Community Development Department, County shall release the Developer’s security, provided Developer has procured the warranty security required pursuant to Section 6 of this Agreement. 17.2 County shall make partial releases of any security pursuant to Section 17.5. 17.3. Upon written request of Developer, County may release any of Developer's obligations under the terms and conditions of this Agreement in writing upon completion and County inspection and approval of any portion of the Required Improvements. 17.4. In the event that Developer provides the documentation described in Section 17.5. before the County provides the documentation described in Section 17.7., the County Treasurer shall distribute the funds (less any distributions made pursuant to Section 17.5.) to Developer. 17.4.1 In the event that the County provides the documentation described in Section 17.7. before Developer provides the documentation described in Section 17.5., County Treasurer shall distribute the funds (less any distributions made pursuant to Section 17.5.) to the County. Page 8 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 17.4.2. In the event of any distribution under Section 17.7., County Treasurer shall first provide three (3) days’ written notice of such distribution to Developer. 17.5 Developer shall be entitled to progress payments from the funds in the Trust Account in accordance with this Section 17.5. 17.5.1. Developer shall, from time to time, submit draw requests to County, requesting the release of a portion of the funds in the Trust Account that corresponds to the portion of the Required Improvements completed to date, as certified in writing by Developer’s architect, less a retention of ten percent (10%). 17.5.2. Not later than fifteen (15) calendar days after receipt of such request (accompanied by the certification of Developer’s architect specifying the percentage of completion of the Required Improvements, and appropriate lien releases), County shall sign a document authorizing County Treasurer to release a portion of the funds in the Trust Account equaling the percentage of the Required Improvements completed to date multiplied by Eight Million Five Hundred Forty-Six Thousand Seven Hundred Ninety-Nine and 24/100 Dollars ($8,546,799.24) and less the aggregate of previous payments under this Section 17.5 and less the ten percent (10%) to be withheld pursuant to Section 17.6.1. 17.5.3 Sections 17.5.1 and 17.5.2 are subject to the County, in its sole discretion, determination that adequate security remains in place for Developer’s completion of the Required Improvements in accordance with this Agreement. 17.6. Within three (3) business days of the completion of all of the Required Improvements and issuance of a certificate of occupancy, the County shall direct the County Treasurer to distribute all funds then remaining in the Trust Account, including all accrued and unpaid interest, to Developer, subject to Section 17.6.1. 17.6.1. If Developer has not yet obtained a bond or other security to guaranty its warranty obligations pursuant to Section 6 or Section 17.5.1, then County Treasurer shall withhold from such funds an amount equal to ten percent (10%) of the construction costs of the Required Improvements. 17.6.2. Developer acknowledges that any funds distributed by the County to Developer from the Trust Account shall remain subject to the Assignment and subject to the security interest of Casilli granted thereby. 17.7. The County Treasurer shall distribute the funds in the Trust Account (less any distributions made pursuant to Section 17.5.) to the County after County sends a written Notice of Default in accordance with this Agreement. 17.7.1. The County shall give Casilli a copy of any such Notice of Default. 17.7.2. As used herein, “Notice of Default” shall mean a memorandum or other documents from the County, signed by the appropriate County official and Page 9 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 certified by one or more attorneys employed by Deschutes County Counsel, indicating that Developer has failed to complete the Required Improvements when required under the terms of this Agreement and stating that the County intends to step in and commence or complete such Improvements and seeks to draw on the Trust Account as permitted by Section 8 hereof. 17.7.3. A copy of the Notice of Default shall be sent to Developer concurrently. 17.8. Developer shall have the right to substitute a bond or other security and obtain the release of the funds in the Trust Account in whole or in part; provided, however, such security complies with the requirements of DCC Section 18.124.050. 18. Shortfall in Security. If the amount available to be drawn from the Trust Account is less than the costs and expenses anticipated to be incurred, or actually incurred, by County to commence or complete the Required Improvements, County may apply the proceeds of the Trust Account to the anticipated or actual costs and expenses of completion of the Required Improvements and then hold Developer responsible and liable for the difference between the anticipated or actual costs and expenses of completion and the amount of the remaining security, if any. 19. Substandard Improvements. Should the Required Improvements prove to be substandard or defective within the twelve (12) month warranty period in Section 6 of this Agreement, County shall notify Developer of the warranty obligation in writing of such substandard or defective Required Improvements. 19.1. Developer shall then have sixty (60) days to complete repair or replacement of the Required Improvements; provided, however, in the event that such repair or replacement cannot reasonably be completed within sixty days, then the same shall be extended by such period of time as is reasonably necessary so long as Developer promptly commence and thereafter diligently prosecute such repair or replacement. 19.2. Should Developer fail to complete repair or replacement of the Required Improvements within the required time period, County may remedy the defects and demand payment for such from Developer. 20. Final Plat Notation. The existence of this Agreement shall be noted upon the final plat of TP-07-1005 by reference to the recording book and page numbers. 21. Successors in Interest. The original of this Agreement shall be recorded with the Deschutes County Clerk and shall be a condition and covenant that shall run with the Real Property. 21.1. It is the intent of the parties that the provisions of this Agreement shall be binding upon the parties to this Agreement, and, subject to the terms contained in Section 22, their respective successors, heirs, executors, administrators, and assigns, and any other party deriving any right, title or interest in or to the Real Property, including any mortgagee or other secured party in actual possession of Page 10 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 said Real Property by foreclosure or otherwise or any person taking title from such security holder. 21.1. Upon completion of the Required Improvements, and the expiration of the Warranty Period, County, upon request by Developer or any person or persons owning an interest in any portion of the Real Property, shall release a lot from the condition and covenant subsisting under this Agreement. 22. Residential Lot Purchasers. Notwithstanding the terms of Section 21, the terms of this Section 22 shall apply to each residential lot and each Villa, condominium unit and overnight lodging unit (each, a “Lot”) created from the Real Property or platted in a subdivision and sold or transferred to a third party (each such buyer or transferee and his or her successors and assigns is a “Transferee”). 22.1 Each such Lot(s) is conveyed free of any obligation to pay money or complete Required Improvements that may arise out of this Agreement. 22.2 Each Transferee is under no obligation or burden to complete the terms and conditions of this Agreement. 22.3. The recordation of this Agreement is for the purpose of putting Transferee(s) on notice of the Agreement’s terms and that the County has no obligation to construct the Required Improvements or any portion of the Required Improvements nor does the Agreement in anyway guarantee that any of the Required Improvements will be constructed. 22.4. The Agreement conveys no right or right of action by Transferee(s) against the County for any act or omission of the County, including but not limited to, the County decisions or acts which result in the Required Improvements, or any part of the Required Improvements, not being constructed. 23. Binding Authorization. By signature on this Agreement, each signatory, signing in a representative, capacity certifies that the signer is authorized to sign the Agreement on behalf of and bind the signer's principal. 24. Expiration. 24.1. Unless otherwise extended, this Agreement shall expire twelve (12) months after the Completion Date or upon expiration of the Permits, whichever is earlier, or by the express written release of Developer by County from this Agreement granted as part of an approval for a change of use of the Real Property. 24.2. Upon expiration, the parties agree to execute a document in recordable form, formally evidencing such expiration. 25. Survival. County's rights under this Agreement, including County's right to draw upon Developer's security in whole or in part to pay the full costs and expenses of completing the Required Improvements and repairs or replacements required herein along with any licenses granted in this Agreement and any costs of enforcement of this Agreement, shall survive the expiration of this Agreement to the extent the Developer’s obligations hereunder have not been satisfied in full before such expiration. Page 11 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 26. No Agency. It is agreed by and between the parties that Developer is not carrying out a function on behalf of County, and County does not have the right of direction or control of the manner in which Developer completes performance under this Agreement nor does County have a right to exercise any control over the activities of the Developer. Developer is not an officer, employee or agent of County as those terms are used in ORS 30.265. 27. No Joint Venture or Partnership. County is not, by virtue of this Agreement, a partner or joint venturer with Developer in connection with the Real Property, and shall have no obligation with respect to Developer's debts or other liabilities of each and every nature. 28. Liens. Developer shall pay as due all claims for work done on and for services rendered or material furnished to the Real Property and shall keep the Real Property free from liens. If Developer fails to pay any such claims or to discharge any lien, County may do so and collect the cost from the Developer. Such action by County shall not constitute a waiver of any right or remedy that County may have on account of Developer's failure to complete the Required Improvements or failure to observe the terms of this Agreement. 29. Indemnification. Developer shall be responsible for any and all injury to any and all persons or property caused directly or indirectly by reason of any and all activities of Developer under this Agreement and on the Real Property; and further agrees to defend, indemnify and save harmless County, its officers, agents and employees from and against all claims, suits, actions, damages, costs, losses and expenses in any manner resulting from, arising out of, or connected with any such injury. 30. Limitation of Liability. This Agreement is subject to the Oregon Tort Claims Act, ORS 30.260 to 30.300. 31. Attorney Fees and Costs. In the event an action or suit or proceeding, including appeal therefrom, is brought for Developer's failure to complete the Required Improvements or to observe any of the terms of this Agreement, County shall be entitled to recover, in addition to other sums or performances due under this Agreement, reasonable attorney's fees and costs as the court may adjudge in said action, suit, proceeding or appeal. 32. Waiver. Waiver of the strict performance of any provision of this Agreement shall not constitute the waiver of any other provision or of the Agreement. No waiver may be enforced against the County unless such waiver is in writing and signed by the County. 33. Compliance with provisions, requirements of Federal and State laws, statutes, rules, regulations, executive orders and policies. Debt Limitation. This Agreement is expressly subject to the debt limitation of Oregon counties set forth in Article XI, Section 10, of the Oregon Constitution. 33.1. Any provisions herein, which would conflict with the law, are deemed inoperative to that extent. Additionally, Developer shall comply with any requirements, conditions or limitations arising under the any Federal or State law, statute, rule, regulation, executive order and policy applicable to the Required Improvements. 33.2. If this Agreement is in any manner construed to constitute the lending of the County's credit or constitute a debt of County in violation of Article XI, Section 10, of the Oregon Constitution, this Agreement shall be void. Page 12 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 34. No Inducement. No representations, statements, warranties have induced the making and execution of this Agreement, or Agreements other than those herein expressed. 35. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Oregon without regard to principles of conflicts of law. 35.1. Any claim, action, suit or proceeding (collectively, “Claim”) between County and Developer that arises from or relates to this Agreement shall be brought and conducted solely and exclusively within the Circuit Court of Deschutes County for the State of Oregon; provided, however, if a Claim shall be brought in a federal forum, then it shall be brought and conducted solely and exclusively within the United States District Court for the District of Oregon in Eugene, Oregon. 35.2. DEVELOPER BY SIGNING BELOW, HEREBY CONSENTS TO THE IN PERSONAM JURISDICTION OF SAID COURTS. The parties agree that the UN Convention on International Sales of Goods shall not apply. 36. Severability. If any term or provision of this Agreement is declared by a court of competent jurisdiction to be void, invalid or unenforceable, the validity of the remaining terms and provisions shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if this Agreement did not contain the particular term or provision held void, invalid unenforceable. 37. Counterparts. This Agreement may be executed in several counterparts, all of which when taken together shall constitute one Agreement binding on all parties, notwithstanding that all parties are not signatories to the same counterpart. 37.1. Each copy of this Agreement so executed shall constitute on original. 37.2. If this Agreement is signed in counterpart, each counterpart shall be recorded as provided herein for the recording of this Agreement and each counterpart shall be noted on the recorded plat map. 38. Notice. Expect as otherwise expressly provided in this Agreement, any communications between the parties hereto or notices to be given hereunder shall be given in writing to Developer or County at the address or number set forth below or to such other addresses or numbers as either party may hereafter indicate in writing. Delivery may be by personal delivery, facsimile, or mailing the same, postage prepaid. 38.1. Communication or notice by personal delivery shall be deemed delivered when actually given to the designated person or representative. 38.2. Any communication or notice sent by facsimile shall be deemed delivered when the transmitting machine generates receipt of the transmission. 38.3. To be effective against County, such facsimile transmission shall be confirmed by telephone notice to County's Director of Administrative Services. 38.4. Any communication or notice mailed shall be deemed delivered five (5) days after mailing. Any notice under this Agreement shall be mailed by first class postage or delivered as follows: Page 13 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 To Developer: Pronghorn Investors LLC 480 San Antonio Road, Suite 205 Mountain View, CA 94040-1245 Fax No. (650) 941-8753 To County: Deschutes County Administrator Deschutes County Administration 1300 NW Wall St., Ste. 200 Bend, OR 97701 Fax No. 541-388-4752 With a copy to To Casilli 2905 Woodside Road Woodside, CA 94062 Attn: Gerald S. Casilli 39. Time is of the Essence. Time is of the essence of each and every provision of this Agreement. 40. Captions. The captions contained in this Agreement were inserted for the convenience of reference only. Captions do not, in any manner, define, limit, or describe the provisions of this Agreement or the intentions of the parties. 41. Merger Clause. This Agreement and the attached exhibits constitute the entire agreement between the parties with respect to the subject matter hereof and supersedes any and all prior or contemporaneous negotiations and/or agreements among the parties, whether written or oral, concerning the subject matter of this Agreement which are not fully expressed herein. 41.1. All understandings and agreements between the parties and representations by either party concerning this Agreement are contained in this Agreement. 41.2. This Agreement shall bind all parties and its terms may not be waived, altered, modified, supplemented, or amended in any manner except by written instrument signed by all parties. 41.3. Except as otherwise expressly provided herein, any written waiver, consent, modification or change shall be effective only when in writing and signed by the parties in the specific instance and for the specific purpose given. 42. Effect of Agreement. 42.1. This Agreement shall amend and has restated in their entirety the terms and requirements of the Original Improvement Agreement with respect to overnight lodging, and, accordingly, upon full execution of this Agreement, the terms of the Original Improvement Agreement that related to overnight lodging shall be deemed to have been amended, restated and superseded hereby. 42.2. Except as amended hereby, the Original Improvement Agreement shall remain in full force and effect. COUNTY: Page 14 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 Dated this ____ of April 2008 BOARD OF COUNTY COMMISSIONERS ______________________________________ DENNIS R. LUKE, CHAIR ______________________________________ TAMMY (BANEY) MELTON, VICE-CHAIR ATTEST: ______________________________________ Recording Secretary ______________________________________ MICHAEL M. DALY COMMISSIONER STATE OF OREGON ) ) ss. County of Deschutes ) Before me, a Notary Public, personally appeared DENNIS R. LUKE, TAMMY (BANEY) MELTON and MICHAEL M. DALY, the above-named Board of County Commissioners of Deschutes County, Oregon and acknowledged the foregoing instrument on behalf of Deschutes County, Oregon. DATED this _____ day of April 2008. __________________________________________ Notary Public for Oregon My Commission Expires: _____________________ DEVELOPER’S SIGNATURE TO FOLLOW ON NEXT PAGE Page 15 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 DEVELOPER: Dated this ___ day of ____________, 2008. Pronghorn Investors LLC, a Delaware limited liability company By: MS-Pronghorn Holding Company, LLC, a Delaware limited liability company, Its sole Member By: High Desert Development Partners, LLC, a California limited liability company, Its Administrator By: Northwest Resort Development, Inc., a a California Corporation Its sole Managing Member By: __________________________ Thomas C. Hix, its President STATE OF OREGON County of Deschutes ) ) ) ss Before me, a Notary Public, personally appeared Thomas C. Hix and acknowledged the foregoing instrument on behalf of Pronghorn Investors LLC as President of Northwest Resort Development, Inc., the sole managing member of High Desert Development Partners, LLC, the administrator of MS-Pronghorn Holding Company, LLC, the sole member of Pronghorn Investors LLC. DATED this _____ day of _______________, 2008. ________________________________ Notary Public, State of Oregon My Commission Expires: ____________ Page 16 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 Exhibit A Legal Description of Real Property owned by Developer Lot 104 Estates at Pronghorn Phase 2, Recorded August 18, 2003 as Document No. 2003-56597, Official Records, Deschutes County, Oregon Lots 230, 240, 241, 242, 243, 244, 248, 251, 252, 256, 257, 258, 259, 260, 262, 263, 268, 269, 274, 275, 282, 283, 285, Estates at Pronghorn Phase 3, Recorded November 10th, 2004 as Document No. 2004- 67478, Official Records, Deschutes County, Oregon LOTS 4, 5, 6, AND 7, CORE AREA AT PRONGHORN AS PLATTED AND RECORDED IN PLAT CABINET G, PAGES 979-984, OF THE DESCHUTES COUNTY CLERKS OFFICE. ALSO: THE RIGHT(S) OF WAY OF GHOST TREE LANE AND HIDEAWAY LANE AS PLATTED IN SAID CORE AREA OF PRONGHORN, LYING WESTERLY OF PRONGHORN ESTATES DRIVE. ALSO: BEGINNING AT THE INITIAL POINT, SAID POINT BEING A FOUND 5/8 INCH IRON ROD WITH YELLOW PLASTIC CAP MARKED "W&H PACIFIC", SAID POINT ALSO BEING THE MOST SOUTHERLY CORNER OF SAID LOT 6; THENCE ALONG THE SOUTHERLY BOUNDARY OF SAID LOT 6, NORTH 85°16'50" EAST 302.20 FEET TO ANGLE POINT IN THE SOUTHERLY BOUNDARY OF SAID LOT 6, SAID POINT BEING MARKED WITH A FOUND 5/8 INCH IRON ROD WITH YELLOW PLASTIC CAP MARKED "W&H PACIFIC"; THENCE LEAVING SAID SOUTHERLY BOUNDARY, SOUTH 75°00'08" WEST 177.57 FEET; THENCE SOUTH 67°36'48" WEST 111.21 FEET; THENCE SOUTH 88%%D41'00" WEST 13.27 FEET; THENCE NORTH 12°00'27" WEST 65.17 FEET TO THE POINT OF BEGINNING, ALL BEING IN DESCHUTES COUNTY, OREGON. Page 17 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 Exhibit B List of Required Improvements and Cost Estimates Page 18 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 Exhibit C Deschutes County Subdivision Approval, File No. TP-07-1005. Page 19 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 Exhibit D Deschutes County Site Plan Approval with list of conditions, File No. SP-08-2. Page 20 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 Exhibit E Deschutes County Site Plan Approval with list of conditions, File No. SP-08-4. Page 21 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-205 Exhibit F Construction Schedule for Required Improvements Page 22 of 22 – AMENDMENT TO IMPROVEMENT AGREEMENT – DC Contract No. 2008-___ Exhibit G Construction Contract between Developer and Developer’s Contractor.